(Tribune)
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.
