The Business Correspondent Federation of India (BCFI) wants the government to remove the Goods and Service Tax (GST) imposed on senders, especially migrant workers when they make a domestic money transfer to a rural area through Business Correspondents (BCs).

Currently, BCs charge the senders 1% of the money to be transferred as a transaction charge. This includes 18% GST. If a migrant worker sends ₹2,000 to his family via a BC agent. He has to pay 1% of the amount being transferred as a transaction charge. That is ₹20, under which the GST component is ₹3.60. Sunil Kulkarni, CEO & Head, BCFI, spoke about one segment of the population being fully banked, with the tech-savvy among them accessing online funds transfer services such as the National Electronic Funds Transfer (NEFT) free of charge, while on the other hand, migrant workers in cities have to pay GST for sending money through BCs to their families in rural areas.

The Federation, which is the national federation of Corporate BCs and Agent BCs in India, is of the view that at least the GST burden on the sender in the transaction fee on DMT via BCs should be removed.