News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax | PPE Safety Kit SITRA Approved | PPE Safety Kit
Top Headlines »
 ITR filing date for FY19 extended: Here's how to do it online
 5 Common Mistakes That Can Draw Income Tax Notice ITR Filing
 Income-tax (18th Amendment) Rules, 2020
 10 tax-saving fixed deposits that offer the best interest rates
 ​Amendment of rule 31​​AA, Form 27EQ
 CBDT extends FY19 income tax return filing deadline till September 30
 7 Money and tax tasks you should complete by July 31, 2020
  5 deadlines that end on July 31 ITR filing to investing for claiming deduction
 Who is eligible to file which tax return for FY 2019-20? ITR form
 How you can check your income tax refund status Income Tax Refund
  How to save tax on sale of residential property All you need to knowa

Banks get a breather as GST Council extends deadline for tax filing
June, 19th 2017

The under-prepared banks, especially in the public sector, will get additional time as the Goods and Services Tax (GST) Council has granted a two-month breather to companies for filing tax returns.

So, while the GST will be implemented from July 1, the government has relaxed timetable and exempted companies from penalties and late fees for filing returns till September.

GST is the biggest indirect tax reform which aims to remove tax barriers between states and create a uniform market.

Most banks were struggling to get the infrastructure in place for the full-fledged roll-out from July 1.

"This (extension) will certainly help those banks that have started preparations recently and will give them added time to prepare," MS Mani, Senior Director, Deloitte.

Without revealing much, a senior banker said this was definitely a much required breather for banks to keep the process ready till the filing of returns.

According to Mani, while foreign banks and large private banks started their preparations about 5-6 months ago, many nationalised banks have floated their RFPs (request for proposals) in the past couple of months and would have started their preparations thereafter.

"Since the deadline for GST is pretty close, many banks may be looking at short term solutions for now and could take up other changes during July so that they are ready at least by the return filing timelines in August, September," he said.

All banks have multiple IT systems for specific operations such as forex, treasury, broking and other products and backend systems to take care of accounting and tax. These need to be moved to GST compliant systems.

Banks will also be required to provide state-wise data and compute state-wise tax payments, which they didn’t have to do previously due to the centralised system.

Experts said that in the absence of GST-compatible frontend IT systems, banks won’t be able to raise invoices and customers may not get input credits.

"Since the GST will be operational from July 1, 2017, banks have to make lot of changes in their systems and other procedures. The preparedness of all banks for implementation of GST on July 1, 2017, is a question mark," the Indian Banks' Association had told the Parliamentary Standing Committee on Finance earlier this month.

It had added that several services by banks to customers were centralised, while others were localised. The banking system is central to any financial transactions, and hence their IT, accounting and compliance standards need to undergo change.

Industry had also raised concerns over filing of returns under GST due to the lack of readiness of the IT infrastructure — the GST Network.

While some of the bigger private and foreign banks had started modifying their frontend IT systems in 2016 itself, many public sector banks and smaller private banks started reconfiguring their systems only about two months back.

Government-owned banks including Bank of Baroda, Union Bank, Allahabad Bank, Indian Overseas Bank and Indian Bank called for proposals from IT companies in April and would have started work only recently.

Government banks control about 80 percent of the banking transactions. Large banks have peak transactions close to 10 million a day.

"All major banks are working 24 by 7, even on Saturdays and Sundays to get their systems ready...So even if the systems may not be ready, banks are trying to get the data or invoices ready by July 1 and they can streamline the process by the filing time," said Siva Subramaniam GV, Vice President and head of product management at SunTec Business Solutions, which is helping in providing GST solutions to banks and financial services.

Home | About Us | Terms and Conditions | Contact Us | PPE Kit SITRA Approved | PPE Safety Kit
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting