In a transfer to encourage digital funds within the nation, the Central Board of Direct Taxes (CBDT) mentioned that banks cannot levy any further cost on transactions made via digital modes on or after January 1, 2020. “… primarily based on part 10A of the Fee and Settlement Techniques Act 2007, any cost together with the MDR (Service provider Low cost Price) shall not be relevant on or after 1st January, 2020 on cost made via prescribed digital modes,” CBDT mentioned in an announcement.
The electronics modes of transactions embody 1) Debit card powered by RuPay, 2) Unified Fee Interface (UPI), 3) Unified Fee Interface Fast Response code (UPI QR code), BHIM UPI QR code. “In accordance with Part 10 A beneath the Funds and Settlement Techniques Act 2007, no bank or system supplier shall impose any cost on a payer making cost or beneficiary receiving cost, via digital modes prescribed beneath part 269SU of IT Act,” the CBDT mentioned.
The regulator seen that sure banks gather fees for UPI transactions. A sure variety of transactions are free and past the restrict, bank fees for each UPI cost. “Such apply on elements of banks is a breach of Part 10A of the PSS Act in addition to part 269SU of the IT act,” the CBDT mentioned in its round. Therefore, the banks cannot levy any further fees for UPI transactions.
“Such breach attracts penal provisions beneath part 271DB of the IT Act in addition to part 26 of the PSS Act,” CBDT additional added.
The banks have been additionally suggested to refund fees collected from clients for digital transaction on or after January 1, 2020. “Banks are subsequently, suggested to right away refund the costs collected, if any, on or after 1st January, 2020 on transactions carried out utilizing the digital modes prescribed beneath part 269SU and to not impose fees on any future transactions carried via the mentioned prescribed mode,” the regulator talked about in its round.
UPI-based funds clocked 1.49 billion transactions in July, in accordance knowledge launched by Nationwide Funds Corp. of India. Digital funds have develop into a necessity within the wake of coronavirus outbreak. “Fee techniques have demonstrated that they’re reliable and sturdy, and proceed to command a excessive stage of confidence from the overall inhabitants,” mentioned PwC in its report.
“With a majority of the sectors that contribute to digital funds nonetheless in a state of flux, it’s nonetheless too early to determine the long-term impression of COVID-19 on digital funds,” it added.