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Clarification on service tax on remittances - Service Tax - SERVICE TAX TRADE NOTICE NO. 10/2012Extract GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX SERVICE TAX TECHNICAL SECTION 71. CLUB ROAD, BELGAUM-590001 C. NO. IV/16/26/2012 ST (Tech.) Dated: 26.07.2012 SERVICE TAX TRADE NOTICE NO. 10/2012 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. 2. 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. 3. 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. 4. 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. 5. The content of the above may be brought to be notice of all the constituent members of the trade and industry. (Authority: Board's Circular No 163/14/2012-ST dated 10.07.2012 issued from file F.N0. 354/119/2012-TRU, New Delhi) (V.B. DESPANDE) ASSISTANT COMMISSIONER ST (TECH)
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