Financial Times - Stamp duty on credit cards and double taxation

If you are a monthly wage earner and if you settle your credit card bill by withdrawing your money from your bank account please consider the following:

According to the new stamp duty on credit cards, the government will charge Rs.10 for every Rs 1000 spent. So even if you spent just Rs 1 they will charge Rs 10. Similarly if your bill is Rs 1,250 they will charge Rs 20. It's not a percentage on the amount spent, rather a slab base rate. When you withdraw from banks, there is a debit tax of 0.1 percent and when you withdraw to pay the credit card bill, you are taxed twice, once with stamp duty and once with debit tax. So under the current situation it is much better to give cash for your transactions than using your credit card.

Further if you pay your lease installment (probably applicable for loans as well) with your credit card this becomes worse. The government has imposed stamp duty of 0.1 percent on receipts (only if a receipt is issued to you by the receiver), and there is a tax in your lease installment. So this will add up to three times taxation if you pay your installment through a credit card and then settle the credit card bill by withdrawing from your bank account. It's very ironic how our government thinks. While the rest of the world is trying to reduce fraud and theft by introducing non-cash based transactions such as use of credit cards and on line payments, here they discourage use of credit cards. Simply pathetic.