Payment Aggregators processing Payments less than Rs. 2000 eligible for GST Exemption, not Applicable to Payment Gateways: FM on GST Council
The decision comes as a huge relief for payments aggregators who had been weighed down with speculations regarding a hike in the Applicable GST
The Union Finance Minister Nirmala Sitharaman chaired the 55th GST Council Meeting held at Jaisalmer, Rajasthan today (21st December, 2024). Convening the press meet that began at 6:38 P.M. IST, Finance Minister Nirmala Sitharaman clarified that payment aggregators that process payments less than Rs.2000 to be exempt from the levy of Goods and Service Tax ( GST ). Payment aggregators serve...
The Union Finance Minister Nirmala Sitharaman chaired the 55th GST Council Meeting held at Jaisalmer, Rajasthan today (21st December, 2024). Convening the press meet that began at 6:38 P.M. IST, Finance Minister Nirmala Sitharaman clarified that payment aggregators that process payments less than Rs.2000 to be exempt from the levy of Goods and Service Tax ( GST ).
Payment aggregators serve as intermediaries, enabling businesses to accept digital payments from customers through various methods like credit and debit cards, UPI, net banking, and mobile wallets. They streamline the payment process by integrating multiple payment options into a single platform, ensuring secure and efficient transactions.
Operating in both - the online and offline retail sector, payment aggregators facilitate seamless payments, including payments received via QR codes, point-of-sale ( POS ) systems, and contactless methods, in consonance with the Digital India campaign promoted by the Government of India.
Complete Draft Replies of GST ITC Related Notices, Click Here
Payment gateways such as RazorPay, PayU and BillDesk operate under regulations set by the Reserve Bank of India ( RBI ), and charge a payment gateway fee ranging between 0.5 per cent and 2 per cent for each transaction. If GST is levied, it is most likely that the Aggegators may shift their tax burden on to merchants.
The issue had been discussed extensively before, prior to the 54th GST Council Meeting that was convened on September 9 this year, yielding no results priorly. A wide demographic of India now uses UPI mode of payment on the daily, with the majority of the payments transacting less than Rs.2000, calling for an expeditious decision on the applicability of GST on such payments aggregators.
However, in a major relief to Aggregators, the Union Finance Minister affirmed today that Payments less than Rs. 2000 shall continue to be exempt from the levy of GST, reestablishing its position as a lucrative and viable option for customers and merchants alike.
Complete Draft Replies of GST ITC Related Notices, Click Here
The meeting was attended by Union Minister of State for Finance, Shri Pankaj Chaudhary, Ajay Seth (Revenue Secretary), along with Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, and Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana.
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