Central Government initiative to raise the digital payment procedure, add relief for the users. Banks have asked to refund charges collected for UPI transition, before January 1. From now onwards no bank can imposed tax on the electronic payment procedure.
The electronics modes of transactions include 1) Debit card powered by RuPay, 2) Unified Payment Interface (UPI), 3) Unified Payment Interface Quick Response code (UPI QR code), BHIM UPI QR code. “According to Section 10 A under the Payments and Settlement Systems Act 2007, no bank or system provider shall impose any charge on a payer making payment or beneficiary receiving payment, through electronic modes prescribed under section 269SU of IT Act,” the CBDT said.
The regulator noticed that certain banks collect charges for UPI transactions. A certain number of transactions are free and beyond the limit, bank charges for every UPI payment. “Such practice on parts of banks is a breach of Section 10A of the PSS Act as well as section 269SU of the IT act,” the CBDT said in its circular. Hence, the banks can not levy any extra charges for UPI transactions.”Such breach attracts penal provisions under section 271DB of the IT Act as well as section 26 of the PSS Act,” CBDT further added.
The banks were also advised to refund charges collected from customers for digital transaction on or after January 1, 2020. “Banks are therefore, advised to immediately refund the charges collected, if any, on or after 1st January, 2020 on transactions carried out using the electronic modes prescribed under section 269SU and not to impose charges on any future transactions carried through the said prescribed mode,” the regulator mentioned in its circular.
UPI-based payments clocked 1.49 billion transactions in July, according data released by National Payments Corp. of India. Digital Payments have become a necessity in the wake of coronavirus outbreak. “Payment systems have demonstrated that they are dependable and durable, and continue to command a high level of confidence from the general population,” said PwC in its report.
“With a majority of the sectors that contribute to digital payments still in a state of flux, it is still too early to ascertain the long-term impact of COVID-19 on digital payments,” it added.