If you are a business importing goods or services from outside India or managing a business on behalf of a person resident outside India, or if you are a non-resident and reading our article from a place outside India and intend to do business here, then this article is relevant for you.

Who is a ‘Non- Resident Taxable Person?

The Goods and Services Tax Law has defined a ‘non-resident taxable person’ 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.
 
Section 24 of the GST law further specifies the requirement for registration for a non-resident taxable person. It mentions certain businesses and entities which are mandatorily required to register under Goods and Services Tax and are not governed by the minimum threshold limit of Rs. 20 lakh/ 10 lakh. Thus, irrespective of whether the business is involved in a one-time transaction or frequent taxable transactions, every non-resident individual or company will have to obtain a registration under the Goods and Services Tax.

Registration Procedure for a Non-Resident Taxable Person

Every person or business who falls under the definition covered above needs to apply for registration at least five days prior to the commencement of business. Further clarification has been provided in case of a high-sea sale; the law says that every person who makes a supply from the territorial waters of India shall obtain registration in the coastal state or Union territory where the nearest point of the appropriate baseline is located.
 
A non-resident taxable person needs to electronically submit a duly signed application, along with a self-attested copy of his valid passport, for registration, using the form GST REG-09, at least five days prior to the commencement of business on the Common Portal. Application must be duly signed or verified through EVC, a new mode of electronic verification based on aadhar.
 
The non-resident (if it is a company) must submit its tax identification number of its original country (whatever is the equivalent of our PAN in that country).
 
A person applying for registration as a non-resident taxable person will be given a temporary reference number electronically by the Common Portal for making an advance deposit of tax in his electronic cash ledger and an acknowledgment will be issued thereafter.

Advance Payment of Tax by Non-Resident Taxable Person

A non-resident taxable person is required to make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which registration is sought.
 
These rules further specify that in case a non-resident taxable person intends to extend the period of registration indicated in their application of registration, an application using the form GST REG-11 should be furnished electronically through the Common Portal before the end of the validity of registration granted to him.

Example
Let’s understand these rules with the help of an example. Say, the company Marc Inc. based out of USA is manufacturing special class turbojet engines which are supplied to India for assembling. This is a one-time transaction for Marc Inc. and thus they have appointed an Agent Mr. Vinod in India to carry out all compliance related formalities. Mr. Vinod, in turn, is required to obtain registration for Marc Inc. by furnishing his own PAN number and pay advance taxes related to this transaction. Once the transaction is carried out successfully and the supply is made, Marc Inc. will need to file their GST returns and meet all GST liability from the advance tax paid at the time of registration. Any tax paid in excess will be refunded through the electronic mode.

What is the validity period of GST certificate of registration for a non-resident taxable person?

The validity period of GST certificate of registration for non-resident taxable person shall be valid for a period of ninety days from the effective date of registration. However, the proper officer, at the request of the said taxable person, may extend the validity of the aforesaid period of ninety days by a further period not exceeding ninety days.

Is there any Advance tax to be paid by a non-resident Taxable Person at the time of obtaining registration under this Special Category?

While a normal taxable person does not have to make any deposit of money to obtain registration, since it is a special category of taxable person, a casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration under sub-section (1) of section 19, make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought. If registration is to be extended beyond the initial period of ninety days, an advance additional amount of tax equivalent to the estimated tax liability is to be deposited for the period for which the extension beyond ninety days is being sought.