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High GST rate applied on POS devices may deter digitalization move
Ever since the government introduced the 'historic' Goods and Services Tax in July 2017, there have been several announcements of amendments in tax rates of several items by the GST Council owing to pressure from public, traders and the political leadership.

However, there are certain items which are still in the bracket of 18 per cent and 28 per cent, which, according to experts, will prove counterproductive for the government in implementing its grand initiatives towards achieving a cashless economy and digitalization of all transactions.

For example, most of the Point of Sale (POS) devices are still under higher rate of GST. While POS devices such as POS terminals, barcode scanners, barcode printers, mobile printers, receipt printers, etc are placed in the 18 per cent slab; POS consumables such as paper rolls, ribbons and inks, and also POS accessories such as pole display, cash drawers and magnetic stripe readers are still in the highest tax slab of 28 per cent.

The higher GST slab for POS devices and accessories will discourage retail vendors to go for digital transformation, feels Bhaskar Venkatraman, the CEO and Managing Director of Millennium India, a pioneer in introducing POS machines to retail businesses in India.

"The government's digitalization move can bear the fruit only when all retail businesses, even in the remotest corner of India, automate their store by digitalizing their business operations moving out from the traditional and obsolete transaction methods. But the high GST slabs on various POS devices is a big discouragement for it. Hence, the GST Council should reduce the GST for all the POS items and accessories and also reduce the burden on importers by slashing the import duties, as majority of POS payment terminals, barcode printers, scanners and other supportive devices are being imported to India," feels Bhaskar, who launched India's first ecommerce portal 'Justransact' in 2014 exclusively for point of sale electronic items.

Even the nominal bank transaction charges for card payments at Point of Sale are scaring away retail vendors from adopting card payment system. Some of them, who have installed POS payment devices at their shops, are simply passing this burden to customers.

Post demonetisation, cash still remains the major source of transaction even after one year of its implementation, though there has been phenomenal increase in card transactions.

GST, which was intended to bring uniform tax regime, has so far not created the required impact among the trading community as almost every week there have been some changes in its implementation or the rates.

"It is too early to gauge the impact of GST on the businesses or the economy. For any major reforms, there will be issues which need to be addressed, and I think, the government is doing the right thing by revising the GST rates after getting feedbacks from various quarters. In the same line, 18 and 28 per cent GST for POS machines are too high to be absorbed by retail vendors. On the other hand, lower GST on POS devices will have positive impact on the growth of the Indian retail industry," concludes Bhaskar.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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