The central govt's push for digital payments seems to be in full measure with the government now planning to offer 2 per cent incentive over the applicable GST tax rate in case of digital payments on bills up to Rs 2,000.
This means an individual will have to pay less if the payment is digitally done. As per reports by TOI, the proposal is being discussed between the finance ministry, RBI, cabinet secretariat and ministry of electronics and Information Technology.
The Prime Minister, while addressing the nation on the 71st Independence Day had asked people to use less cash and had encouraged individuals to shift to digital payments.
The IT ministry has also launched a slew of initiatives to promote digitalization across the nation and is leading the efforts to further popularise electronic payments.
Small transactions and are mostly preferred through the cash mode. According to a report by TOI, relief is being mooted for smaller transactions because they are large in numbers. Meanwhile, if an incentive can be given for big transactions of up to Rs 2,000 which are very high in volumes, it will provide an impetus to digital payments.
If this move is initiated, it is believed to benefit individuals in the form of a discount or cash-back. It will help plug leakages while playing a credible part in countering the development of black money. Reports by TOI quoted a source saying that the main aim of this move is to incentivize all kinds of digital payments, especially smaller transactions that would in turn help in fulfilling the government’s plan of making India a less-cash economy.