GST Group Of Ministers: Delete Section On Reverse Charge, Defer Digital Payment Discount
The group of state finance ministers tasked with reviewing the reverse charge mechanism under Goods and Services Tax has recommended the deletion of Section 9(4) of the Central GST Act, 2017, Bihar Finance Minister Sushil Modi said today.
Under the reverse charge mechanism, registered dealers are required to pay tax in case they buy goods from unregistered dealers or businesses. On June 29, the government deferred the reverse charge mechanism for another three months till Sept. 30, after deciding to keep the reverse charge mechanism in abeyance till June 30.
The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Modi said the final decision on this will be taken by the GST Council.
A separate group of ministers has recommended that the proposal on incentives for digital payments be deferred by a year. The GST Council, in an earlier meeting on May 4, had discussed a two percent concession in the tax rate on items that are bought through digital modes of payment.
The proposal included one percent concession on the Central GST and another one percent on the state GST, BloombergQuint had reported earlier. For instance, an 18 percent tax payable on a particular good or service would be reduced to 16 percent if the consumer chooses to pay online. The incentive is proposed to be available on items taxed at 3 percent or more and subject to a ceiling of Rs 100 per transaction.
The cost to the exchequer of providing such a concession stands at Rs 13,000-26,000 crore, the Council had said earlier.
The panel of states’ ministers on GST is headed by Bihar’s Sushil Modi, and includes Manpreet Singh Badal of Punjab, Rajesh Agarwal of Uttar Pradesh, Amar Agrawal of Chhattisgarh, and Thomas Isaac of Kerala as members.
Source by bloombergquintShare: