New Delhi. In its next meeting, the GST Council may discuss the proposal to levy 18% GST on low value payments made through debit and credit cards. CNBC-TV18 has received this news from sources.
This GST will be collected from the payment aggregator. Payment aggregators are third party platforms that help a merchant accept payments. With their help, a merchant does not need to create his own payment gateway. Razorpay, Paytm and Googlepay are examples of payment aggregates.
When the government demonetised Rs 2000 notes, it stopped charging service tax from aggregators on transactions of less than Rs 2000 to promote digital transactions. Now, tax can be levied on it again. However, the government does not charge tax on the entire transaction amount.
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What is the whole matter?
Actually, payment aggregators charge some money from merchants for providing their services. This is 0.5-2 percent of every transaction. Most aggregators keep it at 1 percent. The government charges service tax on this 0.5-2 percent amount. Therefore, it will not have a direct impact on common people. But it will create problems for small shopkeepers.
Online transactions will be affected.
If the government starts levying service tax on every transaction of less than Rs 2000, then the aggregators will put this burden on the shopkeepers. It is possible that to reduce this burden, shopkeepers may stop accepting online payments for small transactions or start collecting it from the customers.
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