This article is essential for businesses that import goods or services into India, manage operations for non-residents, or are non-residents planning to conduct business within India.

Defining a Non-Resident Taxable Person

Under the Goods and Services Tax (GST) law, a "non-resident taxable person" is identified as an individual or entity that occasionally engages in transactions involving the provision of goods, services, or both. This includes acting as a principal, agent, or in any other role, without having a permanent business establishment or residential address in India. Essentially, any business supplying goods, services, or data retrieval services from foreign databases falls under this definition and is subject to GST regulations. Section 24 of the GST Act outlines the mandatory registration requirements for non-resident taxable persons. These specific businesses and entities must register under GST, regardless of the typical threshold limits of Rs. 20 lakh or Rs. 10 lakh. Therefore, every non-resident individual or company, whether involved in a single transaction or multiple taxable activities, is obligated to obtain GST registration.

Registration Process for Non-Resident Taxable Persons

Individuals or businesses meeting the non-resident taxable person criteria must apply for registration at least five days before starting their business operations. For instances of high-sea sales, the law clarifies that any person making supplies from India's territorial waters must register in the coastal state or Union Territory closest to the appropriate baseline. A High Sea Sale (HSS) involves a sale by the carrier document consignee to another buyer while goods are still in transit, either after leaving the origin port/airport but before reaching the destination port/airport. Consequently, if a high-sea sale occurs near Mumbai's coast, GST registration is required in Maharashtra. A non-resident taxable person must electronically submit a signed application, along with a self-attested copy of their valid passport, using Form GST REG-09. This submission should be made on the Common Portal a minimum of five days prior to commencing business. The application must be properly signed or validated using EVC (Electronic Verification Code), which is an Aadhaar-based electronic verification method. If the non-resident is a company, it must provide its tax identification number from its country of origin, equivalent to India's PAN. Upon application, the Common Portal will electronically provide a temporary reference number, allowing for an advance tax deposit into the applicant's electronic cash ledger, followed by an acknowledgment.

Advance Tax Payment for Non-Resident Taxable Persons

Non-resident taxable persons are mandated to make an advance tax deposit that matches their estimated tax liability for the requested registration period. As per GST Council registration rules, every registered non-resident taxable person must pre-pay tax based on an estimated assessment. This advance payment is credited to the Electronic Cash Ledger and will be offset against the actual tax liability when returns are filed. Furthermore, if a non-resident taxable person wishes to extend their registration period, they must submit an application using Form GST REG-11 electronically via the Common Portal before the current registration's validity expires.

Illustrative Example

Consider Marc Inc., a US-based company that produces specialized turbojet engines for supply and assembly in India. As this represents a single transaction for Marc Inc., they designate Mr. Vinod, an agent in India, to manage all necessary compliance procedures. Mr. Vinod is then responsible for securing GST registration for Marc Inc., providing his own PAN, and remitting the advance taxes associated with this transaction. Upon successful completion of the transaction and supply, Marc Inc. must file its GST returns, settling its GST obligations using the advance tax paid during registration. Any surplus tax paid will be reimbursed electronically.