Casual Taxable Person Under GST: Definition and its Applicability. Get updates for GST Registration Compliance for Casual Taxable Person, Return Compliance, Tax Compliance for Casual Taxable Person. As per Section 2(20) of the GST law, a ‘Casual Taxable Person (CTP) is a person who occasionally undertakes transactions involving supply of goods or services, or both, in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has No Fixed Place of Business.
Thus, every CTP has to mandatory registered under Goods and Services Tax law, irrespective of their turnover limit if the buyer of goods or services, or both, intends to claim Input Tax Credit from such transaction.
Casual Taxable Person Under GST
Definition as per CGST Act 2017
“casual taxable person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business;
A person would be regarded as a casual taxable person if he undertakes supply of goods or services or both:
- (a) Occasionally, and not on a regular basis;
- (b) Either as principal or agent or in any other capacity;
- (c) In a State/ Union Territory where he has no fixed place of business.
A trader, businessman, service provider, etc. undertaking occasional transactions like supplies made in trade fairs would be treated as a ‘casual taxable person’ and will have to obtain registration in that capacity and pay tax. E.g., A jeweller carrying on a business in Mumbai, who conducts an exhibition-cum-sale in Delhi where he has no fixed place of business, would be treated as a ‘casual taxable person’ in Delhi.
The following aspects need to be noted:
- The threshold limits for registration would not apply and he would be required to obtain registration irrespective of his turnover;
- He is required to apply for registration at least 5 days prior to commencement of business;
- The registration would be valid for 90 days or such period as specified in the application, whichever is shorter;
- An advance deposit of the estimated tax liability is required to be made along with the application for registration.
GST Registration Compliance
- Casual Taxable Person are required to apply for registration five days prior to the commencement of business
- Certificate of registration issued to a Casual Taxable Person will be valid for a period of 90 days and the designated officer can further extend this period by 90 days, provided a reasonable cause is provided by the taxable person.
- A Casual Taxable Person can make taxable supply only after obtaining the certificate of registration.
Analysis of Special provisions relating to casual taxable person and Non- resident taxable person
The certificate of registration issued to a “casual taxable person” or a “non-resident taxable person” shall be valid for a period specified in the application for registration or ninety days from the effective date of registration, whichever is earlier, extendable by proper officer for further period of maximum 90 days at the request of taxable person.
A casual taxable person or a non-resident taxable person while seeking registration shall make an advance deposit of tax in an amount equivalent to the estimated tax liability. Where any extension of time is sought, such taxable person shall deposit an additional amount of tax equal to the estimated tax liability for the period for which the extension is sought.
Such deposit shall be credited to the electronic cash ledger of and utilized in the manner Provided under section 44 (Payment of Tax, interest, penalty and other amounts) of the Act.
Since the nature of the activity carried out by a casual taxable person and non-resident person are temporary as compared to a regular taxable person, additional safeguards have been placed to ensure that the registration is granted for a limited period and the tax liability is recovered in advance.
What is the validity period of the Registration certificate issued to Casual Taxable Person and non-Resident Taxable person?
The certificate of registration issued to a “casual taxable person” or a “non-resident taxable person” shall be valid for a period of ninety days from the effective date of registration. A proviso has been made available in this statute by enshrining a discretionary authority for the proper officer, who may at the request of the said taxable person, extend the validity of the aforesaid period of ninety days by a further period not exceeding ninety days.
Tax Compliance:
- The Casual Taxable Person is required to make an advance deposit of tax in an amount equivalent to the estimated tax liability for the period for which registration is sought.
- The amount deposited by a Casual Taxable Person (CTP) will be credited into the electronic cash ledger of the person and will subsequently be adjusted against the tax liability.
Returns Compliance:
A CTP shall for the entire period for which the certificate of registration granted to him had remained in force, has to furnish all the returns required under section 34 to get refund of Advance tax paid and further he is required to furnish an Annual Return for every financial year in Electronic form on or before the thirty first day of December following the end of such financial year.
Non-residents Suppliers Compliance:
On similar lines, even non-residents who occasionally supply goods or services but have no fixed place of business in India will require GST registration. The modalities relating to registration and payment of estimated tax are the same as for ‘casual taxable person’. “For non-residents who occasionally supply goods or services, it is necessary that the application for registration be signed by an authorised Agent.
Author – CA. Kartik Joshi-9824964309
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