Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: empanelment :: form 3cd :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ACCOUNTING STANDARD :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: VAT Audit
 
 
Service Tax »
 IT infrastructure firm of GST under scrutiny for tax evasion
 GST council OKs draft law on relief to states
 GST Network gets notice for avoiding service tax
 GSTN contract may attract tax
 GST Council may discuss tax rate on gold at Udaipur meet
 Govt may rework indirect tax estimates mid-way after GST
 GST Council meeting: States allowed to tweak taxpayer division after consulting Centre
 Government may rework indirect tax maths mid-way after GST entry
 Govt may rework indirect tax mid-way after GST entry
 GST rollout will reduce disparity among states
 GST: E-tailers oppose tax laws

Bank profits may be hit by service tax
June, 02nd 2008

All forex transactions have gotten costlier by about Rs 100, because of the imposition of service tax. However, the bigger problem for banks is paying service tax on all interbank foreign exchange transactions. This could wipe out profits.

 You may not have noticed it but you are perhaps paying a little more every time you buy from or sell foreign currency to a bank. That is because service tax has been imposed on all your foreign exchange transactions. Several banks have started levying a flat fee of Rs 112.36 on all forex services from May 16.

 Under the new rules, banks will be taxed 0.25% of all forex amount transacted, or 12.36% of the fee they charge on forex transactions.

 This is an option given to the bank. If it knows the value or if it wants to ascribe a value to this particular activity, it is open to the bank or an entity given to ascribe a value and pay an applicable service tax at an applicable rate i.e 12.36%, said Uday Pimprikar, Associate Director, E&Y.

 The big problem for banks is that they have to pay this 0.25% tax on their inter-bank forex transactions as well as transactions with the RBI.  The Indian Banks' Association is meeting the central board of excise and customs next week to reconsider this clause.

 There are certain operational issues arising out of this which we are discussing. We are going to hold a meeting next week and whatever loose ends are available, we will try and sort it out, said H Sinor, Chief Executive, Indian Banks Association.

 Bankers point out that daily transaction in the market amount to USD 33 billion. In 240 working days, this will be USD 7.9 trillion and 0.25% of this will amount to USD 20 billion in service tax. That is a figure that can wipe out half the oil subsidy as well as the profits of all the banks. So, it looks like a rethink of this clause should come soon.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions