Card Transaction - Service Tax Exemption
GOVERNMENT has exempted services by an acquiring bank, to any person in relation to settlement of an amount upto two thousand rupees in a single transaction transacted through credit card, debit card, charge card or other payment card service.
When a customer uses a credit card, debit card, charge card or any other payment card for payment of his purchase of goods or services, the merchant/service establishment is charged certain merchant discount rate (MDR) by credit card or debit card issuing banks. With a view to promote digital transactions and encourage merchant establishments to accept such card payments, Government has waived service tax on such amount charged while making payments through credit card, debit card, charge card or any other payment card. However, this waiver is limited to payments upto two thousand rupees only in a single transaction.
"Acquiring bank" means any banking company, financial institution including non-banking financial company or any other person, who makes the payment to any person who accepts such card."
Notification No. 25/2012-ST, dated 20.06.2012, is amended to insert a new entry 64.
Notification No. , Dated December 08, 2016