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The Indian government is considering imposing an 18% Goods and Services Tax (GST) on payments processed by aggregators for transactions up to Rs 2,000, according to recent reports.
The Indian government is considering imposing an 18% Goods and Services Tax (GST) on payments processed by aggregators for transactions up to Rs 2,000, according to recent reports. This proposed change could significantly impact the payment aggregator sector, which handles transactions for a wide range of services, including e-commerce and online payment platforms.
Currently, payment aggregators are primarily taxed under the GST regime at a lower rate or not taxed on certain transactions. However, this new proposal aims to standardize and increase the GST rate on transaction processing to align with broader tax regulations and ensure compliance. The 18% GST would apply to each transaction up to Rs 2,000, potentially leading to increased costs for both businesses and consumers who rely on these payment services.
If implemented, this change could affect the operational costs of payment aggregators, which might be passed on to merchants and consumers through higher transaction fees. The move is expected to generate additional revenue for the government while also creating a more transparent tax structure for financial transactions.
Industry stakeholders are closely watching the developments, as this adjustment could impact the pricing models of payment aggregators and the overall cost of digital transactions. The government has yet to finalize the decision, and further consultations with industry representatives are anticipated.
