New Delhi: A panel of ministers has decided against granting additional tax incentives for digital transactions due to revenue considerations.
In a meeting chaired by Bihar Deputy Chief Minister Sushil Kumar, ministers suggested doing away with the concession of two percent tax on digital transactions and a maximum of exemption Rs 100.
The decision was taken citing losses likely to be incurred due to incentives offered on digital transactions, Modi said.
He further noted that the proposal on reverse charge mechanism will be put forth in the upcoming GST Council meeting.
Furthermore, the panel recommended termination of section 9 (4) of the GST Act, under which any registered trader that procures goods and services from an unregistered trader would have to pay a fine under the reverse charge mechanism.
"We have recommended omitting the present Section 9(4) and introducing a new Section 9(4) which will permit the government, on the recommendations of the GST Council, to notify specific class of registered persons who would be covered under Reverse Charge Mechanism provision," Modi said.
The recommendations put forth during the meeting will be presented at the GST Council meeting on July 21.