RBI has issued a new regulation governing imposition of taxes or fees on foreign currency prepaid cards, store value cards, travel cards and other cards that are redeemable in India.
Reetu | May 13, 2023 |
RBI’s New Rule: Levy of Charge on Forex Prepaid Cards and Travel Cards; Check Details
The Reserve Bank of India (RBI) has issued a new regulation governing the imposition of taxes or fees on foreign currency prepaid cards, store value cards, travel cards, and other cards that are redeemable in India.
The country’s central bank stated in a circular that any charges or fees levied on these cards payable in India must be priced and collected in Rupees exclusively.
The Circular Stated as, “Attention of Authorised Dealers is invited to relevant instructions contained in A.P. (DIR Series) Circular No. 46 dated June 14, 2005 and A.P. (DIR Series) Circular No. 102 dated April 02, 2012, regarding use of International Debit Cards/Store Value Cards/Charge Cards/Smart Cards or any other instrument that can be used to create a financial liability, as ‘currency’.”
The RBI further stated that “a few authorised persons are levying certain fees/charges, which are payable in India on such instruments in foreign currency.” As a result, it is recommended that fees/charges payable in India be priced and paid in Rupees exclusively.
The directions contained in this circular have been issued under sections 10 (4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.
It is worth noting that when visiting foreign nations, Indians typically use Forex prepaid cards, store value cards, travel cards, and so on.
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