GST Provisions In India

GST stands for Goods and Services Tax. GST law is an indirect tax which has come into force on July 1, 2017 across the India. GST has replaced many indirect taxes in one law ie GST Law. 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, OCIs, foreign citizens). Hereunder are certain relevant terms and provisions in relation to Non-Residents:

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.

Registeraton 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. Therefore, the minimum 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

  • 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.
  • For GST registration, NRTP shall have to provide its Tax ID or Unique number of its own country.
  • NRTP need not to have a PAN of India and it can use its valid passport instead.
  • Application for registration need not be like normal applicants. Application can be submitted in simplified form ie REG-09.
  • 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.
  • Eg if any high-sea sale occurs near the shore of Haldia, the GST registration shall be taken in the state of West Bengal.
  • In relation to NRTP GST registration initially a temporary reference number gets generated electronically by the Common Portal. The purpose of this 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

  • GST Provisions provide that non-resident taxable person is required to make an 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.
  • At the end of GST registration period on submission of final returns, any tax, which is excess paid, shall be refunded to the NRTP.
  • 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.

Other Transactions

Other than NRTP, GST provisions are also applicable on various other transactions incurred by Non-Residents, such as:
  • 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.
  • Consulting services provided by Non-residents to Indian residents. On such transactons under the import rules, GST may be applicable as per the transactions.
  • Also, on fact to fact basis, GST provisions may be applicable on various other transactions, where NRIs, OCIs, PIOs, Expatriates, Foreign Companies, Other Non-resdients are involved.

Above information can be helpful on doubts of NRIs, Expatriates and Other Non-Residents in relation to GST Provisions in India such as:

  • What are the GST provisions in relation to NRIs, OCIs, Foreign Companies, Foreign Citizens?
  • Whether GST is applicable on Non-Residents also such as NRIs, OCIs, Foreign Companies?
  • What is the GST law and procedures in relation to Non-Residents and Foreign Companies?
  • I am an NRI/Expatriate/Foreign Company. I wish to carry out some business transactions in India. Whether GST is applicable? What are the provisions.
  • I am NRI. I have an immovable property in India, which is given on rent. Whether GST provisions are applicable on such transaction?
  • I am working with World Organization based outside India. I do services to that organization on consultant basis. Whether GST is applicable on same and what are the provisions?