Banks fail to catch up on e-payment of service tax
March, 10th 2014
Thousands of service tax payers are suffering as a number of banks have not been permitted or notified for mandatory e-payment of the tax.
As per a fresh notification from the Government of India, the threshold limit for the mandatory e-payment for both central excise as well as service tax has been reduced to Rs.1 lakh from the earlier Rs.10 lakh. This means the numbers of tax payers mandated for e-payment would increase. However, many of the mainstream banks are yet to be authorised to collect the same. Ironically enough, if a service provider is mandated for electronic payment of service tax and fails to do so, he is likely to face a penalty up to Rs.10,000 as per legal provisions.
In fact, when it comes to Andhra Pradesh, Andhra Bank is among the banks not notified for collecting service tax. When contacted, a senior bank official said they were awaiting permission from the ministry of finance for collecting the e-payment. "The new limit of Rs.1 lakh means there will be more assessees going for the e-payment and this makes it all the more important for the banks yet to be notified for e-payment to quickly obtain so", said the official.
The new threshold limit for e-payment through internet banking came into effect on January 1, 2014, as per the amendment of Service Tax Rules, 1994 and Central Excise Rules, 2002.
"While the assessee can make payment from anywhere, the government too gets its revenue fast and in a streamlined way", said a senior Andhra Bank official.
In fact, if the official sources are to be believed, then in case of a couple of leading national banks which have been notified, e-payment can be made or collected for only limited and select number of commissionerates. "Furthermore, the co-operative banks are also not authorised to collect e-payment of service tax since the same are not notified", said an official, admitting that non-existence of a uniform policy for all banks will make even the honest tax payers suffer. When contacted, officials in the service tax department said that the respective banks have to apply to the ministry of finance for getting the authorization.