Basics FAQs

The Basics FAQs are designed to help business owners better understand the complex tax system and answer some common questions. These FAQs cover topics such as what GST is, aspects of GST, which government levies GST, etc. Also included in these FAQs is information on who manages the GST website, what CTP is under GST, how to apply for a tax extension, the difference between CTP and NRTP, and much more.

Learn about the GST Law and get answers to some of the most commonly asked questions for this complex tax system. Questions such as what GST is and more.



GST is an indirect tax levied on Supply of Goods and Services. It came in India with effect from 1St July 2017. GST is an indirect tax wherein the liability to bear the tax falls on end user.

  • GST is a consumption-based tax.
  • The state which consumes more goods and services receives more GST.
  • The burden of Indirect Tax always falls on end user.
  • GST was introduced to ensure seamless flow of tax from manufacture to consumer.
  • The business who pays any kind of GST on purchase/expense becomes eligible for Input Tax Credit (ITC) which can be set off against outward liability.
  • Thus, indirectly the business does not pay any GST.
  • GST is implemented in such a manner that basic requirements of society are either taxed at lower rate or they are exempted.

There are three types of GST:
1) IGST.
2) CGST.
3) SGST.

India has adopted a Dual GST model of the federal structure of GST wherein both Center and state government concurrently levies GST on supply of goods and services.

GST is applicable to whole of India including Jammu & Kashmir.

GST Portal is managed and maintained by Goods and Service Network (GSTN).

Both the GST as well as Central Excise Duty is levied on tobacco.

Interstate supply is a supply wherein supplier and recipient are in different states. Whereas Intrastate supply is a supply where supplier and recipient are in same state.

Forward Charge Mechanism (FCM):
  • In FCM, the liability to deposit the tax to the government falls on the supplier. The recipient (buyer) pays the amount to the supplier inclusive of GST and the supplier deposits the tax to government in his return.
  • Mr. A purchases goods from Mr. B and makes full payment to Mr. B. Now Mr. B has an obligation to pay the tax to government in his monthly return.
Reverse Charge Mechanism (RCM):
  • In RCM, the liability to deposit tax to government lies with Recipient. When the recipient (buyer) purchases goods or services then he makes payment to supplier only for price charged by supplier. In RCM, the buyer does not pay GST to supplier. Since supplier has provided RCM supply, he is under no obligation to deposit tax as GST is not collected by him.
  • In RCM the buyer will deposit the amount of tax to government by declaring such supply in his monthly return.
  • For e.g., Mr. A purchases goods from Mr. B. Mr. A will now pay consideration to Mr. B and Mr. A will only deposit the GST on transaction to government in his monthly return.

No, RCM supplies are usually determined by law as recommended by the GST Council. Government notifies the supplies which are required to be paid under RCM.

A registered person is required to maintain following records at his principal place of business. [Section 35(1)]

(1) production or manufacture of goods;
(2) inward and outward supply of goods or services or both;
(3) stock of goods;
(4) input tax credit availed;
(5) output tax payable and paid; and
(6) such other particulars as may be prescribed;

A registered person is required to retain the records for period of 72 months (5 years) from due date of furnishing of annual return of that Financial Year.

A Casual Taxable Person (CTP) under GST is a person who does not have any fixed place of business but supplies goods or/and services in different taxable territories of India. A CTP can act as a principal or agent to expand the scope of business.

A CTP can obtain registration maximum for 90 days. Further additional 90 days can also be extended.

The Casual Taxable Person can extend the registration period by filing the Form GST REG-11 before the end of its validity. It shall be noted that the registration period can be extended for not more than 90 days.

The person applying for registration as CTP is required to pay an amount equivalent to Estimated Tax Liability.

In case actual liability is less than pre deposit of Estimated Tax Liability then refund of difference shall be granted to CTP.

NRTP stands for “Non-Resident taxable Person” is a person who occasionally undertakes transactions involving the supply of goods or services, or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

The person shall apply 5 days prior to the commencement of business electronically along with a duly signed application with a self-attested copy of his valid passport, for registration, using the Form GST REG-09.

A non-resident taxable person is also required to make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which registration is sought.

Similarly, where actual liability is less than pre deposit of Estimated Tax Liability then refund of difference shall be granted to NRTP.

A CTP does not have a fixed place of business in the State/UT where he undertakes supply though he might be registered with regard to his fixed place of business in some other State/UT, while a NRTP does not have fixed place of business/residence in India at all.