The GST Council on Saturday approved the plan for 20% cashback on the total tax amount to BHIM UPI and Rupay card users on the pilot basis to promote digital transactions and formalisation of the economy.
Speaking with reporters after the meeting, interim Finance Minister Piyush Goyal said that the GST Council has decided to launch the plan on a pilot basis under which a lot of rural population using BHIM UPI and Rupay will get the benefit of the cashback up to a maximum of Rs 100.
The plan was earlier shelved and was sent to Group of Ministers (GoM) for drawing out an incentive plan for digital transactions. After the approval from Group of Ministers (GoM), the proposal to incentivise digital payments through Bhim App and Rupay via cashback was placed before the council for the final nod.
As per the proposal approved by the GoM, customers making payments using Rupay card or BHIM UPI will get a cashback of 20 per cent of the total GST amount, subject to a maximum of Rs 100. Now, it is upto the states, how they are planning to take it forward, said Piyush Goyal.
If this pilot plan turns out to be successful in formalising the economy, the incentives can be extended to other users as well. While the council approved the plan on the pilot basis, some states were not in its favour as it is likely to take a hit on the revenues.