States to test GST cashback for payments via Rupay, BHIM app

States will roll out on pilot basis incentives for digital transactions through Rupay card and BHIM app under the GST, Finance Minister Piyush Goyal said today.

The GST Council, chaired by Goyal, in its meeting here today also decided to set up a Group of Ministers (GoM) under Minister of State of Finance Shiv Pratap Shukla to look into the issues of the MSME sector.

Simultaneously, the law and procedure related issues for the sector would be looked into by the law committee of Centre and state tax officers, while tax rate related issues would be looked after by the Fitment Committee of tax officers.

With regard to incentives for digital transactions, Goyal said that these would be rolled out on trial basis by states who volunteer to do so.

Based on the pilot, we can asses the revenue gain or loss, he told reporters after the GST Council meeting.

A ministerial panel headed by Bihar deputy chief minister Sushil Modi today approved the proposal for incentivising digital payments through Rupay card and BHIM app by way of a cash back.

Once implemented, customers making payments using Rupay card and BHIM UPI, would get a cashback of 20 per cent of the total GST amount, subject to a maximum limit of Rs 100.

The next meeting of the GST Council will be held on September 28-29 in Goa.