Recently it was found that most of the private banks in India have been charging goods and services tax on the remittance transactions done by business correspondents.
Approximately 20 basis points have been increased in the charges at least by two large private sector banks on the domestic money remittance business.
In this matter, many of the banking firms have hired legal experts to clear more and more doubts and queries on the matter to further under the taxation scenario better.
While the business correspondents such as bank mitras are the once which actually offers services like provide fund transfer, withdrawal and cash deposit services in the outer areas.
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A senior person from banking correspondent stated that “As a direct result of the tax notices slapped on few private banks, two major players in this space have increased the cost of these services by 20 basis points, taking the rate to 1.2% of the transaction amount.”
Due to high competition in the sector, many of the players have reduced the charges up to 1 percent but still bankers complaint that they have to pay the tax on the fees paid by the retailers which increase the transactions cost.
The major issues also are that the medium banks lending amount levies charges apart from the banking system which further takes the overall remittance charges very much high.
