The ministerial panel led by Sushi Modi today gave a go-ahead to the proposal to boost digital payments under GST via BHIM UPI app or rupay card by way of cashbacks. The recommendation by the GoM will now be placed before the GST Council i.e. scheduled to meet tomorrow. The 5-member GoMs who proposed incentivizing digital transactions include Gujarat Deputy Chief Minister Nitinbhai Patel, West Bengal Finance Minister Amit Mitra, Haryana Excise and Taxation Minister Capt Abhimanyu and Punjab Finance Minister Manpreet Singh Badal.
The GoMs decided that for payments made under the GST regime will be boosted by way of cashbacks of 20% of the total GST amount to the maximum of Rs. 100, in case the customers make the payment using BHIM UPI app or Rupay card.
This cashback incentive is expected to result in a revenue impact of Rs. 1000 crore on an annual basis which will be shared equally between states and the Centre.
Modi said that the idea to incentivize users of Rupay card and BHIM App with cashbacks is to promote digital transactions primarily in rural and semi-urban areas. Further details in relation to the proposal shall be worked out after the GST Council clears it.
In the July 21st meet, GoM were tasked with the agenda to work out modalities for incentivizing digital payments under GST.