New Delhi: To encourage cashless transactions, the Centre on Thursday announced discounts for buying petrol, diesel, railway tickets and catering, insurance from PSUs insurers and national highway toll through digital means like online banking, credit and debit cards and e-wallets.
State-owned petrol pumps will give a discount of 0.75 per cent of the sale price to consumers on purchase of petrol and diesel through digital means.
Finance minister Arun Jaitley said petrol and diesel worth Rs 1,800 crore is sold per day and the incentive scheme has the potential of shifting more customers to digital payment means, which will reduce the cash requirement of nearly Rs 2 lakh crore per year at petrol pumps.
Meanwhile, the finance minister has curtailed use of old Rs 500 notes for purchasing tickets of railway, Metro and road transport buses till December 10, as against December 15 announced previously. It also withdrew facility of using the now-defunct notes for making payments to catering services on trains.
Service tax for up to Rs 2,000 transactions waived
All public sector insurance companies will give discounts of upto 10 per cent of premium in their general insurance policies and eight per cent in new life policies of the Life Insurance Corporation sold through portals, if payments are made through digital means.
People will get a five per cent discount on digital payments for catering, accommodation and retiring rooms, among others, being offered by the Indian Railways through its affiliated entities or corporations. All railway passengers buying online ticket will get a free accident insurance cover of up to Rs 10 lakhs. The Railways, through its suburban railway network, will provide discounts of up to 0.5 per cent to customers for monthly or season tickets purchases from January 1, 2017 if the payment is made through digital means.
Mr Jaitley said around 80 lakh passengers use season or monthly tickets on the suburban railways, largely in cash, spending nearly Rs 2,000 crores per year. The government has also waived service tax on debit and credit card transactions of upto Rs 2,000. When a customer uses a credit and debit card to purchase of goods or services, merchants are charged a merchant discount rate (MDR) by the card-issuing banks.
In order to encourage merchants to accept card payments, the government has waived service tax on MDR. However, this waiver will be limited to payments upto Rs 2,000 in a single transaction. About 70 per cent of all transactions are less than Rs 2,000. The finance minister said Central government departments and PSUs will ensure that transaction fee charges that are associated with payments through digital means will not be passed on to consumers, and all such expenses shall be borne by them.
He also said the state governments are also being advised that they should consider absorbing the transaction fee charges related to digital payments made to them and that consumers should not be asked to bear it.
