GST applicability on Non-Resident

In the current scenario, no borders or boundaries limit a person to do business with India and other countries. In the digital era, making a sale of goods and rendering services in any part of the world is easy and a person can sell his goods and services without any visit to that country where the supply of goods or services takes place.

There are certain conditions that a person (Non-resident) has to fulfil before any supply of goods or services in any particular country. In India, a non-resident has to apply for various registrations and licenses before the commencement of business. Of which Goods and service tax (GST) registration is one of the primary requirements. Under the GST law non-residents are not allowed to commence business without GST registration, hence GST registration becomes mandatory for non-resident. Provisions that apply to a non-resident under the GST Act are set out below-

Who is Non-resident taxable person?

“Non-resident taxable person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

When to apply for GST registration?

Every non-resident should apply for GST registration in India at least 5 days prior to the commencement of business at the GST portal either directly or through a GST consultant. Registration can be applied using a copy valid passport and he/she needs not to have a permanent account number (PAN) in India.

Is it mandatory to have PAN for the GST registration application?

No, Non-resident can make GST registration application without PAN. However, a business entity incorporated or established outside India has to submit 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.

Validity period of registration

In the case of a regular taxable person GST registration has no validity period. Registration is valid until is cancelled by supplier or GST department. GST registration issued to the non-resident is valid for a period specified in the registration certificate or 90 days whichever is earlier. Non-resident can supply goods or services only after the issuance of the certificate of GST registration.

Advance deposit of tax by non-resident

Before making an application for registration a non-resident shall deposit estimated GST liability that would arise for the period for which registration is sought. It is to be noted that the tax liability of GST is to be calculated after subtracting the input tax credit from output tax liability.

Which GST Form should be filed for GST registration application?

GST law has specified numerous Forms for a different set of activities such as GST for sale, job work, registration, GST cancellation. Etc. Each Form has its own purpose. Similarly for the non-resident form GST REG-09 has been prescribed for the registration application. Application has to be submitted at least 5 days prior to the commencement of business. Non-resident can extend the period of registration by making an application in form GST REG-11 on payment of fee prescribed under the GST law.

Can non-resident apply for tax refund?

Yes, Non-resident can apply for GST refund if the advance tax payment at the time of taking GST registration is more than the tax liability arises during the period of registration. A person should remember that refund application should not be made during the period of registration and before making the application all the GST returns are up to date and filed.

For Example: Ram a non-resident has GST registration in Gurgaon and his period of GST registration is over and he has a balance in the electronic cash ledger. What should he do to file GST refund application?

Firstly ram should not fill refund application during the validity period of registration and secondly, he should file his all GST returns. 

About the author: Nitin Bhatia is a qualified chartered accountant practising in Delhi/NCR. He is the best CA in Gurgaon. During his professional journey, he has gained advanced experience in International Taxation, Transfer Pricing, Expatriate Taxation, Corporate Taxation, Domestic Taxation and litigation matters. International Taxation and Domestic taxation are his study topic, and he is deeply involved and updated with the recent judicial pronouncements. It helps him to give efficient and legitimate tax planning to his clients.

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