In bid to promote less-cash economy, the government today announced discount on an array of services from buying petrol to insurance and railway tickets through the digital mode and waived service tax on card transactions of up to Rs 2,000.
The government said for those using cards and e-wallets, Petrol and Diesel purchases will now attract a 0.75% discount.
All transactions under Rs. 2,000 through digital methods will also not attract service tax, or transaction charges, as Parliament has already been informed, Jaitley added, and finally, he also said that toll plazas on national highways that use fast tags and RFID cards will also offer a 10 percent discount to users who buy the cards using digital payment methods.
He also added that those availing insurance policies from public sector insurance companies will get a discount of 10 percent for general insurance, and 8 percent for life insurance, if they make the payments through digital means.
Announcing decisions to promote digital transactions, Finance Minister Arun Jaitley said that monthly and seasonal suburban railway tickets purchased through digital mode will get 0.5 per cent discount from January 1. Online booking of railway tickets will get Rs 10 lakh accident insurance. Those using digital mode to pay for railway catering, accommodation, retiring room will be entitled to discount of 5 per cent.
He also announced that all those who pay toll tax through RFID (Radio-frequency identification) or FASTag procured through digital payment will get 10 per cent discount.
These decisions will go into action right away, with no planned end-date at present.
Arun Jaitley said one lakh villages in India whose population is about 10,000 will be given two Point of Sale or swipe machines each to encourage digital transactions. The government is focused on addressing rural distress amid the cash crunch that has followed the notes ban.
The government's aim, Arun Jaitley said, was to reduce the use of cash as the economy bears both "visible and invisible" transaction costs for these. "So we are using this opportunity to move towards digitisation," the minister said, adding that the cost for these would be borne by the central government and the PSUs participating.
In another move to encourage digital transactions, the Reserve Bank of India had recently doubled the allowed balance in prepaid wallets from 10,000 rupees to 20,000.