GST Implication on supply of goods or services by foreign supplier occasionally in India (Concept of Non-Resident Taxable Person under GST Law)
Under GST law, any person or business entity undertaking transactions involving supply of goods or services in India, is required to obtain GST registration and comply with GST regulations.
In order to avoid cumbersome process for business who intend to supply goods/services occasionally in India, GST law has introduced concept of Non-Resident Taxable Person. As per the provisions of GST law, “Non-Resident Taxable Person means any person who occasionally undertakes transactions involving 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”
Thus, a foreign supplier of goods or services, who intends to supply goods/services locally in India without having permanent or fixed place of business, shall obtain GST registration under the category of NRTP. This registration is valid for 90 days and can be extended, but not beyond 180 days.
Registration Requirement – For NRTP, in order to obtain registration, authorized person is mandatory who would sign all the documents in India on behalf of NRPT. Also, legal name of the NRTP should match with Tax Identification Number (TIN) used to identify said entity in its home country.
A part from above, principal place of business, Indian Bank account, PAN & Aadhar of Authorized signatory is mandatorily required at the time of obtaining registration.
GST Payment, liability on outward supplies, Input Tax credit and Return filling
- NRTP must deposit tax in advance, equivalent to an amount consisting of the estimated tax liability for the registration period.
- NRTP must raise invoice at the time of supply of goods or services to Indian customer and charge GST accordingly.
- Advance tax paid at the time of registration shall be adjusted against the actual tax liability determined while filing GST return in GSTR 5.
- NRTP is debarred from taking any input tax credit on goods or services or both procured locally. However, Input Tax credit can be availed/claimed of GST so paid on import of goods or services.
- NRTP must file return in FORM GSTR-5 electronically, including therein details of outward and inward supplies
- Any excess tax paid by NRTP, will be refunded only after all required returns are filed. Refunds must be applied for under serial no 13 of form GSTR-05.
Disclaimer: This document is intended solely for general informational purposes. It does not constitute a legal opinion, tax advice, or a formal interpretation of law. The applicability of GST provisions may vary depending on specific facts and circumstances. Readers are advised to seek professional consultation before taking any action based on the information provided herein.