There Is No GST On Withdrawal Of Cash From Banks: FM Sitharaman

Mumbai: Finance Minister Nirmala Sitharaman has said there is no GST on the withdrawal of cash from banks. She added that 10 transactions from ATMs are totally free, including five from the parent bank and five from other banks’ ATMs.

The minister clarified during the five-hour-long price hike debate in Rajya Sabha on Tuesday that no GST is levied when people withdraw cash from banks.

Replying to CPI(M)’s Elaram Karim, he said that GST is levied only on banks as they buy check books from printers. She said no GST has been levied on ICU rooms and emergency services in hospitals and reiterated that there is no GST on loose food items to ensure that the poor are not burdened amid inflation.

The minister clarified that the tax is levied only on the construction of new crematoriums and not on existing crematoriums, morgues or funeral services.

“In fact, 10 ATM transactions are completely free from banks, this includes five transactions from the originating bank in which the customer has an account and another five for withdrawals from the ATMs of other banks… Also, a 5% tax is imposed only on hospital rooms that have a rent of ₹5,000 and above… There is also no tax on customer cheques,” she told the Upper House in a speech that went on for about an hour and a half.

Hitting out at the critics of the government, Sitharaman compared the prices of onions, tomatoes and potatoes during UPA-II with the current NDA government. Listing many items to protect the GST regime, he said that the prices of many essential commodities have come down due to the implementation of GST in the country.

She told the Upper House that earlier the tax on tooth powder was 17%, which was reduced to 12% under GST. Tax on hair oil reduced from 23.9% to 18%, on the soap from 29.9% to 18%, on footwear from 21% to 18%, on paint from 31.5% to 18%, on sugar from 6% to 5%, on washing machines 31.8% to 18%, and so on, she said.

The minister said that both the government and the Reserve Bank are taking steps to bring down inflation below 7% and then below 6%. The government has tasked the RBI to ensure that the consumer price index (CPI) based inflation remains at 4% with a margin of 2% on both sides.

“The Indian economy compared to the situation prevailing in our peer group economies and several developed countries is doing better. Our macroeconomic fundamentals are strong. Nobody is in denial about the price rise. We are not running away. The government has adopted a targeted approach, based on ground-level inputs, to tackle retail inflation which is ruling at around 7%,” she said.

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