New Delhi, Dec 8, 2016 : In a bid to boost up digital transaction amidst cash crunch following the withdrawal of old Rs. 500 and Rs. 1000 banknotes government will waive service tax on debit and credit card transactions of up to Rs 2,000.
Sources confirm that the government has decided to “exempt services by an acquiring bank to any person in relation to the settlement of an amount up to Rs 2,000 in a single transaction through credit, debit card or other payment card service”. Finance Minister Arun Jaitley will table a notification to this effect, mentioned PTI.
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Demonetisation drive has been a major challenge for the people throughout the country since the day of its announcement. Never ending queues and death rates have gone up. The biggest hurdle is faced by the rural parts of the country, where there are limited banks and almost negligible ATMs.
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The Government is trying to promote a less-cash economic India by encouraging digital transactions. Recently, the government asked banks to install additional 10 lakh PoS terminals by March 31 in different parts of the country.
Reports from trusted sources suggest that the service tax notification of June 2012 will be amended to include the exemption on credit and debit cards. As of now, services provided by the organisations such as United Nations and other international bodies are exempt from tax.
A range of other services provided by arbitral tribunals, testing of newly developed drugs, educational institutions, trade unions, general insurance business and sports bodies, among others too are exempt from the levy.
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