GST Filing for Non-Resident Taxable Persons: How TaxBuddy Manages GSTR-5
- Nimisha Panda
- 24 hours ago
- 9 min read
Non-Resident Taxable Persons carrying out taxable supplies in India must comply with GST even without a fixed place of business. GSTR-5 is the mandatory monthly return that captures outward supplies, inward supplies, tax payments, and refunds for such entities. The GST filing process for GSTR-5 involves strict timelines, prior registration, bank verification, and accurate reporting of cross-border transactions. Any delay or mismatch can lead to penalties or blocked filings. With frequent rule changes and additional compliance checks, managing GSTR-5 requires precision, continuous monitoring, and timely execution, especially for foreign businesses operating temporarily in India.
Table of Contents
How GSTR-5 Filing Works for Non-Resident Taxable Persons
GSTR-5 is a monthly GST return designed specifically for Non-Resident Taxable Persons operating in India without a fixed place of business. The return captures details of outward taxable supplies, inward supplies, imports, amendments, tax liability, tax paid, and refund claims. Filing is time-bound and closely monitored, as NRTP registrations are temporary and linked to the approved business period. Taxes, largely under IGST, must be paid before submission, and once filed, the return cannot be revised. Any correction is permitted only through amendments in subsequent tax periods, making accuracy at the first stage critical.
Who Is Required to File GSTR-5 Under GST
GSTR-5 must be filed by foreign individuals, companies, or entities that supply taxable goods or services in India without a permanent establishment. These taxpayers register as Non-Resident Taxable Persons and are treated differently from resident taxpayers due to their cross-border nature. Even if no business activity occurs during a tax period, filing remains mandatory for the duration of registration. Failure to file can lead to penalties, blocked returns, or cancellation of GST registration.
GST Registration Requirements for Non-Resident Taxable Persons
NRTPs must obtain GST registration before commencing business in India. Registration is done through Form GST REG-09 and must be completed at least five days before the start of taxable activity. Key documents include a self-attested copy of the passport, proof of foreign tax identification, and details of the authorised signatory. The registration is temporary and valid only for the approved business period. Any extension requires a separate application, making planning and compliance timelines especially important.
Step-by-Step Process to File GSTR-5 on the GST Portal
The filing process begins by logging into the GST portal and selecting the relevant return period. Details of outward supplies, inward supplies, imports, and any amendments are entered using the “Prepare Online” option. Tax liability is auto-computed based on the data provided, after which taxes must be paid using the electronic cash ledger. A preview of the return allows final verification before submission. Once filed using DSC or EVC, the return is locked, and records must be maintained for future reference or scrutiny.
GSTR-5 Due Dates and Recent Regulatory Changes
GSTR-5 is generally due by the 13th of the month following the relevant tax period or within seven days of the expiry of registration, whichever is earlier. Regulatory updates have tightened compliance, including restrictions on filing returns that are delayed beyond three years. Certain periods may receive specific extensions through notifications, but reliance on extensions is risky. Recent changes have also made some GST returns non-editable after submission, reinforcing the importance of timely and accurate filing.
Mandatory Bank Account Verification for GSTR-5 Filing
Valid bank account details are now mandatory before filing GSTR-5. NRTPs must provide account number, account type, and IFSC, either at the time of registration or through a subsequent amendment. Without bank verification, the GST portal restricts return filing. This requirement aims to improve traceability of tax payments and refunds and has become a common bottleneck for foreign taxpayers unfamiliar with Indian banking procedures.
Input Tax Credit Restrictions for NRTPs Under GST
Unlike resident taxpayers, NRTPs face restrictions on claiming Input Tax Credit. Credit is generally not available on inward supplies, except in limited cases involving imports. This increases the effective tax cost of operations and requires careful pricing and tax planning. Incorrect ITC claims can lead to notices, interest, and penalties, making it essential to clearly understand eligibility before reporting figures in GSTR-5.
Penalties and Interest for Late or Incorrect GSTR-5 Filing
Late filing of GSTR-5 attracts a penalty of ₹200 per day, split equally between CGST and SGST or UTGST, subject to a maximum cap. In addition, interest at 18% per annum applies on unpaid tax amounts. Repeated non-compliance can trigger notices, suspension of registration, or even cancellation, which may disrupt ongoing or future business activities in India.
Common GSTR-5 Compliance Challenges Faced by NRTPs
Non-Resident Taxable Persons face a unique set of compliance challenges under GST due to the temporary and cross-border nature of their operations in India. One of the most common difficulties arises from the short validity of GST registration. Since registration is granted only for a specific business period, there is very little room for error or delay. Any mismatch in dates or delay in extension can result in blocked filings or forced closure of compliance activities before returns are properly filed.
Another major challenge is unfamiliarity with Indian GST rules and procedures. Many NRTPs are accustomed to tax systems that operate differently from India’s invoice-based, return-driven framework. Concepts such as return matching, reverse charge reporting, and strict return timelines often require additional learning and external guidance. Misinterpretation of these rules can lead to incorrect reporting or non-compliance.
Bank account requirements create further friction. Opening and validating an Indian bank account often takes longer for foreign entities due to documentation checks, KYC procedures, and coordination with local banks. Until bank details are successfully verified on the GST portal, GSTR-5 filing remains blocked, which can quickly push filings beyond due dates.
Maintaining accurate invoice-level data across borders is another persistent issue. Transactions may be recorded in different currencies, accounting systems, or formats, increasing the risk of mismatches while reporting outward and inward supplies. Ensuring consistency between commercial invoices, import documents, and GST returns requires careful reconciliation and timely data exchange.
Frequent regulatory updates add to compliance pressure. Changes in due dates, filing restrictions, bank verification rules, and system validations require constant monitoring. NRTPs who are not actively tracking GST notifications may miss critical updates that directly impact their filing eligibility or timelines.
Time zone differences also affect coordination. Communication delays between overseas teams and Indian consultants can slow down data sharing, approvals, and final filings. Dependence on local intermediaries further increases risk if instructions are misunderstood or if filings are not closely supervised.
Together, these factors make GSTR-5 compliance for NRTPs time-sensitive and error-prone. Without a structured process and proactive oversight, even small delays or misunderstandings can lead to penalties, blocked returns, or compliance notices.
How TaxBuddy Manages GSTR-5 Filing for Non-Resident Taxable Persons
TaxBuddy manages GSTR-5 filing for Non-Resident Taxable Persons through a structured, compliance-first approach that addresses the practical challenges faced by foreign businesses operating in India. The process begins with guided GST registration support, where documentation such as passport details, foreign tax identification, authorized signatory information, and business period validity are reviewed to ensure accurate registration as a Non-Resident Taxable Person. This early-stage validation reduces the risk of registration errors that could later block return filing.
Once registration is completed, TaxBuddy assists with bank account verification, which has become a mandatory prerequisite for GSTR-5 filing. The platform guides users through adding or amending bank details on the GST portal, ensuring that account numbers, IFSC codes, and account types are correctly updated. This step is closely monitored, as missing or incorrect bank details can prevent return submission and delay compliance.
For return preparation, TaxBuddy uses automated data checks to organise outward supplies, inward supplies, imports, and applicable amendments in line with GSTR-5 reporting requirements. Invoice-level validations help identify mismatches, missing fields, or classification issues before tax liability is computed. This reduces the likelihood of incorrect reporting, which is particularly important since GSTR-5 cannot be revised once filed.
Tax payment tracking is integrated into the workflow, ensuring that the correct tax amounts, primarily under IGST, are paid through the electronic cash ledger before submission. The platform highlights pending liabilities and confirms payment status to avoid filing failures caused by insufficient balance or incorrect challan mapping.
Throughout the filing cycle, TaxBuddy combines automation with expert-assisted review. Tax professionals verify return data, assess compliance with the latest GST rules, and address edge cases such as amendments, business closure filings, or short registration periods. This oversight is critical for Non-Resident Taxable Persons who must comply with strict timelines and evolving regulatory requirements.
Timely filing is supported through compliance tracking and alerts, helping ensure that GSTR-5 is filed within prescribed due dates or within the required period after registration expiry. By maintaining accurate records, monitoring regulatory changes, and providing structured expert support, TaxBuddy helps Non-Resident Taxable Persons remain compliant, minimise error exposure, and reduce the risk of notices or registration disruptions under GST.
Conclusion
GSTR-5 compliance for Non-Resident Taxable Persons involves more than routine filing. Temporary registration, strict timelines, limited credit availability, and mandatory bank verification demand a well-managed approach. A structured system with expert oversight helps ensure accuracy and continuity in GST obligations. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers both self-filing and expert-assisted plans to suit different taxpayer needs. The self-filing option is designed for individuals with straightforward income structures who prefer filing independently with guided prompts and automated checks. The expert-assisted plan is intended for cases involving complex income sources, foreign income, capital gains, GST compliance, or non-resident taxation, where a tax professional reviews data, resolves mismatches, and completes filing to ensure accuracy and compliance.
Q2. Which is the best site to file ITR?
The Income Tax Department’s official e-filing portal is the primary platform for filing income tax returns in India. It is suitable for taxpayers who are familiar with tax forms and compliance requirements. However, many taxpayers prefer assisted platforms like TaxBuddy because they offer automated data extraction, error validation, expert review, and post-filing support, reducing the risk of notices or incorrect filings.
Q3. Where to file an income tax return?
An income tax return can be filed directly on the official Income Tax Department e-filing portal or through authorized tax filing platforms such as TaxBuddy. Assisted platforms are commonly used by taxpayers who want a structured filing experience, automated checks, and access to professional support throughout the filing process.
Q4. Who is required to file GSTR-5 under GST?
GSTR-5 must be filed by every Non-Resident Taxable Person registered under GST. This includes foreign individuals, companies, or entities supplying taxable goods or services in India without a permanent place of business. The filing obligation applies for every tax period during which the GST registration remains active, regardless of the volume of transactions.
Q5. Is GSTR-5 mandatory even if there are no transactions?
Yes, GSTR-5 is mandatory even if no business activity takes place during a tax period. A nil return must still be filed for each active registration month. Non-filing, even in the absence of transactions, can lead to late fees, interest, and restrictions on future filings.
Q6. What details are reported in GSTR-5?
GSTR-5 captures comprehensive details of a Non-Resident Taxable Person’s GST activity. This includes outward taxable supplies to registered and unregistered persons, inward supplies, imports, amendments to previous returns, tax liability, tax paid through cash ledger, and refund claims if any. Accurate invoice-level reporting is essential, as the return cannot be revised once filed.
Q7. What is the due date for filing GSTR-5?
GSTR-5 is generally due by the 13th day of the month following the relevant tax period. If the GST registration expires or business activity ends earlier, the return must be filed within seven days of such expiry. While extensions may be notified for specific periods, reliance on extensions is not advisable due to increasing enforcement and system restrictions.
Q8. Is bank account verification compulsory for GSTR-5 filing?
Yes, bank account verification is mandatory before filing GSTR-5. Valid bank details, including account number, account type, and IFSC, must be updated on the GST portal. Without bank verification, the portal restricts return filing. This requirement ensures proper tracking of tax payments and refunds and has become a common compliance checkpoint for Non-Resident Taxable Persons.
Q9. Can GSTR-5 be revised after submission?
GSTR-5 cannot be revised once submitted. If any errors or omissions are identified after filing, corrections can only be made through amendments in subsequent return periods. This makes careful preparation and verification before submission essential to avoid future compliance issues or notices.
Q10. Are NRTPs allowed to claim Input Tax Credit?
Input Tax Credit availability for Non-Resident Taxable Persons is limited. Generally, ITC is not allowed on inward supplies, except in specific cases such as imports. Due to these restrictions, incorrect ITC claims can attract interest, penalties, and scrutiny, making it important to understand eligibility before reporting credit details in GSTR-5.
Q11. What penalties apply for late GSTR-5 filing?
Late filing of GSTR-5 attracts a penalty of ₹200 per day, split equally between CGST and SGST or UTGST, subject to a prescribed maximum limit. In addition, interest at 18 per cent per annum is charged on unpaid tax amounts. Continued non-compliance can also lead to notices, suspension, or cancellation of GST registration.
Q12. How does TaxBuddy help with GSTR-5 compliance?
TaxBuddy supports Non-Resident Taxable Persons with end-to-end GSTR-5 compliance, including GST registration, bank detail verification, return preparation, tax payment tracking, and timely filing. By combining automated checks with expert oversight, the platform helps reduce filing errors, ensures adherence to deadlines, and minimises the risk of GST notices, making compliance smoother for foreign businesses operating in India.
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