Non-Resident Taxable Person under GST

By Aditya Kumar, Ashwani & Associates, Chartered Accountants

With the introduction of GST in India, it is important for foreign corporations to understand the concept of non-resident taxable person (‘NRTP’). The concept introduced under the GST laws has led to raised eyebrows by the foreign companies doing, or intending to do, business with India.

Once a person falls within this definition there are compliance obligations for registration, payment of taxes and related compliance, including payment of tax in advance, which makes it important to determine if one is a NRTP or not. On a simple reading of the definition of NRTP, it appears that every transaction of import, of either goods or services or both, by an overseas supplier would fall under the mischief of the definition.

So the anomaly one faces is that at one end the supplier may be considered an NRTP and pay tax in advance, and at the same time, the recipient pays tax under reverse charge. A review of the definition of NRTP reveals that it concerns the nature of the transaction as being “casual” or “intermittent”. Simply put, that which is not “regular” in nature.

Does this mean that a single once-off transaction or a transaction spread over less than six months involving supply of service would make the overseas supplier fall under the definition of NRTP and that multiple transactions or transactions spread over a period would not? Frankly, there are no answers to this question at present. The concept seems to have been picked up from that of a casual taxable person. But extrapolating the same to a non-resident gives birth to enormous confusion and complexity. Until such time that the Government issues clarification on the issue, in our opinion, entities should not yet register for GST, as in any case the question of jurisdiction of the Indian Government on NRTP will arise.

Aditya Kumar

Aditya Kumar

Ashwani & Associates, Ludhiana, India
T: +91-98554-00428
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Aditya Kumar is a Chartered Accountant and a Lawyer who specialises in VAT/GST as the Indirect Tax Partner of Ashwani & Associates. He provides consulting in cross-border business to clients in India and abroad. He has a vast experience and working knowledge of all aspects of service tax, trade law, VAT, GST and the like. Serving clients from national and international companies and having worked in every existing kind of indirect tax branch, he offers pragmatic solutions on a cost-effective basis. He is also the author of the first book to be published on GST in India.

ashwani & associates is an audit, tax and consulting firm in India with three offices. Our clients range from emerging entities to large corporations with billions of dollars in revenue. They include privately-held businesses, not-for-profit organisations and publicly-traded companies. They support a local, national and international client base.

Published: Winter 2017 l Photo: babble -

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