GST exemption on interest and low-value card settlement services; government incentives treated as non-taxable subsidy.

Exemption excludes taxation on services where consideration is solely interest or discount and on inter se foreign currency dealings among banks and authorised dealers; it also exempts acquiring-bank services for settlement of low-value card transactions. The acquiring bank definition includes banks, financial institutions and NBFCs. Incentives paid by the government to acquiring banks under a promotional scheme for debit card and low-value UPI transactions are treated as subsidy and not taxable, and further sharing of those incentives among ecosystem participants is non-taxable when distributed according to the scheme's allocation mechanism.

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