Casual taxable person receives unique considerations under the GST. According to the GST Act, a casual taxable person is someone who occasionally conducts transactions involving the supply of goods or services or both in the course or furtherance of business, without a fixed place of business in a State or Union territory. Thus, individuals operating temporary businesses at fairs, exhibitions, or engaging in seasonal business activities fall under the category of a casual taxable person within the GST framework. In this blog, we shall understand eligibility and GST registration of Casual Taxable Person Under GST.
Definition of a Casual Taxable Person
A Casual Taxable Person Under GST refers to an individual or entity that occasionally supplies taxable goods or services within a taxable territory where they lack a fixed place of business. Such individuals or entities can engage in these activities as a principal, agent, or in any other capacity to facilitate business.
Key Points to Consider
1. Diversity of Entities: When we refer to a “person,” we are including various types of entities. These include individuals, Hindu Undivided Families, companies (both governmental and private), firms, limited liability partnerships, associations of persons, groups of individuals, co-operative societies, local authorities, and governmental bodies.
2. Primary Business Location: The principal place of business refers to the specific location detailed in the registration certificate.
Regular Taxable Persons vs. Casual Taxable Persons under GST
Under GST framework, there are distinctions between regular taxable persons and casual taxable persons. Mentioned below is a comparison of the two:
Regular Taxable Persons:
1. GST Registration: Regular taxable persons are required to obtain GST registration as regular taxpayers. This means they are subject to the regular tax provisions and requirements.
2. Fixed Place of Business: Regular taxable persons typically have a fixed place of business located within India. They operate from a permanent establishment.
3. Filing Frequency: Unless they are enrolled under the GST Composition Scheme, regular taxpayers are obliged to file monthly GST returns. They need to maintain detailed accounts in compliance with the GST Act.
4. Compliance: Regular taxable persons must adhere to all GST regulations, which includes maintaining proper records, following input tax credit rules, and complying with tax payment and reporting requirements.
Casual Taxable Person under GST:
1. Nature of Business: Casual taxable person under GST often engages in businesses that are seasonal or occasional in nature and may not have a fixed place of business in the taxable territory.
2. Unique Provisions: To cater to the specific needs and challenges faced by casual taxable persons, the GST Act provides special provisions for their registration and compliance.
3. Filing Flexibility: Casual taxable person under GST is not required to file monthly GST returns continuously. Their filing requirements and registration are more flexible, allowing them to operate for a limited period when needed.
So, regular taxable persons are those with a fixed place of business and are subject to standard GST requirements, including monthly return filings. Casual taxable person under GST, on the other hand, often operates seasonally, have no fixed place of business, and benefit from more personalised provisions to meet their unique business characteristics.
Registration of a Casual Taxable Person under GST
Registration under the Goods and Services Tax system is mandatory for certain individuals or entities when specific conditions are met. One such condition is the aggregate turnover in a financial year exceeding the threshold limit of 20 lakh rupees. However, there are exceptions, and certain categories of suppliers must undergo compulsory registration regardless of their turnover. This threshold limit does not apply to them, and one such category is the Casual Taxable Person under GST.
Mandatory Registration for CTP
A Casual Taxable Person (CTP) is not eligible to opt for the Composition Scheme, and they are required to obtain temporary registration. This temporary registration is valid for a maximum of 90 days and is typically sought by a CTP when they intend to supply taxable goods or services temporarily in a state where they do not have a fixed place of business.
Advance Deposit of GST by CTP
When a CTP estimates the value of their taxable services, they are obligated to make an advance deposit of GST. This deposit is based on an estimation of their tax liability. For instance, if Mr. X anticipates that his taxable services amount to Rs. 100,000 and the applicable GST rate is 18%, he is required to make an advance deposit of Rs. 18,000 (18% of Rs. 100,000) to obtain temporary registration.
Extension of Registration Period under GST
To extend the period of registration under the GST, individuals or entities should follow these steps:
1. Submission of Application: Applicants seeking an extension of their registration period must submit a formal request using “FORM GST REG-11.” This application should be filed before the current registration’s validity period comes to an end.
2. Maximum Extension Period: The extension can be granted for a further period but should not exceed 90 days beyond the initial registration period.
3. Additional Tax Liability Deposit: The extension of the registration period will be approved only if the applicant deposits any additional tax liability that may be applicable for the extended period.
Returns for Casual Taxable Persons under GST
A Casual Taxable Person under GST has specific return filing requirements. Mentioned below are the details of the returns they are required to furnish:
1. FORM GSTR-1 (Details of outward supplies of goods or services): CTPs are obliged to file this return on or before the 11th day of the following month. It should include information regarding the supplies of goods or services made by the CTP during that period.
2. FORM GSTR-3B (Summary of Input Tax Credit, purchases, and tax liability): This return should be submitted on or before the 20th day of the following month. It summarises the input tax credit, purchases, and tax liability of the CTP.
However, if a CTP has opted for the Quarterly Return Monthly Payment (QRMP) scheme, they will have different filing requirements:
IFF/GSTR-1 and GSTR-3B: CTPs under the QRMP scheme are required to file IFF/GSTR-1 (Details of outward supplies) and GSTR-3B (Summary of Input Tax Credit, purchases, and tax liability) on a quarterly basis.
It’s essential to note that a Casual Taxable Person is not required to file an annual return, as typically mandated for regular registered taxpayers.
All these return forms can be submitted through the common portal, either directly or through a Facilitation Centre as notified by the Commissioner.
Refund by a Casual Taxable Person under GST
Casual Taxable Person under GST may be eligible for a refund of any amount they have deposited in excess of their tax liability. Mentioned below is the process for obtaining a refund as a CTP:
1. Eligibility for Refund: A CTP can seek a refund of any amount that they have deposited, which exceeds their actual tax liability.
2. Refund Application: The refund process begins after all the necessary returns have been furnished for the registration period. The CTP must submit an application for the refund of the excess balance in the electronic cash ledger.
3. Application Form: To claim a refund for the excess balance in the electronic cash ledger, the CTP must use “Form GST RFD-01.” This form is categorised as “Refund of excess balance in the electronic cash ledger.”
Final Thoughts
The concept of a Casual Taxable Person under the GST regime provides a framework to accommodate individuals or entities with temporary or seasonal business operations. CTPs, unlike regular taxable persons, often lack a fixed place of business in the taxable territory and engage in occasional supply of taxable goods or services. This unique category allows for more flexible registration and compliance requirements, including the option for temporary registration and simplified return filing procedures. The GST Act recognises the distinct nature of CTPs, enabling them to participate in economic activities without the burden of continuous compliance obligations, while still contributing to the tax system. It streamlines the taxation process and ensures inclusivity, making GST more accessible to various business models.
