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Banks to refund charges collected after Jan 1 on UPI, RuPay payments

The Central Board of Direct Taxes (CBDT) on August 30 asked banks to refund any charges they collected after January 1 on transactions made through electronic means. According to a circular, this comes after the CBDT received several representations that said banks are charging an additional fee on transactions made through UPI.

India TV News Desk India TV News Desk
New Delhi Updated on: August 30, 2020 23:20 IST
Banks asked to refund charges collected after Jan 1 on UPI, RuPay payments
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Banks asked to refund charges collected after Jan 1 on UPI, RuPay payments

The Central Board of Direct Taxes (CBDT) on August 30 asked banks to refund any charges they collected after January 1 on transactions made through electronic means. According to a circular, this comes after the CBDT received several representations that said banks are charging an additional fee on transactions made through UPI. 

These banks were charging for every transaction beyond a certain number of transaction which was in violation of the Payment and Settlement System Act, 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," ANI quotes CBDT release as saying.

"Banks are, therefore, advised to immediately refund the charges collected, if any, on or after January 1, 2020, on transactions carried out using the electronic modes prescribed under section 269SU of the IT Act and not to impose charges on any future transactions carried through the said prescribed modes," the circular added.

Hence, it said that 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. 

 

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