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CA Intermediate · Taxation · Registration

Vikram, a resident of Bengaluru, is a casual taxable person who will run a seasonal exhibition stall in Hyderabad for 20 days. He expects taxable supplies of Rs 6 lakh and estimates net tax liability of Rs 90,000 during that period. He applied for registration five days before commencing business. Which statement is correct regarding the registration?

Vikram needs registration valid for the period specified in his application or 90 days, whichever is earlier, and must deposit in advance the estimated net tax liability of Rs 90,000. A casual taxable person has no threshold exemption and must apply at least five days before starting business.

  1. ARegistration is valid for 90 days and no advance deposit is needed
  2. BRegistration is valid for the period specified in the application or 90 days, whichever is earlier, and an advance deposit of Rs 90,000 is requiredCorrect
  3. CRegistration is valid for 180 days and an advance deposit equal to 50% of liability is required
  4. DRegistration is not required since the stay is under 30 days

Explanation

A casual taxable person must register at least 5 days before commencing business and must deposit in advance an amount equal to the estimated net tax liability for the period of registration. The registration is valid for the period in the application or 90 days from the effective date, whichever is earlier. The estimated liability is Rs 90,000, so that must be deposited.

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