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Though the Goods and Services Tax (GST) is only applicable in India, it does apply to non-resident Indians in certain circumstances (including NRIs, OCIs, foreign citizens). This blog explains all of the terms and provisions of the Goods and Services Taxation for NRIs.

tax for NRIs

How the GST Identifies NRIs 

GST is a type of indirect tax that combines multiple stages of destination-based taxes into a single sum. According to the GST guidelines, a non-resident taxable person can be anyone who does not have a fixed place of business or residence in India but occasionally engages in transactions or accounting services involving the supply of goods or services or both. They can be Indian non-residents or foreign nationals, whether as principal or agent or in any other capacity. And GST registration is necessary even for one-time transactions. 

According to Section 24 of the GST Law, which went into effect in India on July 1, 2017, GST registration is mandatory for a non-resident taxable person without any threshold limit. That means that the Rs. 20 lakh/Rs. 10 lakh minimum GST threshold limit applicable to Indian residents does not apply to non-resident taxable persons. 

The Taxations for NRIs: How Can NRIs Register for GST 

All Non-Resident Taxable Persons, generally have to apply for GST registration at least 5 days prior to the commencement of business or undertaking of supply to residents in India.

In order to make the registration process faster and error-free, it is always a good decision to go for GST consulting. The following prerequisite must be followed.

  • Before beginning the GST registration process the applicant must appoint an authorised signatory in India for GST registration and compliance. It is possible to use a valid PAN number or a passport.

  • Fillup and submit the REG-09 form to apply for GST Registration 

  • Any kind of Unique Identification Number or Tax ID to validate the country the NRTP is currently residing in or have citizenship. 

  • The non-resident taxable person must submit an application for GST registration after processing all required documents and completing all steps. The Portal then generates a temporary reference number for GST deposit submission.

  • Finally, the applicant must pay a deposit in order to be registered for GST. The amount of the GST deposit is determined by the validity period of the GST registration requested as well as the amount of GST liability that the taxpayer is expected to incur during that time.
  • The GST registration certificate is issued upon receipt of the GST deposit and all required documents. 

Remember that the GST registration certificate for foreign non-resident taxpayers and casual taxable persons is set on a validity period. If a foreign non-resident taxpayer needs to extend the validity period of his or her registration, he or she must submit an application for extension before the registration expires. The applicant must pay the required amount of tax liability incurred during the extension period when applying for an extension.

The taxation for NRIs can be particularly deceptive, and there are a wide range of solutions offered by GST consulting to make the process easier and smooth. 

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