Introduction:
The landscape of taxation has evolved with the advent of the Goods and Services Tax (GST) regime in India. Among the various categories of taxpayers, the concept of a “casual taxable person” plays a significant role. In this blog post, we will delve into the definition of casual taxable persons, their obligations, and the registration process outlined under the Central Goods and Services Tax (CGST) Act.
Definition of Casual Taxable Person:
According to Section 2(20) of the CGST Act, a casual taxable person is defined as an individual who occasionally engages in transactions involving the supply of goods or services, or both, in the course or furtherance of business. This includes acting as a principal, agent, or in any other capacity, within a State or Union Territory where they lack a fixed place of business.
In simpler terms, a casual taxable person is someone who, without a fixed place of business in a specific State or Union Territory, sporadically supplies goods or services in the course of their business activities.
Examples of Casual Taxable Persons:
To illustrate this concept, consider the following scenarios:
- An event management company based in Bangalore organizes an event in Goa. Since the company doesn’t have a fixed place of business in Goa but engages in the occasional supply of event management services, it must obtain ‘casual taxable person’ registration in Goa.
- An outdoor catering service provider from Pune offers catering services at the event in Goa. Similarly, this service provider must register as a casual taxable person in Goa due to the intermittent nature of their business activities in the state.
- A medical association holds a conference in Delhi for two days, bringing together delegates from various locations. To comply with the law, the association, which lacks a fixed place of business in Delhi, must register as a casual taxable person for the duration of the event.
Registration Process:
Casual taxable persons are required to adhere to a specific registration process:
- Timing of Registration: The registration must be secured at least 5 days before the commencement of business, and the threshold limit for registration does not apply.
- Advance Deposit: Applicants must make an advance deposit of the estimated tax liability along with the registration application. It’s crucial to note that the deposit should be based on the ‘net’ tax liability after deducting the estimated input tax credit. The common portal issues a temporary reference number for the advance tax deposit.
- Validity Period: The registration obtained is valid for 90 days. If needed, an extension for a further 90 days can be requested by submitting an application in FORM GST REG -11 before the original validity period expires. The extension requires payment of additional estimated tax liability.
Exceptions:
While the rule applies to most cases, there are exceptions outlined in Notification No.56/2018-Central Tax, dated 23-10-2018. Notably, persons making inter-State taxable supplies of handicraft goods or certain products predominantly crafted by hand fall under this exception. The aggregate turnover, computed on an all-India basis, should not exceed the prescribed threshold limit in the relevant State or Union Territory. Additionally, the individual must have obtained a PAN and comply with e-way bill generation rules as per Rule 138 of the Central Goods and Services Tax Rules, 2017.
Conclusion:
Understanding the nuances of casual taxable persons and their registration process is vital for businesses engaging in occasional transactions across different states or Union Territories. Complying with the specified regulations ensures smooth operations, avoiding legal complications. As the GST framework continues to shape India’s tax landscape, staying informed about such provisions becomes indispensable for businesses of all scales and types.
