Govt. waives of the service tax for the payment upto Rs.2000/- using the debit and credit cards. Currently, there is a 15% tax on these transactions. The initiative is to bosst the cash economy of the nation to digital transactions.
The Reserve Bank of India disclosed that Rs. 11.5 lakh crore ($170 billion) outlawed notes have been turned in already. Critics of the demonetisation drive say this proves that the reform has failed at cracking down on black or untaxed money.
The cancellation of high-denomination notes detonated a vast cash crunch: the withdrawn bills formed 86 per cent of the currency in circulation. The situation was exacerbated by a scarcity of new bills, though the government has reassured that conditions will improve by the end of the year. Banks continue to run out of cash within a few hours of opening and remain packed with people desperate for currency.