Investments by non-resident Indians (NRIs) in India have accelerated the growth of the Indian economy. Various steps have been taken by the Indian government to help facilitate trade and business for NRIs.
Goods and services tax (GST) was introduced in India to make compliances user-friendly and avoid multiplicity of taxes. It aims to promote digitalization and increase efficiency through automation of compliance. The registration process introduced under GST is smooth and convenient. There are separate sets of provisions for registration, returns, refunds, etc. for domestic taxpayers and for non-resident taxable persons (NRTPs).
Under the Indian GST law, NRTP means any person who occasionally undertakes transactions involving the supply of goods or services or both, but who has no fixed place of business or residence in India. This may be done as principal or agent or in any other capacity. There are certain key considerations that should be taken note of by the NRTPs vis-à-vis GST registration.
GST law requires every supplier to obtain registration for supply of goods or services, if the aggregate turnover exceeds the prescribed threshold. However, for certain specified categories of persons, registration is compulsory even when the turnover limit is not met. One such category is NRTPs making taxable supply; thus, a non-resident making taxable supply is required to compulsorily register under the Indian GST laws irrespective of the quantum of turnover involved. Such NRTPs are required to apply for registration five days before the commencement of business.
Validity of registration certificate
NRTP can make taxable supplies only after the certificate of registration has been issued. Such registration certificate issued is valid for 90 days unless a shorter duration is mentioned while applying for such registration. This may further be extended by the concerned GST officer by another 90 days.
NRTPs are required to make an advance deposit of tax while applying for registration. This amount is equivalent to the estimated tax liability for the period for which the registration is sought. Further, if the extension of the registration certificate is sought, an additional amount of tax, equivalent to the estimated tax liability for the increased period is required to be deposited. The amount deposited as estimated tax liability is available in the electronic cash ledger of the NRTP. The electronic cash ledger is an e-ledger available on the GST portal, which contains deposits and GST payments that a taxpayer has made.
An authorized signatory, who will generally manage the operational activity, will need to be appointed by NRTP. Such authorized signatory should be a person resident in India having a valid Permanent Account Number (PAN). Such person will be required to sign the registration application. An individual is said to be resident in any previous year if he/she satisfies any one of the following conditions:
* He/She stays in India in the relevant tax year (1 April to 31 March of the following year) for 182 days, or
* He/She stays in India for at least 60 days during the relevant tax year and at least 365 days during 4 years preceding the relevant tax year.
New registration as NRTP can be done through the government portal, www.gst.gov.in. The registration process begins after receipt of the 15-digit Temporary Reference Number (TRN) from the portal on providing the necessary information. The key details required by the GST portal includes PAN, name of the authorized person, registration state/Union territory, district, e-mail address, mobile number, etc. The legal name of the NRTP is also required to be provided which matches with Passport or PAN or Tax Identification Number (TIN) basis which entity is identified by the government of its country.
The application form (GST REG-09) is broadly divided into five parts—business details, authorized signatory, principal place of business, bank account and verification, wherein the following details have to be furnished:
a. Business details
The details relating to the business are required to be furnished, namely, legal name, address, PAN/ TIN/unique identification number, state, the period for which registration is required, etc. Further, the application also requires providing the estimated turnover and its tax liability for the registration period, based on which a challan is automatically generated for depositing the tax.
b. Authorized signatory
The information relating to certain personal details and identity of the authorized signatory is required for the registration process. The personal information of the signatory includes details such as date of birth, father’s name, mobile number, gender, e-mail address, address etc. The identity information would include details such as designation, nationality, Aadhaar number (if any). Supporting documents including photograph and proof of being the authorized signatory which is the Letter of Authorization, copy of the resolution passed by Board of Directors or Managing Committee and Acceptance Letter, are also required.
c. Principal place of business
The ‘Principal Place of Business’ is the primary location within the State from where NRTP’s business will be conducted. The details related to such a place are to be provided which includes address, contact information and nature of possession of premises i.e. owned, leased, etc. One of the following documents are required to substantiate the details provided:
* Property tax receipt, or
* Municipal khata copy, or
* Electricity bill copy, or
* Legal ownership document.
In case of rented or leased premises, an additional document of rent/lease agreement and in case of no/expired lease, additional documents of rent receipt with No Objection Certificate (NOC) are required. Further, in case of shared premises, a consent letter is required to be furnished.
d. Bank Account
Providing bank details is optional while applying for registration. However, the same may be furnished at a later point by filing an amendment application.
The application form can be verified, signed and submitted either by DSC (Digital Signature), E-signature or Electronic Verification Code (EVC) which is received on mobile number. On successful submission of the application form, an Application Reference Number (ARN) is generated by the GST portal. The ARN provides the status of the application like provisional, pending for verification, validation against error etc.
Grant of registration
The GST officer reviews the application made and if it is found in order, the registration is granted within seven working days from the date of submission of the application.
If any deficiencies are found, in terms of any information, document or clarification required, the GST officer issues a notice to the applicant electronically within seven working days of application submission. Such details are to be submitted by the applicant in specified form within seven working days of receiving such notice. If satisfied with additional details provided, the GST officer approves the registration in the next seven working days.
The registration certificate provides a 15-digit unique tax identification number which is required to be quoted on various official documents by the NRTP. The taxpayers are no longer required to visit the department for obtaining the registration or submitting the documents. The registration process is completely faceless. Online registration makes it easier and convenient for any taxpayer to complete the registration process without any difficulty.
Overall, the process of GST registration, compliance and refund is kept easier for NRTP, to facilitate ease of doing business. All the GST details related to registration, return etc. can be easily accessed with help of just one click on the GST portal. Such practices have been developed keeping in mind that the NRTP could be undertaking transactions on a temporary basis.
Sonal Jain and Sonal Kawdia contributed to this article.
The article was first published on Livemint.com