Group of Ministers are expected to hold a meeting on 8th July for final discussions over reverse charge mechanism and tax discount on the digital payments under GST.
The discussion will lead to a final report which will be further suggested to the GST council in the upcoming 28th meeting on 21st July in New Delhi.
There will be the presence of some higher ranked officials including Bihar Deputy Finance Minister Sushil Modi, Punjab FM Manpreet Singh Badal, Kerala FM Thomas Issac, Excise and Taxation Minister of Haryana, Capt. Abhimanyu, West Bengal FM Amit Mitra.
The reverse charge mechanism has been deferred 3 times since the implementation of goods and services tax from 1st July 2017. The latest deadline allotted to the RCM is 30th September which will be revised soon after the date.
There were cases in the official meetings that emphasized the importance of RCM and its role in pugging the tax leakage. For the same purpose, the GoM meeting will finalize the fate of RCM under GST.
According to the officials, “For instance, RCM can be levied only on a particular category of taxpayer. Or there could be some kind of monetary exemption for which tax (on reverse charge basis) may not have to be paid.”
The RCM had earlier created some problems within the dealing of registered and unregistered businesses as the registered business were not ready to pay the taxes on behalf of unregistered and also ignored to make transactions with them.
The idea was targeted at the unregistered dealers and to prohibit registered dealers to transact with them. Apart from the RCM, the GoM will also decide on the issue over a discount on digital payments.
There was lack of consensus on these issues and therefore the GoM had decided to make a discussion on both the provisions introduced in the May 4 meeting.
