India proposes anti-fraud VAT cut on credit cards
India is to become the latest country to attempt to tackle the problem of non-reporting of cash transactions by offering a cut on payments by credit and debit cards.
The proposal is for a 1-2% cut in the VAT rate on transactions in shops and online with consumers.
Other measures being considered include cuts in translation charges for all credit card payments, but especially for fuel and rail travel where fraud is believed to be most prevalent. In addition, payments in excess of 1 Lakh may be forced to be settled online, providing an audit trail for the taxman.
GST to replace Indian VAT
India currently has a highly complex, and overlapping system of consumption taxes. These include VAT, CENVAT, Professional Tax and others. There are advanced proposals to consolidate all of these taxes into a single Goods & Services Tax (‘GST’). It is hoped this could be as soon as April 2016, although there are potential delays to this deadline.
[button_icon icon=”none” url=”/about-us/contact-us/?description=Body,email@example.com”]Click for free VAT & GST news[/button_icon]