The Indian government is hopeful that the Goods and Services Tax (GST) Council will review the 18% tax levied on merchant discount rates for transactions conducted through the Unified Payments Interface (UPI), a government source said on Thursday.
The GST Council is the apex body for decisions related to taxation of most products where levies are shared by the federal and state governments. The council is next scheduled to meet on October 7. It was not immediately clear whether the issue will be discussed then.
Earlier this month, India’s payment authority said that a fee would be imposed on large payments made via UPI to merchants. The decision, expected to kick in from October 15, has faced pushback from retailers and opposition political parties who say the fee will be indirectly passed on to consumers.
The federal government is hopeful the council will take a “favourable” view on reviewing the 18% GST on the merchant fee, the source said.
This tax adds to the burden on merchants.
The government will hold talks with banking associations to ensure the cost is not passed on to consumers and with lobby associations representing traders to ensure merchants do not refuse UPI payments, the source said.
