The government on Friday said banks or system providers will not impose charges or Merchant Discount Rate on customers as well as merchants on digital payments made to establishments having turnover in excess of Rs 50 crore from November 1.
In her Budget speech, Finance Minister Nirmala Sitharaman had said business establishments with annual turnover of more than 50 crore should offer low cost digital modes of payment to their customers and the RBI and banks should absorb cost of transactions.
Following the announcement, amendments have been made in the income tax act as well as in the Payment and Settlement Systems Act 2007.
The new provisions “shall come into force with effect from November 1, 2019,” the Central Board of Direct Taxes (CBDT) said in a circular.
The CBDT has also invited applications from banks and payment system providers who are willing that their payment systems may be used for the purpose as the government plans to prescribe certain electronic modes of payment. PTI NKD