Budget 2022-23, Finance Minister gave good news before budget, tax relief here

New Delhi:Before the budget 2023 (Budget 2023), the central government has given relief to the people. The government has given tax relief to people on RuPay Debit cards and low value BHIM UPI. Government has given tax relief to banks on RuPay Debit cards and incentives to banks on low value BHIM UPI to promote UPI transactions. Now GST will not be applicable on this. Let us tell you that in this ongoing Finance Mantra, the government had approved an incentive scheme of 26 thousand crores to promote transactions through RuPay Debit Card and BHIM UPI.

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

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.

In a circular sent to the chief commissioners of GST, the ministry said the incentive is directly related to the subsidy linked to the value 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 added, “As recommended by the Council, it is clarified that the incentives provided by the Ministry of Electronics and Information Technology (MeitY) to promote RuPay Debit cards and low value BHIM-UPI transactions But GST will not be applicable. Such transaction is in the form of subsidy and will not be taxed.” UPI has created a record of 782.9 crore digital payment transactions worth Rs 12.82 lakh crore in December alone.