GST Registration for foreigners
Goods and Services Tax (GST) is an indirect tax which is levied on all types of good or services supplied including both online and offline. GST has been enforced in India from 1st July, 2017 and non-resident, who want to do business in India are also required to apply for GST registration and file GST returns monthly or quarterly as opted.
GST Registration for Foreigners is very important if you would like to start out business in India. Hence, an individual staying abroad or foreign business or organization supplying goods or services to India would be a non-resident taxable person who requires compliance with all regulations under the Goods and Service law Act. GST Act defines “non-resident taxpayer” as a person who transact occasionally in India including supply of goods or services or both. All non- resident taxpayer should appoint an authorised person or authority in India for the compilation with GST rules and regulations.
When Non-Taxable Persons get himself registered with GST Department
It is mandatory for all non-resident taxable persons to get them registered under the GST Act it is irrespective of their aggregate annual turnover.
It is better if the foreign business supplying goods and services gets GST registration at the earliest.
It is mandatory for them to get registered under the GST Act, the intimation is required to be filed prior to 5 days before commencement of any business activity.
Also, a business entity that is incorporated or established outside India has to apply for GST registration and his Tax identification number based on which it is identified by the Government of that country or The PAN if available.
Provisional Registration
An application in Form GST REG-09 is needed to be submitted, electronically, by the Non-resident taxable person (NRI). Self-attached copy of valid passport is to be submitted along with the application.
Further, in the case of foreign entity, application for GST registration is to be submitted along with tax identification number or unique number or PAN (if applicable).
A non-resident taxable person is required to deposit the advance tax. Such advance payment of tax would be based on self-estimation. Advance tax deposit is mandatory to be submitted along with the application.
Final Registration
Final registration of Non-resident taxable person would be carried out in the same line as of the resident taxpayer in India. The procedure for the same is narrated below:
The applicant is required to submit, electronically, an application in FORM GST REG-26. The applicant is required to submit all the information related to tax and GST within three months from the provisional registration.
If the information provided is accurate and complete, then, final GST registration will be issued to the applicant in FORM GST REG-06. However, if the information provided is incorrect or incomplete, the officer would issue a show-cause notice to the applicant in FORM GST REG-27.
If the applicant is not able to give an appropriate reply to the show cause notice issued and after giving the appropriate opportunity of being heard to the applicant and on the satisfaction of the officer, the provisional registration granted to the applicant would be cancelled through FORM GST REG-28.
However, if the applicant is able to give an appropriate reply to the show cause notice issued and the said reply is acceptable to the officer, the show cause notice would be nullified by issuing an order in FORM GST REG-20.
The application for registration of the non-resident should be duly signed by the authorised signatory of the applicant. The said authorised signatory should be a person resident in India, and he would have a valid PAN.
DOCUMENTS REQUIRED FOR GST REGISTERATION FOR FOREIGNERS
1. Self-attested copy of PAN card (mandatory).
2. Incorporation Certificate or Proof of Business registration.
3. Proprietor identity proof
1. Passport.
2. Aadhar card.
3. Driving license.
4. Address Proof
1. Self-attested copy of Telephone/Mobile or Electricity bill.
2. Bank Account Statement (Less than 2 months old).
5. Passport size photographs
6. Place of Business Address Proof
1. Telephone/ Mobile/ Electricity/ Gas bill (Less than 2 months old).
2. In case of rented premises, a notarized copy of Rent Agreement with any document supporting the ownership of the lessor’s premises like the property tax receipt/ Municipal
Khata copy/ the Electricity bill/ No-Objection Certificate(NOC) for conducting business.
3. In the case of self-owned premises- any document that supports the ownership of the premise like the latest tax property or the municipal khata or the copy of electricity bill Registered title document.
GST Registration Procedure
1) Appoint an Authorized Signatory
Application for GST registration as a non-resident taxable person must be signed by an authorized signatory who is a person resident in India having a valid PAN. Hence, prior to beginning the GST registration process, all foreign non-resident taxpayers should appoint an authorized signatory in India for GST registration and GST compliance purposes.
2) Provide Authorization to Authorised Signatory
The promoters or Officers of the foreign company must then prepare and sign a GST Declaration, validating the appointment of an authorized signatory in India and his/her acceptance of responsibility for complying with GST regulations on behalf of the foreign company.
3) Apply for GST Registration
Provisional GST Registration
All non-resident taxable persons shall file an application for registration in FORM GST REG- 09 alongwith the supporting documents. The application must be filed at least five days prior to the commencement of business activity. An advance deposit of tax shall be paid to the government based on estimated sale.
Final GST Registration
i) The process of submission of application for final registration is same as filed by the resident taxpayers. The application for final registration shall be made in FORM GST REG–26 alongwith the supporting document as required.
ii) If the officer is satisfied with the information provided by the non-resident taxable persons he will issue a certificate of registration.
iii) The application for registration shall be signed by his authorized signatory who is person resident in India having valid PAN.
iv) After processing all the required documents and completing all the steps, the non- resident taxable person shall submit the application electronically for GST registration using the FORM GST REG–26.
v) Any information must be furnished within a period of three months
vi) If the information is correct and complete, the final GST registration will be given in FORM GST REG-06
vii) If the information is not correct, then the officer will issue a show-cause notice using FORM GST REG-27. A reasonable opportunity of being heard will be given after which the provisional registration will be cancelled through the FORM GST REG-28
viii) If the applicant’s reply is satisfactory then the show cause notice issued can be nullified by issuing an order via the FORM GST REG- 20.
ix) After submitting the application for GST registration, the Portal provides a temporary reference number for remitting GST deposit.
4) Pay GST Deposit
All non-resident taxable persons are required to remit a deposit for obtaining GST registration. The amount of GST deposit would depend on the validity period of GST registration requested and the amount of GST liability the taxpayer is expected to accrue during the period. Hence, based on the validity and expected tax liability, the GST deposit must be deposited into the notified banks. Once the GST deposit is remitted, the electronic cash ledger of the taxpayer would be credited for the amount. The GST deposit can then be used against any GST payments that are to be made by the taxpayer.
5) GST Registration Certificate Issued
On remittance of the GST deposit and the necessary documents, GST registration certificate is issued. GST registration certificate for foreign non-resident taxpayers and casual taxable persons have a fixed validity period. In case the foreign non-resident taxpayer needs to extend the validity period, the concerned individual shall submit the application for extension, prior to the expiry of registration. While applying for an extension, the applicant shall pay the required amount of tax liability occurred during the extension period.
Validity of GST registration for Foreigners
GST registration for foreigners and the casual taxable person has a validity period. The validity period is based on the taxable person's request, and the amount of the GST deposit remitted.
If the Non-resident taxable person wants to extend the validity period of GST registration, an application can be made in the Form GST REG-11 before the validity.
Advantages of GST Registration For Foreigners
Ease of business – GST puts goods and services under the same umbrella, unlike VAT and Service Tax, hence making compliance easier.
Lower Taxes – GST is attracted only if the annual turnover of the business exceeds Rs. 20 lacs or Rs. 10 lacs in certain parts of the country.
Collection of taxes – GST registration helps to collect taxes from customers also pass on the tax credit to customers on purchases made.
Input Tax Credit – A customer can claim ITC (Input Tax Credit) for taxes paid on purchases and can utilize the same credit towards payment of due taxes.
Seamless Flow – At the national level, GST helps the seamless flow of ITC towards recipients from suppliers.
DISCLAIMER- These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.
It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information.