GST stands for Goods and Services Tax, GST law is an indirect tax which has come into force on July 1, 2017, across India. GST has replaced many indirect taxes in one law i.e. GST Law in India is comprehensive, multi-stage, destination-based tax.
Though, GST is a tax levied in India. However, there are various transactions, when it may be applicable on Non-Residents also (including NRIs, OCLs, foreign citizens). Hereunder are certain relevant terms and provisions in relation to Non-Resident:
Non-Resident Taxable Person (NRTP)
Under GST Law ' non-resident taxable person' is defined as any person who occasionally undertakes transactions involving the 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.
Registration Requirement of NRTP
Section 24 of the GST law specifies a mandatory requirement for registration for a non-resident taxable person without any threshold limit of Rs 20 lakh/10 lakh is not available to Non-Resident Taxable person. Hence, any Non-resident, who is falling in the definition of Non-Resident Taxable person, is required to obtain GST Registration irrespective of whether the business is involved in a one-time. transaction or frequent taxable transactions.
Registration Procedure for a Non-Resident Taxable person
(a) Every person, who falls within the definition of Non-Resident Taxable person, has to apply for GST registration at least 5 days prior to the commencement of business.
(b) For GST registration, NRTP shall have to provide its Tax ID or Unique number of its own country.
(c) Application for registration need not be like normal applicants. Application can be submitted in simplified form ie REG-09
(d) NRTP need not to have a PAN of India and it can use its valid passport instead.
(e) Further in the case of a high sea sale as per the GST Law provisions every person who supplies from the territorial waters of India shall have to obtain registration in the coastal state or Union territory nearest to appropriate baseline.
(f) Egg if any high -sea sale occurs near the shore of Haldia, the GST registration shall be taken in the state of West Bengal.
(g) In relation to NRTP GST registration initially a temporary reference number gets generated electronically by the common portal. The purpose of the temporary number is to advance deposit of tax in his electronic cash ledger and an acknowledgment will be issued thereafter.
GST Advance Tax payment by Non-Resident Taxable Person
(a) GST Provision provide that non-resident taxable person is required to make and advance deposit of GST. This advance payment of tax shall be of an amount equivalent to the estimated tax liability of such person for the period for which registration is being sought.
(b) At the end of GST registration period on submission of final returns, any tax, which is excess paid, shall be refunded to the NRTP.
(c) GST registration period, which is initially applied by the NRTP, can be extended by the non-resident taxable person. For the same, an application using the form GST REG -11 should be furnished electronically on GST Common portal.
Above information can be helpful on doubts of NRIs, Expatriates and other Non-Residents in relation to GST Provisions in India such as:
(a) What are the GST provisions in relation to NRIs, OCLs, Foreign companies, Foreign Citizen?
(b) Whether GST is applicable on Non-Residents also such as NRIs, OCLs, Foreign Companies?
(c) I am working with world organization based outside India. Ido services to that organization on consultant basis. Whether GST is applicable on same and what are the provisions?
OTHER TRANSACTIONS
Other than NRTP, GST provisions are also applicable on various other transactions incurred by Non-Residents, such as:
(a) Renting of Immovable Property in India eg if an NRI is holding an immovable property in India and the same is being used for commercial/ business purposes then GST provisions shall be applicable on that transaction.
(b) Consulting services provided by Non-residents to Indian residents. On such transactions under the import rules, GST may be applicable as per the transactions.
(c) Also, on fact-to-fact basis, GST provisions may be applicable on various other transactions, where NRIs, OCLs, PIOs, Expatriates, Foreign Companies, Other Non-residents are involved.
GST Registration for Foreigners
Following the implementation of the GST framework, the Government of India mandated that all foreign non-resident taxpayers obtain GST registration when supplying goods or services to residents within the country. If you are planning to supply goods or services to India, securing a GST registration is not just a compliance measure but a key step in establishing your business presence is one of the world's most vibrant markets.
Recognizing the Importance of this registration. India filings offer specialized services to facilitate the GST registration process for foreigners. With expert guidance and streamlined procedures, we simplify the complexities of tax compliance, making it easier for international businesses to thrive in India.
Contact our expert team today to easily get your GST registration. we'll guide you smoothly through each step for a worry- free process.
Non- Resident Taxable Person
A "Non-Resident Taxable Person" under the Goods and Services Tax (GST) framework in India refers to any individual or business entity that conducts transactions involving the supply of goods or services, or both, within India but does not have a fixed place of business or residence in the country. This includes entities operating in India occasionally, in any capacity such as principal, agent, or any other manner, but with their base of operations or residence outside of India. The GST law mandates that this non-resident volume or frequency of their transactions in India.
GST Registration for Foreigners
GST Registration in India is a compulsory process for foreign individuals or entities that supply goods or services in India without a permanent establishment or residence in the country. This registration category is specifically designed for those who may not regularly operate in India but engage in economic activities or transactions under the GST regime.
The process involves obtaining a unique GSTIN (Goods and services Tax identification Number), Which allows these non-resident businesses to comply with GST laws, including filling GST Tax returns and paying applicable taxes on their transactions within India.
GST Registration Requirements for Non-resident Taxable Persons
For nonresident taxable persons engaging in taxable transactions within India, the GST registration requirements are as follows:
(a) Documentation for Business entities: Business entries based outside India must include their tax identification number (TIN) or a unique identification number recognized by their home country's government in their GST registration application. Alternatively, if available, they can provide their Indian Permanent Account Number (PAN)
(b) Mandatory Registration: Regardless of transaction volume, registration under GST is compulsory for non-resident taxable parsons. There's no minimum threshold for registration.
(c) Ineligibility for Composition Levy: Non-resident taxable persons are not eligible to opt for the composition levy scheme under GSt, which allows for a simplified tax payment process and compliance for small taxpayers.
(d) Advance Registration Requirement: Registration for GST must be completed at least five days before beginning business operations in India.
(e) Passport Required for Registration: A valid passport is required for GST registration and serves as the primary documentary evidence.
Validity of NRI GST Registration
The NRI GST registration is valid for the period specified in the App application or ninety days from the effective date of registration, whichever is earlier.
Procedure for GST Registration for NRIs
The GST registration has two main phases: Provisional Registration and final Registration. each phase entails specific steps to ensure compliance with the GST regulations in India
Provisional GST registration for NRI
Provisional registration under GST for non-resident taxable persons is a temporary GST registration granted before obtaining the final GST registration. This provisional status allows non-resident individuals or business entities to start their business activities in India in compliance with the GST laws without having to wait for the completion of the full registration process.
Final GST registration
Final registration under GST for non-resident taxable persons solidifies their tax obligations and compliance status within India, transitioning from a provisional to a permanent GST registration. This process ensures that non-residents engaging in taxable transactions within India are fully integrated into the GST system.
Application for Final Registration: To convert the provisional registration into a final one, the NRI must submit an application electronically using FORM GST REG-26. This step is similar to the procedure followed by resident taxpayers.
Information Furnishing: Required information must be furnished within three months of applying for final registration. This is critical for validating the provisional registration.
Discrepancies and Show-Cause Notice: In cases where the information provided is found to be incorrect or incomplete, a show-cause notice using FORM GST REG-27 may be issued. The applicant will then be given a reasonable opportunity to be neared.
Conversely, if the applicant's response satisfactorily addresses the concerns, the show-cause notice can be nullified with an order issued via FORM GST REG-20, leading to final registration.
Authorized Signatory: All applications made by NRIs must be signed by an authorized signatory who is a resident of India and possesses a valid PAN. This individual acts on behalf of the NRI for GST compliance purposes.
India Filings experts can guide you through obtaining GST registration for NRIs.
Suppose the NRI wishes to extend the registration beyond the initially approved period (up to ninety days or the period specified in the application). In that case, they must file an extension application using Form GST REG-11 before the current registration expires.
(a) This extension also requires an additional advance tax deposit for the extended period.
(b) This detailed procedure ensures that NRIs are well-informed and prepared to meet all regulatory requirements for conducting taxable transactions in India under the GST regime.
Input Tax Credit
A non-resident taxable person is not eligible to claim input tax credit for any goods or services, except for those directly imported foods. However, the taxes paid by a non-resident taxable person can be utilized as a credit by the respective recipients.
GST Returns Filings for Foreigners
A non-resident taxable person must electronically submit a GST return using FORM GSTR-5. This return, which includes outward and inward supply details, must be filed. Any due tax, interest, penalty, fees, or other charges under the Act of regulations must be paid withing thirteen days following the end of a calendar month or seven days after the registration validity period expires, whichever comes first.
Refund of Advance Tax
The advance tax paid by a non-resident taxable person will be eligible for a refund only after submitting all necessary returns for the duration their registration certificate was valid. The application for a refund can be made in section 13 of FORM GSTR -5.
