RBI in GST caul­dron

Gfiles - - ...BY THE WAY -

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.

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