As everyone is well aware of the complex GST framework and its upcoming requirements for the settlement among the Indian economic environment, it’s now the banking sector who have raised the hands in front of extremely rigid and tedious GST regime. The Indian Banks’ Association (IBA) which is a governing body of management of banks operational across the nation has cleared out that numerous banks are not fully ready for the upcoming GST scheme.
IBA in its statement to the Parliamentary Standing Committee on Finance.mentioned that, “Since the GST will be operational from July 1, 2017, banks have to make a lot of changes in their systems and other procedures. The preparedness of all banks for implementation of GST on July 1, 2017, is a question mark.”
The IBA is taking the reason towards the central registration as mentioned in the statement given by the association. As mentioned by the association regarding the complexity, it added that numerous services being offered by the banks to the customers are centralized in nature and others are localized. This factor has led to task banking to revise their infrastructures ultimately challenging the sector.
According to the GST rules and regulations, all the lenders are mandated to register in every state in order to track individual data and revenue of every state accordingly. While the GST council has fixed 18 percent tax rate over the banking sector, it will be expensive for the individuals to maintain banking services from now.
Earlier the IBA took responsibility to become a centralized collector on behalf of the banks and the plan is in works between the government, IBA, and banking fraternity. Personel finance impact will also be seen through a hiked posture as the 18 percent tax rate is 3 percent higher than previous 15 percent on the banking investments sector.
