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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?
 E-way relief, for now, to e-commerce, courier firms sending small orders

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 2018 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