To promote digitization in the country, the Government is planning to provide 2% relief over the applicable GST tax rate in case of making payments through digitization mode, when the is bill up to Rs 2,000. This means an individual will have to pay less amount if the payment is done through digital mode.
According to the sources by TOI, The new proposal is being discussed between the official members including finance ministry, Cabinet Secretariat Ministry of Electronics and Information Technology and RBI. It may provide benefits to individuals through discounted or cash- back form.
According to the sources, “The idea is to incentivize all kinds of digital payments, especially smaller transactions, in line with the government’s plan of making India a less-cash economy.”
The IT ministry is focusing on efforts made by the government on digital transactions. To further promote the digital payments transaction, IT ministry is taking steps on the earlier stock. After the demonetization effect last year in November, recently, a meeting organized on digital payment transactions. The meeting was attended by senior officials of the Government including the finance ministry and the cabinet secretary’s office, as well as IT Minister Ravi Shankar Sharma.
Read Also: Goods and Services Tax Online Payment Guide for Small Taxpayers India
To promote digital payments in India, initiatives have been taken by the Prime Minister Narendra Modi which encourages various departments of the governments to facilitate their greater acceptance. While addressing to nation On 71st Independence day, Modi had communicated to people try to use less cash.
The source said, “Transactions of up to Rs 2,000 are very high in volumes and if an incentive can be given here, it will provide an impetus to digital payments while facilitating the entry of more people within the formal economy. This will help plug leakages while playing a credible part in countering the development of black money.”
Yet it is not clear which route the government will propose for providing 2% relief on payments through digital mode. “The matter is with the finance ministry.” The source, however, said it is not yet clear what route the government will suggest for providing the 2% incentive. “The matter is with the finance ministry.”
The government is also focusing on other measures to promote digital transactions in the country. The source said, “There will be new measures that will be announced on this front in the coming time to strengthen the government’s resolve on the electronics payment front”. According to RBI, the number of digital transactions increased from 67 crores last year in November to 89 crores in March this year. Although, only 84 transactions happened in the month of June in this year.
