No GST shall be applicable to the government incentives provided to the banks for motivating the practice RuPay debit cards and low-value BHIM-UPI transactions, under the finance ministry. The cabinet ministry has authorized a Rs 2,600-crore incentive program for banks to facilitate RuPay debit cards and low-value BHIM-UPI transactions in the current year.
“As recommended by the Council, it is clarified that incentives paid by MeitY to acquiring banks under the Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions are in the nature of subsidy and thus not taxable,” it said.
All the services furnished via the Central or State Governments or the local heads to any person excluding the business entities would be free from GST, with the exception of some designated services like Postal department services and transportation.
Provided the provision of the Central GST act of 2017 the incentive would hold with the Subsidy which is concerned with the service cost and is not provided to the taxable value for the transaction.
The government furnishes banks with incentives as a percentage of the RuPay debit card transaction value and low-value BHIM-UPI transactions up to Rs 2,000 beneath the Incentive scheme for the upgrade of RuPay Debit Cards and low-value BHIM-UPI transactions.
As per the Payments and Settlements Systems Act of 2007, the banks along with the system providers would not be allowed to take fees from persons through the BHIM or Rupay debit cards for sending or receiving payments.
Air force mess providers who furnish services to its troops concerned with lodging would be levied Goods and Services Tax (GST), the ministry stated. Inquiries for clarity on whether GST would be levied on lodging services furnished via the Air force mess to its troops have been obtained by the revenue department.
UPI of Rs 782.9 billion worth of digital payment transactions has stood with a record in the month of December.
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