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GST - FICCI favours fixing of threshold for RCM u/s 9(3)

Published: Aug 07, 2018

By TIOL News Service

NEW DELHI, AUG 07, 2018: WHILE welcoming the GST Council's decision to set up Group of Ministers on the MSMEs issues FICCI has also suggested that:

++ Allow Single Pan-India registration

The GST law mandates registrations to be obtained in every State/Union Territories from where the supply of goods or service is made, despite the taxable person providing the supplies under a single legal entity. Multiple registrations only warrant additional compliances and assessment without increasing tax revenue to the Government exchequer. A single registration will mitigate the uncertainty, cascading and unnecessary compliances. It is imperative that a single registration be allowed for MSMEs with a credit mechanism that ensures that there are no credit blockages.

++ Specify threshold for applicability of reverse charge under section 9(3)

As per section 9(3) of the CGST Act, 2017, the service recipients are required to pay GST on the expenses notified under section 9(3) of the CGST Act, 2017 like payments to advocates, goods transport operator, etc. There are certain compliances required in this case, viz. issue of self-invoices, payment vouchers, maintaining the relevant general ledger etc. This creates an unnecessary compliance burden for the service recipient. It is recommended that the exemption from paying GST under reverse charge should be provided up to a certain threshold of expenditure. This would reduce the compliance burden for MSMEs without much revenue loss for the Government.

++ Non-levy of GST on Advance on Services

As per notification no. 40/2017-Central Tax dated 13 October 2017 - requirement of payment of GST on advance receipts towards the supply of goods was removed for persons having a turnover of less than 1.5 crores in a year. Further to this, Vide Notification no. 66/2017- Central Tax dated 15 November 2017, this relaxation has been extended to all taxpayers from payment of tax on advances received in case of supply of goods, except persons opting to pay GST under the composition scheme. To facilitate the interests of the service providers, it is suggested that the requirement of payment of GST on receipt of advance on services should also be removed, in case of supply of services.

++ GST Rates - 'Breakfast Cereals’ (Chapter Heading 1904)

Breakfast Cereals are popular, nutritious and ready to eat food products, essentially made from familiar and staple grains like Corn, Maize, Wheat, Ragi, Rice and Barley and also fortified with a range of Vitamins and Minerals depending on consumer needs and regulatory requirements. It is requested that rate of GST applicable to Breakfast Cereals be reduced from current 18% to 12% as it will drive penetration of this nutritious food product to a great extent.