Incentives for merchants to popularise plastic money
The govt proposes tax benefits to merchants for accepting electronic payments
New Delhi: All banks are now required to report to the income-tax department if a credit card holder spends over Rs 2 lakh on his card in a year. “To facilitate high-value transactions, the ceiling of Rs 2 lakh could be increased to, say, Rs 5 lakh or more,” said the draft.
The draft put up by the government proposes tax benefits to merchants for accepting electronic payments. It said a tax rebate can be extended to a merchant if at least 50 per cent value of transactions is through electronic means.
“Alternatively, 1-2 per cent reduction in VAT could be considered on all electronic transactions by the merchants,” said the draft. It said utility service providers could be advised to give a discount to users for small ticket payments via electronic means, on the lines of BSNL.
BSNL provides an incentive of one per cent of the billed amount if the payment is done through electronic mode. “At present, government departments/PSUs/organisations levy a convenience fee/service charge/surcharge for e-transactions (card payments) to essential commodities, utility service providers, petrol pumps, gas agencies, railway ticket counters/IRCTC etc. The feasibility of removing the charges will be examined,” said the draft.
The draft said banks will be asked to put up more card accepting machines at merchant shops. “Currently, telcos levy an USSD charge of Rs 1.50 per transaction for mobile banking/payments,” it added.
( Source : deccan chronicle )