The Goods and Services Tax (GST) Council has approved a pilot project to give a cashback to consumers in order to incentivise digital payments, and also set up a panel to look into issues faced by medium and small enterprises (MSMEs).
The pilot project proposes 20% cash back on GST component of transactions. The states will have to decide on it before making available to the people.
“Under the project, consumers will get a 20% cash back subject to a cap of INR 100 on all UPI and USSD transactions as well as transactions made using RuPay card and BHIM app,” Finance Minister Piyush Goyal said.
According to Goyal, the centre is preparing a broad framework of the pilot project. States like Assam, Madhya Pradesh and Tamil Nadu is said have already shown interest in running the pilot.
“We believe that this will help in increasing compliance and give a boost to the formal economy…Based on the pilot, we can assess the revenue gain or loss,” Goyal said.
The minister was speaking at a press conference after holding GST Council meeting on Saturday.