1. It is clarified that there is no service
tax per se on the amount of foreign currency remitted to India from overseas.
2. 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,
theactivity 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. ( As per Place of
Provision of Services Rules,2012,
such services are deemed to be provided outside India and thus not liable to
service tax.)
4. If 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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