According to section 2(20) of CGST Act, 2017, a casual taxable person means person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
Occasionally means irregular intervals. Therefore a supplier having transaction in a State/UT where he has no fixed place of business at a regular interval will not be regarged as Casual taxable person. Example: Event Management, outside Catering.
Advantages of being casual taxable person (CTP)
- Charge Competitive price: Recipient of supply can take credit of input tax paid. CTP always make Intra state supply which means CGST & SGST will be charged as GST. Input credit of IGST (a state) can be used to set off with output tax liability of all CGST, SGST and IGST of the same state. For Example Ram stores, a local trader, of Bihar hires an event management, Shyam Ltd, of West Bengal. If Shyam Ltd is registered as CTP and charges CGST and SGST of Bihar, Ram Stores can take input tax credit quite easily.
- The Casual taxable person can apply for multiple registrations within the state.
Disadvantages of being casual taxable person (CTP)
- A casual taxable person is mandatorily required to get GST registration.
- A Casual taxable person is excluded from composition scheme
- Advance deposit of estimated tax
- The maximum validity of the registration is 90 days only. It can be extended once for a period of 90 days by filling form GST REG-11 with payment of additional taxes. The second extension of registration is not possible.
- Taxable supplies can be made only after the issuance of the certificate of registration.
- Apply for registration at least 5 days before the commencement of business in form GST REG-01.
- Declare PAN, Mobile no., E-mail id, State/UT in Part A.
- A temporary reference number will be communicated in the given mobile no and email id.
- Use this reference no to submit an application in Part B of FORM GST REG-01, along with the documents specified in the said Form.
- Again a temporary reference number will be given for depositing the estimated GST (tax) liability for the period for which the registration is applied.
- Deposit the advance GST liability. This amount shall be credited to the electronic cash ledger.
- After depositing the amount, an acknowledgment will be issued to the applicant in FORM GST REG-02.
However, as per notification no 33/2017, a casual taxable person making taxable supplies of handicraft goods and is availing the benefit of notification No. 8/2017 – Integrated Tax dated the 14th September 2017 is exempted from taking compulsory registration.
Refund of Taxes
A casual taxable person can get the refund of any excess balance of the advance tax deposited by him after adjusting his tax liability. Refund will be given only after all the returns have been furnished, in respect of the entire period for which the certificate of registration was granted.