CMs committee recommends abolition of MDR to incentivise digital transactions

24 January, New Delhi

Chief Ministers’ Committee on demonetization has recommended abolition of the Merchant Discount Rate charges (MDR) to incentivise the digital transactions.

It has also suggested putting a curb on large transaction and considers levying of banking cash transaction tax on transaction of 50 thousand rupees and above. Capping on maximum allowable cash limit in all types of large transactions is another key recommendation of the committee.

The Panel chaired by Andhra Pradesh Chief Minister Chandrababu Naidu in its interim report submitted to Prime Minister in New Delhi Tuesday evening, has suggested to bring all government insurance, educational institutes, fertilisers, PDS and petroleum sectors within the ambit of digital payments.

Briefing media after submitting the report, Naidu said the Committee wants Aadhaar-enabled micro ATM infrastructure in all 1.54 lakh post offices. He said the non-income tax payees and small merchants should be given a subsidy of 1,000 rupees for purchasing smart phones. He also said there should be no retrospective taxation to merchants doing digital transactions.

The committee, was constituted in November last year to prepare a road-map for transition to digital economy post demonetization.

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