The Group of State Finance Minister which met yesterday (11 May) to decide on giving a concession of 2 percentage points on the Goods and Services Tax (GST) for digital transactions could not arrive a consensus, reports The Hindu Business Line. Bihar deputy Chief Minister and chairman of the group Sushil Modi said that they needed more data to reach a decision.
West Bengal finance minister Amit Mitra said that international practices needed to be studied while his Punjab counterpart Manpreet Singh Badal suggested creating a positive and negative list for giving concessions.
The next meeting – also the final one – is expected to take place in ten days. The minister’s panel was formed after the GST Council failed couldn’t take a decision at its last meeting on 4 May.
The scheme involves giving a 2 percentage point ( 1 percentage point each from sate GST and central GST) concession on all business to consumer (B2C) transactions that are carried out digitally subject to a ceiling of Rs 100 per transaction. It will however not be available to businesses paying tax under the composite scheme.
If the incentive kicks in, consumers will pay 2 per cent less GST on goods if they pay digitally.
Two sets of methods for payments are being looked at. The first is Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Immediate Payment System (IMPS), NACH (National Automated Clearing House), and NETC (National Electronic Toll Collection). The second set consists of more widely used ones including National Unified USSD Payments (NUUP), Unified Payments Interface (UPI), cards, mobile wallets and Aadhaar enabled payment system (AEPS).
Data from the government showed 1,329 digital transactions via the second set that amounted to Rs 135.4 lakh crore.The government feels that while revenues will drop it can be made up by better compliance.
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