Tax recovered from Minimum-deposit bank accounts

According to some reports online, banking services may become costlier as banks may be planning to:

Ask customers with minimum-balance accounts to pay up for free services like chequebook issuance, ATM cards received in the last 5 years;

Banks may also increase charges for all bank accounts.

The reason for this is the Goods and Services tax, which the banks are asked to pay for the last 5 years.

According to reports this tax sought from all banks put together is Rs 15,000 crore, which becomes Rs. 35,000 crore if interest and penalty is added.

So in simple words, the above amount of Rs. 35,000 crore includes tax plus interest plus penalty for the free services given by the banks in the last 5 years, to both minimum balance (accounts where it is mandatory to retain minimum balance such Rs. 1500, Rs. 3000, Rs. 5000 etc.; else penalty is imposed) and zero-balance accounts.

According to the reports, the Government is not ready to give any exemption to the Indian Banks’ Association, a lobby for all banks.

To conclude, if you are a bank customer, DO PAY ATTENTION TO THE MONEY CHARGED by your Bank.

It is very likely that functional bank accounts with minimum balance limits will be paying all this tax or; Tax+interest+Penalty amount.

According to VG Kannan, chief executive officer of the association,

“banks are planning to recover service tax and GST from customers and pay the government”.

In January this year, I wrote an article as to how we may unknowingly be paying for many banking services. It is quite simple to believe that an ordinary bank customer will pay more and for every bank service in future months.

It seems an ordinary bank customer will have to bear the unreasonable cost of the Government’s new bank accounts opening drive. A large section of which are either inactive or forgotten. Even if some of them are active, it makes no sense to charge them, when they were encouraged or lured to open a bank account.

It must be noted that such burden doesn’t fall on privileged bank customers. The burden usually is perceived by ordinary bank customers.

So don’t blame the banks. They are asked to service that number of bank accounts which doesn’t make business sense. So it will be no surprise if this tax is recovered from minimum balance customers. Why just minimum balance accounts? … Because the bank needs some money in the bank account to auto-deduct (charge on its own) such money.