Services by the Reserve Bank of India - Service Tax Practice Manual / Ready Reckoner - Service Tax

Chapter 2 Services by the Reserve Bank of India Effective date: 1.7.2012 Scope of Negative Service Section 66D (b) Services by the Reserve Bank of India (RBI) Meanings and Definitions: Section 65B(42) - Reserve Bank of India means the bank established under section 3 of the Reserve Bank of India Act, 1934; (2 of 1934.) Services provided to RBI are not specified in negative list. Therefore, service provided to RBI will be taxable service. If service provided to RBI comes under reverse charge, RBI is liable to pay service tax. As per Notification no. 6/2014-ST, dated 11-7-2014 , services received by RBI, from outside India in relation to management of foreign exchange reserves will be exempt from service tax. Here management means any specialized financial services received by RBI such as external asset management, custodial services, and securities lending services in relation to foreign exchange reserve. Clarification by the Board (Taxation Guide Guidance Note 4 Exemptions dated 20.06.2012) 4.2.3 Would services provided by banks to RBI be also taxable? Yes. Services provided by banks to RBI would be taxable as these are neither in the negative list nor covered in any of the exemptions.