Gateways seek GST waiver on low-value commissions
GST Council meeting on December 21, payment gateway operators have made representations to the finance ministry against levying 18% GST on commissions earned on small-value digital payments up to ₹2,000, multiple people in the know said.
Payment gateways have submitted that any tax levy will hurt the growth of digital payments as they will pass on the added burden to merchants.
The council will consider a proposal on levying GST as the Fitment Committee sees payment aggregators as facilitators for card transactions. Currently, these firms charge a payment gateway fee of 0.5% to 2% on each credit and debit card transaction.
«We have made multiple representations to the finance ministry and even met the revenue secretary to explain our stance that a GST levy will be detrimental to the growth of digital payments and a big burden on our pockets,» said an official who was part of the deliberations. «We hear that the GST levy could be retrospective in nature and that will lead to a huge tax outgo.»
According to the people cited above, the Fitment Committee feels that payment aggregators act as intermediaries for digital transactions and should not be classified as banks. As per the existing regulations, payment aggregators are currently exempt from GST on transactions of less than ₹2,000.
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