AIBOC CIRCULAR NO. 11 DATED 23.02.2010

AIBOC issued its circular No. 11 on Fringe Benefit Tax which is hurting Bank Officers most. We are reproducing the same here.

CIRCULAR NO.11                                     23.02.2010

TO ALL AFFILIATES/MEMBERS:

FRINGE BENEFIT TAX TO HURT THE BANK OFFICERS MOST - 

EXECUTIVE COMMITTEE OF THE CONFEDERATION TO PURSUE THE ISSUE - 

SUB-COMMITTEE CONSTITUTED TO EXAMINE LITIGATION ETC.

One of the burning issues that came up for discussion in the meeting of the Executive Committee of the All India Bank Officers’ Confederation held at Goa on 17^th February 2010, was the impact of the Tax on Perquisites introduced during the last year budget, making it obligatory on the part of the employees to bear the tax burden; wherein there was a choice to the employers in the earlier budget to take this burden on themselves.  The Committee also took note of the impact of the tax burden on the Officers working in the bank when all the benefits provided to them for the efficient conduct of the banking business, are monetized and considered as income.  The Bank Officers are treated as civil servants for all purposes by the Government.  The Bank Officers’ Service Conditions are akin to Civil Service Rules applicable to the Central Government employees.  Some of the facilities that are available to the Civil Servants are not available in total to the Bank Officers and they are being provided alternative benefits to take care of those lacunae for a long time.  For example, the provision of quarters as available to the Civil Servants was made on a limited scale in the earlier days.  However, as the banking industry expanded, the managements of the Banks provided the benefit of leased accommodation in lieu of quarters, and provided certain facilities for its up keeping and also furnishing the house provided to them.  Similarly there are certain perquisites which are required for the efficient conduct of the banking business; such as conveyance, entertainment, provision of news papers, magazines etc.  These facilities cannot be converted into income and at most these benefits are to arm the officers with sufficient leverage to face the competition in an effective manner.  Hence, taxing these items at the hands of the Officers is a huge burden on them and it needs to be exempted from tax as in the case of Government servants.  Or the burden may be borne by the employer and the officers should not be called upon to pay the tax on these facilities.

During the course of the deliberations members made several observations and also the possible impact it would have on the take home salary of the Officers who are already under great pressure due to increasing inflation and cost of living.  After detailed deliberations the members were of the unanimous view that;

a) The Confederation should explore the possibility of getting this tax exempted by insisting that the employer should bear this burden;

b) The Confederation should consider the possibility of litigation to protect the interests of the Officers’ fraternity in the banking industry;

c) For the purposes of speeding up the possibility of a legal remedy a Committee should be set up to take up the task on urgent basis.

It was therefore unanimously decided to constitute a Sub-Committee to see that the issue connected with the legal aspect including the study of the entire subject, obtaining the legal opinion and the possibility of seeking justice in the Supreme Court on the basis of principle of equity etc., are completed expeditiously.  The Sub-Committee set up for the purpose is as follows:-

1)  Com.K.D.Kheda,            Advisor AIBOC                  Convener

2)  Com.T.N.Goel,              Jt.General Secretary          Member

3)  Com.M. Govindarajulu    Jt.General Secretary          Member

The President and General Secretary of the Confederation will be the special invitees.  The Committee will meet and chalk out the necessary action programme to speed up the whole exercise and to resolve this burning issue.

Comrades, the Confederation is confident of taking the issue to the logical end, either through pursuasion and discussions or through litigation, so that our members are relieved from this burden.  The members who are desirous of sending their suggestions/comments on the subject may please forward to our Head quarters on or before 28^th February 2010, for onward transmission to the Sub Committee for their consideration.

All our affiliates/members are requested to await further developments in the matter.

With greetings,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY