Reportedly, the Government has again postponed the implementation of the reverse charge mechanism, TDS and TCS provisions under the Goods and Services Tax (GST) Laws till the end of September.
The GST Implementation Committee (GIC), headed by the Revenue Secretary, has decided to keep in abeyance the TDS/TCS provision and GST by way of RCM by another three months, a senior revenue official said to ET.
The GST Council meeting held at New Delhi in October, had decided to suspend the reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under subsection (4) of section 5 of the IGST Act, 2017 till 31th March 2018 and will be reviewed by a committee of experts.
This was a benefit to small businesses and substantially reduce compliance costs. As the Government failed to resolve the ambiguities over the reverse charge mechanism, the GST Council, on March 10th, had decided to postpone the implementation of Reverse charge mechanism (RCM) to three months.
Under the new tax regime, certain services are taxable under the Reverse Charge Mechanism (RCM), as per which, the service tax on specified services can be collected directly from the service recipient instead of collecting it from the service provider.
Similarly, the Government had decided to defer the implementation of provisions relating to TDS and TCS considering the difficulties of the traders. Representations were made by e-commerce firms that it would be an additional compliance burden and would lock-down working capital for merchants selling online.
“The GIC has decided to postpone by three months the TDS/TCS and RCM provisions. Notification will be issued shortly. The GIC decision has been circulated to the states for issue simultaneous notification, the official told.
A ministerial panel under Bihar Deputy Chief Minister Sushil Modi was constituted in March to iron out issues being faced by businesses under the reverse charge mechanism.
