New Delhi: Banks may soon be forced to stop all free services to customers.
The DGGST is calculating tax on these free services on the basis of charges which banks have recovered from customers who do not maintain a minimum prescribed balance.
While the government is said to be calculating tax liability on banks to be Rs 6,000 crore, bankers estimate that the tax dues could be much higher.
Banks will find it difficult to recover charges from customers retrospectively. But they may be forced to charge taxes in the future on free ATM transactions and other services, which will put a burden on bank customers.
Banks are likely to challenge the notice and take up the issue with the finance ministry. The SBI had to cut charges it had levied on non-maintenance of minimum charges on saving accounts recently due to public anger.
The matter has already assumed political dimensions. “Your bank could soon charge you for ATM transactions, cheques and cards. Why??? Hint: Modi Govt? Taxes. Enjoy people. More #AchheDin are coming!,” tweeted Congress leader Salman Soz.
