You could soon save tax by going cashless

The Goods and Services Tax Council is planning to take up a proposal to give a discount in the tax imposed on a transaction, if the payment for the same is made in electronic mode, the government said.

“An agenda note, proposing certain concession in GST rate on supplies made to end consumers, for which payment is made through digital mode was placed for consideration before the GST Council in its meetings held on 10.11.2017 and 18.01.2018,” said Shiv Pratap Shukla, minister of state for finance, government of India.

However, said Shukla, the GST Council — which is the supreme decision-making body on the subject — has not been able to take it up for discussions yet.

“Because of shortage of time and other urgent agenda items, the same has not been taken up by the GST Council,” he said.

The move could mean a win-win for the government and the consumers.

While consumers can save on the tax that they have to pay, the government too is likely to get more tax revenue due to the difficulties of under-declaring or not declaring transactions that are done electronically.

It is more difficult for merchants to under-declare their revenue and turnover when a large part of their sales is paid for by electronic means such as mobile wallets, cards and UPI.

Customers are also more likely to bother to pay by electronic means if they can save 1% or 2% of the value of the product by doing so.