Good News! No charges on payments to large companies from November 1
Customers who make payments through digital mode have a piece of good news, from November 1, 2019, they will not have to pay any charges on this mode of transactions made to establishments with turnover in excess of Rs 50 crore.
Customers who make payments through digital mode have a piece of good news, from November 1, 2019, they will not have to pay any charges on this mode of transactions made to establishments with turnover in excess of Rs 50 crore. The government has asked banks service digital service providers to not to impose charges or Merchant Discount Rate (MDR) on customers, as well as merchants, on digital payments.
The Central Board of Direct Taxes (CBDT) said in a circular that cost-free digital payments will come into force from November 1, 2019. In this regard amendments have been made in the income tax act. These establishments should offer low-cost digital payments to their customers and the RBI and banks should absorb cost of transactions, Finance Minister Nirmala Sitharaman had said in her Budget speech.
This move may bring down the cost of the digital payment for the customers, as well as service providers. The banks are also invited to facilitate digital transactions for certain electronic modes of payment. After the Narendra Modi-led National Democratic Alliance government came to power in 2014, digital payments have received utmost importance. The government has aggressively pushed for digitisation. However, cash transactions still occupy a large chunk of digital payments.
In order to promote digitisation, the government had launched Digital India scheme, among others. Over the years, the digital mode of payments has witnessed substential growth.