Service Tax on debit/credit card transactionsup to Rs 2,000 waived off

December 08, 2016 13:07

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

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