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01 Aug, 2025
By Online Legal India
Published On 28 Jul 2025
Category GST
The Goods and Services Tax (GST) is a unified indirect tax system introduced in India to simplify and streamline tax collection and administration. It plays a vital role in bringing transparency and consistency across various types of businesses. While GST registration is mandatory for eligible businesses, there is often confusion regarding the need for any deposit or security during the registration process. In this blog, you will learn about the deposit for GST Registration. This blog aims to clearly explain whether a GST registration deposit is required and in what cases it becomes applicable.
A deposit for GST registration is an advance tax payment required in specific cases. It mainly applies to Casual Taxable Persons (CTP) and Non-Resident Taxable Persons (NRTP). These applicants must pay an estimated amount based on their expected GST liability for a limited business period. The paid amount is credited to their Electronic Cash Ledger. This system ensures proper tax compliance during their temporary registration. Regular taxpayers, however, do not need to make any deposit while registering under the GST system.
For Normal (Regular) Taxpayers, there is no requirement to pay any advance deposit during GST registration. Such businesses only need to submit the application form, and once approved, they receive their GSTIN. However, Casual Taxable Persons and Non-Resident Taxable Persons must deposit an estimated GST amount in advance to ensure compliance before starting business operations in India.
Under the current GST framework, a Deposit for GST Registration is required only in specific cases:
A Casual Taxable Person operates a temporary business in a location where it has no fixed place of business. This type of person supplies goods or services occasionally, such as during exhibitions, trade fairs, or seasonal markets.
The GST law requires a Casual Taxable Person to pay a deposit in advance. This deposit equals the estimated GST liability for the period the business wants to operate, which cannot exceed 90 days. The person calculates the expected turnover and tax, then pays that amount before applying for GST registration.
The system accepts the deposit through a challan. Only after successful payment, the portal issues the temporary GSTIN. The deposit amount reflects in the taxpayer’s electronic cash ledger and adjusts against actual tax payable after business operations begin.
A Non-Resident Taxable Person does not live in India but supplies goods or services within Indian territory. Such a person does not have a business base or permanent establishment in India.
Under GST rules, this person must also pay a mandatory advance deposit. The deposit amount must match the estimated tax liability for the proposed duration of business. This deposit ensures that the non-resident meets tax obligations during the period of operation.
Before applying, the person must estimate their expected sales and corresponding GST liability. The payment must happen in advance through the GST portal. Only after the deposit reflects in the cash ledger, the portal grants provisional registration, which remains valid for 90 days or until extended.
As per the GST guidelines, a deposit is required only for Casual Taxable Persons (CTPs) and Non-Resident Taxable Persons (NRTPs). To calculate the deposit, the taxpayer must first estimate the total value of goods or services they plan to supply during the registration period, which can be up to 90 days. Then, they must apply the applicable GST rate (such as 5%, 12%, 18%, or 28%) to determine the gross tax liability.
After calculating the gross liability, the taxpayer must subtract any eligible Input Tax Credit (ITC) they expect to claim. The final amount, known as the net tax liability, becomes the required advance deposit. This deposit must be paid before the GST registration application is submitted, and it reflects in the applicant’s electronic cash ledger.
According to CBIC Circular No. 71/45/2018-GST, this upfront payment ensures tax compliance for temporary or non-resident businesses. The deposited amount can be adjusted later when filing returns like GSTR-3B or GSTR-5. If any balance remains unused, it can be claimed as a refund. Regular taxpayers are not required to make any deposit at the time of GST registration.
Below is the step-by-step process to pay the advance GST deposit for Casual Taxable Persons (CTP) and Non-Resident Taxable Persons (NRTP):
Step 1: Apply for GST Registration
A CTP or NRTP applies to the GST portal before starting any business activity. The CTP uses Form GST REG-01, and the NRTP uses Form GST REG-09. The portal generates a Temporary Reference Number (TRN) once Part A of the form is submitted. This TRN helps continue and track the registration process.
Step 2: Estimate the Tax Liability
The applicant estimates the expected turnover for the period of operation. This estimate includes both taxable supplies and applicable GST rates. The estimate must cover the entire registration period, which can go up to 90 days. The calculation helps determine the advance tax amount.
Step 3: Generate the Challan (PMT-06)
The GST portal generates a challan in Form GST PMT-06 using the TRN. This challan reflects the estimated tax liability based on the information entered during the application. The applicant uses this challan to pay the advance deposit.
Step 4: Pay the Advance Tax
The applicant deposits the estimated tax amount through net banking, credit card, debit card, or NEFT/RTGS. The amount reflects in the electronic cash ledger of the applicant. This deposit is mandatory before registration is approved.
Step 5: Receive Provisional GSTIN
After the payment, the portal approves the application and issues a provisional GST registration certificate. This certificate includes a 15-digit GST Identification Number (GSTIN). The applicant can now supply goods or services under GST for the approved period.
Step 6: File GST Returns and Adjust Deposit
During the operational period, the applicant files regular GST returns (Form GSTR-3B for CTP and Form GSTR-5 for NRTP). The advance deposit is adjusted against the actual tax liability declared in these returns. Any difference is either paid or refunded as per the rules.
Step 7: Apply for a Refund if Excess Remains
After completing the business and filing the final return, the applicant checks for any balance left in the cash ledger. If an excess amount remains, the applicant files Form GST RFD-01 to claim the refund. This ensures proper settlement of the advance tax paid.
Here is a detailed overview of the Refund of Excess Deposit under GST:
A taxpayer can claim a refund only if the advance deposit made during GST registration exceeds the actual tax liability. This situation usually applies to Casual Taxable Persons (CTP) and Non-Resident Taxable Persons (NRTP). They must first discharge all tax liabilities and file all returns. The refund becomes eligible only after completing this process.
The taxpayer must file Form GST RFD-01 on the GST portal. This form serves as the official request for claiming a refund of the excess deposit. The taxpayer selects the option "Refund of excess balance in electronic cash ledger" within the form. This process does not require the taxpayer to justify the refund with any complex calculations. The GST portal verifies the balance automatically.
The taxpayer must file all due returns before applying for the refund. For Casual Taxable Persons, the forms include GSTR-1 and GSTR-3B. For Non-Resident Taxable Persons, the applicable form is GSTR-5. Refund is not allowed unless the taxpayer completes all return filings.
Once the refund application is filed, the tax officer issues an acknowledgement within 14 days. If any clarification or document is needed, the officer sends a notice within this period. The taxpayer must respond to this notice within the given timeline. If everything is in order, the officer processes the refund application.
The approved refund is credited to the taxpayer's bank account or electronic cash ledger. The officer must release the refund within 60 days from the date of application acknowledgement. If the officer fails to do so, the taxpayer becomes eligible to receive interest on the delayed refund amount.
The refund application must be submitted before the expiry of the GST registration. If the taxpayer fails to file the refund claim within this period, the refund becomes ineligible. This condition ensures that all refund claims are processed within the valid registration duration.
Conclusion
Regular taxpayers do not need to pay any advance deposit at the time of GST registration. However, businesses that apply as Casual or Non-Resident Taxable Persons must pay an upfront tax based on their estimated turnover for the registration period. This rule ensures proper tax compliance. Understanding when a deposit for GST registration is applicable helps ensure smooth compliance, avoid delays, and manage finances more effectively. If you want to do a GST Registration, get help from Online Legal India.
No, regular taxpayers do not need to pay any deposit for GST registration. However, Casual Taxable Persons (CTPs) and Non-Resident Taxable Persons (NRTPs) must pay an advance deposit based on their estimated GST liability.
The deposit is calculated based on the taxpayer’s estimated taxable turnover and applicable GST rate for the duration of registration. This estimate must be realistic and justifiable.
The deposit must be paid at the time of applying for registration. Without payment, provisional registration is not granted to Casual or Non-Resident Taxable Persons.
Yes. If there is any unutilized amount left in the electronic cash ledger after filing the final return, the taxpayer may claim a refund using Form GST RFD-01.
The advance deposit must be paid through the GST portal using online payment modes such as net banking, UPI, NEFT/RTGS, or over-the-counter methods, and it gets credited to the electronic cash ledger.
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