In the Goods and Services Tax (GST) era, the ‘Casual Taxable Person’ concept is gaining more significance. A person must obtain registration in the state where the taxable supply is made if his aggregate turnover exceeds the basic threshold limit in a financial year.
However, in some cases, a person who undertakes transactions occasionally and does not have a fixed place of business in a State must also obtain registration, irrespective of the threshold limits. Such taxable persons are called ‘Casual Taxable Persons’ under GST.
Let’s explore eligibility criteria and time limits for casual taxpayer registration.
Prerequisites and Eligibility Factors for Casual Taxpayer Registration
To determine whether a person requires registration as a casual taxable person in a State, the foremost factor is to examine whether the transactions qualify as ‘supply’ under GST.
If the activities do not qualify as ‘supply’, there is no question of registration under GST. For instance, if goods are taken from one State to another exclusively for display purposes in an exhibition and not for sale from the exhibition premises, they will not be treated as supply. Hence, casual taxable person registration will not be required.
Some key factors determining eligibility for casual taxable person registration are:
Occasional Nature of Transactions
The transactions from a State have to be occasional and non-recurring to term the person as a casual taxable person. Frequent transactions may require taking normal registration.
No Fixed Place of Business
The person should not have a fixed place of business, branch or agency in that State from where the transactions are to be undertaken.
Involved in Supply
The transactions undertaken should qualify as ‘supply’ under Section 7 read with Schedule II of the CGST Act, 2017. It may include:
- Supply of goods or services or both to recipients located in that State.
- Occasional inter-state outward supply of goods from that State.
- Transactions specified in Schedule I without consideration also involving that State.
Undertaken in the course of Business
The person will undertake the transactions in the course or furtherance of his business. Any occasional supply undertaken for personal or non-business reasons will not qualify.
Time Limits and Deadlines for Casual Taxpayer Registration
Time Limit for Registration
A person has to apply for registration as a casual taxable at least 5 days before the commencement of business in a State as per Section 25 of the CGST Act, 2017.
For instance, if a trade fair is held from 01-12-2023 to 15-12-2023, registration must be obtained before 26-11-2023.
Period of Validity
The registration certificate released to a casual taxable person is valid for 90 days or the period specified in the application, whichever is earlier. [Sec 27 of CGST Act, 2017]
For example, the validity of the registration certificate will be:
- 90 days if the period applied for is more than 90 days.
- For the period used, if it is less than 90 days.
Extension of Validity
The proper officer may extend 90 days by a further period not exceeding 90 days on sufficient cause being shown. [Sec 27 of CGST Act, 2017].
Thus, the time limits prescribed pertain to applying before commencing business, as well as the total validity period of casual taxable person registration being a maximum of 180 days.
Documents Required for Obtaining Casual Taxpayer Registration
A person seeking casual taxable registration must file FORM GST REG-1 electronically at the GST Portal. Certain documents have to be submitted as part of the registration application.
Mandatory Documents
Some key documents which are mandatory for casual taxpayer registration include:
- PAN Card: Self-attested copy of PAN card issued by Income Tax Department
- Aadhaar Card: Self-attested copy of Aadhaar Card
- Bank Account Related: Copy of bank statement/ cancelled cheque
- Business Related: Any registration certifications under any law like GST, VAT, Service Tax, or Licenses: Legal documents regarding the constitution of the business
- Authorisation Letter: A letter authorising a person to sign documents on behalf of the applicant
Activity Specific Documents
In addition to the above general documents, the applicant may also be required to submit some specific records related to the activity being undertaken:
- For exhibition supply: Contract or consent letter evidencing permission to participate; Payment receipt for stall booking, etc.
- For short-term project supply: Copy of work order or contract.
Thus, along with the standard documents, some additional relevant documents may be warranted for the concerned activity.
Online Registration Process for Casual Taxpayers
Steps for the online application process on the GST portal:
- Access the www.gst.gov.in URL and navigate to the Login option.
- For first-time users, click ‘Register Now’ under the Taxpayers option and select ‘Get New Registration’.
- Enter your email and mobile number for the OTP authentication process.
- Select the ‘Temporary’ option to apply as a casual taxpayer under the GST registration type.
- Fill out Part A of FORM GST REG-1, including business details. Click ‘Temporary’ to ‘Yes’.
- The system will generate a Temporary ID (TRN). Make a payment of the estimated tax.
- Use TRN to make an advance deposit of estimated net tax liability via payment modes on the GST portal. The amount gets credited to the electronic cash ledger.
- Use TRN to fill Part B of FORM GST REG-01 with supporting documents like exhibition booth payment proof.
- Submit signed/verified application. The proper officer examines the application and approves registration within three days if found appropriate.
- If the application is deficient, notice is issued in FORM GST REG-03 seeking clarification within 3 days. Applicant must furnish it in GST REG-04 within 7 days.
- If the officer is satisfied with clarification/docs, registration is approved in 7 days. If not satisfied, the application is rejected via GST REG-05.
- Upon approval of the application, the registration certificate FORM GST REG-06 will be available on the portal.
Also Read: How To Do GST Registration Online
Post-registration Formalities and Obligations for Casual Taxpayers
After obtaining the registration certificate as a casual taxpayer on the GST portal, certain formalities must be fulfilled by such occasional suppliers to remain compliant and avoid penal actions.
1. Issuing compliant tax invoices
Invoices, bills of supply, receipts and other prescribed documents must comply with requirements and contain requisite particulars about supply as mandated under GST.
2. No amendments allowed after the expiry of registration
No changes or modifications in the details furnished at the time of the registration are permitted after the expiry of the registration period. Only simplications can be made during validity.
3. Filing of applicable GST returns
Mandatory GST returns – Form GSTR-1 (outward supplies) and Form GSTR-3B (summary return) must be filed as per due dates notified for various taxpayers based on turnover threshold.
4. Claim eligible input tax credits
All input GST paid on goods or services businesses use for effecting taxable outward supplies can be claimed as input tax credits (subject to conditions and restrictions) for adjustment and reducing net tax liability.
5. Maintaining accurate, relevant records
Proper accounts and records about supplies, taxes, input credits, advances etc. must be maintained accurately at the declared principal place of business.
6. No requirement to file an Annual Return
Casual taxpayers are exempted from filing the Annual Return (FORM GSTR-9), otherwise mandatory for normal GST-registered entities. Quarterly returns suffice compliance requirements.
7. Seek an extension of registration if required
Approaching the end of the initial 90 days of registration, casual taxpayers can evaluate if business cycle completion requires additional time and accordingly file an application for a time extension within validity if the situation warrants so.
8. Pay any additional tax liability by due date
Suppose tax calculations were underestimated initially and actual GST dues payable exceed advance tax deposited already. In that case, the difference tax must be paid via cash ledger by the due date for filing the GST return.
9. File Final Return at the end of validity
On completion of undertakings before the end of the 180-day registration period, the final return (FORM GSTR-10) shall have to be submitted furnishing relevant details within 3 months from the expiry cancellation date. Any unpaid taxes must also be paid with mandatory interest if applicable.
By stringently adhering to such compliances and post-registration obligations in time, casual taxpayers can steer clear of fines or punitive actions under GST while fulfilling tax duties correctly.
Ensuring compliance and avoiding penalties for casual taxpayers
To achieve successful compliance outcomes by avoiding fines or punitive actions under GST, the following measures should be adopted by registered casual taxpayers:
1. Compute taxes correctly
All sales, purchases, and taxes – output GST, input GST, and net GST should be diligently computed without any errors or inaccuracies creeping in, which could attract scrutiny.
2. Timely uploading of invoices by suppliers
Obtain undertakings from vendors that they will upload supply invoices issued well before timelines to ensure a seamless flow of input tax credits and enable reconciliation. Late uploads lead to claims getting reversed and possible scrutiny.
3. Reconcile books of accounts before filing returns
Accounts and returns must be thoroughly reconciled, and differences if any should be identified and resolved before proceeding to file GST returns within due timelines. Variances or mismatches could cause additional avoidable queries.
4. Make tax payments much ahead of deadlines
Avoiding delays leads to discipline, helping avoid any interest that would accrue by further delaying payments. Also, approaching cut-off dates increases the tendency of errors due to haste.
5. Be responsive to notices or scrutiny assessment proceedings
If the tax officer seeks any clarification or additional document, ensure a comprehensive, clear response is provided within the shortest possible time. Non-reply could be misconstrued.
Validity of Registration
As discussed earlier, the certificate of registration granted to a casual taxable person is valid for a maximum tenure of 180 days. [Sec 27 of CGST Act, 2017]
If the purpose and period for which registration is taken expire before 180 days, the certificate will expire automatically after such period, and the status will be converted to ‘Inactive.’
For instance, if registration was taken for a trade exhibition held from 01-12-2023 to 10-12-2023. The registration will expire on 10-12-2023 after the exhibition concludes.
There is no provision for an automatic extension of the registration validity period as a casual taxable person. One has to apply for an extension for a maximum of up to 90 days and also deposit an additional advance tax.
Extension of Validity of Registration
As per Section 27 of the CGST Act, 2017, the proper officer has the power to extend 90 days validity by a further period not exceeding 90 days on sufficient cause being shown at least 5 days before the expiry of the initial period of 90 days validity.
Procedure to be followed in this regard:
- A casual taxable person has to apply in FORM GST REG–11 for an extension before the expiry of the initial period of 90 days.
- The taxable person must also make an additional payment of estimated tax liability for the period for which the extension is sought following the same process as was done when obtaining registration.
- The additional amount has to be deposited in the electronic cash ledger to enable the extension.
- The extension will be acknowledged on the GST portal on successful payment.
If the business continues after 180 days, the entity must register normally in the state without any threshold exemption.
Conclusion
The casual taxpayer registration category provides flexibility for individuals and businesses whose income does not meet the standard business or company registration threshold. However, there are certain eligibility criteria and time limits that must be followed to maintain casual taxpayer status.
Staying within the income limits and renewing registrations before the deadlines helps casual taxpayers avoid penalties or needing to change registration types. For many Australians, being classified as a casual taxpayer simplifies tax compliance while allowing supplementary income generation.
Following the ATO guidelines ensures casual taxpayers can benefit from this registration category appropriately.
Frequently Asked Questions (FAQ’s)
Q1. Who is a casual taxable person under GST?
Ans. A casual taxable person under GST refers to a person who occasionally undertakes transactions in a State/UT where he has no fixed place of business. It may include principals, agents, or any other person undertaking such occasional transactions in the course or furtherance of business.
Q2. Is there any threshold exemption for taking registration as a casual taxable person?
Ans. No threshold exemption from registration is provided explicitly for casual taxable persons. Any person who satisfies the conditions and definition must obtain registration irrespective of aggregate turnover.
Q3. What is the validity period of casual taxable person registration?
Ans. The casual taxable person registration issued is valid for 90 days from the effective date of registration. On sufficient cause being shown, it can be extended further by the proper officer generally for another 90 days, i.e., 180 days.
Q4. Can a casual taxable person opt for payment under a composition scheme?
Ans. No, a registered casual taxable person does not have the option to pay taxes. They have to discharge tax liability at normal applicable rates only.
Q5. Is a casual taxable person eligible for a full input tax credit?
Ans. Yes, a casual taxpayer can claim the input tax credit on inward taxable supplies received subject to fulfilment of conditions like receipt of goods/services, tax invoice availability, payment of tax to the government, etc., as prescribed for normal taxpayers.
Q6. What statements/returns must be filed by a casual taxpayer under GST?
Ans. A casual taxpayer has to file a monthly outward supply statement in FORM GSTR-1 and a monthly/quarterly return in FORM GSTR-3B. In case of voluntary cancellation or expiry of registration, the Final return in FORM GSTR-10 has to be filed.
Q7. Can the registration taken by a casual taxable person be cancelled?
Ans. Yes, a casual taxpayer can get the registration cancelled by applying in FORM GST REG-16. The registration is deemed to be cancelled automatically on the validity or extended period’s expiry.
Q8. What are the consequences of non-compliance under GST for a casual taxpayer?
Ans. Non-compliance, such as late registration, tax default, and late filing of returns/statements, may attract interest, penalties and other consequences as prescribed for normal taxpayers. Maintaining compliance is vital.
Q9. Is an e-way bill required to be generated by a casual taxpayer for sending goods from one state to another?
Yes, as a registered person under GST, the casual taxpayer has to mandatorily generate an e-way bill for the movement of goods exceeding a specified value. The e-way bill has to be generated electronically from the GST portal or notified portal before starting the movement of goods.
Q10. Can the tax liability be discharged using input tax credit/ cash ledger under GST for casual taxpayers?
Yes, the registered casual taxpayer, after claiming eligible input tax credit, can utilise the same for discharging output tax liability in the monthly returns, i.e. GSTR-3B. If any excess payable amount remains after that, the same has to be paid by debiting the electronic cash ledger.
