Understanding Casual Taxable Persons in the GST Framework
An in-depth look at Casual Taxable Persons (CTPs), their registration criteria, and compliance responsibilities.
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Created: 14th July, 2025 7:32 AM, last update:14th July, 2025 7:32 AM
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Introduction to Casual Taxable Persons
Casual Taxable Persons (CTPs) are individuals or entities that intermittently supply taxable goods or services in a taxable jurisdiction where they do not maintain a permanent business establishment. These suppliers must comply with specific GST regulations to ensure adherence throughout their operations. This article explores the complexities of CTPs, their registration processes, and their obligations within the GST framework.
Who is Considered a Casual Taxable Person?
To be recognized as a CTP, an individual or entity must provide goods or services sporadically in a taxable area without a fixed business location. For instance, Mr. Ravi, a management consultant from Bangalore, must register as a CTP in Hyderabad if he offers consultancy services there, as he lacks a physical business presence in that city.
Key Definitions Related to CTPs
Understanding the terminology associated with CTPs is vital:
- Person: This includes individuals, Hindu Undivided Families (HUF), various types of companies, partnerships, associations, cooperative societies, and governmental bodies.
- Principal Place of Business: This refers to the primary location of business as indicated in the registration certificate.
Registration Requirements for a Casual Taxable Person
When is Registration Necessary?
The requirement to register under GST arises when a supplier's aggregate turnover exceeds the threshold limit of Rs. 40 lakhs. However, CTPs must register regardless of their turnover and cannot utilize the composition scheme. They are required to initiate their registration at least five days before commencing business activities.
Understanding the Registration Process
A CTP must obtain a temporary registration, valid for a maximum of 90 days from the state where they plan to provide services. To secure this registration, the CTP must make an advance deposit based on an estimated tax liability. For example, if Mr. Ravi expects his taxable service income to be Rs. 100,000, he must deposit Rs. 18,000 (18% of Rs. 100,000) to receive temporary registration.
Important Note
While CTPs supplying certain handicraft goods are exempt from registering as CTPs, they must still obtain GST registration if their annual turnover exceeds Rs. 20 lakhs.
Process for Extending Registration
CTPs can extend their registration by submitting FORM GST REG-11 before the current registration expires. This extension can be granted for an additional period of up to 90 days, contingent upon the payment of any additional tax liabilities.
Filing Returns as a Casual Taxable Person
CTPs are required to file specific returns:
- Form GSTR-1: This form details outward supplies of goods or services and is due by the 11th of the following month.
- Form GSTR-3B: This summary of input tax credit, purchases, and tax liability must be submitted by the 20th of the following month.
If opting for the QRMP scheme, CTPs will file IFF/GSTR-1 and GSTR-3B quarterly. Notably, CTPs are exempt from filing an annual return, which is typically required for other registered taxpayers.
Refunds for Casual Taxable Persons
CTPs who pay more GST than their tax liability are eligible for refunds. Such refunds are processed after all necessary returns for the registration period have been filed. To claim a refund for excess balance in the electronic cash ledger, CTPs can complete Form GST RFD-01 under the category of “Refund of excess balance in the electronic cash ledger.”
Frequently Asked Questions
Who qualifies as a casual taxable person?
A casual taxable person is anyone who occasionally supplies taxable goods or services in a taxable territory without a permanent establishment there.
Is registration mandatory for casual taxable persons?
Yes, CTPs must register regardless of their turnover, except those involved in the supply of specified handicraft goods.
How do CTPs differ from non-resident taxable persons?
CTPs can claim input tax credit on all inputs, capital goods, and input services, while non-resident taxable persons can only claim ITC on goods imported by them, with all other claims blocked under section 17(5).
What is Form GSTR-10 for CTPs?
Form GSTR-10 is the final return that a CTP must file after they surrender their registration certificate.
When should a CTP apply for registration?
A CTP should apply for registration at least five days before commencing their business in India.
What is the validity of CTP registration?
The registration obtained by a CTP is valid for 90 days and can be extended for another 90 days if necessary. For more information on the registration process, you can refer to our MSME Registration Process in India: A Comprehensive Guide.
Additionally, to ensure compliance with local regulations, CTPs may also need to consider Shop and Establishment Registration Karnataka if they are operating in that region. Furthermore, understanding the implications of business structure is vital, and our article on Comprehensive Guide to Registering a Private Limited Company in India under the Companies Act, 2013 can provide valuable insights.
Frequently Asked Questions
What exactly is a Casual Taxable Person (CTP) under GST?
A Casual Taxable Person (CTP) is someone who occasionally supplies taxable goods or services in a taxable jurisdiction without maintaining a permanent business establishment there. For example, if a consultant from one city offers services in another city where they do not have a business setup, they must register as a CTP in that city. This classification is important as CTPs have specific registration and compliance requirements under the Goods and Services Tax (GST) framework.
When is it necessary for a CTP to register for GST?
CTPs are required to register under GST regardless of their turnover. This is different from regular taxpayers, who need to register only if their aggregate turnover exceeds the threshold limit of Rs. 40 lakhs. CTPs must initiate the registration process at least five days prior to starting their business activities in a new location, ensuring they are compliant with GST regulations from day one.
How does a Casual Taxable Person register for GST?
To register as a CTP, an individual or entity must apply for temporary registration in the state where they plan to provide taxable services. This temporary registration is valid for 90 days and requires the CTP to make an advance deposit based on their estimated tax liability. For instance, if a CTP anticipates earning Rs. 100,000 from their services, they would need to deposit Rs. 18,000 (18% of Rs. 100,000) to secure their temporary registration.
What forms do CTPs need to file under GST?
CTPs must file specific forms to comply with GST regulations. Primarily, they need to submit Form GSTR-1, which details their outward supplies, by the 11th of the month following the reporting period. Additionally, they must file Form GSTR-3B, which summarizes their input tax credit, purchases, and tax liability, by the 20th of the following month. If they opt for the Quarterly Return Monthly Payment (QRMP) scheme, they will file these forms quarterly instead.
What should a CTP do if they need to extend their registration?
If a CTP needs to extend their registration beyond the initial 90-day period, they must submit FORM GST REG-11 before their current registration expires. The extension can be granted for another 90 days, provided they pay any applicable additional tax liabilities. This process ensures that CTPs can continue their operations without interruption while remaining compliant with GST requirements.
Are CTPs eligible for GST refunds?
Yes, Casual Taxable Persons can claim refunds if they pay more GST than their tax liability. To initiate a refund, they must first ensure that all necessary returns for the registration period have been filed. They can apply for a refund of the excess balance in their electronic cash ledger using Form GST RFD-01. This process helps CTPs recover any overpaid taxes, thereby maintaining their cash flow.
How do CTPs differ from non-resident taxable persons?
While both CTPs and non-resident taxable persons operate under GST, they have different rights regarding input tax credit (ITC). CTPs can claim ITC on all inputs, capital goods, and input services related to their business operations. In contrast, non-resident taxable persons are only allowed to claim ITC on goods imported by them, with all other claims blocked under section 17(5). This distinction is crucial for understanding the tax implications and compliance obligations for each category.
What is the significance of Form GSTR-10 for CTPs?
Form GSTR-10 is an important document for Casual Taxable Persons as it serves as the final return that must be filed after they surrender their GST registration certificate. This form is crucial because it helps the tax authorities understand the final status of the CTP’s tax obligations and ensures that all due taxes are settled before the registration is officially canceled. Filing this form is a critical step in the compliance process for CTPs winding up their operations.
What are the exemptions for CTPs regarding registration?
While most Casual Taxable Persons must register under GST, there are exemptions for those supplying certain handicraft goods. These CTPs do not need to register as CTPs if their annual turnover remains below the Rs. 20 lakhs threshold. However, if their turnover exceeds this limit, they must obtain GST registration. This distinction is essential for CTPs in the handicraft sector to understand their compliance obligations and potential exemptions.
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