Request to defer reverse charge upto June 30th 2018

Reverse charge is a mechanism where the recipient of the good or service will have to pay tax, which is otherwise paid by the supplier. The charge is applicable on a registered dealer, if he buys goods from a dealer not registered under GST. However, the receiver of the good is eligible for input tax credit, while the unregistered dealer is not.

A Group of Ministers (GoM), along with a panel of government officials will meet on 16^th April 2018 to discuss the bringing back of liability to pay tax on reverse charge mechanism under GST, as a part of a larger plan to curb tax evasion.

It will be proposed that it could be made applicable for only a particular category of taxpayer. Or there could be some kind of monetary exemption for which tax (on reverse charge basis) may not have to be paid.

Bringing taxpayers, especially composition dealers under RCM is a crucial step against tax evasion. However, any changes on RCM will require amendment in the law.