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Non Resident Taxable Person- Tax Implications under GST

Heet Shah 
on 01 August 2020

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Section 2(77) of CGST Act defines Non-resident taxable person (NRTP) as any person who occasionally undertakes transactions involving supply of goods /services, whether as principal/agent/in any other capacity, but who has no fixed place of business/residence in India. Therefore it covers all such person who is involved in supply of goods/service whether or not such supplies are taxable. However Section 24 of CGST Act requires mandatory registration of NRTP making taxable supplies ignoring the threshold limits. NRTP cannot opt for composition supply. The NRTP can make taxable supplies only after the issuance of the registration certificate.

Registration: 

A NRTP is not required to apply in normal application for registration being filed by other taxpayers. A simplified form GST REG-09 is required to be filled. A non-resident taxable person has to electronically submit an application, along with a self-attested copy of his valid passport, for registration, in FORM GST REG-09,at least 5 days prior to the commencement of business at the Common Portal. A business entity incorporated or established outside India, has to submit the application for registration along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or its PAN, if available.

The application for registration made by a NRTP has to be signed by his authorized signatory who shall be a person resident in India having a valid PAN. On successful verification of PAN, mobile number and e-mail address the person applying for registration, as a NRTP will be given a temporary reference number by the Common Portal for making the mandatory advance deposit of tax for an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought. The registration certificate shall be issued electronically only after the said deposit appears in his electronic cash ledger. The amount deposited shall be credited to the electronic cash ledger of the Non-resident person. The registration certificate shall be valid for the period specified in the registration application or 90 days from the effective date of registration, whichever is earlier.

The extension of registration can be applied in form GST Reg-11 before the end of the validity of registration granted to him. It can be further extended for a period not exceeding 90 Days. These extensions will be allowed only on additional tax deposit for the estimated tax liability.

Non Resident Taxable Person- Tax Implications under GST

Input Tax Credit:

ITC shall not be available in respect of goods/services received by a NRTP except on goods imported by him. The taxes paid by a NRTP shall be available as credit to the respective recipients in their GSTR-2A.

Returns and payments:

As per Rule 63 of CGST Rules The NRTP shall furnish a return in FORM GSTR-5 electronically through the common portal, including therein the details of outward supplies and inward supplies. Further, he shall pay the tax, interest, penalty, fees or any other amount payable under the Act within 20 days after the end of a calendar month or within 7 days after the last day of the validity period of registration, whichever is earlier.

 

Refund:

The amount of advance tax deposited by an NRTP at the time of initial registration/ extension of registration will be refunded only after the person has furnished all the returns required in respect of the entire period for which the certificate of registration granted to him had remained in force. The refund can be applied in serial no. 13 of the FORM GSTR -5.

 

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