: Service sector appeal to govt to allow deposition of GST on payment receipt basis #FinanceIndia #StockMarketNEWS Service sector appeal to govt to allow deposition of GST on payment receipt basis New

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Service sector appeal to govt to allow deposition of GST on payment receipt basis #FinanceIndia #StockMarketNEWS
Service sector appeal to govt to allow deposition of GST on payment receipt basis New Delhi, Feb 7 (KNN) Consulting and services sector in the country have urged the government and the Goods and Service Tax (GST) Council to have a re-look at its GST collection regime for the respective sector.

It has asked the government to allow consulting and services sector to deposit GST after receipt of the payments from the service receiver.

“At present service sector and consultants pay their taxes as conscientious professionals and and feel utterly frustrated as GST has to be deposited on accrual and due basis,” said K K Kapila, former president Consulting Engineers Association of India (CEAI) and past co-chair FICCI Infra committee.

“Consulting engineering companies are engaged in the service sector and are totally dependent for survival on timely receipt of dues from the clients. Banks are reluctant to advance finance to professionals, and in any case are averse to funding payment / deposit of GST and income tax. Delay in receipt of dues from clients adversely affects these organisations financial situation leading to delays in deposit of GST,” he added.

Any delay in deposit of GST leads to threats of Cancellation of GST Registration and/or Prosecution, etc.

This is despite the fact that the service sector pays interest on delayed deposit of GST in spite of its tight liquidity problem, Kapila pointed out.

The service sector has advised the government to make changes so that GST is paid by the Service Receiver (Client) directly instead of a provider on the similar lines as TDS.

“If not, the service sector should be allowed to pay GST within 30 days of receipt of payment from the Client. This was the practice in vogue prior to 2012 when the present dispensation was introduced,” said Kapila.

“Otherwise the service provider may be given a timeline of 180 days from raising the invoice to deposit the GST, in line with receipt of payments from the client. The client may be mandated to make the payment along with the GST to the provider, with a copy to the concerned GST office,” Kapila added. (KNN Bureau)