Govt to waive service tax on card transactions up to Rs 2,000
New Delhi, Dec 8: Government will waive service tax on debit andcredit card transactions of up to Rs 2,000 in a bid to promotedigital transactions amid cash crunch following withdrawal of old Rs500 and 1,000 banknotes.
The government has decided to “exempt services by anacquiring bank to any person in relation to settlement of an amountup to Rs 2,000 in a single transaction through credit, debit card orother payment card service”, sources said.
A notification to this effect will be tabled by Finance MinisterArun Jaitley in Parliament.
Following demonetisation of old high value notes, there has been acash crunch in the country as people have been making a beeline forbanks and ATMs to withdraw new currency.
The government has been taking steps to promote cashless ordigital transactions to take India towards a less-cash economy.
Recently, the government asked banks to install additional 10 lakhPoS terminals by March 31 in different parts of the country. The service tax notification of June 2012 will be amended toinclude exemption on credit and debit cards, the sources added.
As of now, services provided by organisations such as UnitedNations and other international bodies are exempt from tax.
A range of other services provided by arbitral tribunals, testingof newly developed drugs, educational institutions, trade unions,general insurance business and sports bodies, among others, too areexempt from the levy.