The department of financial services (DFS), in the last few months, has sought comments on the existing Goods and Services Tax (GST) slab for filing the tax returns from banks, the Reserve Bank of India and the National Payments Corporation of India with some lenders suggesting higher annual turnover threshold for merchants, according to three banking sources aware of the matter.
As per the current GST ruling, merchants who have an annual turnover of above Rs 40 lakh for goods and Rs 20 lakh for services should register themselves on the GST portal and file returns annually.
“Why should the businesses not be registered under GST, it is only for registration purposes. They do not have to pay taxes, so why should they hesitate? It is only for registration. But probably the idea would be to reduce the compliance, registration also becomes a kind of compliance burden. The idea would be why to bother small businesses, the move would be like reducing the compliance burden for them,” a senior government official with the finance ministry told Moneycontrol.
The deliberations over the last couple of months have been extensive and ongoing among various stakeholders. The data and feedback are also likely to be used for a possible implementation of a merchant discount rate (MDR) for merchant UPI transactions, the sources said.
MDR is the commission that payment companies impose on merchants to pay for the cost of facilitating digital payments.
According to these sources, it is learnt that the financial institutions recommended raising the slab to Rs 1 crore annual turnover. They also recommended that MDR should also be applied only to merchants with an annual turnover over Rs 1 crore.
Source: Money Control
The department of financial services (DFS), in the last few months, has sought comments on the existing Goods and Services Tax (GST) slab for filing the tax returns from banks, the Reserve Bank of India and the National Payments Corporation of India with some lenders suggesting higher annual turnover threshold for merchants, according to three banking sources aware of the matter.
