CAIT urges govt to use incentives for e-payments in retail

23 Jan '16

3 min read

The Confederation of All India Traders (CAIT) has drawn attention of the Union Finance Minister Arun Jaitley towards draft of Cabinet note prepared in August,2015 for proposing various incentives for promoting electronic transactions in India both at the end of merchants and consumers. The said draft note contains several fee waivers and tax benefits for usage of digital payments.

"Since the Government is moving towards 100 per cent e-governance , it is imperative upon the Government to launch a national drive to promote more usage of electronic transactions in India and equip the merchants with electronic gadgets to avoid any mismatch at the time of implementation of the policy," said CAIT Secretary General Praveen Khandelwal in a press release.

The CAIT has already launched a national campaign for cashless economy in association with MasterCard, a global digital payment technology company.

It said that with the implementation of GST every compliance, including payment of taxes etc will be conducted through electronic system and considering the fact of very low penetration among merchants and consumers about usage of electronic payments, it is necessary that more and more people should be encouraged to adopt electronic payments for transactions and purchase of goods.

Providing incentives and tax benefits as a part of incentives will certainly encourage people to adopt electronic payments as a mode of purchase or transactions. About 95 per cent use of debit cards is done for withdrawing cash from ATMs and therefore CAIT has suggested to levy 0.5 per cent surcharge on cash withdrawal from ATMs.

CAIT National President B. C. Bhartia while citing a recent report of United States Agency for International Development (USAID) in context of payment landscape of India said that about 97 per cent retail transactions are done in cash whereas only 11 per cent consumers use debit card for payment and merely 6 per cent merchants in India accept electronic payments. A whopping 82 per cent customers are unaware about making transactions through mobile phones whereas about 79 per cent customers are unaware about online banking. About 89 per cent merchants are in favour of using debit card. The most important reasons for merchants not adopting electronic payment system includes lack of awareness among them about electronic payments.

The CAIT pointed out that the Government's draft incentive proposal in August,2015 spells out certain tax benefits and waiver of transaction costs charged by banks. While urging the Government to implement said proposals, the CAIT said that proposal to provide incentives to shopkeepers accepting payments in business transactions through plastic money will encourage traders to embrace e-payment system.

More Apparel/Garments News - India...