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PRESS INFORMATION BUREAU
GOVERNMENT OF INDIA
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CBEC ISSUES CLARIFICATION REGARDING LEVIABILITY OF SERVICE TAX ON
THE REMITTANCE OF FOREIGN CURRENCY IN INDIA FROM OVERSEAS
New Delhi: Ashadha 19, 1934
July 10, 2012
The Central Board of Excise and Customs (CBEC) issued today necessary clarification regarding the
leviability of service 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 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.
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