This blog is meant for use by members of the Association for news and views. Send comments / suggestions / views to e-mail Id:

Tuesday, April 24, 2018

Your bank could soon charge you for ATM transactions, cheques & cards

The tax department has asked country's top lenders including State Bank of India, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank to pay tax that could run into thousands of crores, on 'free services' provided to customers maintaining a minimum account balance, with retrospective effect 

Show cause notices have been issued by the Directorate General of Goods and Services Tax Intelligence (DGGST) and is likely to be made on other banks as well. 

The tax will be levied for the last five years, the period for which past service tax cases can be opened, said a senior official aware of the details. 

The tax is being calculated after taking into account charges recovered by banks from customers who do not maintain a minimum account balance. This per account charge, for those who keep a minimum balance, is being considered as the deemed value of the service being provided by the bank to its customers and tax is being levied on this amount. 

Banks are worried as they cannot retrospectively recover tax from customers. Customers would have to bear the burden going ahead if the tax is upheld. Banks are likely to contest claims of the department and also take it up with the government, an official with a lender that has received the notice said. 

"Some notices have been issued and some are in the process of being issued. All banks taking these charges would be show caused,” the official said. 

“We are in receipt of the said notice, which we understand, relates to an industry-wide matter. We are, currently, engaged with experts to evaluate the observations made in the SCN” (show cause notice),” said an Axis Bank spokesperson. 

Emails sent to SBI, HDFC Bank, ICICI Bank and Kotak Mahindra Bank did not elicit any response. 

“These notices also cover period prior to launch of GST when service tax was levied," said another official privy to the development. 

Total tax liability could be about Rs 6,000 crore according to this official, but bankers fears it could be much more. 

Service element 

The DGGST had initiated an inquiry into various services offered by banks to their customers for which they collect some charges or come bundled free with accounts where customer is required to maintain a minimum balance. 

Fee-based services include ATM transactions beyond a certain number, refund of fuel surcharge, issue of cheque books and debit card among others. These levies are, however, waived off for accounts that maintain a certain minimum balance or for privileged customers. These services or benefits to customers are treated as a 'deemed service' under the Service Tax law. 

The DGGST has presumed the charge recovered by banks in case of non-maintenance of minimum account balance as the value for such services provided by the bank in terms service tax valuation rules. 

To get an idea of the amount involved, the State Bank of India had in April-November 2017 collected Rs 1,771 crore from customers not maintaining minimum balance. The bank has reduced the charges from the current fiscal. 

Banks may have to cough up tax for past period, which in case of service tax goes to up to five years. "They can claim it as input tax credit and offset it against their other tax liability," said one of the officials quoted above. 

Like in other cases, this tax liability is sure to get passed on to customers. 

Tax experts say this issue needs to be looked at carefully as it has wide ramifications for the banking sector. 

"Banks provide banking services in all cases, including where customers are required to maintain minimum balance. To break it in various components and infer it to be a distinct service does not seem to be the intention of the law," said Pratik Jain, indirect tax leader at PwC. 

ain said given the magnitude of the issue, the government should get it legally examined and take a considered view before taking the proceedings further. 

“If service tax has to be paid for the past period, ultimately the burden would fall onto the consumers," he said. 

Source:-The Economic Times

How the humble postman will bring banking to your doorstep

The khaki-clad, now largely forgotten, ‘dakia’ is drafted in as a key player in the scheme of things to drive Prime Minister Narendra Modi’s pet initiatives of Digital India and financial inclusion. 

Internet illiteracy in rural India where millions still use mobile phones for only voice communication is a major impediment to take Digital India to the grassroots. That is also hampering the government’s efforts towards financial inclusion and make the direct subsidy transfer scheme more effective. 

Officials believe this problem can be addressed by leveraging the postal department, with its vast network and workforce that are increasingly unused in an era when dirtcheap telephone services have reduced letter writing into a hobby of the nostalgia-struck. 

India Post Payment Bank (IPPB), the postal department’s payments bank division, will utilise the services of the postman to offer doorstep — or assisted — banking in rural areas. 

Armed with a smartphone, the postman will assist people to make banking transactions from their homes. They can also use his services to receive subsidy payments through Aadhaar Pay or BHIM. The trust of people that post offices and postmen enjoy, the department hopes, will help IPPB make its presence felt at the ground level and bring individuals and small business into the formal financial system. 

IPPB, which currently has a branch each in Raipur and Ranchi, will later this month expand the operations to 650 post officers at district headquarters and about 3,000 access points. 

Communication Minister Manoj Sinha said IPPB would be a game-changer in taking digital services to rural India. These initiatives, he told ET, “serve PM Narendra Modi’s vision of Digital India”. 

The government is keen to take IPPB’s services to every corner of the country before parliamentary elections a year from now, sources in the Department of Posts (DoP) said. IPPB’s role would be politically significant in view of its direct connectivity with rural people, particularly social sector beneficiaries and migrant labourers. 

“Initially, about 40,000 postmen will be available for IPPB,” a source at the DoP said. Eventually, that number could increase to about 1.50 lakh postmen, including Gramin Dak Sewaks. 

The DoP is currently providing smartphones to the first batch of postmen who will act as IPPB’s agents. 

While IPPB will help process payments from central schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme and the National Security Assistance Programme, it is in touch also with state governments to play a bigger part in the direct benefit transfer scheme for subsidies they offer. 

IPPB’s presence in rural areas may increase access of common people to the formal financial system, the DoP source said. 

Payments banks such as IPPB are meant to take banking to rural locations where infrastructure is lacking. They aren’t allowed to lend to customers, but can take deposits, convey remittances and dispense payments to recipients. 

Postal department sources said while IPPB cannot provide loans, it can still facilitate third parties to offer loans to villagers. 

The postman personally knows the villagers of his area, and that will be useful in evaluating their financial position, a source said. 

“We can assess the financial position of villagers who require small loans for the purpose of purchasing cattle, fertiliser or opening shops. Third parties may consider them for such loans on the basis of our assessment.” 

If villagers get loans through formal channels, it may also put a check on unscrupulous moneylenders in rural areas, he said. 

Source:-The Economic Times

Payment of Dearness Allowance to Gramin Dak Sevaks (GDS) effective 01.01.2018 onwards

To view please Click Here.

Thursday, April 5, 2018

Income tax return forms for FY 2017-18 released

The Central Board of Direct Taxes (CBDT) has released the new income tax return forms for filing returns for the financial year 2017-18. 

The new forms -Sahaj (ITR1) , Form ITR-2, Form ITR-3, Form Sugam -ITR-4, Form ITR-5, Form ITR-6, Form ITR-7, and Form ITR-V have been notified for Financial year 2017-18 or assessment year 2018-19. 

Like last year, CBDT has been quick of the mark in releasing these forms right at the start of the assessment year to enable people to start filing their returns as soon as possible. 

It is noteworthy that this is the first time there will be a penalty leviable for income tax returns filed after the due date which is normally July 1 i.e. ITRs for FY17-18 are due to be filed by July 1, 2018 as per current rules. 

The notification, dated April 3, 2018, had made certain amendments in the income tax rules relating to these forms. 

ITR 1 is the basic income tax return form. Last year it was meant to be used for individuals with income from salary/pension, one house property and other sources upto Rs 50 lakh. 

Source:-The Economic Times 

RBI looking to introduce central digital currency

The Reserve Bank of India (RBI) on Thursday that it is looking at the possibility of introducing a 'central bank digital currency'. Briefing the media at the end of the two-day meeting of Monetary Policy Committee(MPC) of the RBI, Deputy Governor B P Kanungo said, "While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency."

The report will be submitted by end-June 2018, he added. 

Explaining its rationale behind the central digital currency, RBI said technological innovations, including virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system.

The RBI has also directed banks and regulated entities not to deal with or provide services to individuals or businesses dealing in virtual currencies.

"Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time," a statement issued by the RBI stated.

The statement said that a separate circular will be issued in this regard.

Source:-The Times of India

Reimbursement in respect of Newspapers purchased/supplied to officers at their residence-guidelines regarding

To view please Click Here.

Syllabus for Limited Departmental Competitive Examination (LDCE) for AAO cadre of IP&T AFS Group 'B' under AAO RR, 2018

To view please Click Here.

Recruitment Rules 2018 of Indian P&T Accounts and Finance Service (Group 'B') of Accounts Officers and Assistant Accounts Officers for DoT and DoP regarding.

To view please Click Here.

Wednesday, April 4, 2018

GS writes to Secretary(Posts) protesting on on additional responsibility Preventive Checking of Migrated Data in CBS Offices by Sub-Divisional Heads

No. CHQ/AIAIASP/2018-2020/06.                                                                              Dated : 02.04.2018.
The Secretary Posts
Department of Posts  
Dak Bhawan, Sansad Marg
New Delhi-110001.

Subject : Preventive Checks/actions to avert/unearth and investigate fraud in CBS post offices.

Respected Sir,
            While drawing your immediate attention  towards Postal Directorate, Financial Services Division  letter  no.  F. No. 25-31/2017-FS-CBS dated 28.03.2018  wherein the burden of checking and verification of Sanchay Post Mock Migration  data with Live migrated data, cross-checking of 6 months or older Sanchay Post data with Live migrated data and verification thereof has been placed over the Sub Divisional Head,  this Association  strongly protests inclusion of the Sub Divisional head in this verification process.

            This Association strongly advocates that this verification process should done by SBCO, SBSO and technical officials like System Administrators. Only the SBCO has authority to verify  and authenticate    data and Sub divisional Head has no authority to verify or authenticate data and arrive at the correct balance/data. Involving Sub Divisional Head   has no meaning in this context as Sub Divisional  Heads do not have adequate operational skill of the software like Sanchay Post. The Sub divisional heads are neither fully skilled nor have enough time to check data in respect of all Finacle migrated offices under their Sub Division. SDC Chennai/DOP and Infosys should develop such software which can easily filter such desired data.

            Therefore, it is requested to kindly relook  into this matter and cause to withdraw instructions which direct Sub Divisional Heads to check and verify Sanchay Post data w.r.t. migrated  live data issued vide Postal Directorate , Financial Services Division  letter  no.  F. No. 25-31/2017-FS-CBS dated 28.03.2018.

For this, this Association shall ever be grateful.
                                                                                                            Your Sincerely
                                                                                                            (Rajiv Kumar)
                                                                                                            General Secretary.