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Circular No. 71/45/2018-GST

F. No. 349/94/2018-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing

New Delhi, Dated the 26
th
October, 2018

To,
The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)/
The Principal Directors General/ Directors General (All)

Madam/Sir,
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.

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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:
S. No Issue Clarification
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.

Circular No. 71/45/2018-GST

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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
person.
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

Circular No. 71/45/2018-GST

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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
such cases.
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.

(Upender Gupta)
Commissioner (GST)