To incentivise digital transaction, the GST Council had last week 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 Sushil Modi led panel on incentivising digital payments under GST will carry out a detailed analysis of revenue implications on doling out concession in tax rate. It will also study “international best practices” on moving towards a less-cash economy. “The GoM will meet one more time as there are various issues which need to be discussed, including the benefits or losses to the exchequer,” Modi told reporters here today. The Bihar Deputy Chief Minister further said that the Group of Ministers will meet again in 10 days and finalise its view, which would be put forth to the GST Council. “In the mean time the officials will collect some data on the revenue implication and the gains. Issues raised by various states will be taken into account,” he said.
To incentivise digital transaction, the GST Council had last week 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. West Bengal Finance Minister Amit Mitra, who had earlier voiced concerns on the proposal saying that the poor people will suffer because they still find cash as a viable mode for transaction, said that different views were discussed with regard to its short-comings relating to data and political economy. “We will have to go threadbare on each of the view points…may be some international studies as well to look at best practices elsewhere,” Mitra said Set up on May 4, the GoM was tasked with submitting its report to the GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, within 15 days.
The five member GoM 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. Talking to reporters, Badal said that study would be done on countries like Korea and Brazil– who have moved to a cash-less economy. Also there were discussions on whether the concessions in GST rate should be given while purchase of demerit or sin goods.
There were discussions on whether there should be a negative list or a positive list of commodities which are evasion prone, Badal said. Jaitley, after the GST Council meet last week, had said that while most states were agreeable to the proposal of giving a concession in GST rate, some states wanted a small negative list.