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The Centre has put into effect the recent GST Council decision suspending the reverse charge mechanism on purchases of goods or services by registered dealers from unregistered dealers within the State. This dispensation will now be available till end-March 2018.
With this move, any registered dealer can purchase goods or services from unregistered dealers without forking out GST under reverse charge.
This move will bring significant compliance relief to large businesses and encourage them to buy from unregistered dealers, say tax experts.
Post the July 1 GST rollout, several large businesses had stopped buying from unregistered dealers owing to difficulties under the reverse charge mechanism — the paperwork and other processes were rather cumbersome.
MS Mani, Partner-GST, Deloitte India, told BusinessLine the latest move is a welcome measure. However, it is hoped that this will become a permanent measure and reverse charge on purchases from unregistered dealers, which essentially nullified the concept of the threshold exemption, is not revived any time in the future, he said.
Date mattersAbhishek Jain, Partner, EY, said the Centre, in line with the GST Council decision, has finally issued the notification.
However, it is important to note that this notification is dated October 13, which means that any such transaction effected prior to this date would be liable to GST, he added.
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