No service Tax on foreign remittances

0 comments Thursday, July 12, 2012

CBEC issues Clarification Regarding Leviability of Service Tax on the Remittance of Foreign Currency in India from Overseas
The Central Board of Excise and Customs (CBEC) issued today necessary clarification regarding the leviability ofservice tax on the remittance of foreign currency in India from overseas. Various concerns have been expressed at different forums in this regard.
The CBEC through a circular issued today stated that the matter has been examined and it is clarified that there is no service tax per se on the amount of foreign currency remitted to India from overseas. In the negative listregime, ‘service’ has been defined in clause (44) of section 65B of the Finance Act 1994, as amended, which excludes transaction in money. As the amount of remittance comprises money, the activity does not comprise a ‘service’ and thus not subjected to service tax.
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