Delhi Opposes GST on Online Transactions, Research Grants

New Delhi, Sep 8 (PTI) Delhi Finance Minister Atishi on Sunday said the AAP government will oppose the Centre's alleged plan to levy GST on payment gateway transactions below Rs 2,000 and research grants.

The GST Council on Monday is expected to deliberate on a host of issues, including taxation of insurance premiums, the Group of Ministers (GoMs) suggestions on rate rationalisation, and a status report on online gaming.

The council is chaired by Union Finance Minister Nirmala Sitharaman and comprises state ministers.

Addressing a press conference, Atishi said the decision to impose GST (goods and services tax) on online transactions below Rs 2,000 would have severe consequences for numerous startups and small businesses across the country.

She stressed the BJP-led central government's plan would place excessive financial strain on the country's entrepreneurial community.

The minister said the Aam Aadmi Party (AAP) dispensation feels that implementing such a tax on smaller transactions will hinder the growth and development of the startup ecosystem and negatively impact the operations of small-scale enterprises.

Atishi said the central government has been continuously saying that it is promoting digital transactions and a cashless economy.

"However, their hypocrisy is evident as the central government is bringing a proposal in the GST Council meeting tomorrow that online transactions below Rs 2,000, which were exempted from GST until now, will now be taxed," she claimed.

"When we buy something online using debit cards, credit cards, or net banking, if our transaction is below Rs 2,000, it is not subject to GST. If the transaction exceeds Rs 2,000, it attracts a GST of 18 per cent on the payment gateway fees," she explained.

This means that small online purchases, made via debit or credit card, will also be taxed. Most of these payments happen through some payment gateway like Razorpay, CCAvenue, or BillDesk, she said.

Atishi said they would also oppose GST on research grants in the meeting.

"No country in the world imposes GST on research grants given to educational institutions because they do not see research as a business, but as an investment in progress of the country," she said.

"All developed countries of the world invest a large part of their GDP in research. But in the last 10 years, under anti-education BJP, the research budget has been reduced from Rs 70,000 crore to Rs 35,000 crore," she said.

She claimed that six educational institutions, including IIT-Delhi and Punjab University, were sent GST notices of Rs 220 crore.

"The government is reducing the research budget and imposing GST on educational institutions if they get research grants from private entities. This is completely wrong and we will demand that research grants given to educational institutions be exempted from GST," she added.