Govt to waive service tax on card transactions up to Rs 2,000

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

By: PTI | New Delhi | Updated: December 8, 2016 6:33 pm
service tax, no service tax, no service tax on cards, plastic money, cashless economy, service tax debit cards, credit card service tax, The government has been taking steps to promote cashless or digital transactions to take India towards a less-cash economy.

Government will waive service tax on debit and credit card transactions of up to Rs 2,000 in a bid to promote digital transactions amid cash crunch following withdrawal of old Rs 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 Rs 2,000 in a single transaction transacted trough credit, debit card or other payment card service”, sources said.

WATCH VIDEO | Government To Waive Service Tax On Debit, Credit Card Transactions Of Up To Rs 2,000

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 less-cash economy. Recently, the government asked banks to install additional 10 lakh PoS terminals by March 31 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.

For all the latest India News, download Indian Express App now

  1. S
    SubbuI
    Dec 8, 2016 at 1:01 pm
    BYNOT CHARGIG SERVICE TAX ON CREDIT AND DEBT CARD SWIPING, HOW MANY POOR BPL PEOPLE WILL BENEFFIT? CASH LESS OR NO CASH WHICH IS MORE PREVAIL NOW IN INDIA? WILL THE ECONOMY LIZARDS WILL EXPLAIN COMMON MAN? INVISIABLE AND UNREACHABLE BENEFITS FOR WHOM?lt;br/gt;IS GOVERNMENT VPANIKING WITH DAY TO DAY IRRELEVENT CHANGES?lt;br/gt;GOD KNOWS WHAT IS GOING ON?
    Reply
    1. S
      SubbuI
      Dec 8, 2016 at 1:07 pm
      OUR LEGALLY AUNTHANTIC ECNOMIC LIZARD SIDE KICK JAAT LEY SHOULD EXPLAI IN PLAIN TERMS HOW MUCH SLASH MONEY EXCHANGED PRIOR TO NOTE BAN BY DICTATOR NMODI BY GANGSTER AMIT SHAH AND HIM SELF IF HE HAS MARBELS IN PLACE
      Reply
      1. A
        ashok dayal
        Dec 8, 2016 at 2:58 pm
        It should be any amount as cash transaction is normally done for higher amounts only.lt;br/gt;This called putting cart before horse.
        Reply
        1. A
          ashok dayal
          Dec 8, 2016 at 3:00 pm
          There should be no service tax if paid by cheque/Card.lt;br/gt;Service tax should be levied for cash transaction
          Reply
          1. D
            Dash
            Dec 8, 2016 at 7:38 am
            why upto 2000 only?there shlould be no servjce tax on such transactions.
            Reply
            1. D
              Dimpi
              Dec 20, 2016 at 5:09 am
              yesterday I bought pizza form dominos and i had paid by debit card the amount was 490 ...and they charged me SERVICE TAX @ 6%.... Why???Even though I asked them...but they dont have any idea about this... Isss it Implemented or not ??????
              Reply
              1. F
                Feku
                Dec 8, 2016 at 12:23 pm
                Every sort of tax from swacch bharat tax to other tax has evaporated into thin air without results on the ground.
                Reply
                1. F
                  Feku
                  Dec 8, 2016 at 12:32 pm
                  Modi renames Congress schemeslt;br/gt;------------------------------------------------------lt;br/gt;1. National Manufacturing policy of 2011-Renamed to Make in India.lt;br/gt;lt;br/gt;2. Nirmal Bharat - Renamed to Swatch Bharatlt;br/gt;lt;br/gt;3. Direct Benefit Transfer - Renamed Jan Dhan Yojnalt;br/gt;lt;br/gt;4. National Pension Scheme - Renamed Atal Pension Yojanalt;br/gt;lt;br/gt;5. National e-Governance Plan (NeGP) - Renamed Digital India lt;br/gt;lt;br/gt;6. Aam Aadmi Beema Yojana (AABY), - Renamed Pradhan Mantri Suraksha Beema Yojanalt;br/gt;lt;br/gt;7. IAY – Indira Awaas Yojna to GRAM - Renamed National Gram Awaas Missionlt;br/gt;lt;br/gt;8. Planning Commission - Renamed Niti Ayyoglt;br/gt;lt;br/gt;9. Rajiv hi Gramin Vidyutikaran Pariyojna - Renamed Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGY).lt;br/gt;lt;br/gt;10. Accelerated Irrigation Benefits Programme (AIBP) - Renamed as Pradhan Mantri Krishi Sinchai Yojana (PMKSY)lt;br/gt;lt;br/gt;11. Modi said the current government took a strategic decision to begin production of neem-coated urea to boost the falling fertility of India’s over-fertilised agricultural lands.lt;br/gt;Reality: Parliamentary data reveal that urea, along with various pesticides, has been coated with neem for 11 years.lt;br/gt;lt;br/gt;12. Modi has implied that issuing “soil-health cards” is an original idea of the National Democratic Alliance (NDA) government.lt;br/gt;Reality: More than 50 million soil-health cards had been issued to farmers across states and union territories by March 2012.lt;br/gt;lt;br/gt;13. Modi claim Farm credit target raised to Rs 8.5 lakh crore. This was a key achievement during 2014-15.lt;br/gt;Reality: An examination of government data since 2010-11 reveals that farm-credit targets are raised by at least Rs 1 lakh crore every year. The target for 2014-15 was fixed at Rs 8 lakh crore.lt;br/gt;lt;br/gt;14. Modi Launched Paramparagat Krishi Vikas Yojna (PKVY), Traditional Agriculture Growth Programme, to promote organic farming; every farmer to get Rs 20,000 per acre every three years.lt;br/gt;Reality: PKVY is, again, an example of change in nomenclature; it clubs existing organic-farming schemes/programmes.
                  Reply
                  1. V
                    Vin Petrol
                    Dec 8, 2016 at 9:09 am
                    Does that mean we are going to get two separate bills ? One larger amount if you pay by using cash and another lower one if you pay by card
                    Reply
                    1. A
                      Aoo
                      Dec 9, 2016 at 7:39 am
                      This is a propaa. Only service charges are wavered, which Govt was charging from the banks stating that cashless txn is a service . However the bank txn fee is still levied.lt;br/gt;Example Pay by debit card for say 2000. U pay Rs 57.50 as fee. Out of which is 50 Rs as bank txn fee and Rs 7.5 is service tax, here govt has wavered this Rs 7.5, so u have still to pay Rs 50 .lt;br/gt;He is making a C***** of the public. lt;br/gt;If u agree plz copy and paste in ur whatsapp gps and facebook pages.lt;br/gt;Male all aware.lt;br/gt;Better pay in cash at petrol pumps.lt;br/gt;All is well. :)
                      Reply
                      1. A
                        Aoo
                        Dec 9, 2016 at 7:34 am
                        hi
                        Reply
                        1. K
                          KIRAN
                          Dec 8, 2016 at 8:04 am
                          1) make a law to stop accepting cash for current bills and telephone bills in cities if bill is more than 1000 per month.lt;br/gt;2) train tickets that costs more than 300 should be charged 1%extra for cash transactions. (exclude the ticket counters in small towns and villages )
                          Reply
                          1. K
                            KIRAN
                            Dec 8, 2016 at 7:57 am
                            Good, but also add service tax for cash transactions in bank. then only people will go cash less. in countries like USA banks extra fee for cash transactions in bank to discourage cash transactions.
                            Reply
                            1. S
                              SANDEEP
                              Dec 8, 2016 at 7:58 am
                              Hey all,lt;br/gt;lt;br/gt;Wait don't jump on this news I think you all take this wrong way.lt;br/gt;This Service tax waive means when we transac upto 2000 a transaction charge incured to merchant may be 1.25% on this transaction charges 15% service tax incured AND thants tax is waived.lt;br/gt;As customer we benefit on Feul surcharge service tax waive and Irctc transaction service charged waive.lt;br/gt;As we see not so difference it made but some thing is better
                              Reply
                              1. S
                                SANDEEP
                                Dec 8, 2016 at 8:00 am
                                Hey all,lt;br/gt;lt;br/gt;Wait don't jump on this news I think you all take this wrong way.lt;br/gt;This Service tax waive means when we transac upto 2000 a transaction charge incured to merchant may be 1.25% on this transaction charges 15% service tax incured AND thants tax is waived.lt;br/gt;As customer we benefit on Feul surcharge service tax waive and Irctc transaction service charged waive.lt;br/gt;As we see not so difference it made but some thing is better anyway
                                Reply
                                1. M
                                  Manoj Menon
                                  Dec 19, 2016 at 12:44 pm
                                  Is this in effect or yet to be implemented? I still get charged service tax for transaction below 2000. Also the vendor/merchant claims they have no clue about this?
                                  Reply
                                  1. S
                                    Sean Sen
                                    Dec 8, 2016 at 7:48 am
                                    If government is serious about cashless economy then they NEED to WAIVE OFF service tax on all card transactions. If you Tax card payments then why won't people pay in cash??? It's not illegal to pay in cash....so Government needs to make up its mind ...do they want to support and a cashless society or not? If you are supporting then don't tax card transactions at all!
                                    Reply
                                    1. S
                                      SanjayG
                                      Dec 8, 2016 at 7:29 am
                                      Very Good , when cashless transactions are incentive driven then only people would take that route instead of going for cash based transaction. This is one small step in that direction. Also make provision of fraud insurance so that users are safe from being stripped off their cash by online hackers and intruders.
                                      Reply
                                      1. S
                                        Swaroop Sudheendran
                                        Dec 10, 2016 at 4:48 pm
                                        Only Service Tax is waived. Service charges still applicable . lt;br/gt;For example , if we fill fuel for Rs.1000, the previous charges was 28.75 (25 service charge 3.75 service tax ) and the current charges is 25 . Still we loose Rs.25 for digital payments compared to cash payments !
                                        Reply
                                        1. T
                                          Thomas George
                                          Dec 8, 2016 at 2:16 pm
                                          Another hle for the pump owner.
                                          Reply
                                          1. T
                                            Thomas George
                                            Dec 8, 2016 at 2:11 pm
                                            Now, the Government asks private companies to do things that they did not do voluntarily probably because it does not make economic sense. Will the Government compensate these companies? Even SBI has private shareholders. When will the Government stop instructing companies with private shareholding on business decisions? Pathetic!
                                            Reply
                                            1. Load More Comments