Finance Minister Arun Jaitley is going to announce the Annual Budget for 2016-17 on 29th of February. This year it would be more appropriate to strike your cards or to pay via digital wallets than to spend the hard cash. Apparently, this year’s budget plans prepared by the Payments Council of India (PCI), the government circulates tax enjoyment for non-cash proceedings.
Paresh Rajde, managing director of Suvidhaa Infoserve and a member of the PCI committee that devised the recommendations, conveyed, “We are extremely confident that in this year’s Budget, merchants and customers will get a major incentive from the government for digital transactions. This government is very serious about the Digital India push.”
As per the government, if more than 50% of the transactions done digitally by the merchants, then they will get a privilege to earn a tax repayment or 1-2% depletion in VAT in all electronic dealings. Also, consumers can take an advantage of getting some income tax rebates if they settle down their net payments digitally to a certain extent.
“Payments companies are helping in the process of financial inclusion, but our business works on thin margins and longer gestation periods, hence we should be treated at par with infrastructure companies and the government should look into the tax issues we are facing,” announced Naveen Surya, chairman of PCI.
The committee also highlighted that the government should focus on the point of the tax debited at source, building the working capital for payment aggregators. Ketan Doshi, Managing Director, PayPoint India, said, “We have to pay a hefty fee to the acquiring bank for every transaction and the margin for our trade is very thin. Often, because of TDS, we have to pay the government from our own pockets because we are not profit-making and by the time the returns come, my business is already in the doldrums.”
Performing electronic digital transactions is very important for the country to uplift the motto of Digital Push India, added, Rajde. “We have seen the Korea model where they shifted from a cash-heavy society to digital. This was achieved through incentivisation,” he concluded.
