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August 9, 2023

Know all about- Taxable Person under GST and Different Types of Taxpayers

Know all about- Taxable Person under GST and Different Types of Taxpayers

Taxable Person under GST:

A ‘taxable person’ under the Goods and Services Tax (GST) Act refers to an individual or entity engaged in any business across India and registered under the GST Act. This encompasses economic activities including trade and commerce. The term ‘person’ includes various entities such as individuals, HUFs, companies, firms, LLPs, AOPs/BOIs, government corporations, foreign corporate bodies, co-operative societies, local authorities, trusts, and artificial judicial persons.

Who is Liable to Get Registered under GST?

Several categories of individuals or businesses are required to register under GST, including:

  • Businesses involved in the supply of goods with a turnover exceeding Rs. 40 lakhs (Rs. 20 lakhs for Special Category States).
  • Businesses involved in the supply of services with a turnover exceeding Rs. 20 lakhs (Rs. 10 lakhs for Special Category States).
  • Entities previously registered under Excise, VAT, Service Tax, etc.
  • Businesses making inter-state supplies.
  • Casual taxable persons (temporary supply of goods/services in a territory without a fixed place of business).
  • Non-resident taxable persons (non-residents supplying goods/services without a fixed place of business in India).
  • Agents of suppliers.
  • Those paying tax under reverse charge mechanism.
  • Input service distributors (distributing CGST/IGST credit on input services).
  • E-commerce operators or aggregators.
  • Persons supplying via e-commerce aggregators.
  • Persons supplying online information and database access or retrieval services (OIDAR) from a place outside India to a person in India

Types of Taxpayers under GST:

1. Casual Taxable Person:

A person who occasionally supplies goods and / or services in a territory where GST is applicable but he does not have a fixed place of business. Such a person will be will be treated as a casual taxable person as per GST.

Example: A person who has place of business in Bangalore supplies taxable consulting services in Pune where he has no place of business would be treated as a casual taxable person in Pune.

2. Non-Resident Taxable Person:

When a non-resident occasionally supplies goods / services in a territory where GST applies, but he does not have a fixed place of business in India. As per GST, he will be treated as a non-resident taxable person. It is similar to above except the non-resident has no place of business in India.

3. Input Service Distributor (ISD):

‘Input Service Distributor” means an office of the supplier of goods / services which receives tax invoices on receipt of input services and issues tax invoices for the purpose of distributing the credit of CGST/IGST paid on the services to your branch  with the same PAN. (It must be a supplier of taxable goods / services having the same PAN as that of the office referred to above).

Thus, only credit on ‘input services’ can be distributed and not on input goods or capital goods. This will be a new concept for assesses who are currently not registered as input service distributors. However, this facility is optional in nature.

4. Composition Taxpayer:

A composition taxpayer refers to those registered under the composition scheme who need not collect GST from his customers at nominal rates. Instead, he can pay tax at a nominal rate or lower rates to the government on the basis of turnover or receipts on a quarterly basis while filing CMP-08.

There are certain conditions defined for such taxpayers. At the inception of GST, only suppliers of goods could opt into the composition scheme governed by Section 10 of the CGST Act with annual turnover upto Rs. 1.5 crore. From 1st April 2019, service providers are also given an option to join a similar scheme. The annual aggregate turnover limit must be up to Rs. 50 lakh.

5. QRMP taxpayer:

A registered person who is required to furnish a return in GSTR-3B, and who has an aggregate turnover of up to Rs. 5 crore rupees in the preceding financial year, is eligible for the QRMP Scheme. Under the scheme, one can file GSTR-1 and GSTR-3B once in a quarter whereas make tax payment every month in form PMT-06. Further, if B2B sales invoices need to be uploaded on the GST portal monthly, then Invoice Furnishing Facility (IFF) can be used.

6. GST Registration by Type of Taxable Person:

Every person liable for registration must apply within 30 days of becoming liable. Casual/non-resident taxable persons should apply at least five days before business commencement. GST registration is PAN-based and required for each state of operation. Separate registration for each business vertical in the same state is also possible.

7. Special Provisions for Casual and Non-Resident Taxable Persons:

A casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business. Section 24 provides for special provisions relating to casual taxable persons and non-resident taxable persons under GST.

Casual / non-resident taxable registration for a period of 90 days (extendable for additional 90 days). A person who obtains registration u/s 24, will be required to make an advance deposit of GST (based on his estimated tax liability).

Adhering to these GST registration guidelines and understanding the various taxpayer types ensures compliance within the GST framework.

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