Public and private banks are readying themselves to handle collection, accounting, and money transfers under the goods and services tax (GST) structure by December.
The Reserve Bank of India (RBI) and the finance ministry have started holding monthly meetings with banks to check their preparedness. The new tax structure may be implemented from April 2017.
Banks also need to send their status reports to the RBI and the government. Sources said the technology teams are trying to identify “teething problems” that could arise in the next couple of months.
Banks that mostly follow automatised systems will have to further upgrade their IT management to ensure the GST is implemented smoothly.
The individual bank boards have also been monitoring the situation.
“Most public sector banks are almost ready with the systems, we are confident we would be able to move towards the seamless implementation of the new structure,” K Raghu, former president, Institute of Chartered Accountants of India, who is currently an independent director of Indian Overseas Bank, told Hindustan Times.
Under the new tax regime, firms with an annual turnover of over ₹1.5 crore will be taxed by the Centre, which in turn would send the states their share and those with a turnover of below ₹1.5 crore could pay their taxes to states. The states will subsequently pass it on to the Centre.
Raghu further said so once it was in operation, bank branches would undertake the process.
{{/usCountry}}Raghu further said so once it was in operation, bank branches would undertake the process.
{{/usCountry}}Yes Bank chief Rana Kapoor said Indian banks already had state-of-the-art technology. “We would just need to upgrade our IT system ... there is absolutely no cause for any concern,” Kapoor added.