Rupay Card, BHIM Users to Get Cashbacks for Digital Payments on GST
⪻ Articles ⪼
Ministerial panel led by Sushil Modi approved proposal for incentivizing digital payments thru Rupay card & BHIM app by way of cashbacks. Cashback would be credited to bank account when detailed modalities will be worked out once GST Council clears proposal.
- Rupay Card, BHIM Users will get cashback of 20 % of total GST amount for making digital payments, subject to max. of ₹ 100.
- Recommendations of Group of Ministers (GoM) will be placed before GST Council.
- Move to provide cashback to users of Rupay & BHIM is intended to encourage use of digital mode of payment, especially in semi-urban & rural areas.
- Incentives will be extended to users of all card holders at later date.
Impact of the Move to Give Cash Back
- Move will have revenue impact of ₹ 1,000 cr. annually, to be shared equally b/w Centre & states.
Background on Cash Back
- Council had meeting on 21st July tasked GoM to work out modalities for incentivizing digital payments under Goods & Services Tax (GST) for users of Rupay & BHIM.
- All Jan-Dhan account holders have Rupay cards, which is launched by National Payments Corporation of India (NPCI) .
- BHIM, developed by NPCI, is based on United Payment Interface (UPI) for cashless payments.
- GoM had decided to defer by a year proposal to incentivise digital payments under GST citing revenue implications of doling out concessional tax rate.
- GoM was looking at incentivizing digital payments using all modes of online payments.
BHIM App
- BHIM app is aggregator of UPI services across various banks, developed by National Payments Corporation of India.
- UPI app enables range of cashless transaction across any 2 bank accounts, via smartphone. These can be conducted either online via internet, or offline via Unstructured Supplementary Service Data.
- UPI app can be used for diff. kinds of transaction.
Rupay Card
- RuPay is combination of 2 words - Rupee & Payment. RuPay Card is Indian version of credit/debit card. It is very similar to international cards such as Visa/Master.
- National Payments Corporation of India (NPCI) initiated launch of RuPay card in India.
- It was done w/intention of integration of payment systems in country. It has tied up w/Discover Financial Services firm for promoting this.
- Benefits of RuPay card:
- Lower transaction cost - International transactions lead to higher transaction costs. Such costs can be reduced by using RuPay card since processing will be done w/i country. Transactions will be faster.
- Sms alerts - Users will get alerts for every transaction made thru this card.
- Reduced processing fees - Processing fees for RuPay card compared w/regular debit/credit cards will be considerably lower.
✍Examrace Team at