HDFC Bank levies charges on inoperative account, cash deposits

‘The bank will levy a charge of Rs50 on inoperative account. This charge is applicable across savings and current account on per quarter basis:’ HDFC Bank

If you are an account holder of HDFC Bank, then be prepared to pay Rs50 per quarter for a non-operational account of over a year and Rs25 for depositing cash of over Rs1 lakh.

‘The bank will levy a charge of Rs50 on inoperative account. This charge is applicable across savings and current account on per quarter basis,’ HDFC Bank informed its customers.

The order come into affect from 1 January 2012. Though there is no cash handling fee for deposits of up to Rs1 lakh in a day at home branch for 'non-managed customers', amounts above this level will attract a charge of  Rs25 per Rs50,000 and part thereof for such clients.

Non-managed customers are those clients who do not have a private banking or wealth management account with the bank.

Besides, it said Rs50 per instance will be levied for any deliverable returned by courier due to negative reasons (no such consignee/consignee shifted and no such address).

The lender will charge Rs100 each for its photo attestation, signature attestation and address confirmation.

If the average monthly balance (AMB) of saving account in urban and metro branches is between Rs5,000 to Rs10,000, the bank would charge Rs250 per month. If AMB is less than Rs5,000, then Rs350 per month would be levied, it said. It is to be noted that all banks including public sector lender levy charges if monthly average balance is less than a stipulated level. For example, ICICI Bank and Axis Bank charges Rs750 for non-maintenance of minimum quarterly average balance.

As per Finance Bill 2009, all fees and charges will attract 10% service tax and education cess of 3% of the service tax amount effective 24 February 2009, it said.


Goods and Service Tax will solve issues—like Santa Claus?

We do not see any rational debate or solution on that issue as yet. And that is where the flaw lies with the introduction of the new GST regime—there is no mention of the aspect of rationalising compliances as well as subsequent returns

Recent news on ‘streamlining’ of the service tax regime mentions the addition of many new services into the list, by the simple method of making a fairly specific ‘negative’ list, and taxing everything else as a ‘service’. Assuming, of course, that it is not being taxed as ‘goods’ already. Often, simultaneously.

And therein lies the rub. Speak with any manufacturer or service provider who has faced the issue of multiple compliance systems and multiple adherences and most of all multiple legit and non-legit demands for the same transaction—and you realise that one of the biggest flaws in the system is the fact that the excise departments and the sales tax departments (central and state) function as multiple separate entities.

Add to that the issues put forth by the same authorities when the goods are passing through ‘transit’ states by road, and you have Kafka plus Dante meets the Indian service and sales tax assesee, and that too often in a regional language which he does not understand.

Sometimes it also feels that these departments may be working for separate countries, such is the vicious pincer movement that assesees can face when saddled with their demands, legit as well as otherwise. National interest takes a back seat when the aim is to squeeze and extract, for that is how the complicated provisions of service tax as they exist are added to the already complicated provisions of central and state sales taxes.

There are people working the cash economy for all it is worth—highway toll operators are one such tribe—who are of the opinion that one reason they choose to function in the badlands of the black economy is also because they simply cannot exist otherwise within the complications of the excise and sales tax systems. Horror stories about being served with demands and queries from these two departments for providing free drinking water and toilets as well as rest areas are reportedly not incorrect, is what I learnt when I wanted to know more about why toll booth operators do not provide these facilities.

Truck operators speak in hushed whispers about how their truck drivers have even been killed for not being able to bow to the demands from these departments, even when all documentation and adherences are in order, such is the reality of the viciousness on our roads when it comes to excise and sales tax authorities. But it is even worse now in the offices and factories—anticipatory bail for managers and officers is the order of the day in many such cases where multiple demands are raised for the same transactions.

So, the proposed implementation of the Goods and Service Tax (GST) comes as a ray of light. In one way, this is great in theory, since it promises better tax adherence by all sectors of the non-cash economy. How to try to bring the cash economy, also known as ‘black’, into the ambit of the service tax regime may work if the GST Bill comes into effect as planned from April this year—though there still does not appear to be any cogent effort to include the cash economy, it seems.

However, for the sectors which adhere to the service and sales tax regimes, the bigger question is—can and will the flow of documentation required for compliances be streamlined, and can the multiple excise and sales tax departments co-ordinate the modus operandi of paying these taxes and then filing the returns?

Without going into details, as on date, the forms, methods, dates, returns, softwares and therefore employees and consultants required for these activities are all different. A single transaction involving, for example, the interstate movement of goods from manufacturer to customer which will in almost all cases also have sales tax as well as service tax elements, will require multiple adherences before the loaded truck can even leave the premises.

Today, demurrage income is a great source of earning for transporters, as loaded trucks wait for service and sales tax documents to fall into place.

Speak frankly to the businessman, and he is clear—paying taxes is not the issue, that is the cost of doing business anywhere in the world. It is the cost of compliances and documentation required in India, designed to engineer flaws and slip-ups, which is killing them.

We do not see any rational debate or solution on that issue as yet. And that is where the flaw lies with the introduction of the new GST regime—there is no mention of this aspect of rationalising compliances as well as subsequent returns.

And these complications in compliances, this is what is killing the businessperson who wishes to prosper in a legit manner—literally forcing him into the cash economy. It can not be said or written simpler.

(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)




5 years ago

Received offline:- Dear Veeresh,
You are correct in your findings and suggestions. The GST is not expected to include local taxes like Local Area Development Tax, Octroi and Mandi Tax and such like ones, which means the laudable objectives of containing the costs at the hands of the manufacturers and service providers will continue – though in a smaller measure.

RBI issues another warning on scam e-mails

The central bank itself has been the target of the scamsters who have used its name in a fake e-mail, asking people for numerous personal details to register for a one-time password. The best way to deal with such mails is to delete it ASAP

Reserve Bank of India (RBI), while issuing another warning about scam e-mails and SMS that are doing round, has asked people to stay away from such messages.

In a statement, the central bank advised people to immediately register a complaint with the local police/cyber crime authorities when they receive fictitious offers of money from abroad or if they are victims of such offers. “It has also placed, on its (RBI) website, the list of such nodal agencies with whom the public can register complaints,” the central bank said.

E-mails claiming you have won a lottery prize worth millions of dollars or fraudulent e-mails in the name of your banker, seeking account details for verification are not new. Time and again people are lured to such messages and have lost their money.

Now acting on it, the RBI once again, issued a warning asking people to stay away from such e-mails.

In fact, the central bank itself has been the target of the scamsters who have used its name in a fake e-mail, asking people for numerous personal details to register for a one-time password.  In reality, the apex bank never asks for these details for the purpose of verification, by e-mail.

Often these scam e-mails, ask you to furnish your personal and bank details. Most of them are originally sent from foreign countries, telling you to make some payment to claim the prize money.

However RBI has cautioned “against making any remittance towards participation in such schemes/offers from unknown entities since such remittances are illegal and any resident in India collecting and effecting/remitting such payments directly/indirectly outside India is liable to be proceeded against for contravention of the Foreign Exchange Management Act, 1999. They are also liable for violation of regulations relating to Know Your Customer (KYC) norms/Anti Money Laundering (AML) standards.”

Another e-mail was circulated where unclaimed funds were offered in the name of RBI. To make this email more realistic, they had even used RBI governor D Subbarao's name and mentioned a so-called meeting with a "Senate Tax Committee on Finance", except that there is no such committee in India.

The central bank in the past have issued similar advisory to the people against falling prey to fictitious offers/lottery winnings/remittance of cheap funds in foreign currency from abroad by so-called foreign entities/ individuals or to Indian residents acting as representatives of such entities/individuals.

Best way is to delete any email that asks your personal and bank details. However, in case you have free time on your hand then read an interesting book “Delete This At Your Peril” by Bob Servant / Neil Forsyth. This book hilariously shows internet scam artists are just as gullible as their victims if not more so. The idea in one of these scams is to get the recipient to wire the sender money. Here, it is the email recipient who gets the senders to promise to send alligators, leopards, and a talking lion (no, really) as his part of a 419 scam. (Read Lions, Gold and Confusion, an extract from the book)


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