Transactions fees of financial services become more expensive after government may put 18% tax in the new (GST) regime. According to one expert these services were so far taxed at 15% and the hike in the tax rate means that individuals will have to pay Rs 3 more for every Rs 100 paid for banking transactions.

Financial institutions can absorb this tax hike because companies do bulk transactions but individuals will certainly have to pay more, though be no large impact on demand.

Government has categorised 1211 items under various tax slabs in the new GST regime. The broad range of tax rates is between 5% and 28% with some goods like milk, eggs, fresh fruits, vegetables, fresh meat, fish, chicken, stamps, judicial papers, printed books, newspapers, etc are exempt according to the government announcement this week.
A large number of goods and services are kept under 18% tax slab. Financial services are bracketed together with AC hotels that serve liquor, telecom and IT services, branded garments,

A large number of goods and services are kept under 18% tax slab. Financial services are bracketed together with AC hotels that serve liquor, telecom and IT services, branded garments, flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, notebooks etc.
It can be termed as balancing act in prevailing circumstances. Even insurance premiums will go up depending on the structure of the policy and how much of the premium is classified as risk and how much is classified as investment. Banks also have to register their branches state-wise under

It can be termed as balancing act in prevailing circumstances. Even insurance premiums will go up depending on the structure of the policy and how much of the premium is classified as risk and how much is classified as investment. Banks also have to register their branches state-wise under a new regime, unlike currently when branches were registered through the bank’s headquarters.