Rs 38,000 cr service tax dues: Govt mulls out-of-court deal to resolve issue with banks

Agencies
August 2, 2019

Bengaluru, Aug 2: The government may be inclined for an out-of-court settlement in its dispute with banks over unpaid service tax dues to the tune of Rs 38,000 crore with officials indicating a more flexible stance to resolve the outstanding issues.

Sources in the government said that officials in the Finance Ministry may soon meet bankers to thrash out a compromise formula to resolve the issue that has divided the banking industry and pushed it into taking legal recourse.

A meeting proposed last month to resolve the issue could not take place and sources now say that all efforts are being made to organise the banker-official meeting this month so that a compromise is worked out well before the next date of hearing by the Delhi High Court in November. A meeting of bankers with Finance Minister Nirmala Sitharaman is also slated on Friday.

About 13 banks, including State Bank of India and HDFC Bank, moved Delhi High court early last month against a government demand for service tax to the tune of Rs 38,000 crore. Their claim is that the government decision is arbitrary and the amount has been calculated by multiplying penalty with the total number of accounts held with the respective banks resulting in big increase in tax demand.

Other banks in the petition include Punjab National Bank, Yes Bank and Hong Kong and Shanghai Bank, among others.

The government made the service tax demand for "treating the commitment of the customers to maintain minimum average balance (MAB) in bank accounts as a consideration for banking facilities provided for free".

Though the demand is of Rs 38,000 crore, sources said that the total amount could reach up to Rs 60,000 crore if interest and penalty are both included. Of the current demand, HDFC Bank itself is facing a penalty of up to Rs 18,000 crore.

"The stakes are high and has the potential to put the banking segment under prolonged periods of disruption. Coming at a time when the NPA issues are getting resolved, the government is unwilling to risk further and may work out an out-of-court settlement," said a source privy to the development. 

At the last hearing on the matter, a division bench comprising Justice S. Muralidhar and Justice Talwant Singh had issued a notice to the Centre, the Central Board of Indirect Taxes and Customs, the Goods and Services Tax Council and other authorities on the petition filed by the banks. The next day of hearing is November 14.

Other than the Delhi High Court, similar petition is pending before the Madurai bench of the Madras High Court. In this case, three banks have approached the court for relief.

As per industry estimates, savings account holders have paid over Rs 10,000 crore to the banks in the last three years as penalties for not maintaining minimum balance in their savings accounts. The penalty for non maintenance of minimum balance also varies from bank to bank.

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News Network
April 26,2020

Mangaluru, Apr 26: In the wake of the fears among local people regarding the cremation of coronavirus victims, an understanding has been reached with all stakeholders that the Mangaluru city corporation's crematorium here will be the official funeral site for such cases in future.

Mangaluru South MLA D Vedavyas Kamath, who had to face stinging criticism on social media for his alleged support to local people who stopped the cremation of a COVID- 19 victim at Pachanady near here on Thursday, took an active role in finding the solution.

The body of the victim, a woman, had to be taken from Pachanady to Kaikunje during the night, delaying the funeral by hours.

Kamath visited Boloor on Saturday and sought to convince the people that cremating the bodies of coronavirus victims would not endanger their lives in any way as the guidelines of WHO and union health ministry are being strictly followed.

The crematorium at Boloor is run by the MCC and has an electric furnace and firewood pyres.

Kamath said a tacit understanding that final rites of COVID-19 patients inDakshina Kannada will be performed at Boloor has been reached at a meeting with all stakeholders.

Cremating bodies in such a controlled environment is deemed safe as per guidelines, he said.

City Mayor Diwakar, local corporator Jagadish Shetty and MCC assistant commissioner Madan Mohan took part in the meeting.

The decision was conveyed to the DK district administration.

The district administration has also launched a campaign on dead body management protocol to convince the people to ignore misinformation being spread regarding the cremation of coronavirus victims.

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News Network
May 29,2020

Bengaluru, May 29: Seven out of ten (72 per cent) workers in Karnataka reported having lost their employment during the COVID-19-induced lockdown, according to findings of a survey by Azim Premji University, in collaboration with ten civil society organisations.

The university said in a statement it conducted "a detailed" phone survey of 5,000 workers across 12 states in the country, to gauge the impact of the COVID-19 lockdown on employment, livelihoods, and access to government relief schemes.

The survey covered self-employed, casual, and regular wage and salaried workers and it released the findings for Karnataka on Thursday.

Seventy-six per cent of urban workers and 66 per cent of rural workers lost their employment, the survey findings said.

For non-agricultural self-employed workers and wage workers, who were still employed, average weekly earnings fell by two-third.

More than four in ten salaried workers (44 per cent) saw either a reduction in their salary or received no salary during the lockdown.

Six out of ten households reported that they did not have enough money to buy even a weeks worth of essential items, according to the survey.

Eight out ten households reported a reduction in food intake, while less than three in ten vulnerable households (27 per cent) in urban Karnataka received any form of cash transfer from the government, it said.

In summary, the disruption in the Karnatakas economy and labour markets is enormous. Livelihoods have been devastated at unprecedented levels during the lockdown.

The recovery from this could be slow and very painful, the statement said.

As a response to the findings of this survey, the team which has conducted the survey suggested a universalisation of the PDS to expand its reach and implementation of expanded rations for at least the next six months.

It suggested cash transfers equal to at least Rs.7000 per month for two months, and proactive steps like expansion of MGNREGA, introduction of urban employment guarantee, and investment in universal basic services, among others.

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coastaldigest.com news network
May 19,2020

Mangaluru, May 19: In a bizarre incident which exposes the publicity craze of “philanthropists”, members of a city-based organisation returned without disturbing grocery kits after villagers refused to be photographed while receiving them. 

The incident took place at Mukrampady village in Puttur a few days ago. According to sources, a team belonging to an organisation from Mangaluru had visited the village with a letter from their organisation, to distribute grocery kits to families near mosques in the month of Ramadan. 

The team members reportedly insisted the beneficiaries to pose for pictures with the team near a mosque while being given the food kit. The villagers refused to fulfil their wish.

The organisation members then left the place without handing over the Ramadan kits, sources said.

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