Published: Wed, March 14, 2018

GST Council Defers Reverse Charge Mechanism to July 1

GST Council Defers Reverse Charge Mechanism to July 1

Jaitley said the current system of GST return filing has been extended by three months. Therefore, the concerned people will be having time until June to file their tax returns.

While welcoming the extensions of exemptions to exporters, tax experts said the uncertainty about returns filing and invoice matching creates problem for industry about preparing for compliances.

The GST Council in October past year had said that an e-wallet mechanism for refunds to exporters would be developed and had entrusted the DGFT to prepare required norms for the implementation from April, 2018.

With states divided on the simplification of return filing procedures, the present filing system was extended for another three months. For intra-state movement, the e-way bill would be rolled out in a phased manner beginning April 15.

"Each group will come under it every week after 1st April and efforts will be made to implement it across the country by April end". This would also apply, to the demands by the service tax or central excise authorities of service tax on licenses for alcoholic liquor for human consumption in the pre-GST era, that is from April 1, 2016 to June 2017. The Council could not decide on a simplified GST return form and entrusted the ministerial panel under Sushil Modi to chalk out a single page form which is simpler and evasion proof.

The first group of states to roll out of intra-state e- way bill from April 15 will be decided on April 7. "Further, the Committee are surprised to learn that no GST revenue targets have been fixed by the government", the Standing Committee on Finance headed by Congress member M Veerappa Moily said in its report tabled in Parliament on 10 March. Both e-way bill and RCM are anti-evasion measures under GST but traders have been protesting against these since inception. To ease exporter woes, the Council has also allowed exporters to continue to claim tax exemptions till October 1, 2018. Accordingly, merchant exporters can pay a tax at the rate of 0.1 per cent on goods procured for export purposes and obtain a refund for the same.

Also, domestic procurement made under Advance Authorisation, EPCG and EOU schemes are being recognised as "deemed exports" with flexibility for either the suppliers or the exporters being able to claim a refund of GST/IGST paid thereon.

Jaitley said that while there were no tariff items on the agenda of the GST Council on Saturday but only some procedural issues including the simplification of the return filing system.

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