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No service tax on foreign remittances: Govt
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SME Times News Bureau | 11 Jul, 2012
The government said
Tuesday remittances sent from overseas will not be liable for service tax
charge, putting to rest the confusion that had arisen after the presentation of
union budget for 2012-13 in March.
"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," the Central Board of Excise and Customs (CBEC) said in a
circular.
The circular clarified that remittance does not comprise a "service"
and thus not subjected to service tax.
The clarification will be a major breather for the millions of Indian disapora
living abroad, especially those working in the Gulf countries, who are the
major source of remittance to India.
A confusion related to the service tax on remittances was created after the
then Finance Minister Pranab Mukherjee in the union budget for 2012-13
presented in March this year proposed to levy tax on all services except those
in the negative list.
Various organisations and political parties had asked the central government
not to levy any such tax on remittance.
The CBEC further clarified that any fee or conversion charges levied for
sending remittances are also not liable to service tax as the person sending
the money and the company conducting the remittance are located outside India.
"Such services are deemed to be provided outside India and thus not liable
to service tax," it said.
"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,"
it added.
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Commision received from Overseas Party
SN Patro | Tue Apr 29 04:11:43 2014
We have one company in India and Overseas many times we support to our Overseas Unit to promote the sales in India and accordingly we receive also commission from overseas party. In this whether TDS and Service tax will be applicable in India while receiving the Inward Remittance from Overseas party.
thanks and regards,
snp
Service Tax on Commission received from foreign company
IS | Tue Jul 24 11:38:17 2012
Buyer is "B" (Indian Company)
Seller is "S" (foreign company)
Commission Agent "C"
We are "C". We help the seller "S" (foreign company) receive order from "B". The order is placed on "S" directly and also payment by L/C is made to "S" directly by "B". After "S" receives payment they remit the commission from their country in foreign exchange directly to our bank account. Are we "C" liable to pay serviced tax ?
no servicetax for remittance
Thomas Kayvee | Wed Jul 18 06:31:02 2012
Its good news that govt of India will not levy service tax on remittance
by NRIs from foreign countries.I also strongly object collecting taxes
/cess in various names ,sales tax, vat, excise,customs import, wealth
tax,building tax,land tax,luxury tax, professional tax, octeroy, service
tax etc.A single point tax for all will be only a dream for Indians.We
can soon see a tax implemented for each individual for breathing
free-air and drinking water from natural resources as these are all
belongings of state . A good portion of taxes as public funds are stolen
by politicians and milliners keeping the "poor becomes more poor"
darker India !!As a true patriot we all shall try for a brighter India ! jai hind !!!
service tax
subramanian | Wed Jul 18 02:42:57 2012
What about tax on income from services provided to clients overseas, acquired through internet, but provided as offshore services payment received in forex through payment systems such as paypal but credited as INR in Indian bank accounts of teh service provide?
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