SBI is Income Tax refund banker
The Government has appointed State Bank of India as the Income Tax refund banker to credit the due amount to the bank accounts of taxpayers. With the launch of the scheme as a pilot project, about eight to 10 lakh IT assessees in Delhi and Patna will benefit with speedy refunds.
SBI will refund cheques to tax assessees within three days of the IT department intimating the bank about refund details.
Launching the pilot scheme yesterday, Finance Minister P. Chidambaram said
`This path-breaking initiative of the Income-Tax department will ensure refunds reach the assessees quickly without fraud and accounts are maintained scrupulously and according to the law.''
SBI will have the facility to directly transfer the IT refund amount to the bank accounts of assessees through the electronic clearing system or through banker's cheques. For its services, the SBI will receive Rs. 5 per assessee if the refund is transferred through ECS and Rs. 10 along with postal charges if it is transferred through cheques.
Refunds which were 26.52 per cent of the total collections during 2002-03 declined to 18.18 per cent in 2005-06.
Will SBI be liable to pay Service Tax on the amount of Rs.5/- and Rs 10/- it collects for providing the refund service?