Agency banks - Collection of tax dues, Direct and Indirect taxes

The RBI issued a number of instructions to agency banks for the accounting and reporting of direct and indirect taxes. Banks were notified that the date for closure of Residual Transaction for March 2007 was 16 April 2007. In case of Closing of Government Accounts for the financial year 2005-06, special messenger arrangements had to be made at bank branches and all arrears had to be cleared before 15 March 2007. Further, the nodal and focal branches were required to follow the procedure annexed to the circular and to ensure that transactions of April 2007 were not mixed up with the 'Residual March transactions'.

The Chief Executive Officers
All Agency Banks (As per list enclosed)

Dear Sir

Scheme for Collection of Dues of (i) Central Board of Direct Taxes (ii) Central Board of Excise and Customs (iii) Departmentalised Ministries Account -Reporting and Accounting of March Transactions -

Special Arrangements - Financial Year 2006-2007

Please refer to Circular DGBA.GAD.No.H- 11835/42.01.001/2005-06 dated February 14, 2006 advising the procedure to be followed for the Financial Year 2005-06 for reporting and accounting of collection of Direct Taxes (CBDT) and Indirect Taxes (CBEC) and transactions of Departmentalised Ministries at the Receiving /Nodal / Focal Point branches of your bank.

2. It has been decided in consultation with Government of India that for the Financial Year 2006-07 the date of closure of Residual Transactions for the month of March 2007 be fixed as April 16, 2007 (Monday).

3. In view of the ensuing closing of Government Accounts for the financial year 2006-07, you may please reiterate the instructions to your branches regarding introduction of special messenger arrangements at your receiving branches (situated locally) from the second fortnight of March 2007. Receiving branches not situated locally should also adopt special arrangements such as courier service etc. from the second fortnight of March 2007 for passing on challans/scrolls etc. to the Nodal/Focal Point branches so that all payments and collections made on behalf of Government towards the end of March are accounted for in the same financial year. The branches may also be instructed to take all necessary steps to ensure that the arrears, if any, are cleared before 15 March 2007.

4. As regards reporting of March 2007 transactions by Nodal/Focal Point branches in April, the branches may be advised to follow the procedure as outlined in the Annexure. To sum up, the Nodal/Focal Point branches will be required to prepare separate sets of scrolls, one pertaining to March Residual Transactions and another for April transactions during the first 16 days of April 2007. The Nodal/Focal Point branches should also ensure that the accounts for all transactions (revenues/tax collections/payments) are effected at the receiving branches upto 31st March 2007 in the accounts for the current financial year itself and are not mixed up with the transactions of April 2007. Also, while reporting transactions upto 16th April 2007, the transactions of April 2007 should not be mixed up with 'Residual March transactions'.

5. The procedure now followed for reporting and accounting of transactions of Non-Civil Ministries viz. Defence, Posts, Railways and Telecommunications (which was revised with effect from 1st October 1993), is similar to the procedure for reporting and accounting of transactions of Departmentalised Ministries. The special arrangements for reporting March transactions by receiving branches to Nodal/Focal Point branches and the procedure for reporting March 2007 transactions in April 2007 by Nodal/Focal Point branches as indicated in paragraphs 3 and 4 above are also applicable to the reporting of transactions of Non-Civil Ministries. The branches of your bank handling the Non-Civil Ministries transactions, if any, may, therefore, be advised to follow the above procedure.

6. We shall be glad if you will please issue necessary instructions in the matter to your branches concerned immediately.

Yours sincerely

M.T. Varghese
General Manager

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Annexure

(Enclosure to DGBA Circular No.RBI/2007/264 dated February 22 , 2007

Reporting of March Transactions

Beginning from 1st April 2007, the Nodal/Focal Point branches will segregate on a daily basis all scrolls/challans pertaining to March 2007 received from the receiving branches concerned and prepare separate main scrolls for:

(a) scrolls for transactions of March 2007 or earlier period (i.e. effected during the previous financial year 2006-07) and

(b) scrolls pertaining to current transactions (i.e. those effected from 1st April 2007 onwards ).

2. The main scrolls for March 2007 transactions prepared from April 1, to April 16, 2007 are to be distinctly marked as March Residual - 1, March Residual - 2 and so on upto 16th April 2007. In other words, serial number should be allotted in consecutive order for each main scroll of March 2007 transactions sent from 1st April to 16th April 2007. These scrolls alongwith the copies of daily summary of Receipts and Payments prepared separately for March 2007 transactions will be forwarded to the Departmental Officials concerned ( i.e. Zonal Accounts Officers/Pay and Accounts Officers and Designated Officers) in the usual way. The Nodal/Focal Point branches will also be required to report the above transactions to the Link Cell through separate Daily Memos. These advices must be sent by telegrams/FAX to enable the Link Cell of each bank at Nagpur, to make daily settlement with Reserve Bank of India, Central Accounts Section (CAS) Nagpur. On receipt of advices (Memo/Telegrams/FAX) from the Nodal/Focal Point branches, the Link Cell should segregate the advices for the March Residual transactions and forward them separately to Reserve Bank of India, CAS, Nagpur for being processed on the computer. This procedure should continue upto and inclusive of April 16, 2007 only. All transactions reported thereafter by the receiving branches will be reported and accounted for in the usual manner in the accounts of the month of report irrespective of the date of transaction. Following the special arrangements for March 2007 transactions, it is necessary for the Nodal/Focal Point branches to prepare two sets of DMS to be submitted to Zonal Accounts Officers/Pay and Accounts Officers for March 2007 transactions - one for transactions upto March 31, 2007 and another for March Residual Transactions adjusted by Nodal/Focal Point branches with Reserve Bank of India, Central Accounts Section, Nagpur, during April 1, to April 16, 2007. Since the Nodal/Focal Point branch will also be reporting the April 2007 transactions pertaining to year 2007-2008 in addition to March Residual transactions, monthly statement for April transactions should be compiled and furnished to Zonal Accounts Officers/Pay and Accounts Officers in the usual way. In order to distinguish the April 2007 (year 2007 - 2008) and March Residual Transactions, the statement pertaining to March Residual Transactions should be clearly marked as ' March Residual Account':

Note: As advised in our circular GA.NB.No.376/42.01.001/95-96 dated May 22, 1996 all the cheques/amounts realized on or before 31st March 2007 should be treated as transactions relating to the current financial year as 'March 2007 or March Residual Transactions', the reporting of which may take place during the month of April (upto April 16, 2007). But if any cheque is tendered on or before 31st March 2007 and realized on or after 1st April 2007, it will be treated as transaction for the next financial year as 'April transactions'. Accordingly, the banks will prepare separate scrolls for March 2007 and April 2007 (year 2007 - 2008) transactions.

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Endt.DGBA.GAD.No.H.12813/42.01.029/2006-07 of date.

Copy forwarded for information and necessary action to:

1. the Controller General of Accounts, Department of Expenditure, Ministry of Finance, 2nd floor, Lok Nayak Bhavan, Khan Market, New Delhi 110 003 with reference to his letter S-11012/2/3(17)/RBI/2004/RBD/277 dated February 20, 2007.

2. the Principal Chief Controller of Accounts, Government of India, Office of the Chief Controller of Accounts, Central Board of Direct Taxes, Lok Nayak Bhavan, Khan Market, New Delhi 110 003.

3. the Director, Finance (A) (II ), Government of India, Ministry of Railway, Railway Board, Rail Bhavan, New Delhi-110001.

4. the Principal Chief Controller of Accounts, Central Board of Excise and Customs, 1st floor, AGCR Building, New Delhi - 110 002.

5. the Director General, (PA ), Department of Posts, Government of India, Ministry of Communications, Department of Telecommunication, Dak Bhavan, 4th Floor, Sansad Marg, New Delhi-110 001.

6. the Controller General of Defence Accounts, West Block- V, R.K. Puram, New Delhi - 110 066.

7. the Deputy Director General(Budget and Accounts), Ministry of Communications, Government of India, Department of Telecommunication, Sanchar Bhavan, Dak Bhavan, 4th Floor, Sansad Marg, New Delhi-110 001.

8. the Regional Director/Chief General Manager, (Officer-in-Charge) Reserve Bank of India, Public Accounts Department, Ahmedabad/ Bangalore/ Belapur, Navi Mumbai/ Bhopal/ Bhubaneswar/ Chandigarh/ Chennai/ Guwahati/ Hyderabad/ Jaipur/ Kanpur/ Kolkata/ Mumbai/ Nagpur/ New Delhi/ Patna/ Thiruvananthapuram. He may also follow the procedure outlined in the circular.

9. the General Manager, Central Accounts Section, Reserve Bank of India, Additional Office Building, East High Court Road, Post Box 118, Nagpur - 440 001.

10. the General Manager, Reserve Bank of India, Central Office, Rajbhasha Vibhag, Garment house, Worli, Mumbai 400 018.

11. the General Manager, State Bank of India, Central Office, Government Accounts Department, New Administrative Bldg., 3rd Floor (Rear Wing), Sector 11, CBD, Belapur, Navi Mumbai 400 614.

12. the General Manager, Banking Operations Department/Subsidiary Banks Section), State Bank of India, Central Office, P.B.No.12, Mumbai -400 021.

A.S. Kulkarni
Dy.General Manager