What changed
RBI revised and updated the master circular on agency commission, consolidating instructions issued up to March 31, 2023. The circular clarifies that stamp duty collected via physical or e-mode (challan-based) is eligible for commission, provided banks do not charge the public or receive separate remuneration from the state government. It also reiterates that banks' own tax liabilities paid through their branches are not eligible for commission and must be separately indicated.
What it means for you
For banks acting as agency banks, this circular provides a consolidated reference for claiming commission on government business, reducing ambiguity. The clarification on stamp duty ensures banks can claim commission for legitimate collections, but they must avoid double remuneration. Banks must tighten internal controls to exclude own tax payments from commission claims, as non-compliance could lead to claim rejections or audits.
What you must do
- Review and update internal processes to ensure stamp duty collections via challan (physical or e-mode) are claimed for commission only when no charges are levied on the public or separate state government remuneration is received.
- Implement a mechanism to separately identify and exclude own tax liabilities (e.g., TDS, corporation tax) paid through your branches from agency commission claims, and furnish the required certificate.
- Ensure that claims for agency commission on eligible transactions, including small savings schemes and special deposit scheme transactions, are submitted to RBI's Central Accounts Section, Nagpur, in accordance with instructions.
- Ensure that no claim of agency commission is made on ineligible transactions as specified in the circular.
Who it affects
All agency banks appointed under Section 45 of the RBI Act, 1934, Branches handling government revenue receipts, payments, and pension disbursements, Banks involved in small savings schemes and stamp duty collection
Are we eligible for agency commission on stamp duty collected via e-mode?
Yes, if the stamp duty is collected through challan (physical or e-mode) and your bank does not charge the public or receive separate remuneration from the state government for this work. However, if your bank acts as a franking vendor and collects stamp duty for franking, that transaction is not eligible for commission.
How should we handle our own tax liabilities in commission claims?
Your bank's own tax liabilities (e.g., TDS, corporation tax) paid through your branches or other agency banks must be separately indicated in the scroll and excluded from agency commission claims. You must also furnish a certificate confirming this exclusion.