New Delhi: The Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved withdrawal of surcharge, service charge and convenience fee on card and digital payments.
It was learnt that the government move came to discourage cash transactions. The cabinet also approved mandating payments beyond a prescribed threshold only through a card or digital mode.
In a statement issued by the government reads, "The essential features of the proposals for promotion of payments through cards and digital means include steps for withdrawal of surcharge, service charge and convenience fee on card and digital payments currently imposed by various government departments, organizations."
"The promotion of payments through cards and digital means will be instrumental in reducing tax avoidance, migration of government payments and collections to cashless mode," it added.
Among other measures aimed at reducing cash transactions include rationalisation of Merchant Discount Rate (MDR) on card transactions and a differentiated MDR framework for some key segments.
Other features include introduction of formula-linked acceptance infrastructure by the stakeholders of certain card products, rationalisation of telecom service charges for digital financial transactions and promotion of mobile banking.
(With additional inputs from PTI)
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