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No Service tax on Debit Card or Credit Card Transactions Up to Rs 2000

service tax on credit-and-debit-cards

Good news for Credit Card and Debit card users. To make the country use cashless economy and boost digital transactions, Government of India today announced that it wouldn’t charge any service tax on credit or debit card transactions up to Rs 2,000.

Currently, we pay 15% as the tax on card transactions, and now you won’t pay service tax for up to Rs 2,000. The government is taking necessary steps over Cashless transactions, and the Government’s latest initiative of exemption of service tax on credit or debit card for up to Rs 2,000 is to boost the country for using digital operations.

The tax break for using cards come exactly a month after Prime Minister Narendra Modi announced the statement of demonetization of currency. He announced the ban of Rs 500 and 1000 notes on November 8.

Rs 10 for Digital Transactions: Government is Looking to Provide Inducements to Boost Cashless Digital Payments

Yesterday, the Reserve Bank of India (RBI) clarified that already 11.5 lakh crores ($170 billion) had come to banks through depositing. Central Government is going to modify the June 2012 service tax notification and finance minister Arun Jaitley will submit the information to Parliament.

RBI Monetary Policy Committee had taken this initiative to reduce cash crunch. However, critics of the demonetization drive say this shows that the modification has failed at cracking down on black money.

The ban of the high-denomination notes set off a huge cash crux. The withdrawn bills formed 86 percent of the currency in circulation. The situation was worsened by a lack of new bills through the Government has relieved that conditions will improve by the end of the year. Cash in the banks disappeared within few hours of opening and remain packed with people desperate for currency.

Visa, MasterCard and Rupay Launches QR Code Payment System for Making Cashless Transactions in India

Yesterday, the RBI unexpectedly didn’t lower its key policy rate. India’s economy grew by an annual 7.3 percent between July and September. RBI on Wednesday proposed a new set of guidelines for those who are doing online transactions. From now onwards, transactions up to Rs 2,000 won’t allow OTP and also announced that it would take some time to take new Rs 500 notes in the market.

Users should Pay 15% Service Tax for Downloading Music, e-books from Foreign Sites

CBEC to impose 15% tax on purchase of music, e-books from overseas portals

People of India are getting many shocks this month. After the announcement of the ban on big notes, another one has added to the list. The latest one will be hurting only one section of people.

All the users who are downloading or buying e-books, music, movies from overseas websites will have to pay 15% of service tax. Other services like cloud sharing, e- games, internet advertising, software and other intangible products would also come under the tax payable list.

This new service tax policy will be in the force from 1st of December 2016. The Central Board of Excise and Customs (CBEC) has changed the existing ‘Place of provision of service’ to the ‘Place of the recipient.’ The change to the old amendment was done on November 9th by the excise board.

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So from now all the above-mentioned downloads in India will be subject to service tax. The amendments impact overseas companies were providing various services like advertisements, web subscriptions, cloud hosting, music, e-books, and gaming, to name a few. These services provided to governments and individuals were earlier not subject to service tax. They now become taxable, and the overseas service provider or any intermediary or authorized representative will need to register in India and pay the service tax,” said Sunil Gabhawalla, Charted account expert.

The definition of ‘Online Information & Database access or retrieval services’ was also changed.The revised definition states that those services whose “delivery is mediated by information technology over the Internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology.”

Govt says Rs 1000 Note will be Back Soon with Modification

The Current Taxation Process Before this change in the amendment. The existing practice will be like if the supplier locate in overseas. And the buyer who can either individual, government, local body based in India then there is no charge on service tax.

So the current changes will put more burden on the e-buyers who are purchasing from abroad sellers. This will increase their bill depending on the purchase or subscription. So e-buyers beware of this extra tax before buying from foreign portals.

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