GST Council: The GST Council met on Monday under the chairmanship of Finance Minister Nirmala Sitharaman. The focus of this meeting was on the announcement of imposing 18% GST on payment aggregators like BillDesk and CCAvenue for small online transactions up to Rs 2,000 through debit and credit cards. However, no decision has been taken on this yet and the matter has been sent to the Fitment Committee for the time being.
Fitment Committee will decide
Uttarakhand Finance Minister (Uttarakhand FM) Premchand Aggarwal, who attended the GST Council meeting, said that no decision has been taken yet in the 54th GST meeting regarding imposing 18% GST on small online transactions.
He said that there was a discussion on imposing this tax on payment aggregators on income from transactions less than Rs 2,000, but no decision could be taken, after which the issue has been sent to the Fitment Committee, now the committee will submit a report to the council after giving a thorough consideration to the issue.
80% transactions are less than 2000
More than 80% of the total digital payments in India are less than Rs 2,000. According to a notification issued by the government during demonetization in 2016, payment aggregators were prohibited from levying tax on the services provided to merchants on these transactions. Aggregators currently charge merchants 0.5% to 2% per transaction. In such a situation, if GST is applicable on these small payments, then payment aggregators can pass on this additional cost to the merchants.
This decision of the Fitment Committee will not affect those who make payments through UPI. This will have to be paid only on payments made through debit cards, credit cards and net banking.