The Ministry of Finance has advised banks not to collect any charges on transactions or payments made through electronic mode, the Central Board of Direct Taxes said on Sunday.
The Ministry of Finance has advised banks not to collect any charges on transactions or payments made through electronic mode, the Central Board of Direct Taxes (CBDT) said in a statement on Sunday. According to the CBDT, representations were made that some banks were imposing and collecting charges on transactions carried out through UPI.
A certain number of transactions were allowed free by these banks beyond which every transaction bears a charge, the CBDT noted.
“This is in violation of the Circular no 32/2019 dated December 30, 20219, which was issued by CBDT to clarify that based on section 10A of (Payment and Settlement System (PSS) Act, any charge including MDR (Merchant Discount Rate) shall not be applicable on or after January 1, 2020 on payments made through electronic modes,” the release said.
The Ministry has advised the banks to immediately refund the charges collected, if any, on or after January 1, 2020, on transactions carried out using electronic mode prescribed under section 269SU of the IT Act and not to impose charges on any future transactions carried through electronic mode, the release added.