Bihar’s Deputy Chief Minister Sushil Kumar Modi-led Group of Ministers (GoM) has given green signal to incentivising digital payments made through Bhim app and Rupay card.
The proposal, once implemented, will allow consumers to get cashback of 20 per cent of the total goods and services tax (GST) amount paid on a particular item, said Sushil Modi. The cashback or discount would be capped at Rs 100 per transaction.
For example, if you use BHIM app or Rupay card to buy an item costing Rs 100, including Rs 18 as GST, you will get Rs 3.60 as cashback.
The amount will be credited to a consumer’s account. The time period for crediting on the cashback will be decided once GST council approves it.
Today, the proposal will be discussed in GST council meeting. The council will also discuss issues faced by MSME including aspects related to laws, simplification, compliance burden and technology-related issues impacting the sector.
The move will cost govt Rs 1000 crore, which will be equally shared between central and state governments.
Digital incentive is primarily aimed at encouraging digital payments in semi-urban and rural areas. Based on the success of this move, the incentives will be extended to users of all cardholders, added Modi.
In June, Prime Minister Narendra Modi had appealed to the citizens of the country to serve the nation by using Rupay debit/credit cards. At present, there are around 50 crore RuPay cards in the country. Recently, NPCI rolled out RuPay credit cards with over 12 banks.
In addition, Rupay has partnered with international players like Discover, Japan Credit Bureau and China Union Pay to enhance its international acceptance. With WhatsApp UPI and UPI 2.0 yet to be rolled out for masses, Rupay is expected to grow exponentially in coming months.
PM also asked people to install BHIM app to facilitate paying for goods and services digitally. BHIM saw more than 91.5 crore transactions involving an amount of Rs 10,983 crore in 2017-18, from 1.78 crore transactions worth Rs 695 crore at the end of 2016-17.
However, Mobikwik’s co-founder and CEO Bipin Preet Singh had alleged that government cashback move to support BHIM UPI as discriminatory. Following the criticism, the government had withdrawn incentive scheme of up to Rs 1,000 for accepting payments using the Unified Payments Interface (UPI) for shopkeepers eight months before its maturity.