Delhi HC directs Govt to decide on the issue of surcharges on card payments

September 13, 2016

The Delhi High Court in its recent order asked the government to decide on the issue of surcharges levied on transactions made through credit cards and debit cards throughout the country. The court was hearing a petition filed by Advocate Amit Sahni, who had contended that since no such surcharge was levied in case of payments made in cash, charging of surcharge for payments made through debit cards and credit cards was illegal and discriminatory. The Bench comprising Chief Justice G. Rohini and Justice Sangita Dhingra Sehgal observed, “ The writ petition is accordingly disposed of with a direction to the respondents to consider the contents of this writ petition by treating the same as a representation and take an appropriate decision is accordance with law.” “ The petitioner has noticed that illegal, unequal and arbitrary treatment is seen across the country on transactions being done through credit and debit cards by levying surcharge at the rate of 2.5 per cent or more, while such surcharge is not levied when the payment of such transaction is done by making cash payment in that regard,” the petition had said. During the hearing, Advocate K.S. Parihar, appearing on behalf of the Reserve Bank of India, submitted that the issue was already under consideration by the respondents and that the grounds raised in the petition would also be taken into consideration while taking a decision on the same. Relying on such assertions, the court dismissed the petition, with liberty to the petitioner to file a fresh writ petition in case the issue was not completely resolved by the respondents.

OUR TAKE

Surcharge on card payment discourages a lot of people from using credit card for payment, which increases transactions in cash and a lot of that goes unaccounted, thereby creating a big tax impact for the government. So encouraging card payment would help the government and hence government should move in a direction to reduce surcharge on card payments.