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How the businesses will overcome the below mentioned difficulties?
Difficulties arising whererin reverse charge on goods or services is to be paid by registered dealer :
1. Classification of goods or services as per HSN
2. Rate to be paid on such goods or services
3. Working Capital Block
4. Additional Maintenance of RecordIt is a new concept that is introduced in GST in India, to increase tax revenues, coverage and compliance from partly or unorganized sectors.
Earlier goods were exempt from this scheme, now the collection of GST will increase tremendously.
In GST, the supplier will be liable to collect tax on goods and services provided. But the central government has the power to notify categories of supplies against which service recipient has to discharge the tax liability. Hence, all the provisions of the Act will now be applicable to the recipient of such goods or services as if he is the supplier of such goods or services.
When a person becomes liable to pay tax on the reverse charge, certain provisions like threshold exemption, time of supply, availing of input credit changes. There is a threshold limit for turnover aggregating to Rs.20 Lakhs for registration for normal tax payers but under reverse charge, there is no such limit. The person has to be registered under GST irrespective of the aggregate limit.
This provision will have serious adverse impact on unregistered dealer business as most of the companies will try to not to engage unregistered dealer to avoid unwanted additional compliance burden.
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