Demonetisation, GST will reduce cash in system: Finance minister Jaitley

The Union finance minister said that both demonetisation and GST had led to an increase in digital transactions and a wider taxpayer base for both direct and indirect taxes.

Finance minister Arun Jaitley on Saturday said that generation of cash will become difficult as a result of demonetisation coupled with the implementation of the Goods and Services Tax (GST).

A wholesale markets are largely cash-run, and the demonetisation move severely affected how they run their business.(AP)

“Demonetisation coupled with the implementation of Goods and Services Tax (GST) regime will make generation of cash a lot more difficult, help towards the objective by creating greater compliance and increasing digitisation,” he said at the ‘Delhi Economics Conclave 2017’ here organised by the finance ministry.

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Jaitley said that both had led to an increase in digital transactions and a wider taxpayer base for both direct and indirect taxes.

“Signs of increasing digitisation are already visible in terms of expansion of direct and indirect taxpayer base,” he noted.

Besides, Jaitley said three steps – penalising those who had stashed illegal money abroad, benami property law and Bankruptcy and Insolvency Code – attacked the black money in the system.