Mumbai, July 3: The newly-launched Goods and Services tax impacts not just the money in your pocket, but that inside ATMs also. With Automatic Teller Machines (ATMs) placed under the highest tax bracket of 28 per cent, small banks will have to bear higher costs to make ATM facilities available to the public.
The higher costs for sourcing ATMs will be compounded by the increased taxes placed on servicing the cash dispensing machines. While the tax rate placed on servicing was 15 per cent pre-GST, the rate has risen to 18 per cent after the nationwide tax network was introduced.
According to a report in the ET, the Confederation for ATM Industry (CATMI) will be requesting a revision in the current slabs that ATM machines and services fall under, by sending a representation to the GST Council, the revenue secretary and the Ministry of Finance.
Ravi Goyal, managing director of AGS Transact Technologies that deploys ATMs, is also quoted by the report as having stated, “As an industry, we are planning to reach out to the government to bring ATMs on par with other payment terminals as otherwise there will be a general 7-8 per cent increase on the cost of terminals. The biggest advantage for banks is that now they will be able to claim input tax credit on GST which will improve their cash flows and help their businesses.”
There are over 2 lakh ATMs across India that will be affected by the high tax rate under GST. However, post-demonetisation electronic payment options are becoming more and more popular as people rely less on cash. This has meant that the growth of the ATM network has been temporarily halted.