Goods and Services Tax, popularly known as the GST, has been synonymous with convenience, ease, and transparency ever since it was implemented in July 2017. GST is a vast subject, and claiming mastery over the GST mechanism is not an easy task.
Khatabook has been a favourite destination of taxpayers willing to understand the various clauses of GST in simple language.
The latest blog scrutinizes the GST notification and brings you the benefits of encouraging your customers to make digital payments and the impact it will have on your GST filing.
Payments and the Digital India Initiative
As part of the flagship Digital India initiative, the central government and various state governments are promoting digital payments, as it is fast, transparent, and easy.
The Modes of Digital Payment
The various ways in which your customers can make digital payments are:
- Banking Cards
- Unstructured Supplementary Service Data or USSD
- Aadhar Enabled Payment System or AePS
- United Payments Interface or UPI
- Mobile Wallets
6 Bank Pre-paid Cards
- Point of Sale
- Internet Banking
- Mobile Banking
- Micro ATMs
Click here to understand the modes of payment in detail.
Why Should You Encourage Your Customers to Make Digital Payments?
Motivating your customers to pay digitally may have several advantages for your business.
Firstly, it saves costs, as it reduces your business’s dependence on paper. It also saves costs by reducing the number of accounting staff you may require to execute operational activities.
Secondly, it increases transparency, as there is virtually no chance of theft and corruption.
Thirdly, your business’s customer base expands, as the cost of expanding your business beyond your existing locale becomes cost-effective and easy.
Fourthly, you may save yourself from paying a hefty penalty. From 1st February 2020, the government has made it mandatory for businesses with a turnover of INR 50 crore and more to provide customers with digital payment facilities.
What are the Best Ways to Encourage Customers to Make Digital Payments?
- Provide Cashback Offers and Discounts
Cashback offers and discounts are time-tested methods to retain customers. Many now-popular online retailers shot to prominence with their deep discounts and up to a hundred per cent cashback offers. Examples include Amazon, Flipkart, Paytm, Snapdeal, and so on.
Cashback offers are better than discounts, as discounts do not make your customers stick to your business. Cashback offers, on the other hand, provide the customers with a reason to visit your website again.
- Show How Digital Payments Offer More Convenience
Almost all of us become frustrated when it comes to keeping track of countless papers, documents, and bills. Inform the customers how digital payments can declutter their lives and offer them more convenience.
By educating customers about digital payments, you not only empower them but also convert them into loyal customers.
- Tell Your Customers How Digital Payments Can Give Them ‘Anywhere Anytime’ Account Access
A customer may need information about his/her account anytime. As your business office follows a limited-hour slot, it might not be possible for the customer to visit your office whenever they require to. Plus, the customer might not live in the vicinity of your business, making it even more difficult to access.
Digital payments take away all worries as customers may access their accounts from anywhere, 24 hours a day. Better accessibility leads to better customer retention.
- Ask Customers to Do Their Part for the Environment
Businesses that do not rely on digital payments require tons of paper, plastics, and other consumables that cause extreme damage to Mother Earth.
Ask your customers to do their part for the environment by reducing dependence on manual payments. Online payments require nothing more than a smartphone and internet connection, thus saving both time and money, and saving nature in the process.
- The Process of Filing GST Becomes Easy for You and Your Customers
Be it for you or your customer; the GST certificate download changes things for better. As the GST tax and return filing process is entirely online, keeping records become easier when you pay online.
Also, manual bill generation leaves room for errors. There is no possibility of fake invoices or wrong bills in case of digital payments.
With digital payments, what your customers see is what they pay, and what you collect online is what you file returns for.
The government is focused on making India a less-cash nation. Now is the best time to encourage your customers to move to digital payments.A