New Delhi: Several payment companies, including BillDesk and CCAvenue, have received a goods and services tax (GST) demand notice for the fees charged to merchants on digital transactions under Rs 2,000.
Joint Managing Director of Infibeam Avenues, Vishwas Patel, confirmed to the newspaper that the payment processor CCAvenue, operated by Infibeam Avenues, has received a show cause-cum-demand notice from the GST authorities.
The tax demand is for the financial year 2017-18, the year the GST regime was implemented, according to ET. The dispute concerns payments made through debit, credit cards, and net banking, while transactions via UPI and RuPay cards are exempt from such taxes.
Industry executives, however, assert that during demonetization, the government issued a notification directing payment aggregators, who support retail and online merchants, not to charge GST for transactions up to Rs 2,000.
This issue arises just two days before the GST Council meeting, which is expected to decide whether to impose an 18 per cent GST on digital payments under Rs 2,000 processed by payment aggregators like Pine Labs and Razorpay.
At present, payment aggregators that handle digital payments, including QR scanning, POS machines, and net banking, are not subject to GST for transactions below Rs 2,000. The GST Council is set to make a final decision based on the recommendations of the rate fitment committee.
