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Free banking services, including ATM withdrawal out of GST: FinMin official

The Department of Financial Services had approached its revenue counterpart to clear the confusion over the levy of GST on some of the free services offered by banks to their customers.

Press Trust of India  |  New Delhi 

money exchange at atms

like cheque book issuance and withdrawals are likely to remain out of the ambit of the GST, a senior ministry official said.

The had approached its revenue counterpart to clear the confusion over the levy of (GST) on some of the free services offered by to their customers.

"The revenue department is likely to tell the financial services department that GST will not be levied on free banking services," an official told PTI.

Amid getting service tax notice for non-payment of the levy on free services, the (DFS) had approached the revenue department seeking clarity on whether such services would attract GST.

The DFS was of the opinion that services such as the issuance of cheque books, account statements and withdrawals are free up to a certain limit and not commercial activities which cannot be brought under the ambit of GST.

The Association (IBA) on behalf of the management of banks too had made representation to the tax authorities.

The service tax notice for period 2012-2017 was served as tax officials were of the view that banks were not offering 'free services' but actually charging customers by asking them to maintain a minimum account balance.

Every bank offers a different slab of minimum balance to customers, based on which some free services are provided.

GST was rolled out from July 1, 2017, prior to which central excise and service tax was levied on goods and services.

First Published: Tue, May 15 2018. 17:28 IST
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