It has been said that all the banking services including- ATM Cash Withdrawal, Cheque Book issuance, demand draft, the cash deposit will turn Costly, before the GST for all these services the govt. was used to charge 15% but it has been found that the GST will roll out these services with an increase of 3%.
Bank Services like Cash Withdrawal are charging 18% after GST
The Service tax for all those services was currently at 15% will go up to 18% under the new Goods and Services Tax.
Arundhati Bhattacharya, chairman of State Bank of India (SBI), said, “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%.”
A senior tax official said, “Various exemptions like not taxing interest is already allowed. But there are issues on input tax credit that need to be looked into. The GST will be rolled out on July 1 and then, we will fine-tune depending on the difficulties.”
Rajeev Rishi, chairman of Indian Banks’ Association (IBA), said, “The tax rate is going up from 15% to 18% and thus the cost of banking services is expected to increase marginally. However, it may not adversely impact business entities as they get 100% input credit.”
The GST will not affect the bank services only, the Service tax on your insurance policy premium will increase from Rs 1500 to Rs 1800 after the GST rollout.
“These days banks also deal in commodities such as gold and silver wherein a concessional GST rate is expected to be applicable. Thus, banks need to be careful in paying GST with the appropriate application rate on different products,” said Pritam Mahure, a Mumbai-based chartered accountant