cashless-transactions

On Sunday, the group of State Finance Ministers headed by Bihar Deputy Chief Minister Sushil Modi came on a decision to delay the proposal which will provide concessions in tax while making digital payments under GST. The reason behind delaying the proposal being instability in revenue collections as per the new indirect tax regime. This decision made by the group of State Finance Ministers will be communicated to the GST Council in a meeting on July 21.

Regarding this, Prime Minister Narendra Modi said, “The Group of Ministers (GoM) on digital transactions has decided that this is not an opportune moment to incentivise digital payments as it will have revenue implications. Let returns and GST revenues stabilise, then we can think about incentivising digital transactions.”

“The GoM will be recommending to the Council that it may think about the proposal of incentivising digital transaction again after a year. The GoM is recommending deferring the proposal for a year,” the Bihar Deputy Chief Minister said.

According to our sources, a meeting was held in may by GST Council in which various discussions were made by the members regarding concessions in tax while making digital payments. According to these discussions a concession of 2 per cent in GST rate which will be restricted to Rs 100 per transaction was to be provided to the consumers paying through digital mode.

In order to encourage digital transaction in India the following five members are included:- 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.

Besides this, another ministerial committee which is headed by PM Modi after a meeting on Sunday regarding Reverse Charge Mechanism(RCM) has made a decision to provide GST Council with the required powers in order to inform the registered persons who would come under RCM.

“With regard to the decision on RCM, the GoM will recommend that the GST Council will decide on the class of registered persons who would be required to deposit taxes on a 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,” Pm Modi said.

Modi further added that the conditions regarding Reverse Charge Mechanism and the date of its being imposed in the country will be further decided by the council.