The Government has exempted services provided by a business facilitator or a business correspondent to a banking company with respect to basic savings bank deposit accounts covered by Pradhan Mantri Jan Dhan Yojana (PMJDY) from payment of service tax. Further, services provided by any person as an intermediary to a business facilitator or a business correspondent for these services have also been exempted from service tax.

PMJDY, a national mission on financial inclusion, was announced by Prime Minister Narendra Modi in his Independence Day 2014 speech and was formally launched by him on August 28 the same year with the main objective of covering all households with at least one bank account per household across the country. So far, over 18.7 crore accounts have been opened under the scheme.

As per RBI guidelines, the accounts that can be opened under PMJDY are basic savings bank deposit accounts (BSBDA) which can be of zero balance. Deposit in accounts opened under the government’s flagship financial inclusion programme has exceeded Rs 25,000 crore.