NEW DELHI: The government's decision to incentivize digital payments under GST will be deferred by one year as it will have revenue implication for the government, as per the suggestion by the ministerial panel.
The group of ministers, led by Sushil Kumar Modi met today where they decided to wait for stabilisation of revenues under Goods and Services Tax and the new return filing systems in the current fiscal before considering differential GST rates for people making payments using the digital mode.
Apart from that another ministerial panel under Modi, on Reverse Charge Mechanism has decided to recommend powers to the GST Council to notify the registered persons who would come under RCM purview.
The recommendations of these ministerial panels will be placed before the GST Council, chaired by Union Finance Minister and comprising his state counterparts, in its next meeting on July 21."Let returns and GST revenues stabilise, then we can think about incentivising digital transaction".The GST Council in its last meeting in May had discussed giving a concession of 2 per cent in GST rate (where the tax rate is 3 per cent or more) to consumers making payment through cheque or digital mode. The discount would be capped at Rs 100 per transaction.
The five-member GoM on incentivising digital transaction include Gujarat Deputy Chief Minister Nitinbhai Patel, West Bengal Finance Minister Amit Mitra, Haryana Excise & Taxation Minister Capt Abhimanyu and Punjab Finance Minister Manpreet Singh Badal.
With regard to the decision on RCM, Modi said the GoM will recommend that the GST Council will decide on the class of registered persons who would be required to deposit taxes on reverse charge basis.
"We have recommended omitting the present Section 9(4) and introducing a new Section 9(4) which will permit the government, on the recommendations of the GST Council, to notify specific class of registered persons, goods which would be covered under RCM provision," he added.
The conditions and the date for levying of RCM will be decided by the council, Modi noted.
Under the RCM in GST law, registered dealers are required to make tax payments in case they procure goods from unregistered businesses.Currently, RCM, which is touted as an anti-evasion measure, has been deferred till September 30.
Punjab Finance Minister Manpreet Singh Badal, and Kerala Finance Minister Thomas Issac, among others are a part of the GoM on RCM, which was constituted in March by the GST Council.