INTRODUCTION TO MULTIBANKING SCHEME

"One Bank One Commissionerate" Scheme was introduced in 1986 with the objective of ensuring better accounting and reconciliation of revenue receipts and to monitor delays in remittances of government funds, Th,ese objectives were well served over the years and the average percentage delay in remittances has been reduced to less than 2%. With the increasing revenues and expanding scope for Indirect Taxes there has been a persistent demand for allowing more banks including private sector banks to collect Indirect Taxes. The Finance Secretary under the Chairpersonship of the PR. CCA, CBEC to review the existing banking arrangements. The committee inter-alia recommended that :

• Up to 5 banks in a commissionerate can be authorised presently for Excise and Service Tax collection depending upon the work-load, assessee convenience and taking in to consideration the administrative exigencies and requirements.
• In view of their technological capabilities, complete computerisation and value additions in services in terms of validation challans at source, faster remittance of funds to Government Account and transmission of data electronically, Private Sector Banks could also be involved for CBEC work.

Recommendations of the committee were accepted by the Central Board of Excise and Customs as well as by the Controller General of Accounts. The Task Force on Indirect Taxes headed by Dr. V.V. Kelkar. Advisor to the finance minister also recommended the Introduction of additional banks including private banks for Indirect Taxes collection.

Nomination of additional banks has been taken up during the year 2003-2004 in phases, covering metros in the first phase. Public sector banks have been nominated as additional banks for Central Excise Commissionerates Delhi I to IV, Mumbai I to V, Belapur, Raigarh, Thane I and II, Bangalore I to III and Chennai I to IV. The Reserve Bank of India and the Controller General of Accounts have accorded approval of induction of Private Sector Banks such as HDFC Bank, ICICI Bank, UTI Bank and IDBI Bank for dealing the Government business including indirect tax revenues. This is now under active consideration (October 2003).