A Practical Guide to Corporation vs....
11 Apr 2025
Casual Taxable Person Under GST: Businesses sometimes operate in places where they have no permanent base, possibly for a limited span or seasonal events. In such scenarios, you might wonder how to manage taxes. The term “Casual Taxable Person” under the Goods and Services Tax (GST) framework addresses this exact situation. This detailed guide breaks down what it means to be a Casual Taxable Person, how to register, the necessity of an advance tax deposit, and other important rules. If you want professional support in understanding or implementing these rules, Trustlink a top-notch provider of company registration, finance, marketing, and accounting solutions can guide you every step of the way.
A Casual Taxable Person is someone who occasionally supplies goods or services but does not maintain a permanent place of business in the region where they operate. Imagine a craftsman or exhibitor who sets up a stall at a trade fair for a few days in a particular state. This person can’t register as a regular GST taxpayer in that state because they don’t have a steady office or warehouse there. Instead, they must follow special provisions in the GST Act designed for one-off or short-term business ventures.
Temporary Business Events: Fairs, exhibitions, or seasonal marketplaces.
Short-Term Projects: A consultant might temporarily work in a different state without a permanent office.
No Fixed Headquarters: If the supplier does not keep goods, staff, or a facility in that state.
Under GST law, taxes typically get linked to a taxpayer’s business location. Without a permanent base, confusion can arise about tax obligations. The “Casual Taxable Person” category clears this up, ensuring short-term businesses still comply with GST.
Normally, GST registration can be optional for some small businesses if they fall below a turnover threshold. However, a Casual Taxable Person has no such exemption. Regardless of anticipated turnover, if you’re going to make taxable supplies in a state where you don’t have a fixed location, you must register as a Casual Taxable Person. This requirement helps the authorities track and collect GST from short-term suppliers who might only be present for a few days or weeks.
If you plan to operate in multiple states, the law generally expects separate GST registration in each state. As a casual supplier, you register only for the limited duration of your activity in each location. For instance, if a wedding décor company from State A is supplying in State B and State C for separate events, it must seek casual registration in both those states, each time fulfilling the conditions set out for a Casual Taxable Person.
Casual Taxable Persons cannot opt for the composition scheme, which is otherwise available to smaller businesses for simplified GST compliance. The law states that casual taxpayers must pay taxes under the standard regime. This means charging normal GST rates on their invoices and filing standard GST returns.
One distinct feature separating casual taxpayers from regular ones is the mandatory advance tax deposit. Before you get your temporary GST registration, you must pay an estimated tax amount in advance.
Estimate Your GST Liability: Assess how much tax liability you’re likely to incur during your stay or event in that state. This projection is based on expected sales or service income.
Make an Electronic Payment: Once you fill in the online application, the portal generates a temporary reference number. Use that number to deposit the estimated GST via net banking, debit card, or other allowed payment modes.
Electronic Cash Ledger: Once paid, this deposit appears as a balance in your electronic cash ledger on the GST portal. As you file returns, the actual tax due is offset against this balance.
If your actual tax liability exceeds the deposit, you must pay the difference. Conversely, if you end up depositing more than you owe, the surplus becomes eligible for a refund. However, the law requires that you finish filing all relevant returns for the period before any refund can be claimed.
Fill Out Part A of Form GST REG-01:
Provide your PAN, mobile phone number, email address, and state in which you want the casual registration.
Verify your contact details using an OTP sent via SMS or email.
Once verified, the system generates a temporary reference number (TRN).
Submit Part B of Form GST REG-01:
Use the TRN to log in and complete the rest of the form.
Attach required documents, such as an identity proof, proof of address, and possibly a photograph.
Fill out estimated details, including projected turnover and the tax that may arise.
Pay the Advance Tax:
The portal will issue a temporary reference number to facilitate your deposit of estimated tax.
Once paid, the amount credits into your electronic cash ledger.
Receive Registration Certificate:
After successful validation, you get a temporary GST Registration Certificate.
This certificate remains valid for 90 days from the start date. Officials can extend it by up to another 90 days if needed.
Base Period: The initial validity is 90 days from either the date of registration approval or a date you specify as your starting business day in that state.
Possible Extension: If your business activity extends beyond that, you can apply via Form GST REG-11 to extend validity by another 90 days at most.
Multiple Registrations: If you operate at multiple times in the same state but not continuously, each separate occasion may need a fresh casual registration unless you fit the timeline extension criteria.
Short-term business does not exempt you from routine GST reporting. In fact, you must adhere to the same monthly or periodic returns as a regular taxpayer, with some modifications.
Deadline: Must be filed by the 10th of the following month.
Purpose: Disclose details of all sales or services provided. This ensures correct tax liability is calculated and your customers can claim input tax credit if applicable.
Update: Under the original GST framework, GSTR-2 involved matching purchase records. However, the form’s exact requirements and deadlines can change due to policy revisions. Keep an eye on announcements from tax authorities or consult experts at Trustlink to confirm the current guidelines.
Deadline: Usually due by the 20th of the month, but the exact date can depend on changes announced by the government.
Purpose: Summarizes outward and inward supplies, calculates net tax liability, and finalizes monthly tax due.
A casual taxpayer typically isn’t required to file the annual return in Form GSTR-9 that regular taxpayers do, provided the registration was only valid for a short duration within the financial year. However, be sure to verify any changes the GST Council might introduce over time.
After you pay your final tax liability, any unused balance in your electronic cash ledger can be claimed as a refund. This usually happens through your final GSTR-3 or GSTR-3B for that operating period. While the older guidelines mention GSTR RFD-01 for refunds, casual taxpayers often reflect refunds in their final return, ensuring the deposit is reconciled properly.
All Returns Must Be Filed: Authorities typically wait until you’ve filed your returns for that operating period.
No Dues: Any pending tax, interest, or penalty for that registration must be settled.
Proof of Conclusion: If you cease business in that location before your 90-day window ends, you’ll still need to file a return indicating zero operations for the remainder.
Sometimes, a project or business event runs longer than initially expected. Or you want to capitalize on local market demand for a few more weeks. In that case:
Apply Using GST REG-11
Do it before your current registration expires.
Declare how long an extension you need and provide reasons.
Estimate additional tax due for the extended duration and deposit it.
Approval for Up to Another 90 Days
Once cleared, your registration stands valid for this new period.
Keep a close watch on the extended timeline, as you generally cannot surpass 180 days in total as a casual registrant without reapplying from scratch.
One tricky part of being a casual taxpayer is predicting revenue. You might overshoot your expected turnover or perhaps grossly underestimate it. Overestimation leads to blocking surplus funds in the electronic cash ledger. Underestimation forces you to deposit extra amounts later.
Tip: Consider recent experiences, industry benchmarks, or average sales you’ve seen in similar contexts. If in doubt, consult professionals at Trustlink for a practical estimate.
Operating across several states under short-term arrangements can turn complicated. You’d need separate usernames, track separate returns, and maintain clear records for each state’s registrations.
Tip: Adopt robust record-keeping or accounting software that can handle multiple GSTINs. This helps you stay on top of deadlines and ensures no confusion about which transactions belong where.
Missing filing deadlines leads to fines, interest, and potentially invites scrutiny from tax authorities. Even if your business ended earlier than planned, you need to file returns up to the date your registration remains valid.
Tip: Set calendar alerts or reminders. Alternatively, consider outsourcing the compliance work to experts who can manage monthly or quarterly filings on your behalf.
Artisan at a Crafts Fair:
Suppose you live in State X, but you join a 10-day crafts fair in State Y. As soon as you anticipate making sales there, you must apply for casual registration at least 5 days before the event begins. After the fair ends, you finalize your sales figures, pay any balance tax, and request a refund of leftover amounts.
Consultant on a One-Time Project:
A freelance marketing consultant from City A gets a short contract in City B. The consultant cannot list City B as a permanent place of business. Therefore, if her fees are taxable in City B, she needs casual registration. She calculates expected revenue, pays an advance deposit for the estimated GST, and subsequently files the required returns.
Food Stall at a Festival:
A food vendor might attend a month-long festival in a different region. They register as a Casual Taxable Person, deposit an approximate GST sum, and keep daily sales records. Once the festival wraps up, any extra deposit is claimed back through the final return.
These scenarios illustrate how the concept functions in practice, ensuring that no matter how temporary the operation is, it remains transparent and tax-compliant.
The GST portal facilitates registration, return filing, payments, and refunds. For those less familiar with online tax systems, it can take time to learn. The system also updates with new rules or notifications, requiring constant vigilance.
While do-it-yourself is feasible for simpler businesses, complexities often arise when:
Operating in many locations
Handling large transaction volumes
Unsure about estimated turnover or applicable tax rate
In such cases, specialized assistance can save time and help avoid penalties. Trustlink is experienced in GST compliance, from initial registrations to final refunds. Their services free you to focus on running your business or event smoothly, without the stress of missing deadlines or miscalculating taxes.
Plan Well in Advance
Legally, you have to register at least 5 days before starting operations in a new state. Don’t wait until the last minute.
Maintain Comprehensive Records
Keep sales invoices and expense bills well-organized. For short-term projects, a daily tally can simplify monthly or final returns.
Monitor Additional GST Changes
GST laws evolve with notifications from time to time. For example, the government may update certain rules or forms. Stay informed or work with professionals who track these changes.
Review Past Events
If you attended a similar fair or festival before, your prior data can guide your new deposit estimate.
Stay Aware of Refund Timelines
After your compliance period closes, remember to file a final return. Only then can you claim any surplus deposit. Failing to do so delays the entire refund process.
A Casual Taxable Person under GST is an individual or business that engages in temporary or seasonal transactions in a place where they don’t hold a permanent establishment. While this category ensures that such transactions remain within legal frameworks, it also brings special procedures—most notably the advance tax deposit and registration valid for only a set number of days.
Complying with these obligations can feel complicated for newcomers. Between predicting sales, meeting deadlines, and navigating the return filing system, errors or late filing can lead to penalties or withheld refunds. That said, with careful planning or expert support from Trustlink, you can handle these requirements smoothly. Timely registration, correct deposit calculations, and regular record maintenance ensure you abide by tax laws and focus on delivering products or services effectively.
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What is the main difference between a regular GST registration and casual registration?
A regular GST registration applies to businesses with a permanent place of business in a specific state. A casual registration is for entities operating temporarily without a fixed site and is valid for up to 90 days (extendable by another 90 days).
Do casual taxpayers have to file annual returns like regular taxpayers?
Typically, a casual taxpayer is not obligated to file an annual return if their registration is valid for a short period within the financial year. However, do confirm any updates from tax authorities, as policies may change.
Can a casual taxpayer opt for the composition scheme?
No, the GST Act disallows casual taxpayers from opting for the composition scheme. They must pay tax at normal rates and adhere to standard GST return procedures.
What happens if the actual sales exceed the advanced tax deposit?
You are required to pay the extra amount once you finalize your actual sales data. This ensures your tax liability is fully covered. Conversely, if you paid too much, you can claim a refund after submitting your final return.
How soon must I register before starting business in another state?
The law states you must complete the casual GST registration process at least 5 days prior to beginning operations. Delaying registration risks penalties or legal complications if you make sales without proper compliance.
by Corporate Advisory, TRUSTLINK
