The Finance Ministry on Sunday stated that the products and companies tax (GST) shall not be relevant on incentives paid by the federal government to banks for selling RuPay debit playing cards and low-worth BHIM-UPI transactions.
Last week the Cabinet cleared a Rs 2,600-crore incentive scheme for banks to advertise RuPay debit playing cards and low-worth BHIM-UPI transactions within the present fiscal.
Under the Incentive scheme for the promotion of RuPay Debit Cards and low-worth BHIM-UPI transactions, the federal government pays banks an incentive as a share of the worth of RuPay Debit card transactions and low-worth BHIM-UPI transactions as much as Rs 2,000.
The Payments and Settlements Systems Act, 2007 prohibits banks and system suppliers from charging any quantity from an individual making or receiving funds via RuPay Debit playing cards or BHIM.
In a round to chief commissioners of GST, the Ministry stated the motivation is within the nature of a subsidy instantly linked to the worth of the service and the identical doesn’t type a part of the taxable worth of the transaction in view of the provisions of the Central GST Act, 2017.
“As recommended by the Council, it is hereby clarified that incentives paid by MeitY to acquiring banks under the Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions are in the nature of subsidy and thus not taxable,” it stated.
In December alone, UPI achieved a document of 782.9 crore digital fee transactions with a price of Rs 12.82 lakh crore.
Separately, the Ministry has additionally clarified the applicability of GST on lodging companies equipped by Air Force Mess to its personnel.
It stated that the income division had obtained references requesting clarification on whether or not GST is payable on lodging companies equipped by Air Force Mess to its personnel.
Currently, all companies, barring just a few specified companies resembling companies of the postal division, transportation, equipped by Central or State Governments, or native authority to any particular person apart from enterprise entities are exempt from GST.
“It is hereby clarified that accommodation services provided by Air Force Mess and other similar messes, such as Army mess, Navy mess, Paramilitary and Police forces mess to their personnel or any person other than a business entity are covered by Sl. No. 6 of notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 provided the services supplied by such messes qualify to be considered as services supplied by Central Government, State Government, Union Territory or local authority,” the Ministry stated.
“CBIC has clarified that accommodation services provided by Air Force Mess, Army mess, Navy mess, Paramilitary, and Police forces mess to their personnel or any person other than a business entity are tax neutral. This clarification would help restrict the cost of accommodation services for our elite forces services,” AMRG & Associates Senior Partner Rajat Mohan stated.
[Disclaimer: This story was automatically generated by a computer program and was not created or edited by Journalpur Staff. Publisher: Journalpur.com]
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