NEW DELHI: The government today announced to come up with pilot project to incentivise digital payment, however GST council members claim that the move may not be happen anytime sooner as the technology is not ready yet to support the system.
A ministerial panel headed by Bihar deputy chief minister Sushil Modi today approved the proposal for incentivising digital payments through Rupay card and BHIM app by way of cash back.
“Once implemented, customers making payments using Rupay card or BHIM UPI will get a cashback of 20 per cent of the total GST amount, subject to a maximum of Rs 100. We will first launch it on the pilot basis in states which are willing to take up the project,” Interim Finance Minister Piyush Goyal told reporters after the meeting, without specifying any time-line.
However other members claim that the technology is not yet ready to support the move.
“The technology is not ready yet. It will take lot of time to prepare technology to calculate tax slabs and do the refund process, so it was decided that once technology is ready, then it will be up to the states, if they wish to take up this pilot project. It is not mandatory. All this will take some time,” Amit Mitra, Finance Minister of West Bengal told TNIE after the meeting.
Bihar Deputy chief minister Sushil Modi said Uttar Pradesh, Bihar, Maharashtra and Gujarat have all agreed to join this pilot project, he said. “Compliance will increase. In the longer run, it will encourage formalization of the economy,” said Modi.
The GoM had last month decided to defer by a year the proposal to incentivise digital payments under GST citing revenue implications of doling out concessional tax rate, however in its latest meeting on July 21, Piyush Goyal asked the GoM to have a re-look at the possibility of early introduction of concessions for digital payments.
Meanwhile, the meeting which was called to discuss the problems specific to micro, small and medium enterprises (MSME) in the country did not take any major decision on the sector today and has decided to form a six member sub-committee headed by minister of state for finance Shiv Pratap Shukla to look into the taxation and other issues related to smaller businesses.
“The issues related to law will be taken up by the law committee and those related to rates will go to the fitment committee,” Goyal said.
A group of ministers will prepare a report after hearing all the problems of MSMEs including tax refunds.
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