A GST Problem That Threatens Domestic Cash Transfer Services
A slew of goods and services tax demands have been made on banks to pay GST on the fees charged by their banking correspondents for cash transfer services, according to four persons aware of the development. This threatens the domestic remittances business of many banks, according to these four officials. It, however, does not impact other functions like credit, loan applications etc that are also part of a business correspondent’s remit.
Axis Bank has shut its domestic money transfer operations — the mechanism to transfer money for non-account holders via banking correspondents — after it was asked to pay about Rs 10 crore of GST, according to two officials handing the case but who didn’t want to be named. The private lender refused to comment on the matter.
ICICI Bank, Yes Bank and RBL Bank are considering to restructure or shut similar operations, said the two officials quoted above. While ICICI Bank declined to comment, Yes Bank and RBL Bank did not respond to emails seeking comment.