Alert! For SBI, HDFC Bank, ICICI, BoB, PNB, Canara, other lenders: This service gets tax-free, this not
The GST council on Friday turned santa ahead of the Christmas, reducing tax rates on 23 goods and services.
GST rates for banking services: The GST council on Friday turned santa ahead of the Christmas, reducing tax rates on 23 goods and services. These items included movie tickets, TV and monitor screens and power banks. Frozen and preserved vegetables have been exempt from the levy.
For public and private sector banks like , SBI, HDFC Bank, ICICI, BoB, PNB, Canara and other lenders, the GST council exempted services supplied Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY).
In a official statement, the Ministry of Finance said, "Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under PradhanMantri Jan DhanYojana (PMJDY) shall be exempted."
Earlier, the banks were complaining about the GST on free services like Jan Dhan Account. In fact, the banks are up in arms against the revenue authorities who are not ready to forgo Rs 40,000 crore that the former have been asked to pay as service tax levied on free services.
In their last meeting with Department of Revenue (DoR) and the Department of Financial Services (DFS) of the Ministry of Finance in June this year, the banks had failed to reach a breakthrough.
Banks had warned that free services would have to be withdrawn if they are forced to pay Rs 40,000 crore. These services included cheque leves, ATM withdrawals, cash deposits, monthly account, locker visits and even Prime Minister Narendra Modi's pet Jan Dhan Yojana for financial exclusion.
Leaving Jan Dhan Account service out of GST net, the council is yet to decide on other free banking services. The council also deliberated on some other issues related to banking services and made these decisions:
"To clarify that the banking company is liable to pay GST on the entire value of service charge or fee charged to customers whether or not received via business facilitator or the business correspondent," the statement said.