19th January, 2020
GST

After revising rates, govt plans GST discount on card payments

The government is planning to make concessions on GST payments, if you chose to pay using a card or electronic wallet. 

The move is clearly aimed to discourage cash transactions and bring financial transparency to the system.

Differential GST

Individuals may be allowed to pay a somewhat lower tax rate at various service outlets if a consumer opts for digital payments.

The concessions, till date, were provided in the form of cash back facility offered on card payments made at retail fuel outlets. The plan was not extended to other services after repeated plea.

Has GST failed?

The GST was celebrated initially as it was expected to arrest tax evasion but the results have not been very encouraging. The restaurants and other service facility counters refuse to accept card payments and insist on payments in cash.

An incentive to pay via card may plug the leakages to some extent.

Rates slashed

After the ire of taxpayers and service providers alike, the GST rates are being slashed, especially the ones in 28% bracket.

Reduction in tax rates may reduce tax evasion too.