GST Applicability on Cash Service Charges for Non-Chest Branches
Current · Source: Reserve Bank of India · RBI/2022-23/112 · issued 06 Sep 2022 · ~1 min read
Quick answerRBI clarifies that service charges for cash deposited by non-chest branches at currency chests are exclusive of GST. Banks must add applicable taxes to the ₹5 or ₹8 per packet charges specified in earlier circulars.
The rule, in the simplest words
The ₹5 and ₹8 per packet (bundle of cash) fees for cash sent by non‑chest branches (branches without their own cash vault) are **before** adding GST (government tax), so banks must add the tax on top.
GST (tax) must be calculated and added to each packet fee, just like any other taxable service.
All banks that run currency chests (big cash vaults) must change their price lists and tell the non‑chest branches the new total amount they will be charged.
Treasury and operations teams must update their accounting software so it shows the tax‑inclusive charge and avoids penalties.
How it plays out — a real example
Rohit, a cash‑operations manager at a bank in Delhi, checks the daily cash‑deposit schedule. When a non‑chest branch in Jaipur sends a packet of notes, he now adds the GST amount to the ₹5 fee before billing the branch, and he sends a friendly email to the Jaipur manager explaining the new total.
What changed
RBI has clarified that the service charges of ₹5 and ₹8 per packet for cash handling by non-chest branches at currency chests are exclusive of GST. This means banks must now add applicable taxes on top of these base charges, as per earlier circulars from 2016 and 2019.
What it means for you
Banks with currency chests must revise their billing to include GST on service charges for non-chest branch cash deposits. This ensures compliance with tax laws and avoids disputes over charge amounts. Lenders should update their fee schedules and communicate the change to affected branches.
What you must do
Update service charge rates to include applicable GST on top of ₹5 and ₹8 per packet.
Communicate the revised charges to all non-chest branches and currency chest operators.
Review and adjust internal accounting systems to reflect tax-inclusive billing.
Ensure compliance with GST regulations to avoid penalties or queries.
Who it affects
All banks operating currency chests, Non-chest bank branches depositing cash at currency chests, Treasury and operations teams handling cash logistics
❓ Common questions
What are the base service charges mentioned in the circular?
The base charges are ₹5 per packet and ₹8 per packet, as per earlier circulars from January 2016 and May 2019.
Does this circular change the base service charge amounts?
No, it only clarifies that these amounts are exclusive of GST, so applicable taxes must be added.
When is this clarification effective?
The circular is dated September 6, 2022, and is effective from that date.
📜 Read the original circular — full text as issued by RBI
RBI/2022-23/112
DCM (NPD) No.S770/09.40.002/2022-23
September 06, 2022
The Chairman & Managing Director
Managing Director/ Chief Executive Officer
All Banks having Currency Chests
Madam/ Sir,
Incentive for improving service to non-chest branches
Please refer to circulars RBI/ 2015-16/ 293 DCM (NPD) No. 2564/ 09.40.02/ 2015-16 dated January 21, 2016 and DCM (Plg.) No 2845/ 10.25.007/2018-19 dated May 23, 2019 on the captioned subject.
2. We have been receiving queries regarding the applicability of GST on the service charges levied on cash deposited by non-chest bank branches to the Currency Chests. It is clarified that the amount indicated in the aforesaid circulars are exclusive of applicable taxes. Accordingly, the service charges mentioned in the aforesaid circulars is to be read as ₹5 plus applicable taxes per packet and ₹8 plus applicable taxes per packet, as the case may be.
Yours faithfully,
(Sanjeev Prakash)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2022-23/112 · issued 06 Sep 2022. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the revised charges to all non-chest branches and currency chest operators.
💻 IT / Systems
Review and adjust internal accounting systems to reflect tax-inclusive billing.
📜 Compliance
Update service charge rates to include applicable GST on top of ₹5 and ₹8 per packet.
Ensure compliance with GST regulations to avoid penalties or queries.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All banks operating currency chests, Non-chest bank branches depositing cash at currency chests, Treasury and operations teams handling cash logistics), your first concrete step on “GST Applicability on Cash Service Charges for Non-Chest Branches” is: “Update service charge rates to include applicable GST on top of ₹5 and ₹8 per packet.” (RBI issued this 06 Sep 2022).
Circular: RBI/2022-23/112 -- GST Applicability on Cash Service Charges for Non-Chest Branches
Issued: 06 Sep 2022
Action required: Update service charge rates to include applicable GST on top of ₹5 and ₹8 per packet.
Action required: Communicate the revised charges to all non-chest branches and currency chest operators.
Action required: Review and adjust internal accounting systems to reflect tax-inclusive billing.
Action required: Ensure compliance with GST regulations to avoid penalties or queries.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12383&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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