Every retailer will now have a POS machine
The Dollar Business Bureau
With the Government aiming to drastically reduce cash transactions in the country with its recent move to demonetise currency notes of Rs.500 and Rs.1,000, and with the recent announcement by the Government to exempt central excise duty on Electronic Data Capture Machine (EDC) or Point of Sale (POS) machines, retailers big or small will now have to shift to accepting plastic money in their daily transactions. The Government for some time now has been laying greater emphasis on digital payments.
Point of Sale (POS) devices are used for cashless transactions, both for making payments or disbursing cash.
POS do not attract any basic customs duty. To further reduce the cost of such devices and thereby encourage digital payments, the Government has exempted such devices from Central Excise Duty. Consequently, these devices will also be exempt from Additional Duty of Customs (known as CVD) and additional duty of customs (known as SAD). Simultaneously, to encourage domestic manufacturers of such devices, all goods required for the manufacture of POS devices have also been exempted from excise duty, and consequently from CVD and SAD. These exemptions will be valid till 31st March 2017. A notification No.35/2016-Central Excise to the effect was released on Nov 28th by the Govt.
A dealer in POS or what is technically called (EDC) machine, Tecimo Engineering India Pvt Ltd, Delhi, was happy with the Govt’s move. The company’s Marketing Director Varun Panchal said sales have increased drastically since the time Rs.500 and Rs.1000 notes were demonetised by the government. Their EDC machines that are imported from Bulgaria now have more takers. He estimates that on the whole there would be around 16% reduction in the price of individual POS machines and going forward small-time shopkeepers, small retail outlets and even roadside stall owners will be needing these machines. He was confident that sales from their company alone could increase to nearly 2lakh pieces per month.
Earlier supermarkets, registered retail outlets whose credentials were registered with the bank and the government could use POS machines, but now a normal stall-keeper who has a bank account will need an EDC machine in order to stay in business.
In India credit card swiping machines or EDC devices are made available by the merchant acquiring teams in banks. And the banks that hold sway are HDFC Bank, ICICI Merchant Services and the State Bank of India. In exchange of the machines, the banks charge fees for the transactions, levy rental charges and also get the advantage of asking the merchant to open a current account in their bank.
Going forward manufacturers, sellers/dealers of POS/EDC machines and banks are likely to benefit a lot.