The decision to offer discounts on digital payments for the Goods and Services Tax (GST) has been deferred by a Group of States’ Finance Ministers on Sunday.
The GoM also decided to empower GST Council to finalise goods for addressing the Reverse Charge Mechanism (RCM).
“In principle, we support a GST discount in digital payment. However, considering the current revenue situation, it would be better to wait for some more time. Accordingly, we have proposed to defer this proposal,” said Sushil Kumar Modi, Chairman of the State Finance Ministers’ Group and Deputy Chief Minister of Bihar.
The minister added that the proposal could be considered after completion of one more year of revenue collection under GST.
Further, the decision of deferring the proposal is revenue connotation of Rs 14,000-15,000 crore.
The two recommendations namely discount on GST digital payments and RCM will be tabled before the 28th meeting of the GST council, scheduled for July 21.
The proposal of offering discount on GST digital payments envisages of providing a concession of two per cent in the GST rate on B2C (Business to Consumer) supplies, for which the payments are made digitally (1 per cent each from the applicable CGST and SGST rates, if the applicable GST rate is 3 per cent or more) subject to a limit of Rs 100 per transaction.
RCM enables the buyer to pay GST, which is otherwise paid by the seller.
