The Delhi High Court has asked to withdraw the petition, which was filed by Meerut Publishers Association and Institute of Management Association, on the constitutional validity of the RCM (reverse charge mechanism) under the GST, arguing that such petition is of no importance since the council has already postponed the RCM implementation on transactions made through unregistered businesses.
However, the petitioner denied withdrawing the petition. Abhishek Rastogi, counsel of the petitioner, said that the petition was on the constitutional validity of the RCM provision and will not be withdrawn.
The GST Council had earlier decided to defer the implementation of the RCM till September 2019. Under the provision, a registered buyer has to pay the tax directly to the government on a supply, unlike the seller in normal situations. RCM is currently applicable to many circumstances, but its applicability to unregistered entity transactions have been postponed as of now.
Even though the whole RCM matter has been deferred by the Council for a later date, the publishers are not ready to withdraw their petition just yet.
The court also heard the petition of non-availability of input credits for services on which there is no output tax. The issue is related to authors and publishers who are not able to get a credit for input taxes.
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Rastogi said that there is presently no mechanism for refund of input credits in cases where there is no GST on output supplies. It is negatively affecting the growth of such sectors. The publishing sector is among the worst hit by this mechanism as the royalty is paid under RCM, in addition to unavailability of credits for input expenses of paper, printing and ink.
