Rs 38,000 cr service tax dues: Govt mulls out-of-court deal to resolve issue with banks

Agencies
August 2, 2019

Bengaluru, Aug 2: The government may be inclined for an out-of-court settlement in its dispute with banks over unpaid service tax dues to the tune of Rs 38,000 crore with officials indicating a more flexible stance to resolve the outstanding issues.

Sources in the government said that officials in the Finance Ministry may soon meet bankers to thrash out a compromise formula to resolve the issue that has divided the banking industry and pushed it into taking legal recourse.

A meeting proposed last month to resolve the issue could not take place and sources now say that all efforts are being made to organise the banker-official meeting this month so that a compromise is worked out well before the next date of hearing by the Delhi High Court in November. A meeting of bankers with Finance Minister Nirmala Sitharaman is also slated on Friday.

About 13 banks, including State Bank of India and HDFC Bank, moved Delhi High court early last month against a government demand for service tax to the tune of Rs 38,000 crore. Their claim is that the government decision is arbitrary and the amount has been calculated by multiplying penalty with the total number of accounts held with the respective banks resulting in big increase in tax demand.

Other banks in the petition include Punjab National Bank, Yes Bank and Hong Kong and Shanghai Bank, among others.

The government made the service tax demand for "treating the commitment of the customers to maintain minimum average balance (MAB) in bank accounts as a consideration for banking facilities provided for free".

Though the demand is of Rs 38,000 crore, sources said that the total amount could reach up to Rs 60,000 crore if interest and penalty are both included. Of the current demand, HDFC Bank itself is facing a penalty of up to Rs 18,000 crore.

"The stakes are high and has the potential to put the banking segment under prolonged periods of disruption. Coming at a time when the NPA issues are getting resolved, the government is unwilling to risk further and may work out an out-of-court settlement," said a source privy to the development. 

At the last hearing on the matter, a division bench comprising Justice S. Muralidhar and Justice Talwant Singh had issued a notice to the Centre, the Central Board of Indirect Taxes and Customs, the Goods and Services Tax Council and other authorities on the petition filed by the banks. The next day of hearing is November 14.

Other than the Delhi High Court, similar petition is pending before the Madurai bench of the Madras High Court. In this case, three banks have approached the court for relief.

As per industry estimates, savings account holders have paid over Rs 10,000 crore to the banks in the last three years as penalties for not maintaining minimum balance in their savings accounts. The penalty for non maintenance of minimum balance also varies from bank to bank.

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News Network
December 7,2025

SHRIMP.jpg

Mangaluru, Dec 7: A rare bamboo shrimp has been rediscovered on mainland India more than 70 years after it was last reported, confirming for the first time the presence of Atyopsis spinipes in the country. The find was made by researchers from the Centre for Climate Change Studies at Sathyabama Institute of Science and Technology, Chennai, during surveys in Karnataka and Odisha.

The team — shrimp expert Dr S Prakash, PhD scholar K Kunjulakshmi, and Mangaluru-based researcher Maclean Antony Santos — combined field surveys, ecological assessments and DNA analysis to identify the elusive species. Their findings, published in Zootaxa, resolve decades of taxonomic confusion stemming from a 1951 report that misidentified the species as Atyopsis moluccensis without strong evidence.

The shrimp has now been confirmed at two locations: the Mulki–Pavanje estuary near Mangaluru and the Kuakhai River in Bhubaneswar. Historical specimens from the Andaman Islands, previously labelled as A. moluccensis, were also found to be misidentified and actually belong to A. spinipes.

The rediscovery began after an aquarium hobbyist in Odisha spotted a shrimp in 2022, prompting systematic surveys across Udupi, Karwar and Mangaluru. Four female specimens were collected in Mulki and one in Odisha, all genetically matching.

Researchers warn the species may exist in very small, vulnerable populations as freshwater habitats face increasing pressure from pollution, sand mining and infrastructure development. All verified specimens have been deposited with the Zoological Survey of India for future reference.

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News Network
December 15,2025

Mangaluru, Dec 15: Educational institutions in Mangaluru that rely on the popular Mangala Stadium for their annual sports events are bracing for an inconvenience as the city's key sporting venue is set to close its gates for a significant upgrade. The stadium is expected to be unavailable for approximately two months starting from January 15, 2026.

The closure is necessitated by a proposed overhaul of the stadium's facilities, with a special focus on upgrading the synthetic track. Pradeep Dsouza, Assistant Director of the District of Youth Empowerment and Sports (DYES), Dakshina Kannada, confirmed the development.

"Experts have visited the stadium, conducted a thorough inspection, and have given the go-ahead for a complete makeover," Dsouza stated. "Funds have been allocated for the project, and we are currently awaiting the final green signal from state officials to commence the work. We anticipate that the work will likely begin in the second week of January. Consequently, we have stopped renting out the stadium to colleges and other organizations in preparation for the upgrade."

The timing presents a logistical challenge for colleges, as many schools have already concluded their sports meets.

"Colleges will now be organizing their events and will need to find alternative locations to host their sports meets," Dsouza added. He suggested a few potential venues, including the Dakshina Kannada police ground, University College grounds, Panambur grounds, Swaraj Maidan in Moodbidri, and the Mangalore University sports grounds in Konaje.

However, many institutions note that finding a comparable venue will be difficult. While the DK police ground and University College grounds are closer to the city center, they do not possess the extensive facilities and infrastructure offered by Mangala Stadium.

Dr. P Dayananda Pai - P Satisha Govt First Grade College, Carstreet, is one such institution dependent on the stadium. Principal Jayakar Bhandary expressed hope for a swift completion of the work. "We expect the work to be completed at the earliest. If not, we will be forced to look for other venues to host the sports day for our students," Bhandary said, highlighting the pressing need for the city's main sporting facility.

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News Network
December 15,2025

Mangaluru, Dec 15: Air India Express has announced that it will resume direct flight services between Mangaluru and Muscat from March 2026, restoring an important international air link for passengers from the coastal region.

Airport authorities said the service will operate twice a week—on Sundays and Tuesdays—from March 1. The initial flights are scheduled on March 3, 8 and 10, followed by March 15 and 17, with the same operating pattern to continue thereafter. The flight duration is approximately three hours and 25 minutes.

The Mangaluru–Muscat route was earlier operated under the 2025 summer schedule, with services beginning on July 14. At that time, Air India Express had operated four flights a week before suspending the service.

Officials said the summer schedule will come into effect from March 29, after which changes in flight timings and departure schedules from Mangaluru are expected. Passengers have been advised to check the latest schedules while planning their travel.

The resumption of direct flights to Muscat is expected to significantly benefit expatriates, business travellers and others, further strengthening Mangaluru’s air connectivity with the Gulf region.

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