GST Registration for Non-Resident Taxable Persons in India

India's Goods and Services Tax (GST) system aims to create a single, unified tax structure to streamline the collection of taxes on goods and services. While most businesses in India are required to register for GST if they meet specific thresholds, there are unique provisions for Non-Resident Taxable Persons (NRTPs) under the GST framework. These provisions cater to businesses or individuals located outside India but engaged in the supply of goods and services in India.

In this blog post, we will explore what constitutes a Non-Resident Taxable Person (NRTP), their GST registration requirements, and the relevant provisions that businesses need to follow to ensure compliance under GST in India.

Who is a Non-Resident Taxable Person (NRTP)?

A Non-Resident Taxable Person is defined under Section 2(77) of the Central Goods and Services Tax (CGST) Act, 2017, as a person who:

• Is not a resident of India,
• Supplies goods or services in India, either directly or indirectly, or
• Engages in business or commerce in India, whether through an agent, or otherwise.

In other words, any business entity or individual who is not a permanent resident of India, but makes taxable supplies in India, is considered a Non-Resident Taxable Person under GST. These individuals or businesses are still subject to the GST law and are required to follow specific compliance procedures to operate within India.

GST Registration for Non-Resident Taxable Persons

Even though Non-Resident Taxable Persons are not required to follow the regular GST registration process like resident businesses, they are still obligated to register for GST if they intend to make taxable supplies in India. The registration process for NRTPs differs from that of regular taxpayers.

Here are the key points for GST registration for NRTPs:

1. Compulsory Registration

• Non-Resident Taxable Persons must obtain GST registration if they are making taxable supplies in India.
• Unlike resident businesses, NRTPs do not need to meet the turnover threshold for mandatory registration. Therefore, regardless of the volume of business, any non-resident engaging in taxable supply in India must get registered under GST.

2. Procedure for GST Registration

The procedure for GST registration for Non-Resident Taxable Persons is simple and can be completed online through the GST Portal. The steps include:

• Application Form: NRTPs must fill out Form GST REG-09, which is the application form for GST registration specifically designed for Non-Resident Taxable Persons.

• Documents Required: NRTPs are required to submit the following documents along with the registration application:

  • Passport or any other valid identity proof of the non-resident.
  • Address proof of the place of business in India (e.g., lease/rent agreement or proof of business premises).
  • Photographs of the authorized signatory.
  • Email ID and Phone Number for communication purposes.

• GST Registration Number: Once the application is submitted, the GST portal will generate a GSTIN for the non-resident taxpayer, which they can use for compliance and reporting purposes.

3. Temporary Registration

• Validity: The registration granted to NRTPs is typically temporary and is valid only for a specific period during which the non-resident intends to conduct business in India.
• Duration: Non-Resident Taxable Persons are generally given a temporary GST registration for up to 90 days, which can be extended for a further period, provided the person continues to make taxable supplies in India.

4. Advance Payment of Tax

One key feature of GST registration for Non-Resident Taxable Persons is the advance payment of tax:

• Non-Resident Taxable Persons are required to pay advance tax at the time of registration itself. This advance tax is based on the estimated taxable liability during the period of business operations in India.
• The advance tax is deposited into the Electronic Cash Ledger of the non-resident, and the amount paid will be used for the payment of GST on supplies made during the registration period.

This advance payment ensures that the non-resident complies with the GST law even before conducting any business in India.

5. No Input Tax Credit (ITC)

Unlike regular taxpayers who can claim Input Tax Credit (ITC) for the tax paid on goods or services purchased for business purposes, Non-Resident Taxable Persons are not allowed to claim ITC under the GST law.

This means that NRTPs cannot offset the tax paid on their purchases against the output tax payable on their sales. The tax paid on purchases remains a cost for the business.

6. Compliance and Reporting Requirements

Once registered, Non-Resident Taxable Persons are required to comply with the regular GST filing obligations, although with some variations:

• GST Returns: NRTPs are required to file GSTR-5 (for non-residents) monthly. GSTR-5 is the return for Non-Resident Taxable Persons that need to be filed by the 20th of the following month.

• Payment of Tax: NRTPs must make the tax payment on supplies made in India, including output tax liability on taxable supplies.

• Record Maintenance: Non-resident businesses must keep proper records of the goods and services supplied in India, including invoices, receipts, and other documentation, in compliance with GST laws.

Who is Exempted from GST Registration as NRTP?

While all non-resident businesses making taxable supplies in India must register under GST, some businesses may be exempt from registration. These exemptions typically apply to:

1. Exporters: Non-residents involved in the export of goods or services from India are generally exempt from GST registration for their export-related activities.
2. Low-Value Transactions: If the non-resident business engages in low-value supplies that do not reach the threshold prescribed by the government, they may not need to register. However, this exemption is rare and subject to specific rules.

What Happens After the Expiry of GST Registration for Non-Residents?

As the registration granted to Non-Resident Taxable Persons is temporary, once the period of operation (usually 90 days) is over, the GST registration is automatically canceled. However, if the NRTP intends to continue its business in India after the expiry of the registration period, they must apply for an extension before the end of the registration period.

If the NRTP has settled their tax liabilities and filed all returns, the GST registration will be canceled without any penalty.

Conclusion

The Non-Resident Taxable Person (NRTP) provisions under GST ensure that foreign businesses engaging in taxable supplies in India remain compliant with tax regulations. NRTPs must follow a simple but specific registration process and comply with all the relevant provisions, such as advance tax payments and GST return filings, to operate smoothly within India’s tax framework.

While the process may seem complicated, understanding the GST registration requirements for Non-Resident Taxable Persons can help ensure that your business complies with the law, avoids penalties, and operates effectively in the Indian market. If you're a non-resident business planning to do business in India, it’s advisable to consult with a GST consultant or tax professional to navigate the compliance requirements and stay up-to-date with any regulatory changes.