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Paytm, INOX Face Legal Action For Charging Illegal Internet Handling Fees

| Published on April 22, 2019

Paytm and multiplex chain INOX face charges for Illegal internet handling fees

The Indian e-commerce and digital wallet company Paytm and multiplex chain INOX have been facing an FIR in Hyderabad over exorbitant and illegal charges levied by both the companies.

Vijay Gopal, a social activist who has registered the complain shared how he was charged an additional of Rs. 80 in addition to the real cost of Rs. 276 as a convenience fee for booking movie tickets.

In his complaint, he mentioned, “The levying of such charges is illegal as it has not been authorized by the RBI.”

Digital service providers such as Paytm, BookMyShow, and others do not have the permission to charge a service fee according to 6A (3) section of the IT Act. The Act says that for service providers to collect, retain and appropriate service charges, they would need to take permission from the government authorities.

The development was revealed in a Right To Information query filed by the Hyderabad based activist, in which RBI clearly stated that online platforms through which movie tickets are booked do not hold the authority to levy handling fees from customers. The reply further explains that this is in violation of the RBI’s Merchant Discount Rate (MDR) regulations).

However, platforms such as BookMyShow, Paytm, INOX and even PVR cinemas continue to charge the additional fee from its customers which are in violation of the MDR regulations making it illegal.

Following the revelation, Gopal had earlier moved consumer court in Hyderabad against BookMyShow, PVR and the Department of Information Technology. And now he has filed a complaint against Paytm and INOX including a grievance with MeitY following which both the companies have been sent emails with a request to “Kindly look into the matter urgently and resolve it as per RBI and Government guidelines for Digital Payments.”

On this, the spokesperson for INOX Multiplexes said, “It’s up to them to respond. We are in no way connected to this complaint by Vijay Gopal.”

Well, only time will reveal the real story so be suited!

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