Circular No 71/45/2018 GST
Clarification on issues pertaining to registration as a casual taxable person & recovery of excess Input Tax Credit distributed by an Input Service distributor
F. No. 349/94/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 26th October, 2018
The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)/
The Principal Directors General/ Directors General (All)
Subject: Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor – Reg
Representations have been received seeking clarification on certain issues under the GST laws. The same have been examined and the clarifications on the same are as below:
|1||Whether the amount required to be deposited as advance tax while taking registration as a casual taxable person (CTP) should be 100% of the estimated gross tax liability or the estimated tax liability payable in cash should be calculated after deducting the due eligible ITC which might be available to CTP?||1. It has been noted that while applying for registration as a casual taxable person, the FORM GST REG-1 (S. No. 11) seeks information regarding the “estimated net tax liability” only and not the gross tax liability.|
2. It is accordingly clarified that the amount of advance tax which a casual taxable person is required to deposit while obtaining registration should be calculated after considering the due eligible ITC which might be available to such taxable person.
|2||As per section 27 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the said Act), period of operation by causal taxable person is ninety days with provision for extension of same by the proper officer for a further period not exceeding ninety days. Various representations have been received for further extension of the said period beyond the period of 180 days, as mandated in law.||1. It is clarified that in case of long|
running exhibitions (for a period more
than 180 days), the taxable person
cannot be treated as a CTP and thus
such person would be required to
obtain registration as a normal taxable
2. While applying for normal
registration the said person should
upload a copy of the allotment letter
granting him permission to use the
premises for the exhibition and the
allotment letter/consent letter shall be
treated as the proper document as a
proof for his place of business.
3. In such cases he would not be
required to pay advance tax for the
purpose of registration.
4. He can surrender such registration
once the exhibition is over.
|3||Representations have been received regarding the manner of recovery of excess credit distributed by an Input Service Distributor (ISD) in contravention of the provisions contained in section 20 of the CGST Act.||1. According to Section 21 of the|
CGST Act where the ISD distributes
the credit in contravention of the
provisions contained in section 20 of
the CGST Act resulting in excess
distribution of credit to one or more
recipients of credit, the excess credit so
distributed shall be recovered from
such recipients along with interest and
penalty if any.
2. The recipient unit(s) who have
received excess credit from ISD may
deposit the said excess amount
voluntarily along with interest if any by using FORM GST DRC-03.
3. If the said recipient unit(s) does not
come forward voluntarily, necessary
proceedings may be initiated against
the said unit(s) under the provisions of
section 73 or 74 of the CGST Act as
the case may be. FORM GST DRC-07
can be used by the tax authorities in
4. It is further clarified that the ISD
would also be liable to a general
penalty under the provisions contained
in section 122(1)(ix) of the CGST Act.
2. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
3. Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow.
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