ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • MSME Summit
  • Trending News
    • Viral News
    • Travel
    • People
    • Entertainment
    • Sports
  • More ...
    • VIDEOS
    • PHOTOS
BREAKING NEWS
  • Paisa Wasool: Mutual Funds-SIP Returns Calculator | Start from Rs 5k, get Rs 1.75 cr - SOLID MONEY FORMULA
  • WhatsApp New Feature: Soon! you can undo, recover WhatsApp deleted messages
  • LIC customers ALERT! Insurer launches campaign to revive lapsed policies - All you need to know
  • Wealth Guide: Income Tax - SMART TIPS! 5 tax-saving techniques for FY23 - Here is what expert suggests
  • Loss-making US company's share price zooms over 400% in one month - factors behind rally DECODED
Read in App
Business News » India News

Govt to introduce reverse charge mechanism to check GST evasion

The controversial GST feature will reportedly help the government estimate turnover of small firms, and also prevent the firms from hiding their actual turnover and profits. 

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Govt to introduce reverse charge mechanism to check GST evasion
Small businesses have been against implementation of reverse charge, citing the compliance burden. Image source: Reuters
Key highlights:
  • Under it, recipient of goods or services are required to pay GST instead of suppliers
  • Small businesses have been against implementation of reverse charge
  • A six-member business advisory panel recommended to scrap this provision altogether

In its bid to check evasion, especially by traders and small businesses under goods and services tax (GST), the government is likely to introduce the reverse charge mechanism, wherein, recipient of goods or services are required to pay GST instead of suppliers, said a report. 

This will ensure more transactions to increase coverage of GST to the unorganised sector, thus boosting tax collection, said the Financial Chronicle report, which quoted a Financial Ministry official saying as, “We will soon implement reverse charge mechanism.” 

The controversial GST feature will reportedly help the government estimate turnover of small firms, and also prevent the firms from hiding their actual turnover and profits. Through this, all sundry expenses of the companies would come in the GST network’s digital system.

Citing tax experts, the report said though reverse charge mechanism would definitely improve compliance, it would increase documentation burden on companies.

“Implementation of reverse charge mechanism could increase difficulties for businesses. The government may therefore reconsider its decision. It should first allow the basic thing to settle down and then bring this also,” Amit Bhagat, tax partner at PwC, told the newspaper.

It may be noted that small businesses have been against implementation of reverse charge, citing the compliance burden. 

A six-member business advisory panel formed by the government to suggest measures to make GST more taxpayer-friendly had few weeks ago reportedly recommended that this provision be scrapped altogether.

The panel consisted of Ajay Sahai, director general and CEO of Federation of Indian Exporters Organisation (FIEO), Praveen Khandelwal of Confederation of All India Traders (CAIT) and Gautam Ray, former DG (audit), customs and central excise, as its members.

In the wake of protests from trade and businesses, the GST Council had reportedly put the reverse charge clause on hold.

The Finance Ministry, however, believes tax evasion among small businesses is one of the reasons for the recent drop in GST collection, therefore, it seeks to plug the loopholes.

It may be noted that monthly tax collection in November at Rs 80,808 crore was the lowest in last 5 months of the GST roll out. The overall tax collection is below expectation, forcing the government to borrow Rs 50,000 crore more from the market to meet committed expense.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
GSTReverse charge mechanismtax evasionsmall tradersFinance MinistryProftsActual turnoverEconomy
Written By: ZeeBiz WebTeam
Updated: Mon, Jan 01, 2018
11:22 am
ZeeBiz WebDesk
RELATED NEWS
GST on Rent of residential property, commercial property: All scenarios where this indirect tax is applicable GST on Rent of residential property, commercial property: All scenarios where this indirect tax is applicable
Rs 5 cr prize to those who take GST bills; Kerala Government launches Lucky Bill App to check GST evasion Rs 5 cr prize to those who take GST bills; Kerala Government launches Lucky Bill App to check GST evasion
All confusion cleared on 'GST on rent' - Check what government said All confusion cleared on 'GST on rent' - Check what government said
Will government impose blanket 28% GST on casinos, online gaming and horse racing? Will government impose blanket 28% GST on casinos, online gaming and horse racing?
No new levy on items consumed by poor; states taxed such products in pre-GST era: FM Nirmala Sitharaman No new levy on items consumed by poor; states taxed such products in pre-GST era: FM Nirmala Sitharaman

LATEST NEWS

Hikal, HDFC AMC, Muthoot Finance shares could yield 14-30% return in short to medium term—Here's why

Cabinet approves interest subvention of 1.5% on short term agriculture loan up to Rs 3 lakh for FY23 to FY25

When will Mahindra's electric SUVs hit roads? Know company's big EV game plan

How is Akasa Air's financial health after Rakesh Jhunjhunwala? CEO Vinay Dube sheds light on airline's business plan

Wealth Guide: Income Tax - SMART TIPS! 5 tax-saving techniques for FY23 - Here is what expert suggests

REC Bonus shares 2022: REC share price jumps 3% ahead of record date

Breakthrough in Delhi-Dehradun Expressway project, announces Nitin Gadkari

"It is our moral duty to ensure best deal, India can't afford higher oil prices..." EAM Jaishankar on importing Russian oil

Closing Bell: Market extends rally to 7th day; Sensex ends near 60,200, Nifty settles above 17,900- Bajaj twins lead rally

Stocks to buy today: Ashok Leyland, Bharti Airtel, Vodafone Idea among 20 shares for profitable trade on August 18

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2022. India Dot Com Private Limited. All Rights Reserved.
LIVE TV