Govt may defer thorny GST rules till 2019

Govt may defer implementation of certain knotty GST rules till 2019

Govt may defer thorny GST rules till 2019
With the Goods and Services Tax (GST) increasingly posing hurdles to businesses, a wary government may postpone certain pricking rules till 2019.

The knotty E-way bill, matching of returns and reverse charge mechanism are some of the rules that may not see the light of the day till India goes into Parliamentary elections in 2019, according to informed sources.

Though postponing these will have an adverse affect on revenue collection under the GST, the finance ministry has admitted in the past, the political cost may be heavier than that in case they are implemented.

An e-way bill refers to a document that is required for the movement of goods worth above a certain threshold.

The newly set up advisory group to further simplify the provisions of GST too has suggested deferring the e-way bill mechanism till 2019 among other things.

The group has also recommended doing away with the reverse charge mechanism which relates to the recipient of goods and services paying the tax instead of the producer.

Reverse charge is a mechanism where the recipient of the goods and/or services is liable to pay GST instead of the supplier. Traders feel reverse charge mechanism is heavily tilted against small businesses. The government has already postponed the e-way bill till March 31,2018 but there is a buzz in the finance ministry that this along with some other provisions may be deferred well beyond 2019.

The revenue collection for the government has already dropped under the GST after the overall incidence of taxes on most commodities came down. In October the government collected Rs 83,346 crore as GST, 10% less from September's collection of Rs 92,000 crore.

"The revenue implication is substantial but the political implication can be huge," a source said, adding the government is serious about postponing certain provisions.

Liked the story?

  • 0

    Happy
  • 0

    Amused
  • 0

    Sad
  • 0

    Frustrated
  • 0

    Angry