BANGALORE, June 29: The finance ministry will soon convene a meeting of all nationalised banks to ensure smooth collection of the undisclosed income declared under the voluntary disclosure scheme (VDS).

Revenue secretary NK Singh said ``We will soon meet the bank heads to facilitate tax collections received under the VDS". There is a general fear among public that lump sum cash payment disclosed under VDS will not be accepted by banks, he said adding that a solution is expected soon.

According to senior Income-Tax Officers (ITOs), queries are pouring in about the mode of payment of tax under VDS. "Obviously, people are unwilling to give a cheque for the tax payable under VDS but they are equally worried as the banks have been hesitating to accept large amounts in cash," the official said.

Various suggestions including participation of private sector banks in VDS collections, are under consideration of the revenue department, the officials added.

When asked if the ministry is doling out more incentives to the VDS, Singh said that the proposal for allowing people to retain a part of their property held abroad is under consideration. The proposal was put forth by various chambers of commerce.

"The central board of direct taxes (CBDT) has already requested the Reserve Bank of India to look into the matter", he said. The board is ready to accept the proposal provided it complies with the suggestions made in the Tarapore Committee report, he added.

The VDS which is being launched next week, will remain open till December 31. The CBDT is spending Rs 30 crore on the publicity of the scheme for which high-profile ad firms, HTA and O&M, have already been hired.As regards notification on the 5 per cent service tax on transportation of goods by road, Singh said that it is under progress.

The transporters had gone on a nation-wide strike in April protesting against the levy of the service tax. The strike was withdrawn only after the Finance Minister stayed the implementation of the tax.

The service tax cover was extended to various areas in the Budget. So far, the ministry has issued notification only in case of custom house agents and steamer agents.

The service tax notifications for air travel agents, tour operators and car rental agencies, out-door caterers, pandal contractors and mandap keepers, manpower recruitment agencies and consulting engineers were approved by the central board of excise and customs on Friday, Singh said.

The notices will be issued next week, he added.

Besides getting feedback on VDS, Singh solicited views of officials on the revenue target set for each department for 1997-98.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.