GST impact: Banking services, insurance premium, credit card bills get costlier from today

GST impact: Most of the financial services will attract a higher tax of 18 per cent as against the previous 15 per cent under the new indirect tax regime.

By: Express Web Desk | New Delhi | Updated: July 1, 2017 7:17 pm
GST impact: Among the banking services that will attract higher service tax include debit card, fund transfer, ATM withdrawal beyond the number of free services and home loan processing fee. (PTI Photo)

With the country ushering in a new tax regime with the introduction of the Goods and Services Tax (GST), consumers will now have to pay more for banking services, insurance premium payments and credit card bills beginning Saturday. Most of the financial services will attract a higher tax of 18 per cent as against the previous 15 per cent under the new indirect tax regime.

Almost all the banks and insurance companies have sent messages and mails to their respective customers about the new tax rates which will be charged. “Dear policyholder, revision of service tax on account of GST will come to effect from July 1, 2017,” said a Life Insurance Corporation of India (LIC) message.

Punjab National Bank (PNB) informed its customers that “with effect from July 1, 2017, the existing service tax of 15 per cent levied on all the banking services will be replaced by a GST of 18 per cent.” Meanwhile, HDFC said, “GST is being implemented from 1 July 17. In accordance, Service Tax of 15% will change to 18%. Provide GSTIN for your a/c @ customercare@hdfcsec.com.”

Among the banking services that will attract higher service tax include debit card, fund transfer, ATM withdrawal beyond the number of free services, home loan processing fee, locker rentals, issuance of cheque books/drafts/duplicate passbooks, collection of bills, collection of outstation cheques, cash handling charges and SMS alerts. In addition, life and non-life premiums will see an increase from 15 per cent to 18 per cent.

Reflecting on the implementation of GST, Chanda Kochhar, MD & CEO, ICICI Bank said, “The Goods & Services Tax is a transformational structural reform which will have multiple benefits – the creation of a national market; enhanced ease of doing business; greater productivity & efficiency; and improved tax compliance. All stakeholders are working together for a seamless transition to this new paradigm. This reform will result in benefits for all participants in the Indian economy, including both businesses & consumers.”

At the stroke of June 30 midnight, India witnessed the introduction of GST at a special midnight ceremony in the Central Hall of Parliament. Prime Minister Narendra Modi described the GST as a “Good and Simple Tax” that will be “not only a tax reform but an economic and social reform as well” that will unify the nation, “check corruption and end harassment at hands of officers”.

Among the host of dignitaries who were present during the grand event included President Pranab Mukherjee, Vice-President Hamid Ansari, Speaker Sumitra Mahajan, Union Finance Minister Arun Jaitley, former Prime Minister H D Deve Gowda, ministers, MPs and other special invitees.

With inputs from PTI

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  1. N
    Nitesh
    Jul 3, 2017 at 2:50 pm
    OMG how govt. forget to add tax on air . It is still free i am using it maximum until they put tax on it.
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    1. V
      Vijay Kaul
      Jul 2, 2017 at 2:44 am
      It is a masterstroke of looting the honest taxpayer. Who uses the services maximum,is it the Lower middle income people or the Deprived. It is the middle and upper middle classes. Among them 1 crore honest taxpayers. Why Tax us again and again?? And keep on giving free tax goods to other 400 million people or so.
      Reply
      1. S
        sanjay dhamdhere
        Jul 2, 2017 at 12:19 am
        Honest tax payers paying 33 , percent income tax. Again they have to pay 20 to 28 percent gst.only those who are not paying income tax can afford luxuries.going to good hotels tourism air travel becomes more costlier for tax payers.we are hoping that gst rates will lower all this. In Singapore malesiya gst ia 7 percent for all items .28 percent is too much.only those who are having black money can enjoy life in india.
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        1. M
          Mahesh Joshi
          Jul 1, 2017 at 8:54 pm
          These are items that get cheaper after GST. Eatables 1. Milk powder 2. Curd 3. Butter milk 4. Unb ed natural honey 5. Dairy spreads 6. Cheese 7. Spices 8. Tea 9. Wheat 10. Rice 11. Flour 12. Spices 13. Groundnut oil 14. Palm oil 15. Sunflower oil 16. Coconut oil 17. Mustard oil 18. Sugar 19. Jaggery 20. Sugar confectionery Items of daily use 1. Bathing soap 2. Hair oil 3. Detergent powder 4. Soap 5. Tissue papers 6. Napkins 7. Matchsticks 8. Candles 9. Coal 10. Kerosene 11. LPG domestic 12. Spoons 13. Forks 14. Ladles 15. Skimmers 16. Cake servers 17. Fish knives 18. Tongs 19. Agarbatti Healthcare 1. Insulin 2. X-ray films for medical use 3. Diagnostic kits 4. Glasses for corrective spectacles 5. Medicines for diabetes, cancer Others 1. Diesel engines of power not exceeding 15HP2. Tractor rear tyres and tubes 3. Weighing machinery4. Static converters (UPS)5. Electric transformers,6. Winding wires7. Helmet8. Crackers and explosives9. Lubricants10. Bikes11. Movie tickets less
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          1. I
            I Ali
            Jul 2, 2017 at 1:00 pm
            Can you please specify how much impact on above mentioned in price ?? how much a person can save monthly. becuase the way you are mentioning it looks soothing to our eyes - but when we pay heavier taxes from the cards we pay ... hope that less doesn't cover from my banking transactions .
            Reply
          2. S
            Sujatha Selvam
            Jul 1, 2017 at 8:44 pm
            Arun Jaitley can you answer to the Hashtag which is going on today: #GST #SanitaryPads #MenstruationIsLuxury? How come Sanitary pads are a luxury? Do women bleed out of choice? Instead of removing tax from such basic necessity, Government has increased the tax from 6 to 12 . Menstruation is an expensive affair from today onwards...!!
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              Anonymous
              Jul 2, 2017 at 4:06 pm
              Probably His mother bled out of choice
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              Muthukrishnan Jayarama
              Jul 1, 2017 at 8:15 pm
              On the pretext of financial reform, the Govt. subjects the public to miseries. Those who have voted for the Govt have already realised their mistakes and sure people will never vote for the party which has pushed the public to the streets in long ques for drawing their hard earned money.
              Reply
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                Prasanta Mishra
                Jul 1, 2017 at 8:11 pm
                Tax,tax more tax nothing except tax and increases.Bhakts are claping despite hunger.
                Reply
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                  S.Kumar
                  Jul 1, 2017 at 7:42 pm
                  The govt is squeezing the public for taxes. But what is the public getting in return ? Bad roads, bad politicians, bad governance, no social security like in the US. Only bhashans n chest beating !! Corruption in govt departments has not come down. Ease of doing business has Not improved. This Govt should not take the public for granted. This is one of its strongest supporters giving a warning!
                  Reply
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