GST: Last week, the Union Cabinet approved an incentive scheme of Rs 2,600 crore for banks to promote RuPay debit cards and low-value BHIM-UPI transactions in the current financial year.
GST: The Finance Ministry said that the Goods and Services Tax on incentives given by the government to banks to promote RuPay debit cards and low-value BHIM-UPI transactions (GST) will not be applicable. Last week, the Union Cabinet approved an incentive scheme of Rs 2,600 crore for banks to promote RuPay debit cards and low-value BHIM-UPI transactions in the current financial year.
Under the Incentive Scheme for Promotion of RuPay Debit Cards and Low Value BHIM-UPI Transactions, the government will give incentives to banks as a percentage of the value of RuPay Debit Card transactions and low-value BHIM-UPI transactions up to Rs 2,000. I pay the incentive. The Payments and Settlements Systems Act, 2007 prohibits banks and system providers from accepting payments or making payments through RuPay Debit Cards or BHIM.
GST will not be applicable on incentive
In a circular sent to the chief commissioners of GST, the ministry said that the incentive is directly related to the subsidy linked to the value of the service. It does not form part of the taxable value of the transaction under the provisions of the Central GST Act, 2017. It states that, as recommended by the Council, it is clarified that GST on the incentives provided by the Ministry of Electronics and Information Technology (MeitY) to promote RuPay Debit cards and low value BHIM-UPI transactions Will not take. Such transaction is in the nature of subsidy and will not attract tax.
Record UPI transaction in December
UPI has created a record of 782.9 crore digital payment transactions worth Rs 12.82 lakh crore in December alone.
