Rupay Card, BHIM Users to Get Cashbacks for Digital Payments on GST

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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 to Get Cashbacks for Digital Payments
  • 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 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.

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