BUSINESS

Govt Proposes No Service Tax On Card Payments Up To ₹2,000

Go cashless.

08/12/2016 12:59 PM IST | Updated 08/12/2016 1:26 PM IST
Getty Images/iStockphoto
Photo of payment terminal

NEW DELHI -- Government will waive service tax on debit and credit card transactions of up to ₹2,000 in a bid to promote digital transactions amid cash crunch following withdrawal of old ₹500 and 1,000 banknotes.

The government has decided to "exempt services by an acquiring bank to any person in relation to settlement of an amount up to ₹2,000 in a single transaction through credit, debit card or other payment card service", sources said.

A notification to this effect will be tabled by Finance Minister Arun Jaitley in Parliament.

Following demonetisation of old high value notes, there has been a cash crunch in the country as people have been making a beeline for banks and ATMs to withdraw new currency.

The government has been taking steps to promote cashless or digital transactions to take India towards a cashless economy.

Recently, the government asked banks to install additional 10 lakh PoS terminals by 31 March in different parts of the country.

The service tax notification of June 2012 will be amended to include exemption on credit and debit cards, the sources added.

As of now, services provided by 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.

Also on HuffPost India:

Rare Photos Of Jayalalithaa You May Have Never Seen Before

More On This Topic