Another blow from the goods and services tax might come soon and this time on the digital banking transfers. A lot of private banks have decided to discontinue the domestic money deposit services from their (BC) banking correspondents.
The reason for such a step is seen as the applicability of GST on the agents carrying out such services under the shade of banking services. According to these reports, there might be issues on the doorstep banking services too.
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In a statement by the significant Aadhaar Enabled Payment Services provider, “We have learnt that banks will be closing the domestic money deposit services for a week from Tuesday to see the impact and if required, add the GST amount on top of the 1.50% fee @ 0.27% so that the intended cost of GST is passed to the end customer to address issues raised by tax authorities.”
Currently, the banking correspondents aren’t getting any remunerations from the banks but get some fees from the value added as they help in depositing money into the customer’s bank account with any bank.
Business Correspondents Federation of India (BCFI) has already petitioned the Central Board of Indirect Taxes and Customs on this issue and demanded some concern on the matter.
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It is to be seen that what happens to the newly engaged banking services from banking correspondents gets boost up or gets stalled basis upon the new decision trying to save as much GST as they can when equally hampering a whole sector.
