Government to offer 2% discount on GST to encourage digital transactions

In a bid to encourage digital transactions, the Government is likely to offer 2% discount with a possible cashback offer on transactions upto Rs 2000, reported The Times of India. 

Citing sources, the TOI report further stated that the the Finance Ministry, the RBI, cabinet secretariat, ministry of electronics and IT were mulling over the proposal with continuos meetings lately. 

The Narendra Modi-led government wants to promote digital methods and the Ministry of Information and Technology is said to be leading the charge and planning methods to make digital transactions popular among Indians.

The government, at present, might offer the 2 per cent discount to transactions up to Rs 2,000 because such transactions are high in volume.

"Transactions of up to Rs 2,000 are very high in volumes and if an incentive can be given here, it will provide an impetus to digital payments while facilitating the entry of more people within the formal economy. This will help plug leakages while playing a credible part in countering the development of black money," The Time of India quoted the source as saying.

According to RBI data, digital transactions had witnessed a considerable downfall in recent months.  From 67 crore digital transactions in November 2016, when the demonetization happened, it had tremendously grown to 89 crores in March 2017. However, it again dropped to 84 crores in June.