« Service Tax » Open DEMAT Account in 24 hrs  Government Proposes Tax Relief for Offshore Funds and Electronics Contract Manufacturing: Key Changes Explained  Income Tax Refund Adjustment Against Old Tax Demands: What AY 2026–27 Taxpayers Should Know Before Claiming a Refund  ITR filing 2026: Here are the 7 income tax notices you may receive after filing your return and what they mean  ITR filed and verified? Here's how the Income Tax Department spots mismatches—and when it sends a notice  ITR Filing 2026: CBDT Introduces 6 Major E-Filing Portal Upgrades Ahead of Peak Tax Return Filing Season  ITR Filing 2026: Sold Shares, Property or Crypto? Key Tax Rules You Must Know Before Filing Your Income Tax Return  ITR filing 2026 Secondary address field is now mandatory here s how it can help taxpayers  New GST Rates: When will changes in GST rates take effect? What's the GST on medicines? | Top FAQs answered  New Income Tax Bill 2025: 3 key changes that could make ITR filing easier  Tax e-filing: New banks enabled for online tax payments via e-pay tax service Check the entire list of banks  Income Tax Bill 2025: Changes under the new bill that taxpayers must know. Check FAQs «  Wipro launches Excise & Service Tax 'ACES' portal for CBEC... Similarity of treatment in exports and imports of services... » Banks up in arms against service tax on govt business December, 02nd 2008 Banks are in a quandary over the imposition of service tax by the Central Board of Direct Taxes (CBDT) on income out of agency commission on various services being provided by them on behalf of the government. These services include accepting advance payment of tax, pension disbursement and various government payments which generate income for the banks. In turn, the banks want an increase in the agency commission to compensate the service tax burden in case the government was unable to waive such a tax. For example, banks get Rs 60 per transaction of pension disbursement in the form of agency commission. Similarly, they get 9 paise per Rs 100 transactions of advance tax payments. Earlier, they were not paying any taxes against these income accrued from services which are being provided by them on behalf of the Reserve Bank of India (RBI) as the central bank is the nodal agency for such collections and disbursements. However, the CBDT has decided to imposed service tax of 12% on the agency commission. The Indian Banks Association (IBA) will take up the issue for the enhancement of agency commission to the RBI. Decision to this effect was taken during the monthly managing committee meet of the IBA which was held in Mumbai on Monday. Requesting anonymity, a public sector bank chief told FE, We want our agency commission to be increased to such an extent that we remain unaffected by the imposition of the tax. Some of the other issues that came up for discussion during the meeting of the managing committee include update on National Payment Corporation of India Limited , consortium of banks for lending of amount more than Rs 100 crore and second option of pension for the bank employees. A sub-committee will be formed by the IBA to finalise the banks action plan on these issues. The IBA source told FE that while the wage revision issue was likely to be discussed again with the United forum of Bank Unions early next month. A report on fresh calculation of pension liability has already been submitted by the actuaries panel comprising of D Basu of Kolkata and KP Sharma of Chennai. The panel has suggested that the pension option would put Rs 6,000 crore of burden on the banks.