look news india
GST Council: The Goods and Services Tax Council (GST Council) meeting is scheduled to be held on September 9. In this, the proposal to impose 18% GST on payment aggregator companies like BillDesk and CCAvenue may be discussed. If this decision is taken, then they may have to pay GST even on payments of less than Rs 2000 through debit and credit cards. At present, they have been exempted on small transactions. The GST fitment panel believes that these companies cannot be put in the category of banks.
80% of digital payments are of value less than Rs 2,000
A report by CNBC TV18 claims that the GST fitment panel believes that GST should be imposed on payment aggregator companies. This will prove to be a big blow to all payment aggregator companies as currently more than 80 per cent of the total digital payment transactions in the country are worth less than Rs 2000. According to a government notification issued during demonetisation in 2016, payment aggregators were barred from levying tax on services provided to merchants on small transactions.
Currently the fee charged is 0.5% to 2%
Payment aggregators currently charge 0.5% to 2% from merchants on every transaction. If GST is implemented, they can put the burden of additional cost on merchants. Currently, payment aggregators do not pay GST on transactions less than Rs 2000. They provide payment facility through many digital payment systems like QR code, POS machine and net banking. If this happens, small businessmen will be badly affected. Most of their payments are less than Rs 2000. If a businessman currently has to pay a fee of Rs 10 along with 1% gateway fee on a payment of Rs 1000, then after GST he will have to pay Rs 11.80.
GST will be applicable only on payments made through debit and credit cards. Currently, UPI has become the most popular method of digital payment. In the financial year 2024, UPI transactions have increased by 57 percent year-on-year and have crossed 131 billion. UPI's share in digital payments has increased to more than 80 percent. GST is applicable only on digital transactions made through debit and credit cards. Merchant Discount Rate (MDR) is not applicable on UPI transactions, so there will be no impact on them even after the imposition of GST.