{"id":1285038,"date":"2024-09-08T13:34:55","date_gmt":"2024-09-08T08:04:55","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1285038"},"modified":"2024-09-08T13:35:15","modified_gmt":"2024-09-08T08:05:15","slug":"payment-aggregators-will-be-asked-to-pay-gst-on-all-sub-rs-2000-transactions","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/payment-aggregators-will-be-asked-to-pay-gst-on-all-sub-rs-2000-transactions\/","title":{"rendered":"Payment Aggregators Will Be Asked To Pay GST On All Sub-Rs 2000 Transactions"},"content":{"rendered":"\n

Large payment aggregators, including BillDesk and CCAvenue, have received notices from GST authorities demanding taxes on digital transactions under Rs 2,000. These companies had previously not charged merchants for processing such payments, following a 2016 government notification issued during demonetisation. Now, the GST authorities are seeking tax payments dating back to the implementation of GST in 2017.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Background of the GST Dispute<\/h3>\n\n\n\n

More than 80% of India\u2019s digital payments are transactions of less than Rs 2,000<\/a>. Following a government notification during demonetisation in 2016, payment aggregators did not charge merchants GST on these smaller transactions. This exemption was interpreted from a clause stating that services provided by acquiring banks for transactions under Rs 2,000 via debit and credit cards would not attract taxes. Payments firms believed they were covered under this exemption.<\/p>\n\n\n\n

However, with the introduction of the GST regime in 2017, there was no explicit continuation of this relief for payment aggregators. Despite this, the industry continued not to charge GST on these smaller payments. Now, GST authorities are asking for retrospective tax payments from fiscal year 2017-18, which could run into hundreds of crores for companies handling billions of transactions annually.<\/p>\n\n\n\n

Challenges Facing Payment Aggregators<\/h3>\n\n\n\n

Payment aggregators like CCAvenue have responded to the notices, emphasizing that they followed the norms at the time by not charging GST. If these firms are now required to pay retrospective taxes, they would have to recover the GST from merchants for transactions made over the past several years. This would be a massive task and could strain the financial stability of smaller merchants.<\/p>\n\n\n\n

The GST issue only applies to transactions via debit cards, credit cards, and net banking. UPI and RuPay debit card payments are exempt, as the government mandated zero merchant discount rates for these payment methods.<\/p>\n\n\n\n

Industry Concerns and Next Steps<\/h3>\n\n\n\n

Vishwas Patel, chairman of the Payments Council of India and joint managing director of CCAvenue, expressed concerns that this move could disrupt the digital payments ecosystem, especially if retrospective taxes are imposed. The industry hopes for a favorable clarification from the GST Council in its upcoming meeting on September 9.<\/p>\n\n\n\n

Image Source<\/a><\/p>\n\n\n\n

\n","protected":false},"excerpt":{"rendered":"

Large payment aggregators, including BillDesk and CCAvenue, have received notices from GST authorities demanding taxes on digital transactions under Rs 2,000. These companies had previously not charged merchants for processing such payments, following a 2016 government notification issued during demonetisation. 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