October 5, 2024

GST on Non-Resident Tax Payer

To understand the applicability of GST for non-resident tax payer ,one should know who is a non-resident as per GST law. A non-resident taxable person means any person who occasionally undertakes transactions involving supply of goods and/or services whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

Registration of non-resident tax payer under GST

A non-resident taxable person planning to do business in India should mandatorily obtain GST registration at least 5 days prior to the commencement of business in India irrespective of his turnover.

A Non-resident taxable person will not be eligible to obtain registration under Composition levy under GST.

Upon application for registration and subject to fulfillment of requirements as specified by GST Act, a non-resident taxable person will be granted registration certificate for a period specified in the application or maximum of 90 days which may be further extended to another 90 days.

Levy and Collection of Tax

The procedure of charging and collection that is applicable to a resident tax payer is applicable to non-resident tax payer.

Input Tax credit

A non-resident taxable person shall not avail any input tax credit in respect of goods or services except on those imported by him.

Therefore, the taxes paid by a non-resident taxable person shall be available as credit to the respective recipients.

Advance Payment of Tax

A non-resident taxable person shall, at the time of submission of application for registration is required to make an 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.

If registration is to be extended beyond the initial period of 90 days, an advance additional amount of tax equivalent to the estimated tax liability is to be deposited for the period for which the extension beyond 90 days is being sought.

Furnishing of return

A non-resident taxable person shall, for every calendar month or part thereof, furnish, a return (disclosure to GST department) in GSTR-05, electronically, within 20 days after the end of a calendar month or within 7 days after the last day of the period of registration, whichever is earlier.

Refund of tax

The amount of advance tax deposited by a non-resident taxable person under GST 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 serial no. 13 of the FORM GSTR -5

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FAQ’S –

Is PAN mandatory for obtaining GST registration?

PAN is not mandatory for a non-resident taxable person; however, he may be granted registration on the basis of other documents in the foreign country or by using a valid passport (and need not have a PAN number in India

If some supply is provided in territorial waters of India, is the supply taxable?

Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

If a non-resident has different business verticals do they need to have multiple registrations?

A non- resident person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.

If a non-resident is supplying in more than one state, is one registration sufficient?

Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of GST.

Will a foreign incorporation eligible to take GST registration in India?

A business entity incorporated or established outside India, the application for registration shall be submitted 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 Permanent Account Number, if available.

How to apply for GST registration for non-resident taxable person?

A non-resident taxable person is not required to apply in normal application for registration being filed by other taxpayers. A simplified form GST REG09 is required to be filed.

What is the procedure for registration ?

The application for registration made by a non-resident taxable person 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 non-resident taxable person 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.

Disclaimer:

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice or after a thorough examination of the particular situation. Please consult relevant professional before taking any actions based on the information present in the document.