The government on Thursday made several announcements to promote digital payments – from offering discounts on petrol, diesel purchase to payment of insurance premium. The discount offered on petrol and diesel alone has the potential of a big reduction in the cash requirement of nearly Rs. 2 lakh crore per year at the petrol pumps.
If bought through debit/credit cards or other digital modes, a discount of 0.75 per cent will be offered on purchase of petrol and diesel. And this would translate into a saving of 49 paise per litre and 41 paise on petrol and diesel prices at prices in Delhi.
Public sector insurance companies will offer discount on online purchase of insurance by digital payments. For general insurance, this discount will be 10 per cent and life insurance 8 per cent.
Rs. 10 lakh insurance will be given to rail passengers who book railway ticket via digital payments.
0.5 per cent discount will be offered from January 1 on digital payments for purchase of sub-urban railway monthly and seasonal passes.
Railways will also offer 5 per cent discount on digital payments for food and retiring room bookings.
For online payment of toll on national highways using RFID card/fast tags a discount of 10 per cent will be offered.
The government has also waived service tax charged while making payments through credit card, debit card, charge card or any other payment card, up to payment Rs. 2,000 in a single transaction.
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. When a customer uses a credit card, debit card or other e-payment mode, for payment of his purchase of goods or services, the merchant establishment is charged certain fees by credit card or debit card issuing banks. The government has waived service tax on such payments.
The central government departments and public sector undertakings will ensure that transaction and merchant charges applicable on digital payments are not passed on to the public on payment via digital mode, the government said.