Under the Goods and Services Tax (GST) regime, a Casual Taxable Person (CTP) is an individual or business entity who occasionally supplies goods or services in a state or union territory where they do not have a fixed place of business. CTPs are not required to obtain a permanent GST registration but need to apply for a temporary registration before beginning any business activity. The temporary registration is valid for a period of 90 days and can be extended by an additional 90 days. The CTPs are required to pay tax on their supplies and are entitled to claim input tax credit on the tax paid on their purchases. Understanding the concept of CTPs is crucial for businesses that occasionally supply goods or services in other states or union territories to comply with GST regulations.
A casual taxable person buys, sells, supplies and distributes taxable services in a territory where he does not have a place of business. It is applicable whether the person acts as a principal, agent or in any capacity to further or continue the business. Registration is mandatory (there is no minimum threshold) if an individual wishes to partake in the industry. The income tax department should be informed at least five days before the commencement of the business in the said territory. For example, Mr Arun, who sells colors during Holi, has a seasonal business and does not have a fixed place of business so he can be referred to as a casual taxable person.
A regular taxable person refers to an individual with a fixed business place in a taxable territory, such as an apparel store where products and companies would be open throughout the year. In contrast, for a casual taxable person, the place of business is occasional or seasonal, where neither the industry nor the product is perennially available.
A business or an individual must register under GST if the turnover in one financial year is more than twenty lakh rupees; however, certain elements are exempt from this rule. One such entity is the casual taxable person. Instead, a Casual Taxable Person is expected to obtain a temporary registration whose validity is ninety days in the preferred place of business via an advanced GST deposit based on estimated tax liability.
For example- Mr Aryan estimates his tax liability will amount to 3,00,000. To obtain a temporary registration, his deposit would be 54000 (18% of 3,00,000). The process does not differ much from the regular registration for GST. One has to submit GST REG-01, which other taxable persons use.
For an extension on the registration, one has to apply by filling the FORM GST REG-11 before the validity of the said resignation expires. The extension is only granted if additional tax liability for the extended period is deposited. The extension is not more than ninety days.
Returns to be furnished by a Casual Taxable Person
Unlike normal taxpayers, a Casual Taxable Person is not liable to file for an annual return. The following are the returns that need to be furnished by a Casual Taxable Person:
A casual taxpayer can refund any surplus cash after paying the tax bill. A casual taxpayer can refund any surplus cash after paying the tax bill. The amount is repaid only when necessary returns have been furnished for the valid registration period. It is possible to claim it by submitting the FORM GST RFD-01 under the provision for a refund of the excess balance in the electronic cash ledger.
To conclude, a casual taxable person is someone who conducts business in a territory where they do not have a fixed place of business. They must register for GST and obtain a temporary registration valid for 90 days by depositing an estimated tax liability amount. Unlike regular taxable persons, they do not have to file an annual return and are only required to file monthly returns. They can also claim a refund for any surplus cash after paying their tax bill. Overall, understanding the concept of a casual taxable person is essential for those conducting seasonal or occasional business in different territories.