• About Us
  • Privacy Policy
  • Disclaimers
  • Terms and Conditions
  • Contact Us
  • DMCA Policy
Tech Chilli
  • News
  • AI
  • Fintech
  • Crypto
  • AI India
  • Robotics
  • Courses
  • How-To
  • Puzzles
  • Gaming
  • Contact Us
No Result
View All Result
  • News
  • AI
  • Fintech
  • Crypto
  • AI India
  • Robotics
  • Courses
  • How-To
  • Puzzles
  • Gaming
  • Contact Us
No Result
View All Result
Tech Chilli
No Result
View All Result

Home » FinTech » 18% GST Proposal on Payment Aggregators for Small Card Transactions Raises Concerns in India

18% GST Proposal on Payment Aggregators for Small Card Transactions Raises Concerns in India

The GST Council is considering an 18% tax on payment aggregators for card transactions below Rs 2,000, leading to concerns within the digital payments industry. If approved, this could impact merchants and encourage a shift to UPI for smaller transactions.

Bilal by Bilal Abbas
Wednesday, 11 September 2024, 5:28 AM
in FinTech
18% GST Proposal on Payment Aggregators

18% GST Proposal on Payment Aggregators

The recent discussions that the GST Council held to levy an 18% GST on payment aggregators on card transactions below Rs 2,000 has created a stir in the digital payments industry. Though the final decision has gone to the Fitment Committee for re-evaluation, industry circles have already begun discussing implications for digital payments in India.

Implications of GST for the payment aggregators

Payment aggregators (PA), like BillDesk and CCAvenue, charge 0.5% to 2% on every transaction that they process to the merchant. If 18% GST is levied, then this will add cost for the merchants. For instance, if a PA charges Rs 2 on a Rs 100 transaction, the new GST would add 36 paise more. This may seem like a small amount, but for small shop owners with a lot of sales, these little charges could amount to a lot of money. 

Before demonetization in 2016, there was an 18% service tax for every card transaction, to encourage digital transactions, the government exempted this duty for under Rs 2,000 transactions. 

With Government support, UPI has been made the most popular way to execute a digital payment. Once GST is levied on card-based payments, more people will shift gradually towards UPI. This will discourage many customers who will see lower fees for UPI and will choose that option instead.

However, it seems that not everyone thinks this policy change will make much of a difference. The average ticket size for a credit card payment is Rs 5,276 and Rs 2,642 for a debit card, far larger than the Rs 656 average for a UPI payment according to the Worldline report. Many shops would still allow card payments because of the benefits accruing therein in the form of credit and reward points.

Fitment Committee to Decide

The matter is presently under consideration by the Fitment Committee, and they are yet to take a decision. According to Uttarakhand Finance Minister Premchand Aggarwal, “No decision has been taken yet in the 54th GST meeting about putting 18% GST on small online transactions.” The Minister said this while stating that due consideration is being given to the matter, and the committee would report for due consideration.

The debate on the levy of GST on small transactions through PAs is not just about an 18% tax. It’s about how this change is going to impact digital payments in India. Large shops can afford the additional cost due to their higher amount of transactions and also the tax benefits, but small ones may not be able to afford it, and this may push them to ask for UPI instead of card payments. While the Fitment Committee is studying the matter, businesses and payment firms can only speculate on how this would affect their future.

India’s Top 9 Fintech Lending Platforms

Previous Post

Adam Sullivan Net Worth – Core Scientific CEO

Next Post

Oracle NetSuite Unveils AI Advancements to Boost Efficiency, Growth, and Business Insights

Bilal

Bilal Abbas

Bilal Abbas holds a Master’s in International Relations from Jamia Millia Islamia, Delhi, and a Bachelor’s in Economics from the University of Lucknow. A creative yet logical thinker, Bilal is deeply curious about the intricacies of the global economy and international politics. His interest in technology has led him to explore and write on fintech topics, blending his academic expertise with a passion for innovation. Bilal also finds joy in nature and appreciates the serenity of greenery. In his leisure time, Bilal can be found sketching, or immersed in a good book.

Next Post
Oracle NetSuite Introduces AI Features

Oracle NetSuite Unveils AI Advancements to Boost Efficiency, Growth, and Business Insights

  • Trending
  • Comments
  • Latest
top Yield Farming Platforms

Top 13 Yield Farming Platforms in 2025: Maximize APY with Secure and Trusted Crypto Tools

April 17, 2025
scott wu net worth

Scott Wu Net Worth: Devin AI Software Engineer, CEO of Cognition Labs

April 17, 2025
Artificial Intelligence (AI) Glossary and Terminologies

Artificial Intelligence (AI) Glossary and Terminologies – Complete Cheat Sheet List

April 18, 2025
TurbolearnAI

Turbolearn AI: How to Use It for FREE, Features and Pricing Models

April 3, 2025
What is Blockchain Technology

What is Blockchain Technology And How Does It Work?

Enterprise AI

What is Enterprise AI? Meaning, Companies, Examples and More Details

Cosine Genie AI Software Engineer

What is Cosine Genie and How to Use? Check Benchmark, Functions, and Access Details

PhonePe Leads UPI Market in August 2024, Claims 50% Share by Value and 48% by Volume

PhonePe Partners with Liquid Group to Bring UPI Payments to Singapore for Indian Travelers

Google is moving Android news to a virtual event before I/O

Google is moving Android news to a virtual event before I/O

April 29, 2025
Generative AI Companies

Top Generative AI Companies of the World 2025

April 28, 2025
Veo 2 extends access to more Gemini Advanced Users

Veo 2 extends access to more Gemini Advanced Users

April 25, 2025
Perplexity launches the iPhone voice assistant

Perplexity launches the iPhone voice assistant

April 24, 2025

Recent News

Google is moving Android news to a virtual event before I/O

Google is moving Android news to a virtual event before I/O

April 29, 2025
Generative AI Companies

Top Generative AI Companies of the World 2025

April 28, 2025
Veo 2 extends access to more Gemini Advanced Users

Veo 2 extends access to more Gemini Advanced Users

April 25, 2025
Perplexity launches the iPhone voice assistant

Perplexity launches the iPhone voice assistant

April 24, 2025

Trending in AI

  • Perplexity CEO Net Worth
  • Grammarly AI Detection
  • What is LangChain
  • Canva AI Tool
  • Koupon AI
Tech Chilli

Tech Chilli is a beacon of knowledge, a relentless purveyor of the latest information, news, and groundbreaking research in the realm of cutting-edge technology.

We are dedicated to curating and delivering the most relevant, accurate, and up-to-the-minute information on the technologies that are shaping our world.
Contact us – [email protected]

Follow Us

Browse by Category

  • AI
  • AI India
  • Courses
  • Crypto
  • Featured
  • FinTech
  • Gaming
  • How-To
  • News
  • Puzzles
  • Robotics

Top Searches

  • Scott Wu Net Worth
  • Mira Murati Net Worth
  • Online Games for Couples
  • Amazon Q vs Microsoft Copilot
  • DarkGPT

Recent News

Google is moving Android news to a virtual event before I/O

Google is moving Android news to a virtual event before I/O

April 29, 2025
Generative AI Companies

Top Generative AI Companies of the World 2025

April 28, 2025
Veo 2 extends access to more Gemini Advanced Users

Veo 2 extends access to more Gemini Advanced Users

April 25, 2025
Perplexity launches the iPhone voice assistant

Perplexity launches the iPhone voice assistant

April 24, 2025
  • About Us
  • Privacy Policy
  • Disclaimers
  • Terms and Conditions
  • Contact Us
  • DMCA Policy

© 2024 Tech Chilli

No Result
View All Result
  • News
  • AI
  • Fintech
  • Crypto
  • AI India
  • Robotics
  • Courses
  • How-To
  • Puzzles
  • Gaming
  • Contact Us

© 2024 Tech Chilli

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.OK