GST: Reverse Charge Mechanism postponed till 30th September [Read Notification]

Service Tax - RCM - payable - Proprietary - factories - CESTAT - taxscan

The Central Government has postponed the application of reverse charge mechanism under the Goods and Services Tax (GST) regime till 30th September 2018.

Notification in this regard has been issued for exempting payment under reverse charge under sections 9 (4), 5 (4) and 7 (4) of the CGST Act, IGST Act and UTGST Act respectively.

As per the new notification, there will not be the reverse charge on the supply of goods or services by unregistered person till September 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. This was further extended till tomorrow. Now, a further extension has been made.

The Goods and Services Tax, launched on last year is completing one year on this Monday.

Earlier, there were reports that 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.

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.

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