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It's been a month since India saw demonetization. Yesterday, i.e. 8th December 2016 the finance Ministry waived the 15% service tax on card payments of upto INR 2000 in a single transaction. As a potential user I'm trying to figure out how much charges/fees I would be charged if I use debit cards from public sector Banks like State Bank of India or Bank of Baroda . In both the links, there isn't a breakdown of the charges to know what are Government Fees and Taxes and which charges are being levied by the bank.

Even if we take INR 20/- as the transaction charge (which is being shown on SBI's portal) how much less it would become after Indian Financial Ministry's announcements yesterday ?

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8th December 2016 the finance Ministry waived the 15% service tax on card payments of upto INR 2000 in a single transaction

It will not direct benefit you except for few cases. It will benefit the merchant.

Generally when you swipe for Rs 100 on Credit/Debit Card. The merchant only gest Rs 97.50/- or Rs 98/-. So the Rs 2 [or 2.5] is the commission / charge that the Bank recovers from Merchant. On this there is a 15% service tax. So around 0.375% of the transaction. The idea is this would encourage the merchant to use the card more. RBI is also trying to push the banks to reduce the fees Rs 2[or Rs 2.5] as well.

When you swipe for Rs 100 on petrol pumps [or some Jewellery shops]you are charged Rs 102 + 15% on Rs 2. This 15% on Rs 2 will vanish.

Today Govt has made an announcement that if you fill petrol using card, you will get 0.75% credit. i.e. if you swipe for Rs 100 on petrol, Govt will refund 75 paise.

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  • Not the govt. directly but the OMC's (Oil Marketing Companies) as per clarification issued by the Finance Minister.
    – shirish
    Dec 9, 2016 at 15:35

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