GST Council decides to offer 20% cashback for digital transactions
Posted on: 06/Aug/2018 12:20:04 PM
It was emphasized in the recent GST Council meeting that the state governments should implement the cashback offers to encourage cashless digital transactions in the villages and small cities.
The 28th conference of the GST Council was held in Delhi presided by the central finance minister Piyush Goyal. All the state finance ministers participated. The Finance minister explained after the meeting that a new scheme is to be introduced in the rural areas/villages and small cities in order to encourage the cashless digital transactions.
As per this new scheme, all cashless transactions done through RuPay debit cards, Bhim App will be offered a ‘cashback’ arrangement.
The state governments should now come forward to implement this proposal on a trial basis in the respective states in order to encourage the cashless digital transactions.
The GST Council and the National Payment Corporation will develop a new software for this purpose. Once this scheme is implemented, a 20% cashback will be given for the GST amount paid in the digital transaction using RuPay cards, Bhim App, or UPI.
In this scheme, a maximum of up to 100 cashback transactions can be availed. RuPay debits cards, Bhim App, Aadhar, UPI cashless digital transactions are mostly used by the economically very backward sections of the society.
The associated software will be developed for the state governments coming forward on their own to implement this proposal. The minister also informed that the loss of revenue incurred due to the above scheme will be considered.
A special committee of ministers presided by the Bihar Deputy Chief Minister Sushil Modi was formed to discuss and review the modalities to implement the above scheme. It has been informed that an estimated loss of Rs. 1000 Crore per annum would be incurred if the above scheme is implemented.
It is also gathered that some states are not interested in this scheme as it incurs losses for the state governments. The next GST Council meeting is scheduled for 28th and 29th September.
During the recent GST Council meeting, the Tamil Nadu Government Minister for fisheries, D. Jayakumar, participated and emphasized on the various demands of the Tamil Nadu State Government during this meeting. He explained the taxes on the micro, mini, and medium industries must be reduced. For the benefit of those paying GST, the minister emphasized that the interest levied on delayed GST payment must be reduced to 12%.
Similarly, it was presented that the industry of vehicle spare parts needs the investment related expenses. So, the tax on these vehicle spare parts must be reduced from 28% to 18%. Also, other issues such as changing the items like unbranded snack food items from the present GST to the other list.
With regard to reduction in GST, a special committee is to be set up comprising of the state ministers. Tamil Nadu state minister Jayakumar stated this committee will review, analyse and take a decision on the proposal to reduce GST on which items on which state. During the last GST Council meeting, GST was reduced on 88 items. However, in this meeting, no announcements were made regarding any GST reduction.
The Chief Economic adviser for the central ministry of finance, Sanjeev Sanyal, informed that the categories of GST domains will be reduced to 3. Presently, there are 4 GST domains – 5, 12, 18, and 28%. Out of this, several items under the GST 28% have been shifted to the other GST domains. The Chief Economic Adviser explained in this regard that the GST domains are planned to be reduced to 3 in course of time. Then, there will be only 3 GST domains of 5%, 15%, and 25%. The present domains of 12% and 18% would be charged under the 15% GST domain. There are plans to further simplify the present systems and procedures on GST.
