Reverse Charge mechanism (RCM) may return for Composition Dealers under GST?

The nightmare in the form of Reverse Charge mechanism (RCM), i.e. if anything is purchased from unregistered dealer, then GST is to be paid by the purchaser may return for only composition dealers under GST. The finance minister Arun Jaitley said in the press conference after the meeting of the GST council. He said that some anti tax evasion provision will be established for the taxpayers under GST since, it is being witnessed that the taxpayers are under reporting their taxable revenue under GST.

He further states that GST collection from the composition dealer is just Rs.307 crore and hence, there are many chances that the taxpayers must have done some under assessment of their revenue and hence, paying less tax than the actual.

E-way bill mechanism - Another anti evasion measure

Arun Jaitley further states, that eway bill mechansim which is being implemented on a trial basis from 15th of January, 2018 is also a anti evasion measure for GST. He said that these provisions are necessary to be implemented under any law to make people fully complient in terms of the states laws. He also said, that some states will also open portal of eway bill even for the intrastate movement of goods. Government is planning to keep a exact watch on the movement of goods so that the real value of turnover can be reported.

Conclusion

The composition dealers get ready for some more compliances and tax payment, if government finally agrees and reapprove the reverse charge mechanism for unregistered dealers under section 9(4) of CGST Act, 2017.

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