1. GST on ATM withdrawal fees: Transactions get more expensive as taxes jump 3%

GST on ATM withdrawal fees: Transactions get more expensive as taxes jump 3%

GST on ATM withdrawal fees: The newly implemented Goods and Services Tax (GST) that was officially launched by President Pranab Mukherjee and Prime Minister Narendra Modi has not just impacted various business industries, but also affected the financial transactions costs.

By: | New Delhi | Published: July 3, 2017 12:32 PM
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GST on ATM withdrawal fees: The newly implemented Goods and Services Tax (GST) that was officially launched by President Pranab Mukherjee and Prime Minister Narendra Modi has not just impacted various business industries, but also affected the financial transactions costs. Banking services including ATM withdrawals, cash deposits, demand drafts and cheque book issuance has turned costlier under the new tax regime. According to a report by DNA, the service tax for the banking transactions, which is currently at 15 per cent, will now go up to 18 per cent. The revised rates would be applicable for servicing charges, annual maintenance contracts which will have to be borne by the banks eventually.

Days before the Bharatiya Janata Party (BJP)-led NDA government announced the GST launch in a special midnight Parliament session, top bankers of the country met the GST council to get further clarification on the revised tax rates. “For all our services, we have to put the cost of the service plus the service tax. Under the GST regime, this will get converted into the cost of the service plus the GST, which will go up from the existing service tax rate of 15% to 18%,” DNA quoted SBI chairperson Arundhati Bhattacharya as saying.

Reports say that changes in the tax slabs means for every banking transaction of Rs 100, each customer will have to pay Rs 3 more. Customers are currently paying 15 per cent service tax for cash deposit, ATM transactions, credit and debit cards, insurance premiums and EMIs.

A day before the GST launch, SBI had even sent SMS to its customers informing about the higher incidence of tax. The text read: “Important: The Government of India proposes to implement the GST which is likely to be effective from July 1, 2017. Consequently, the existing service tax rate of 15 per cent shall be replaced by a GST rate of 18 per cent.”

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Even other private banks of the country including Standard Chartered and HDFC have sent alerts related to GST to their customers. ICICI Prudential Life Insurance, in email messages to its customers, said premium payable on term policy and fund management charges on a Unit Linked Insurance Policy will attract 18 per cent GST post implementation of the new indirect tax regime, reported PTI.

As off now, customers pay 1.88 per cent service tax on endowment policies, but now GST will be levied at the rate of 2.25 per cent on premium payment for endowment such policies.

  1. G
    Gundiga Nagaraju
    Jul 5, 2017 at 12:13 pm
    I submit that please try to reduce the bank expenditures on various things like electricity, stationery and staff ries etc insted collecting from poor man,BPL and poor pensioners those have no other income. Most of them are suffering from various health problems at the end of life period. Please think a while, where have to these people kept their money? because the Govt has depositing the pensions in the respective accounts and the pensioners has to invariably withdraw the amounts for their lively day to day needs. Finally I request the CHIRMEN madem do the needful justice.
    Reply
  2. B
    Benoy Scaria
    Jul 3, 2017 at 8:45 pm
    Before executing ,implementing new rules regulations Policys analise understand estimate what impact it will make to the common public.Regarding ATM transactions banks came with a new policy charging after permitted transactions. 3 in Urban 5 in Rural.Thst is a sample dose nobody not reacted responded.Now banks are charging for every service.A service sector turned into big business corporate.During demonitisation poor people only suffered. Standing in que for many days for few thousands and the rich rhey made a deal with banks many bank employees arrested.But no government don' t have the capacity and guts to touch the banks .Reason they have there union they will start strike.Charging for our money while withdrawimg it is not accceptable.Hope BRO and Govt will look into this.
    Reply

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