Govt mulling 2% relief on GST for digital payments

NEW DELHI: You may soon need to shell out less if you pay digitally. The government is looking at giving a 2% incentive over the applicable GST tax rate in case of digital payments where the bill is up to Rs 2,000, in a move aimed at discouraging cash payments.

According to sources, the proposal - which may give the benefit in the form of a discount or cash-back - is being discussed between the finance ministry, RBI, cabinet secretariat and ministry of electronics and IT.

"The idea is to incentivise all kinds of digital payments, especially smaller transactions, in line with the government's plan of making India a less-cash economy," a source told TOI. The IT ministry is leading the government's efforts on digital payments and has been taking stock of initiatives to further popularise electronic payments.

A recent meeting analysed digital payment transactions post demonetisation last November. It was attended by IT minister Ravi Shankar Prasad and senior officials from other wings of the government, including the finance ministry and the cabinet secretary's office.

The need to boost digital payments has been raised by PM Modi himself, prompting various departments of the government to facilitate their greater acceptance. Addressing the nation on the 71st Independence Day, Modi had asked people to use less cash.