Complete details about the Casual Taxable Person under GST

The casual taxable person is defined as a person who undertakes the transaction occasionally involving the supply of goods and services, like shops in the fairs and seasonal businesses are required to take GST registration. A casual taxable person should take GST registration prior to the commencement of business. The registration certificate is granted on the condition that he has deposited advance GST in the electronic cash ledger.

Validation of registration certificate:

The registration Certificate allotted to the causal taxable person is valid till the period mentioned in the registration certificate or 90 days whichever is earlier. The validity period may be extended by the proper office at the request of the causal taxable person.

Advance tax liability:

A casual taxable person is registered as temporary as compared to a regular taxable person hence additional safeguard has been taken by putting additional obligation by depositing estimated advance tax liability. The causal taxable person must deposit advance GST on the estimated sales for the period for which registration is sought

If any extension request is made then a casual taxable person should deposit estimated tax liability for the period for which registration is sought. Such deposited liability shall be credited to the electronic credit ledger and shall be utilised in the manner as prescribed in the GST rule.

The causal taxable person had a lack of clarity on the deposit of tax liability because the tax was required to be deposited in output tax liability without adjustment of the input tax credit. Circular No. 71/45/2018-GST dated October 26, 2018, has been issued to clarify that tax to be deposited by the casual taxable person will be “estimated net tax liability” after considering ITC available to the such taxable person.

Procedure for registration:

The normal application form GST REG 01 uses by the regular taxable person shall also be used by the casual taxable person for making the GST registration application.

A person shall be given a temporary reference number by which such person should deposit his estimated tax liability and after that registration certificate is granted.

Once tax estimated tax liability is deposited by the person, he can further proceed to make the application complete because GST portal does not allow you to complete and file the application for registration unless advance tax liability is paid. On making the application proper officer shall verify the documents and allot the GST registration certificate within 30 days. If any deficiency is found in the application the proper officer may ask you to resubmit the required documents with clarifications. Further, the proper officer has the requisite authority to physically verify the place of business from which registration is sought.

Time limit for application:

For a regular taxable person, 30 days has been prescribed to make an application from the date on which liability to register is arisen, however, causal taxable shall take GST registration in Gurgaon at least 5 days prior to the commencement of business.

GST returns by the Casual Taxable Person:

The causal taxable person currently is required to file 2 GST returns forms i.e. GSTR 1 and GST 3B. However, they are not required to submit annual return forms as applicable to other registered taxable persons.

GST Refund by Causal taxable person:

The casual taxable person is eligible for the refund of any balance of the advance tax deposited by him after adjusting his tax liability. The balance advance tax deposit can be refunded only after all the returns have been furnished, in respect of the entire period for which the certificate of registration was granted to him had remained in force.

Frequently Asked Questions:

Question 1: Is a casual taxable person required to take GST mandatorily?

Answer: Yes, a Casual taxable person is required to take GST registration in Gurgaon mandatorily.

Question 2: Whether GST registration exemption limit applies to casual taxable person?

Answer: No, GST exemption threshold shall not be applicable to the casual taxable person

Question 3: What exemptions are granted to causal taxable person under the GST law?

Answer: The Government has issued notifications under section 23(2) to provide exemption from registration to the following person-

Casual taxable persons making taxable supplies of handicraft goods if the aggregate turnover does not exceed ` 20 lakhs (Notification No. 56/2018-Central Tax, dated 23.10.2018 which superseded notification No. 32/ 2017–Central Tax, dated 15.9.2017)

Question 4: What is the time limit for taking a registration under GST Law?

Answer: Every person should take registration, within 30 days from the date on which he becomes liable for registration, in such manner and subject to such conditions as may be prescribed. A casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.

Question 5: What is the validity period of the registration certificate issued to a casual taxable person

Answer: The certificate of registration issued to a “casual taxable person” or a “non -resident taxable person” shall be valid for a period of 90 days from the effective date of registration. A discretionary power has been made available with the proper officer, who may at the request of the said taxable person, extend the validity of the aforesaid period of 90 days by a further period not exceeding 90 days.