After having deferred the implementation of TDS and TCS provisions under the goods and services tax (GST), the government has decided to open the registration window for the same from July 25. Also, the enrolment window for GST Network (GSTN) will remain open for three months for taxpayers who were already registered under value-added tax (VAT), service tax and central excise before the roll-out of GST on July 1.
“If you are an existing taxpayer under VAT, service tax and central excise, you can enroll yourself at the GST portal. Enrolment window will remain open till next 3 months,” an official communication said.
The process of migration of 84 lakh VAT, excise and service tax assessees to the GSTN had started in November last year, with a phased enrolment plan for each state. The government had earlier set March 31 as the migration deadline, which was later extended to April 30, following which the government shut down the enrolment process for technical reasons.
The enrolment was reopened for 15 days on June 1. GSTN then opened a window from June 25, including registrations by new taxpayers under GST. Since June 25, 2.23 lakh new dealers have registered on GSTN by filing draft applications. Out of this, 63,000 have submitted full details and 32,000 dealers have been granted fresh registrations, the finance ministry said.
The implementation of TDS and TCS provisions under GST was deferred last week by the Centre following representations by e-commerce firms that it would be an additional compliance burden and would lock-down working capital for merchants selling online. As per the provisions, e-commerce firms will be required to collect one per cent Tax Collected at Source (TCS) while making payment to their merchants under the new indirect tax regime. Also, as per the Central GST (CGST) Act, the notified entities are required to collect TDS at one per cent on payments to suppliers to goods or services in excess of Rs 2.5 lakh.
The finance ministry had last week said that to ensure smooth roll-out of GST and taking into account the feedback received from the industry regarding the provisions of TDS and TCS, the provisions are being kept in abeyance. Originally, the rate of TCS was set at two per cent, but was later reduced to one per cent after online retailers made representations that two per cent TCS would result in freeze working capital for sellers to the tune of Rs 400 crore every year, and discourage them from selling online.