Penalty mechanism for banks enforces incentives and restrictions for timely, accurate GST remittance and reporting compliance.

A transparent incentive/penalty regime will tie banks' eligibility to collect GST receipts to timely remittance and error free reporting, administered by the relevant Accounting Authority; RBI and Accounting Authorities will define required validations and capabilities, and banks that fail to implement them shall not be permitted to collect GST receipts, with a long term service quality rating envisaged.

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