Economy

Govt to Provide 2% GST Incentive on Digital Transactions ?

Govt to Provide 2% GST Incentive on Digital Transactions?

Government of India is mulling to provide an incentive of 2% under GST to the dealers if they go for digital transactions up to 2000 rupees. This comes when a reasonable fall is seen in the digital transaction of past few months.

Initiative Taken to Encourage Digital Economy

The government may soon come out with the plan of incentivizing digital transactions by 2% under GST up to the transaction of 2000 rupees. The Finance Ministry, RBI and IT Ministry are discussing on various prospects to encourage digital transactions. It has been noted that there are heavy transactions between the range of 2000 therefore the government may soon provide 2% GST incentive. The mission is to push digital economy while discouraging cash transactions. The same message was conveyed by PM Modi on the 71st Independence Day where he urged people to use less cash and focus on digital India.

The experts have also said that the government may soon come out with various initiatives to boost digital economy. The matter is with Finance Ministry and we can expect new announcements very soon.

Lots of Complexity in Making India a Digital India

The mission of the Prime Minister is to make India a digital India but there is lots of complexity the government is facing at present. Since the demonetization drive, there has been a huge surge in digital transactions but now the transactions have fallen low because of the availability of cash in the market. The data shows that there were 67 crore digital transactions that were carried out in November, 2016.  The transactions increased to 89 crores in March but it has now slowed down to 84 crores in the month of June. The reason is the availability of cash in market that has slowed the digital economy.

Other reasons are the service charge that the customer has to pay on every transaction. Many traders have opt out of using POS machines because they have to pay monthly charges to banks for the same. Internet connection problems, server problem, availability of POS and many other issues are there that have affected the digitization process. The government has to look into these issues and only then the digital India mission will come to a meaningful conclusion.

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  1. Pingback: Ten Measures Modi & BJP Govt Need to Revive Indian Economy

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