The CBIC has notified that the provisions relating to Reverse Charge Mechanism (RCM) under Section 9(4) of the CGST Act, 2017/ Section 5(4) of the IGST Act, 2017 have been further Deferred by Govt. for 3 months upto 30 Sept. 2018 (i.e. earlier deferred upto 30 June 2018), as under:
GST RCM Provisions deferred upto 30 Sept. 2018: CBIC Notification No.12/2018 Central Tax Rate dt. 29 June 2018
GST RCM Provisions deferred upto 30 Sept. 2018: CBIC Notification No.13/2018 Integrated Tax Rate dt. 29 June 2018
GST RCM Provisions deferred upto 30 Sept. 2018: CBIC Notification No.12/2018 UT Tax Rate dt. 29 June 2018
RCM, TDS, TCS under GST further Deferred till 30 Sept. 2018: News Report dt. 26 June 2018
GST Reverse Charge Mechanism (RCM) further Deferred/ Suspended till 30 June 2018: CBEC Notification
The CBEC has notified that the reverse charge mechanism (RCM), under Section 9(4) of the CGST Act, 2017/ Section 5(4) of the IGST Act, 2017, has been further deferred/ suspended till 30 June 2018, in line with GST Council recommendations dt. 10 March 2018. In the meantime, a Group of Ministers (GoM) will look into the modalities of its implementation to ensure that no inconvenience is caused to the trade and industry.
CBEC Notifies Partial Suspension of ‘Reverse Charge Mechanism (RCM) under GST till 31 March 2018
GST Council, in its 22nd Meeting dt. 6 Oct. 2017, has recommended that the reverse charge mechanism (RCM) under Section 9(4) of the CGST Act, 2017/ Section 5(4) of the IGST Act, 2017 shall remain deferred/ suspended till 31.03.2018 and will be reviewed by a committee of experts.
Accordingly, the CBEC has notified suspension of Reverse Charge Mechanism (RCM) till 31 March 2018 under Section 9(4) of the CGST Act, 2017/ Section 7(4) of the UTGST Act, 2017/ Section 5(4) of the IGST Act, 2017. There is nothing in the Notification on the effective date of RCM suspension. However GSTN has tweeted on 12 Oct. 2017 that the RCM Suspension will be applicable w.e.f. the date of Notification (i.e. 13 Oct. 2017).
It may be noted that there is no change on reverse charge provisions under Section 9(3) of CGST/ SGST Acts, Section 7(3) of UTGST Act and Section 5(3) of the IGST Act, relating to GTA, Legal Services provided by an Advocate, etc. and for that reason only it’s called to be a partial suspension of RCM.
This partial suspension of RCM is basically meant for convenience of large taxpayers and survival of unregistered taxpayers. It will provide an opportunity to such taxpayers with more time to be familiar with the compliance requirements. Meanwhile the Government will also be able to streamline the relevant procedures. In fact large/ registered businesses were reluctant to make compliance/ pay tax on behalf of small/ unregistered businesses and they were avoiding to do business with them. This will benefit small businesses and substantially reduce compliance costs.
CBIC (CBEC) Notifications on RCM Suspension
G.S.R. …(E).- In exercise of the powers conferred by sub-section (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 8/2017 –Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 717 (E), dated the 28th June, 2017, and amended vide notification No. 38/2017- Union Territory Tax (Rate), dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1264 (E), dated the 13th October, 2017, namely:-
In the said notification, for the figures, letters and words “31st day of March, 2018”, the figures, letters and words “30th day of June, 2018” shall be substituted.
Note: The principal notification No. 8/2017-Union Territory Tax (Rate), dated the 28th June,2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i) vide number G.S.R. 717 (E), dated the 28th June, 2017 and amended vide notification No.38/2017- Union Territory Tax (Rate), dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1264 (E), dated the 13th October, 2017.
G.S.R. ….(E).- In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 32/2017- Integrated Tax (Rate), dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1263 (E), dated the 13th October, 2017, namely:-
In the said notification, in paragraph 2, for the figures, letters and words “31st day of March, 2018”, the figures, letters and words “30th day of June, 2018” shall be substituted.
Note: – The principal notification No. 32/2017- Integrated Tax (Rate), dated the 13th October, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1263 (E), dated the 13th October, 2017.
G.S.R.1262(E).— In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.8/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 680(E), dated the 28th June, 2017, namely:-
In the said notification, the proviso under Paragraph 1 shall be omitted.
2. The exemption contained in the notification No. 8/2017-Central Tax (Rate) dated the 28th June, 2017 as amended by this notification shall apply to all registered persons till the 31st day of March, 2018.
Note:- The principal notification No.8/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 680 (E), dated the 28th June, 2017.
G.S.R.1263 (E).— In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the inter-State supply of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the integrated tax leviable thereon under sub-section (4) of section 5 of the said Act.
2. The exemption contained in this notification shall apply to all registered persons till the 31st day of March, 2018.
G.S.R.1264 (E).- In exercise of the powers conferred by sub-section (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.8/2017- Union Territory Tax (Rate), dated the 28thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 717(E), dated the 28th June, 2017, namely:-
In the said notification, the proviso under Paragraph 1 shall be omitted.
2. The exemption contained in the notification No.8/2017-Union Territory Tax (Rate) dated the 28th June, 2017 as amended by this notification shall apply to all registered persons till the 31st day of March, 2018.
Note:- The principal notification No.8/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 717(E), dated the 28th June, 2017.
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