In order to promote digital transactions, the Government has decided to waive off service charges on debit and credit card transactions up to an amount of Rs 2000/-. This has been done in order to promote digital transactions after Rs 500 and Rs 1000 currency notes were banned.
A notification for the same is likely to be tabled in Parliament by the Finance Minister Arun Jaitley. This move comes as a part of an initiative by Government of India to promote cashless transactions. Banks will now install 10 Lakh PoS terminals which will be operational in different regions of the country by March 31, 2017.
In order to give a practical shape to this development, the Government of India will amend the service tax notification of 2012 to exempt credit and debit cards. As on date, only services provided by United Nations and other international charitable organizations are exempted from tax.
This whole initiative is to make India truly digital though numerous hurdles still prevail in the way. People have to be taken into confidence on the safety of online transactions. With service charges being waived off on transactions worth Rs 2000/- the Government has taken a firm step in the direction of usage of cards for small purchases.