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Casual Taxable Person in Goods and Service Tax

For some persons, it is hard to maintain a fixed place of business due to seasonable nature of their industry. Also, if they have to register as a regular taxable person then they have to file monthly or quarterly return on a regular basis throughout the year. This lead to the logic for creating special provisions for a casual taxable person in the GST Act.

Meaning

As per Section 2(20) of CGST Act, casual taxable person means

  • a person who occasionally undertakes transactions involving the supply of goods or services or both in the course or furtherance of a business;
  • in a State or a Union territory where he has no fixed place of business;
  • whether as principal, agent or in any other capacity,

Registration

As per Section 24 of CGST Act, compulsory registration is applicable on the casual taxable person making a taxable supply in India irrespective of the turnover. In other words, no threshold limit is applicable to the casual taxable person. Also, a casual taxable person is not allowed to exercise the option to pay tax under the composition scheme.

Other Points

  • Section 25 of CGST Act required every casual taxable person to apply for the temporary registration in every State or Union Territory, at least 5 days prior to commencing his business in India.
  • No special form is required for registering as a casual taxable person. The normal FORM GST REG-01 which is used by regular taxable persons can be used for obtaining registration by a casual taxable person also.
  • As per Section 27 of the CGST Act, certificate of registration issued to a casual taxable person shall be valid for the period specified in the application for the registration or ninety days from the effective date of registration, whichever is earlier. In case the casual taxable person intends to extend the period of registration indicated in his application of registration, an application in FORM GST REG-11 shall be submitted electronically, before the end of the validity of registration granted to him. The validity period of ninety days can be extended by a further period not exceeding ninety days.
  • A casual taxable person can make taxable supplies only after issuance of a certificate of registration.
  • The applicant will be given a temporary reference number by the Common Portal for making the mandatory advance deposit of tax for an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought. The registration certificate shall be issued electronically only after the said deposit appears in his electronic cash ledger. The amount deposited shall be credited to the electronic cash ledger of casual taxable person. On depositing the amount, an acknowledgment shall be issued electronically to the applicant in FORM GST REG-02. If the applicant sought to get the extension of registration then such extension will be allowed only on payment of the amount of an additional amount of tax equivalent to the estimated tax liability for the period for which the extension is sought has to be deposited.

Returns

The casual taxable person is required to furnish the following returns electronically: –

  1. a) FORM GSTR-1 – Details of all outward supplies of goods or services which is required to be filed on or before the 11th day of the following month in case the turnover in the preceding financial year or current financial year exceeds Rs. 1.5 crores otherwise on or before the end of the following month from the quarter’s end.
  2. b) FORM GSTR-2 – Details of all inward supplies which is required to be filed after 10th but on or before 15th of the following month.
  3. c) FORM GSTR-3 – Which is required to be filed after 15th but on or before 20th of the following month.
  4. d) FORM GSTR-3B – Which is required to be filed on or before 20th of the following month.

Note: – Presently only FORM GSTR-1 and FORM GSTR-3B is required to be filed. A casual tax person shall not be required to file the annual return as per Section 44 of CGST Act.

Refunds

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. The refund relating to balance in the electronic cash ledger has to be made in serial no. 14 of the last FORM GSTR-3 return required to be furnished by him (instead of FORM GST RFD01).

About Prateek Agarwal

Prateek Agarwal is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He writes mainly about GST and Finance.

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