Pay commercial taxes through banks

The Karnataka government, in association with the State Bank of India, has announced the launch of a scheme to remit commercial taxes through banks. The scheme has been put into operation in Bangalore on a pilot basis and is likely to be implemented across the state within the next 2-3 months.

All bank branches that come under SBI's network and its associate banks will now be able to collect taxes. Tax can also be remitted at any other bank if permitted by the Reserve Bank of India.

"Tax payment measures must always be simplified. This method of payment through banks should help us to introduce VAT. The mode of payment will be reviewed every three months," Siddaramaiah, deputy minister and finance minister said.

The scheme will help dealers quickly get challan copies for remitting the taxes. Cheques will be collected on a T+1 basis, that is, the tax will be credited to the government on the day following the depositing of the cheque. Hitherto, dealers were paying monthly taxes and other tax dues only at their jurisdictional offices.

They would now be able to pay it either at any of the designated 73 branches of the SBI group or at the jurisdictional office.

This scheme is expected to greatly convenience the dealers because the jurisdictional office is located in one of the 11 buildings housing nearly 150 offices in the tax department, whereas, the 73 branches of the designated banks are spread across the city.

In his address, Ashok Kumar C Manoli, Commissioner of Commercial Taxes, government of Karnataka, said, "We will stabilise this scheme in the next 2-3 months. The government intends to introduce this in many other banks and this is an effort towards the smooth initiation of VAT."

The state government has set itself a target of Rs 10,024 crore to come from tax collection during the current fiscal, when compared to Rs 8,101.24 crore during the previous fiscal. Of this, nearly 78 per cent of the amount is expected to be contributed by Bangalore.