Parrikar for suspension of reverse charge ‘irritant’

Panaji: Stating that the reverse charge mechanism under the Goods and Services Tax (GST) Act was posing an obstacle to small-time traders, chief minister Manohar Parrikar on Wednesday called for the mechanism to be suspended till March 31 and subsequently reviewed. He also indicated that he was personally in favour of fewer GST slabs.

Speaking at Institute Menezes Braganza, where the state GST department had organised a public meeting for dealers to voice their grievances, the chief minister assured traders that he would put forth a proposal before the GST council to allow traders whose turnover was less than Rs 20 lakh and who registered under GST out of fear, to cancel their registration.

Parrikar is expected to attend the GST council meeting to be chaired by Union finance minister Arun Jaitley, in New Delhi, on Friday. "I am going to strongly advocate for the reverse charge to be kept in abeyance. We need to think it over and find a correct mechanism so that people don't cheat the system," he said.

Calling the reverse charge system an "irritant that had to be removed", Parrikar said its suspension would benefit small-time traders and self-help groups. Currently, small traders and self-help groupwhich have a turnover lower than Rs 20 lakhhave not registered under GST. But, large retail chains and traders registered under the tax regime refuse to do business with them as they have to pay the reverse charge.

The chief minister also promised to come out with a mechanism to assist traders who had suffered losses during the GST transition period.

"Don't panic. The government will see that the people who have faced a problem for no mistake of their own will not be penalised. I cannot tweak the GST website and you may have to pay a penalty to settle. We will come out with a mechanism that will ensure that unfair taxation or unfair punishment will be neutralised," Parrikar said.