The Central Board of Excise and Customs (CBEC) has notified that the implementation of reverse charge mechanism (RCM) has been deferred until 30th June 2018.
As per the new notification, there will not be the reverse charge on the supply of goods or services by unregistered person till June 30, 2018
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.
