In the recently held GST council meeting, Government has taken some bold decisions, one among them is the waiver for supplier of goods to pay GST on the advances. This is a big booster for manufacturing and trading community wherein the compliance burden would come down.
We urge government to enable this provision even for service sector so that there is complete uniformity in the GST law. This shall not have any impact on revenues for government as taxes would continued to be paid upon raising of the invoice.
However, not enabling this provision for service sector would have high legal and practical issues. Firstly, it would lead to rising of the old disputes as to whether a supply is that of ‘goods’ or ‘services’. Further, the very essence of GST i.e. to not have any distinction between goods and services will be lost. Also, since service sector contribute to approximately 60% of the country’s GDP, therefore the sector needs to be boosted and must not be given a different and complicated tax treatment.