Executive Summary:
This circular from the Reserve Bank of India announces a rationalisation and revision of agency commission rates payable to banks on government transactions, effective July 1, 2019. It updates the commission rates due to increased transaction volumes and technological advancements. Additionally, it changes the process for claiming GST on agency commissions, moving from centralised claims to payments by RBI Regional Offices.
Key Points / Main Content:
Revised Agency Commission Rates (Effective July 1, 2019):
* Physical Receipts: Revised to ₹40 per transaction (previously ₹50).
* E-mode Receipts: Revised to ₹9 per transaction (previously ₹12).
* Pension Payments: Revised to ₹75 per transaction (previously ₹65).
* Payments other than Pension: Revised to 6.5 paise per ₹100 turnover (previously 5.5 paise).
GST Claim Process Change:
* The centralised claim submission process for GST reimbursement is replaced.
* Applicable GST (currently 18%) will be paid along with agency commission by respective RBI Regional Offices/CAS, Nagpur.
* RBI will deduct TDS on GST as applicable.
Transitional Arrangement:
* For eligible government transactions up to June 30, 2019, agency banks continue to submit agency commission and ST/GST reimbursement claims as before.
Validity:
* The revised rates will remain valid until the next review.
Impact Analysis:
Agency Banks:
* Impact: Changes in agency commission rates for government transactions and a new process for GST claims.
* Action Required: Submit agency commission claims, including applicable GST amounts, to RBI at respective Regional Offices/CAS, Nagpur, as per revised rates and extant instructions for transactions from July 1, 2019. Continue with the existing process for transactions up to June 30, 2019.
Reserve Bank of India (RBI):
* Impact: Implementing revised agency commission rates and a new process for GST payment on agency commissions.
* Action Required: Regional Offices and CAS, Nagpur, to pay applicable GST along with agency commission and deduct TDS on GST.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Agency Banks: Banks authorized by the Reserve Bank of India to handle government transactions.
Central Accounts Section, Nagpur: A branch of the Reserve Bank of India located in Nagpur, Maharashtra, responsible for processing government transactions and related claims.
Goods and Services Tax (GST): An indirect tax used in India on the supply of goods and services.
Department of Government Bank Accounts: A central office department of Reserve Bank of India.
Mumbai, Maharashtra: A city in Maharashtra where the central office of Department of Government Bank Accounts is located.
Charulatha S. Kar: Chief General Manager at Reserve Bank of India, signing the circular.
RBI CAS: Reserve Bank of India, Central Accounts Section
भारतीय �रज़व र् बक�
_______________________ RESERVE BANK OF INDIA _______________________
www.rbi.org.in
RBI/2018-19/219
DGBA.GBD.No.3144/31.02.007/2018-19 June 20, 2019
All agency banks
Sir/Madam
Rationalisation and Revision of Agency Commission
Payable to Banks on Government Transactions
A reference is invited to our circular DGBA.GAD.No.7575/31.12.011/2011-12 dated May 22,
2012 advising revision in the rates of agency commission payable to agency banks with effect
from July 01, 2012.
2. Since then, there has not only been an expansion in volume and value of government receipts
and payments, and coverage of bank branches handling government transactions, but also
significant movements towards adoption of technology and migration to electronic means of
payments. These changes have necessitated a review of the costs incurred by the banks in
handling government business, which has been carried out by a Committee set up for this
purpose.
3. Accordingly, the agency commission rates on eligible government transactions to be carried
out with effect from July 01, 2019 shall be as under:
Sr. Type of Transaction Unit Existing Revised
No. Rates Rates
1 Receipts - Physical per transaction ₹ 50/- ₹ 40/-
2 Receipts – e-mode per transaction ₹ 12/- ₹ 9/-
3 Pension Payments per transaction ₹ 65/- ₹ 75/-
4 Payments other than Pension Per ₹ 100 turnover ₹ 5.5 paise ₹ 6.5 paise
4. Reference is also drawn to the instructions contained in our letter dated November 4, 2016
advising the process of claiming reimbursement of service tax on agency commission received
for Central and State Government transactions, based on which banks are submitting claims for
reimbursement centrally to Reserve Bank of India at Central Accounts Section, Nagpur. The
same process continued after ST got subsumed into the GST framework.
सरकार� एवं बक� लेखा �वभाग, केन्द्र�य कायार्लय, मुंबई स�ट्रल रेल्वे स्टेशन के सामने, भायखला, मुंबई - 008 400
Department of Government & Bank Accounts, Central Office, Opp. Mumbai Central Railway Station, Byculla, Mumbai - 400 008
Telephone: (022) 2308 4121, Fax No. (022) 2300 0370/2301 6072/2301 0095, e-mail : cgmicdgbaco@rbi.org.in
�हन्द� आसान है, इसका प्रयोग बढ़ाइए ।5. A review of this claim process has been done internally after observing significant delays and
discrepancies in the claims submission by agency banks. Based on this review and also taking
into consideration the references received from agency banks in this regard, it has been decided
to replace the current process of centralised claims submission with a system whereby applicable
GST (18% at present) shall be paid along with agency commission by the respective Regional
Offices of RBI / CAS, Nagpur as the case may be.
6. For eligible government transactions done with effect from July 01, 2019, agency banks shall
submit the agency commission claims, including applicable GST amount, as per revised agency
commission rates indicated above, to RBI at respective ROs / CAS, Nagpur as per the extant
instructions issued by RBI in this regard. TDS on GST shall be deducted as applicable by RBI at
the time of making agency commission payment.
7. However, for eligible government transactions done by agency banks upto June 30, 2019,
agency banks shall continue to submit agency commission claims as well as the claims for
ST/GST reimbursement as hitherto.
8. The revised rates will remain valid till the next review.
Yours faithfully
(Charulatha S. Kar)
Chief General Manager
सरकार� एवं बक� लेखा �वभाग, केन्द्र�य कायार्लय, मुंबई स�ट्रल रेल्वे स्टेशन के सामने, भायखला, मुंबई - 008 400
Department of Government & Bank Accounts, Central Office, Opp. Mumbai Central Railway Station, Byculla, Mumbai - 400 008
Telephone: (022) 2308 4121, Fax No. (022) 2300 0370/2301 6072/2301 0095, e-mail : cgmincdgbaco@rbi.org.in
�हन्द� आसान है, इसका प्रयोग बढ़ाइए ।