The technical issues of GST Network (GSTN) coupled with errors in invoice matching have brought in criticism from all corners. The GST law Committee, comprising of Senior Center and State officials, on January 5, proposed their recommendation to the Ministry of Finance. The Ministry of Finance, after further assessment, would present it before the GST council on January 18.
As per the report, the Committee has recommended deferment of GST provisions like tax deducted at source (TDS) and tax collected at source (TCS) as well as the reverse charge mechanism (RCM).
Unlike general norms, under RCM the receiver of goods or service has a tax liability and not the supplier. The tax is levied a registered dealer if he buys goods from an unregistered dealer. The receiver of the good is eligible for input tax credit, while the unregistered dealer is not. Reluctant Registered taxpayers meant dooms for the small or unregistered taxpayers. Small and unregistered dealers would run out of business if registered dealers do not buy goods from them. This compelled the GST Council headed by Finance Minister Arun Jaitley in October 2017, to defer RCM mechanism.
The Committee has recommended further postponement for RCM. Only businesses under composition Scheme would come under RCM. The Committee’s proposal also aims to simplify the procedures for filing returns, refunds, as well as ease the compliance burden and reduce invoicing errors.
