GST Council discusses 2% concession to customers on digital payment

The GST Council has referred the matter of incentivising digital payments to the five-member group of state finance ministers.

The GST Council on Friday discussed to giving up to ₹100 incentive for digital payments for purchases by consumers, approved a new model for single monthly return and decided to turn the GSTN into a government-owned entity.

NThe GST Council on Friday discussed to giving up to ₹100 incentive for digital payments for purchases by consumers (Sunil Ghosh / Hindustan Times)

Most member states on the GST Council panel were agreeable to the proposal of giving a concession of 2% in GST rate (where the tax rate is 3% or more) on business-to-consumer (B2C) supplies, for which payment is made through cheque or digital mode, subject to a ceiling of ₹100 per transaction, so as to incentivise promotion of digital payments.

But since some states wanted a small negative list, the issue will be referred to a five-member group of state finance ministers, Jaitley said.

A separate group of ministers would go into the issue of levy of cess on sugar and reduction of GST on ethanol.

While the cost of sugar production is over ₹35 per kg, the market price is around ₹26-28 a kg, he said, adding cane growers are in deep distress and a proposal to levy a cess was made to help them.

Now since this (suggestion has been made) after the GST has been implemented,” he said, referring to GST roll-out from July 1 last year where a cess on top of GST rate was imposed only on luxury and demerit goods like cigarettes and high-end cars to make up a kitty to compensate states for their losses due to implementation of the new tax regime.

Collections from a similar cess on sugar could be used for helping farmers, it was proposed.