Induction of Banks for conduct of State Government Business – Handling of Tax Business


Based on the recommendations of the State Government Andhra Pradesh and the Reserve Bank of India, in the reference has authorized the Oriental Bank of Commerce to undertake Government business in all divisions of the State of Government of Andhra Pradesh for collection of Commercial Taxes/A.P.V.A.T. and refunds on behalf of Government of Andhra Pradesh through e-payment mode subject to the condition that the existing system for reporting of State Government transactions to Reserve Bank of India will be followed. Further, to follow the instructions contained in the “Memorandum of Instructions – Accounting & Reconciliation – State Government Transactions” and the other instructions issued by the Reserve Bank from time to time in the matter.

Under the new A.P. Value Added Tax Act and Rules, a monthly refund may be required and such frequent refunds may be difficult to implement under Treasury Rules. It is not possible to apply SR.27 TR.16 to VAT if monthly refunds are to be provided to dealers. The Revenue Department has proposed to entrust refunds of Plastic VAT Dealers under A.P.VAT Act through the Oriental Bank of Commerce.

The Oriental Bank of Commerce has entered into Memorandum of Understanding with Director of Treasuries and Accounts, A.P., Hyderabad for collection of Commercial Taxes/A.P.V.A.T. and refunds on behalf of Government of Andhra Pradesh through e-payment mode.

Government after careful consideration of the matter, hereby entrust the work of collection of Commercial Taxes, A.P.V.A.T. and refunds to Oriental Bank of Commerce through physical and online mode in all divisions of the State of Government of Andhra Pradesh for a period of one year from 15.02.2013 to 14.02.2014 in relaxation of S.R.27 under T.R. 16 of A.P.Treasury Code Volume-I with the following conditions:

i) The Revenue Department and the Commissioner of Commercial Taxes Department shall establish connectivity between Commercial Tax Department, Oriental Bank of Commerce enabling efficient collection of taxes as ordered in G.O.Ms.No.72, Finance (TFR.I) Department, dated 31.03.2007.

ii) Keeping in view of the importance of collection of revenue it is imperative that the funds are collected efficiently and passed on to the Government in the minimum possible time. To monitor this aspect the bank collecting commercial taxes on behalf of the Government shall submit a report (as per proforma-I in
annexure to G.O.Ms.No.224, Finance (TFR.I) Dept. dated 12.09.2005 appended to this order on weekly basis, to Finance (DCM.I) Department containing the information regarding daily collection of tax, the date of remittance of tax proceeds to the Government account and reasons for any delay of credit to the Government account and refund of tax. Further, details of the cheques above Rs.1.00 lakh remitted by dealers as commercial tax such as the date of presentation of the cheque by the dealer to the bank, date on which the proceeds of the said cheque are remitted to the Government account and reasons for any delay should be reported on a weekly basis (as per proforma-II to G.O.Ms.No.224, Finance (TFR.I) Dept. dated 12.09.2005 appended to this order) to Finance (DCM.I) Department.

iii) The Banks shall submit the data in the electronic form by adopting the software already designed by the Government.

iv) For all other refunds including those under APGST Act and other refunds of VAT Dealers, the procedure already prevailing shall be continued as ordered, in the reference 1st read above.

The Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad is requested to monitor the transactions of the above Bank and ensure that the amount collected is credited without any delay and refunds made are genuine and authorized.

The Bank is liable for any unauthorized refunds made by them as determined by the Commissioner of Commercial Taxes, Andhra Pradesh.

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