The Tamil Nadu Foodgrains merchants’ association has urged the finance minister Nirmala Sitharaman to abolish the reverse charge mechanism way of taxation or extend the implementation date by a year from Sept 30, 2019. According to a press release, president of the association, S P Jeyaprakasam has said that it has almost been two and a quarter year since the Goods and Service Tax act was implemented in the country. It is only now that the authorities are coming to know the hardship faced by traders and manufacturers. The reserve charge mechanism was there in the country when GST was implemented.
For example, expenses for coffee, tea and unregistered tiffin to customers, products purchased, services utilized from unregistered dealers by the registered stakeholders are levied under the reverse charge mechanism. Small manufacturers and traders are immensely affected by this way of taxation. After many representations were made the authorities by section 9(4) deferred the reverse charge mechanism way of taxation till Sept 30, 2019. With the deadline nearing, all the expenditures and services under section 9(4) will be levied under the reverse charge mechanism. This should either be abolished, or the last date should be extended by another year, he said.