India is one of the fastest-growing economies in the world and an attractive destination for global companies seeking to expand their market. However, entering the Indian market requires compliance with local tax laws, including the Goods and Services Tax (GST). If your foreign company intends to sell goods or provide services in India, GST registration is mandatory.
In this article, we will walk you through everything a foreign company needs to know about GST registration in India — from eligibility, process, and documentation to compliance and penalties. Whether you’re an international SaaS provider, e-commerce platform, or consulting firm, this comprehensive guide will help you navigate the GST system effectively.
What Is GST?
The Goods and Services Tax (GST) is a unified indirect tax system that replaced multiple central and state taxes in India. Introduced in 2017, GST applies to the supply of goods and services and is categorized into:
- CGST (Central GST)
- SGST (State GST)
- IGST (Integrated GST – for inter-state or international transactions)
For foreign companies operating in India, IGST is often the most relevant, especially when providing cross-border services or goods.
Do Foreign Companies Need GST Registration?
Yes. Under Indian GST law, foreign companies must register if they make taxable supplies in India, regardless of turnover. There is no minimum threshold for GST registration in such cases.
Categories of Foreign Companies Requiring GST Registration:
- Non-Resident Taxable Persons (NRTP): Companies with no fixed place of business in India but supplying taxable goods or services.
- Foreign companies with a branch, liaison office, or subsidiary in India: These entities are treated as regular taxpayers.
- Foreign providers of Online Information and Database Access or Retrieval (OIDAR) services: E.g., software downloads, e-learning platforms, digital services.
- E-commerce operators serving Indian customers
- Event organizers or participants in exhibitions in India
Types of GST Registration for Foreign Companies
There are two main categories:
1. Non-Resident Taxable Person (NRTP)
- Temporary GST registration
- Valid for 90 days (can be extended)
- Requires advance payment of estimated tax liability
- Ideal for businesses without a physical presence in India
2. Regular Taxpayer Registration
- For foreign companies with a fixed establishment (like a branch office) in India
- Same obligations as domestic businesses
- No need to pre-deposit tax
GST Registration Process for Foreign Companies
Step 1: Appoint an Authorized Signatory
A foreign company must appoint a person (resident in India) as an authorized signatory. This individual will act on behalf of the company and manage all GST-related matters.
Step 2: Collect Required Documents
Here’s a checklist of documents needed:
- Certificate of Incorporation (translated into English, if required)
- Tax Identification Number (or equivalent)
- Passport and visa of the authorized signatory
- PAN card of the authorized signatory
- Authorization letter or board resolution
- Indian address proof (if any)
- Proof of Indian bank account (for regular registration)
- Digital Signature Certificate (DSC)
Step 3: Register on GST Portal
Foreign companies need to apply online through the GST portal (www.gst.gov.in) using:
- Form GST REG-09 for Non-Resident Taxable Persons
- Form GST REG-01 for companies with a permanent place of business in India
For NRTPs, the application must be submitted at least 5 days before starting business in India.
Step 4: Pay Advance Tax (For NRTPs)
Non-resident taxable persons must estimate their tax liability for the registration period and deposit it in advance. This payment is mandatory before GSTIN (GST Identification Number) is issued.
Step 5: GSTIN Issued
Once the application is verified and the advance tax is paid, the GSTIN is issued. This number is used for all GST returns and payments in India.
GST Returns and Compliance for Foreign Companies
Once registered, foreign companies must comply with regular GST filing obligations.
Return Types and Due Dates:
| Return Type | Description | Applicability | Due Date |
|---|---|---|---|
| GSTR-5 | Monthly return for NRTPs | NRTPs | 20th of the following month or 7 days after expiry |
| GSTR-5A | Return for OIDAR services | OIDAR Providers | 20th of the following month |
| GSTR-1 | Outward supply return | Regular taxpayers | Monthly/Quarterly |
| GSTR-3B | Summary of outward & input tax credit | Regular taxpayers | Monthly |
Failure to file returns can result in penalties, interest, and even cancellation of GSTIN.
Input Tax Credit (ITC) for Foreign Companies
Who is eligible?
- Regular foreign companies can claim Input Tax Credit on GST paid on purchases, capital goods, and services used in their business.
- NRTPs are not eligible for ITC unless they become regular taxpayers.
This can significantly reduce the tax burden for companies involved in import-export or who use domestic suppliers in India.
Renewal and Extension of NRTP Registration
- NRTP registrations are valid for 90 days.
- You may request an extension before expiry by filing Form GST REG-11.
- A further advance tax deposit is required based on estimated liability for the extended period.
Failure to extend in time means you will be operating illegally, which could result in penalties.
Common Challenges in GST Registration for Foreign Companies
- Lack of Physical Office in India: Address proof is often required for communication, making virtual presence difficult without a local partner.
- Banking Hurdles: Setting up an Indian bank account may take time, which delays registration.
- Complex Documentation: Legal translation, apostille, and notarization may be required.
- Understanding Compliance: Navigating India’s GST return filing process can be challenging without local support.
- Advance Tax Estimate: NRTPs must calculate and deposit estimated tax liability before registration — a tough ask for new entrants.
Benefits of GST Registration for Foreign Companies
- Legal Compliance: Avoids penalties and enables smooth operations in India.
- Input Tax Credit: Helps reduce overall tax costs for regular taxpayers.
- Reputation Boost: Shows commitment to transparency and compliance, building trust with Indian clients and authorities.
- Business Expansion: Enables participation in tenders, trade shows, and long-term projects.
Penalties for Non-Compliance
Foreign companies failing to register or comply with GST rules may face:
- ₹10,000 or 10% of tax due, whichever is higher
- 100% penalty for willful tax evasion
- Cancellation of GST registration
- Prosecution in severe cases
How CompaniesNext Can Help
At CompaniesNext, we specialize in helping foreign companies register for GST in India. Our services include:
- End-to-end documentation and filing
- Appointing an Indian authorized signatory
- Estimating advance tax liability
- Filing ongoing GST returns
- Managing compliance and renewals
With our expertise, you can enter the Indian market confidently and avoid regulatory hurdles.
Conclusion
If you are a foreign company planning to conduct business in India, GST registration is non-negotiable. From appointing a representative to filing monthly returns, the process may seem complex, but it’s crucial for smooth operations and long-term success. By staying compliant and partnering with experienced professionals like CompaniesNext, you ensure that your Indian venture begins on a strong legal and financial footing.
For tailored support and affordable GST registration services for foreign companies, contact CompaniesNext today.
