Daily Morning News

Payment Firms Receive GST Demand Notice for Transactions Below Rs 2,000

Several payment firms in India have received Goods and Services Tax (GST) demand notices for processing transactions below Rs 2,000. The notices point out discrepancies in GST compliance related to services deemed exempt from tax, creating concerns among digital payment providers. The firms are accused of not charging GST on smaller transactions, which authorities now assert should be taxed under revised interpretations of the law.

The issue surrounds the services provided by payment firms, such as digital wallets and payment gateways, which previously operated under the belief that certain low-value transactions were exempt from GST. However, tax authorities argue that these services, even for transactions under Rs 2,000, are liable for GST, leading to a significant potential tax burden for companies. This development has sparked uncertainty within the digital payments sector, prompting calls for clearer guidelines and a reassessment of tax obligations to avoid penalizing companies that have fostered cashless transactions in India.