Banks Promoting RuPay Cards And Low-Value BHIM-UPI Transactions Will Not Attract GST

Rupay & BHIM-UPI GST: The government’s incentive to banks to promote RuPay debit cards and low-cost BHIM-UPI transactions will not attract Goods and Services Tax (GST). The Finance Ministry has given this information. Last week, the Union Cabinet approved an incentive scheme of Rs 2,600 crore for banks to promote RuPay debit cards and low-cost BHIM-UPI transactions in the current financial year.

GST will not be applicable on these UPI transactions and Rupay debit card transactions

Under the Incentive Scheme for Promotion of RuPay Debit Card and Low Value BHIM-UPI Transactions, the government will pay incentives to banks as a percentage of the value of Rupay Debit Card transactions and low value BHIM-UPI transactions up to Rs.2,000. does. The Payment and Settlement Systems Act, 2007 prohibits banks and system providers from accepting or making payments to anyone through RuPay Debit Cards or BHIM.

Finance Ministry sent circular

In a circular sent to the Chief Commissioner of GST, the Finance Ministry said that the incentive is directly related to the subsidy linked to the price of the service. It does not form part of the taxable value of the transaction under the provisions of the Central GST Act, 2017. It states, “As recommended by the GST Council, it is clarified that for the promotion of RuPay Debit Card and low cost BHIM-UPI transactions, given by the Department of Electronics and Information Technology, GST will not be applicable on incentives. Such transaction is in the form of subsidy and will not attract tax.

UPI transactions worth Rs 12.82 lakh crore in December

UPI has created a record of 782.9 crore digital payment transactions worth Rs 12.82 lakh crore in December alone. No GST on incentives to promote RuPay, low cost BHIM-UPI transactions is expected to drive further growth in this sector.

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