In a small business-friendly move, the Centre has extended the suspension of the reverse charge mechanism on purchases of goods or services by registered dealers from unregistered dealers within the State till September 30.
This is not the first time such dispensation is being extended. This suspension was earlier available till end-June 2018, after being extended from March 31 this year.
With this move, any registered dealer can purchase goods or services from unregistered dealers without forking out GST under reverse charge till September 30, tax experts said.
This move will bring significant compliance relief to large businesses and encourage them to buy from unregistered dealers, they added.
Experts’ opinion
M S Mani, Partner, Deloitte India, said: “The reverse charge on supplies from unregistered dealers was essentially an anti-evasion tool intended to increase the number of registered dealers and its extension signifies that while the government does not want to increase the compliance burden, it reserves the right to re introduce reverse charge after three months if revenues are not as per expectations.’’
Abhishek Jain, Partner, EY’, says: “This extension was much sought for as the industry genuinely wanted some time before adhering to additional compliances envisaged for such procurements.”