The transaction fee and the AMC are debited to your demat account on a regular basis. But the DP also puts some additional costs on you depending on the nature of the services demanded. For example, there is no charge if you use the online DP facility but if you use the Debit Instruction Slip (DIS) facility then some DPs do impose a small administrative charge on you. Additionally, there are occasions when your debit instruction could fail or could get rejected for technical reasons. In such cases, the DP imposes a small penal charge on the customer. Apart from all these, the DP will also charge you when you dematerialize your physical shares or rematerialize your demat shares back to physical form.
To understand Demat charges, you need to get a holistic picture of all the above costs. You get all these details when you try to understand how to open a demat account and the benefits of demat account. When your DIS gets rejected for various reasons, the DP incurs costs in terms of time, and bandwidth spent. That is the reason most DPs charge you a small fee for rejected DIS slips. Also compels customers to be more vigilant and careful when they fill up the DIS slips.