New Delhi : Consumers will have to shell out more for banking services, insurance premium payments and credit card bills with the GST rollout from Saturday.
Under the Goods and Services Tax, effective Fridayt tonight, most of the financial services would attract a higher tax of 18% as against 15% as of now. Banks and insurance companies have been already sending messages and mails to their customers about the new tax rates which would 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%.” Common banking services that would 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. Besides, life and non-life premiums would see a rise from 15% to 18%.
Canara HSBC Oriental Bank of Commerce Life Insurance Company Chief Financial Officer Gaurav Seth said the premium amount on a term insurance policy will be 18% from 15%per cent currently.
