In this article we will discuss the concept of a ‘casual taxable person’ in the context of GST
Overview:
For Casual Taxable Persons, it is difficult to keep up a fixed spot of business or document month to month GST returns consistently, because their business would be regular in nature with no fixed spot of business. Extraordinary arrangements have been given under the GST Act to the registration of casual taxable persons.
Registration of a Casual Taxable Person
To engage in occasional and temporary business activities in a state where one does not have a fixed place of business, it is necessary to register as a Casual Taxable Person (CTP) under GST. The registration process for CTPs is similar to that of regular taxpayers, but there are some specific requirements and considerations.
Registration Obligation for Casual Taxpayers
GST Registration in-state base and subsequently there might be where an individual who is registered under one state may likewise require enrolling under another state however just for a couple of days. Further, she or additionally does not have other permanent spots of business from where he or she can take registration. In this manner, the idea of a casual taxable person will help that individual who does not have any permanent spot of business but rather they are at risk to enroll under GST from that state. A casual taxable person making an assessable supply in India needs to necessarily take enrolment. There is no maximum limit for enlistment. A casual taxable individual cannot pay tax on regulatory expense under opus tariff. The person needs to apply for enlistment at any condition 5 days earlier to starting his business in India.
Who is a Casual Taxable Person under GST?
A Casual Taxable Person refers to a person who occasionally makes the supply of goods or services for business purposes in a specific location where they do not have a fixed establishment. The supply can be made in the capacity of a principal or agent.
For example, jeweller from one state conducting selling a diamond necklaces in another state on an occasional basis would be classified as a Casual Taxable Person in that state.
Who is not a Casual Taxable Person under GST?
Not all business activities fall under the category of Casual Taxable Persons. If an activity is not considered a business, there is no requirement for registration as a CTP.
Additionally, the threshold limit for registration does not apply to CTPs. Therefore, even if a person’s turnover does not exceed the threshold, they must register as a CTP if they engage in occasional business activities in another state.
Advance Tax Deposit Provisions for Casual Taxpayers
In contrast to customary tax paying citizens, casual taxable persons are required to submit tax ahead of time for GST enrolment. The measure of duty to be saved would be equivalent to the normal expense obligation during the legitimacy time of GST enlistment. Henceforth on applying for GST services, a transitory reference number is produced for payment of the GST store. On paying the GST store, the electronic money record of the citizen is credited and the official GST enlistment document comes out.
Documents required for Casual Taxable Person Registration
The documentation required for the registration of a Casual Taxable Person is similar to that of regular registration, with additional documents related to the temporary place of business where the activities will be conducted. Some of the required documents include:
- Copy of PAN Card
- Copy of Aadhaar Card
- Passport Size Photograph
- Contact details such as phone number and email address
- Proof of principal place of business
- Bank details
- GSTIN, if applicable
- Details about the additional place of business
- Bank Account details
- Tax challan payment details
- HSN wise summary of main goods provided or services rendered
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Registration Process of a Casual Taxable Person
Under the Goods and Services Tax (GST) regulations, a person is generally required to register when their aggregate turnover exceeds the threshold limit of 20 lakh rupees in a financial year. However, there are certain suppliers, such as Casual Taxable Persons (CTPs), who must obtain compulsory registration regardless of their turnover. The threshold limit does not apply to them.
CTPs cannot opt for the Composition Scheme and need to obtain a temporary registration valid for a maximum of 90 days in the state where they intend to supply as a casual taxable person. They are also required to make an advance deposit of GST based on an estimation of their tax liability.
For instance, if Mr. Rudra estimates his taxable services at Rs. 50,000, he would need to make an advance deposit of Rs. 9000 (18% of Rs. 50,000) to obtain temporary registration.
GST Temporary Registration for Casual Taxable Person
A Casual Taxable Person must obtain temporary GST registration in the state where they intend to make supplies. This temporary registration is valid for a period of 90 days.
The process for obtaining temporary registration is similar to regular registration, with the applicant selecting “yes” for registering as a casual taxable person on the GST portal.
The application process involves the following steps:
- Provide valid PAN, Aadhaar, mobile number, and email ID for registration.
- Generate a temporary application reference number by completing Part A of Form REG 1.
- Validate your credentials with OTP and proceed to the GST portal to complete the form.
- Fill in Part B of Form REG 1, including details such as business name, ownership proof, address of the principal place of business, additional place of business, HSN code of goods and services, etc. Attach the required valid documents.
- After completing the form, submit the application through OTP.
- The registration certificate will be issued electronically once you have made the tax deposit in the cash ledger.
- Upon receiving the certificate, you can commence making taxable supplies.
The Validity of GST Certificate of Registration for a Casual Taxable Person
The validity of GST certificate of registration for a casual taxable person is valid for ninety days from the activation date of enlistment. Notwithstanding, the correct official, in line with the said assessable individual, may lengthen the legitimacy of the previously mentioned time of ninety days by a further period not surpassing ninety days. Discover the GST rate, HSN code, or SAC code for all goods and services by using our GST rate finder service. This finder service is also known as the HSN code finder. For products and services, GST is calculated on the basis of an item’s HSN or SAC code.
GST Registration Validity Extension
A Casual Taxable Person can apply for an extension of registration by submitting Form GST REG-11 before the expiry of the initial registration period. The extension can be granted for a period of up to 90 days. However, if the business is still ongoing, the person must apply for permanent GST registration in that state as further extension cannot be requested.
Return Filing Compliances for Casual Taxable Person
A Casual Taxable Person is required to file GST returns, including details of output supplies in Form GSTR-1 and a summary of input tax credit, inward supplies, and tax liability in Form GSTR-3B.
The frequency of return filing depends on the chosen plan, either monthly or quarterly. The due dates for monthly return filing are as follows –
|
GSTR FORM NAME |
DUE DATE |
| FORM GSTR-1 ( Details of outward supplies of goods or services) | On or before the 11th of the following month |
| FORM GSTR-3B (Summary of ITC, purchases and tax liability) | On or before the 20th of the following month |
What if the Tax Paid in Advance Falls Short of Actual Liability?
If the tax paid in advance falls short of the actual tax liability, the person must deposit the additional tax due on the supplies. No interest will be charged on the increased tax liability if the additional tax is paid on the due date specified under the CGST Act.
Refund for Casual Taxable Person
After filing all the required returns, any excess tax paid in advance can be refunded at the time of surrendering the registration. A Casual Taxable Person is eligible for a refund of any amount in excess of their tax liability. To request a refund, Form GST RFD-01 under the category “Refund of excess balance in the electronic cash ledger” can be used.
FAQs
What is the limit of casual taxable person?
The limit for a casual taxable person refers to the threshold limit of turnover that determines the requirement for GST registration. However, for casual taxable persons, the threshold limit does not apply. They are required to obtain registration irrespective of their turnover.
What is a casual taxable person and a non-resident taxable person?
A casual taxable person is someone who supplies goods or services occasionally in a taxable territory without having a fixed establishment there. On the other hand, a non-resident taxable person is an individual or business entity that is not a resident of India but makes supplies of goods or services in the country.
Can a casual taxable person claim ITC?
Yes, a casual taxable person can claim Input Tax Credit (ITC) on the taxes paid on their inward supplies. However, certain conditions and restrictions may apply, and it is important to comply with the GST laws and regulations to be eligible for claiming ITC.
What is an example of a casual income?
Casual income refers to income earned from sporadic or irregular sources, such as occasional freelance work, one-time consulting projects, or temporary employment. It is not a regular or fixed source of income and may not be subject to regular deductions or contributions.
What are the types of Casual income?
Types of casual income can include income from part-time jobs, freelance work, temporary or seasonal employment, income from occasional sales or services, or any other income earned on an irregular or sporadic basis.
Is GST applicable to non resident taxable person?
Yes, GST is applicable to non-resident taxable persons who supply goods or services in India. They are required to obtain GST registration and comply with the relevant GST rules and regulations.
Who Cannot claim ITC under GST?
Under certain circumstances, the following entities or scenarios may not be eligible to claim Input Tax Credit (ITC) under GST:
✷ Composition scheme taxpayers
✷ Taxpayers making exempt supplies
✷ Taxpayers opting for certain special schemes or provisions as prescribed by the GST laws and regulations
✷ Taxpayers engaged in the composition scheme or providing specific goods or services as specified by the authorities
Who is casual taxable person tax guru?
According to Vakilsearch’s tax gurus a casual taxable person is one who is required to pay GST in a state, on account of occasional sales or services rendered in that state.
Who are exempt from GST registration?
Certain individuals or businesses may be exempt from GST registration under specific circumstances, such as:
✷ Small-scale suppliers whose turnover does not exceed the prescribed threshold limit
✷ Certain categories of businesses or services that are exempt from GST as per the law or government notifications
✷ Individuals or entities engaged in activities that are specifically exempted from GST based on the nature of the supply or service provided
Conclusion
A Casual Taxable Person is someone who engages in temporary and occasional business activities in a state where they do not have a fixed place of business. They must register as a CTP, fulfill the necessary compliance requirements, and file returns as per GST regulations. It is essential to understand the specific procedures and obligations associated with being a Casual Taxable Person to ensure compliance with the GST law.
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