Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
(Tax Research Unit)
Circular No. 163/ 14/2012 –ST
Room No 146, North Block, New Delhi-1,
Dated the 10th July 2012.
To
Chief Commissioner of Customs and Central Excise (All)
Chief Commissioner of Central Excise & Service Tax (All)
Director General of Service Tax
Director General of Central Excise Intelligence
Director General of Audit
Commissioner of Customs and Central Excise (All)
Commissioner of Central Excise and Service Tax (All)
Commissioner of Service Tax (All)
Madam/Sir,
Subject: Clarification on service tax on remittances - regarding.
Concerns have been expressed in various forums regarding the leviability of
service tax on the remittance of foreign currency in India from overseas.
- 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 list regime, ‘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.
- In case any fee or conversion charges are levied for sending such money, they
are also not liable to service tax as the person sending the money and the
company conducting the remittance are located outside India. In terms of the
Place of Provision of Services Rules, 2012, such services are deemed to be
provided outside India and thus not liable to service tax.
- It is further clarified that even the Indian counterpart bank or financial
institution who charges the foreign bank or any other entity for the services
provided at the receiving end, is not liable to service tax as the place of
provision of such service shall be the location of the recipient of the service,
i.e. outside India, in terms of Rule 3 of the Place of Provision of Services
Rules, 2012.
- This Circular may be communicated to the field formations and service tax assessees, through Public Notice/ Trade Notice. Hindi version to follow.
Yours faithfully,
(Dr. Shobhit Jain)
O.S.D. (TRU)
Fax: 23095590
F. No. 354/ 119/2012- TRU