RBI in GST cauldron
What do you do when the central bank of the country, that is the Reserve Bank of India, and other leading banks don’t pay the GST to the government. The matter becomes all the more puzzling when the Ministry of Finance pays no heed and instead keeps the issue in abeyance. The issue is very simple. The RBI collects funds in Government of India 8 per cent Savings Bonds from the public by appointing sub-agents through agency banks. Payment of commission of 1 per cent to the sub-agents through agency banks came under Service Tax regulations and the RBI agreed to pay the Service Tax to the agency banks. After implementation of GST, GST credit should also be available to agency banks from the RBI. However, most agency banks have held back commission payments and GST of their agents, with a plea of seeking a clarification from the RBI, which in turn has asked for clarifications from Ministry of Finance. The matter is still pending and unresolved for last six months. The non-reimbursement of GST to subagents is leading to 84.59 per cent payment of commission. Further, the non-payment of commissions within 30 days is again violating the RBI circular. Moreover, it is learnt that ICICI Bank is charging additional 9 per cent of GST i.e. paying 91 per cent inclusive of GST, in gross violation of RBI circular and terms of appointment of agents and sub-agents. The Secretary Finance has to take a call to resolve this problem, of what is clearly a simple office procedure.