No service tax for debit or credit card usage up to Rs.2000
Posted on: 08/Dec/2016 4:17:50 PM
From today, there will be no service tax charged for using credit or debit card transactions up to Rs 2000. At present, about 15 percent service tax is paid for these transactions. This move comes as an initiative to encourage digital transactions and lessen the use of hot cash.
To note, this tax break comes precisely after one month of announcing demonetization where Rs 500 and Rs 1000 notes were withdrawn from usage and new Rs 500 and Rs 2000 notes were introduced. It was stated that these notes can be deposited until 30th December.
In a note released by the RBI yesterday, it was stated that notes worth Rs 11.5 lakh crore or about 75 percent of outlawed notes are already turned in. Critics claim that this demonetization has failed in its sole purpose of cracking down black money.
Following this announcement about demonetization began a cash crunch. The withdrawn bills account to about 86 percent of currency in circulation.
Though the government has promised that the scenario will get better around the end of this year, the scarcity of new bills has exacerbated. Within very few hours of opening, the banks run out of cash.
