NRIs have a reason to cheer as remittances from abroad will not attract service tax and same has been clarified by govt (Central Board of Excise and Customs) of CBEC has issued a clarification on the subject. The logic behind waiver is that remittance comprises money, the activity does not comprise a 'service' and thus not subjected to service tax.
The CBEC further clarified that Indian bank or financial institution which charge the foreign bank for the services provided at the receiving end, is not liable 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, the circular issued by the Board said.
It is worthwhile to note that India received remittances of USD 64 billion in 2011 and this data is authenticated as it comes from World Bank.
Chief Ministers of Punjab and Kerala, which are among the states receiving the largest remittances from expatriates, had taken up the matter with Prime Minister Manmohan Singh.
Kerala, Punjab, Tamil Nadu and Andhra Pradesh have the maximum NRIs abroad and now they can send all the more loads of money to India and can participate in the growth of the nation and we can make India a force to reckon with. Are you contributing for the progress of the nation.
