CASUAL TAXABLE PERSON
DEFINITION OF CASUAL TAXABLE PERSON U/S 2(20) OF CGST ACT 2017
Casual Taxable person means:-
(1) Undertakes transactions occasionally;
(2) Involving supply of taxable goods or services or both;
(3) In the course or furtherance of business;
(4) Whether as principal, agent or in any other capacity;
(5) In a state or UT where he has no fixed place of business.
Example
XYZ Exports are manufacturers of textile products registered under GST in DELHI. They do not have any place of business in JAIPUR but they have to participate in a textile exhibition in JAIPUR where its products will be displayed and sold. It will have to obtain Casual taxable person (“CTP”) registration in RAJASTHAN to make taxable supplies of goods in INDORE.
Notes
1. Frequency of transactions = occasionally (non recurring)
2. Fixed place of business in a State or UT where transactions takes place occasionally= No
3. Transactions amounts to supply. If not, no need to take CTP Registration.
4. Transactions = in the course or furtherance of business.
2. REGISTRATION OF CASUAL TAXABLE PERSON
As per section 24(1)(ii) of CGST Act, a person who falls under the category of Casual taxable person making taxable supplies, required to get registration compulsorily irrespective of the threshold limit ie. Rs. 40 lacs in some states provided vide N/N 10/2019-central tax dated 07.03.2019 effective from 01.04.2019.
Note :- if any person is involved in supplying Non GST Supplies or Exempt Supplies, not required to get registration compulsorily.
Exemption from compulsory registration for CTP
N/N 56/2018 CENTRAL TAX DATED 23.10.2018
The categories of casual taxable persons who shall be exempted from obtaining registration under the said Act are –
1. Such persons making inter-State taxable supplies of handicraft goods.
Handicraft Goods :- Goods predominantly made by hand even though some tools or machinery may also have been used in the process.
The goods must fall within the list of HSN Code and description is given in Notification No. 21/2018 – Central Tax (Rate) dated 26-07- 2018).
2. Such persons making inter-State taxable supplies of the products mentioned in this notification, when made by craftsmen predominantly by hand even though some machinery may also be used in the process. (A list of products and respective HSN is given in Notification No. 56/2018 – Central Tax dated 23-10-2018).
FAQ’S related to Casual Taxable Person.
Q 1. whether a casual taxable person can opt for composition scheme ?
Ans. A casual taxable person does not have an option to register and pay taxes under Composition Scheme.
Q 2. WHAT IS THE TIME LIMIT FOR OBTAINING REGISTRATION IN CASE OF CTP?
Ans. A casual taxable person shall apply for registration at least 5 days before the commencement of business.
Example: Rajdhani Textiles is a manufacturer of textiles in Ahmedabad. It has to participate in a Textile exhibition in Rajasthan to be held on 25.10.2019. What is the due date to obtain registration in Rajasthan?
Ans. Rajdhani Textiles has to obtain CTP registration in Rajasthan on or before 20.10.2019.
Q 3. IS THERE ANY SEPARATE FORM FOR REGISTRATION AS A CTP?
Ans. There is no separate form to register as a casual taxable person. The procedure for applying as a casual taxable person is the same as for a regular taxpayer. The application for regular registration in FORM GST REG-01 has to be filed on the GST portal for CTP registration also.
Q 4. WHAT ARE THE LIST OF DOCUMENTS REQUIRED FOR CTP REGISTRATION?
Ans. Following are the documents required :-
1. Business/Trade Name, Copy of PAN of the applicant.
2. Mobile Number and Email address for communication and OTP purposes.
3. Existing registration of the applicant if any. (E.g., GSTIN, Incorporation document or proof of registration with any other authority like MCA)
4. Copy of Incorporation document evidencing the existence of the applicant (e.g.: a copy of Partnership Deed, Company Incorporation Certificate.
5. Details of promoters/partners/directors etc. of the applicant along with a copy of their address proofs and ID proofs such as Aadhar card, PAN, Photo, Email ID, Mobile Number.
6. Bank Details: Documents such as Cancelled Cheque of firm/Copy of passbook or bank statement with the name of the applicant.
7. Details of the principal place of business for supply in the State: Address along with documents evidencing right or permission to conduct business from the place. 8. If the person has any additional place of business in the State, the same documents as above are required.
9. Nature of business carried out by the applicant. List of top 5 products or services to be provided by the applicant.
10. Authorization letter provided on the applicant’s Letterhead to authorize one or more persons for signing all documents related to GST. An authorization letter is not required in the case of proprietorship.
Q 5. WHAT IS THE VALIDITY OF REGISTRATION?
Ans. The certificate of registration issued to a casual taxable person shall be valid for:
- The period specified in the application for registration or
- 90 days from the effective date of registration,
WHICHEVER IS EARLIER
It is important to point that the casual taxable person shall make taxable supplies only after the issuance of the certificate of registration.
Q 6. IS THERE EXTENSION OF VALIDITY AVAILABLE BEYOND 90 DAYS?
Ans. . YES, the extension of validity is available. A casual taxable person may apply for an extension of the period of operation and the proper officer may extend the said period of 90 days by a further period not exceeding 90 days on sufficient cause being shown by the said taxable person.
Q 7. WHAT IS THE PROCEDURE TO GET EXTENSION?
Ans. Following steps to be taken to get extension: –
Step 1. An application in FORM GST REG-11 shall be submitted on the GST portal before the end of the validity of registration granted to him.
Step 2. Such a taxable person shall deposit an additional amount of tax equivalent to the estimated tax liability of such person for the period for which the extension is sought.
Step 3. Application for the extension shall be acknowledged only on payment of the estimated tax liability for the period for which the registration is sought.
Q 8. WHAT IS THE RESTRICTION ON CTP REGISTRATION FOR MORE THAN 180 DAYS?
Ans. A clarification has been provided by CBIC in Circular No. 71/45/2018-GST dated 26-10-2018 in this regard as under:
1. It is clarified that in case of long running exhibitions (for a period more than 180 days), the taxable person cannot be treated as a CTP and thus such person would be required to obtain registration as a normal taxable person.
2. While applying for normal registration the said person should upload a copy of the allotment letter granting him permission to use the premises for the exhibition and the allotment letter / consent letter shall be treated as the proper document as a proof for his place of business.
3. In such cases be would not be required to pay advance tax for the purpose of registration.
4. He can surrender such registration once the exhibition is over.
Q 9. IS IT MANDATORY TO APPLY FOR CANCELLATION/SURRENDER OF CTP REGISTRATION?
Ans. There is no specific provision in CGST Act. On the completion of the validity period, the status of registration gets converted to ‘Inactive’.
Q 10. IS THERE ANY REQUIREMENT TO FILE FINAL RETURN GSTR 10. ?
Ans. Yes, it is mandatory to file Final Return GSTR 10 within 3 months from the date of cancellation or date of order of cancellation, whichever is later.
Q 11. What are the late fees in case of delay of furnishing GSTR 10?
Ans. Rs. 200/day subject to maximum Rs. 10000.
Q 12. DOES CTP NEED TO DEPOSIT ADVANCE ESTIMATED GST BEFORE REGISTRATION?
Ans. Yes, As per section 27 of CGST Act, A CTP needs to deposit advance estimated GST liability for the period for which registration is sought at the time of submission of application of registration.
Note:- It is estimated net advance tax liability (Not gross tax liability), which is required to deposit.
Circular No. 71/45/2018-GST dated 26.10.2018.
Q 13. HOW TO CALCULATE ESTIMATED NET TAX LIABILITY?
Ans. Estimated net tax liability= Estimated Gross GST Liability-ITC.
Q 14. WHAT IF, AMOUNT DEPOSITED IN ADVANCE IS SHORT DEPOSIT?
Ans. Tax Deposited in advance<tax on actual supplies = short deposit, need to deposit the difference amount of tax.
Q 15. WHAT IF, AMOUNT DEPOSITED IN ADVANCE IS EXCESS DEPOSIT?
Ans. Tax Deposited in advance>tax on actual supplies = excess deposit, A CTP will get refund the excess amount deposited.
Q 16. IS THERE ANY LEVY OF INTEREST ON SHORT DEPOSIT OF ADVANCE TAX?
Ans. There is no provision for levy of interest on a short deposit of advance tax. Hence it does not attract any interest.
Q 17. WHAT ARE THE REQUIREMENTS OF CTP WITH RESPECT TO RETURNS?
Ans. Every CTP is required to furnish the following GST Returns:-
- Form GSTR 1 = Details of Outward Supplies
- Form GSTR 3B = Consolidated summary of inward and outward supplies
- Annual Returns = No requirement.
Q 18. WHAT ARE THE LATE FEES IN CASE OF DELAYING RETURNS?
Ans. Late Fess for GSTR 3B = Rs 25 per day under CGST Act.
Late Fees for GSTR 1 = For Rs. 100 per day subject to maximum Rs. 5000 under CGST Act.
Q 19. WHAT ARE DUE DATES OF FURNISHING THE ABOVEMENTIONED GST RETURNS?
Ans. GSTR 1 = AGGREGATE TURNOVER IN PFY. > 1.5 CRORES = 11TH OF SUBSEQUENT MONTH OTHERWISE Usually notified as last day of the subsequent month after the end of the quarter. GSTR 3B = AGGREGATE TURNOVER IN PFY. > 1.5 CRORES = 20th of succeeding month OTHERWISE For some States – 22nd of the subsequent month For remaining States – 24th of the subsequent month
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