The clarification follows concerns over reports that there was a move to levy 12% tax on money sent back home by Indians abroad under the changed service tax regime from 1st July
New Delhi: The Indian government on Tuesday said remittances from abroad will not attract service tax, putting to rest the concerns raised in view of new tax norms, reports PTI.
"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.
The clarification follows concerns over reports that there was a move to levy 12% tax on money sent back home by Indians abroad under the changed service tax regime from 1st July.
Emerging as the top recipient among developing nations, India received remittances of $64 billion in 2011, according to the World Bank data.
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.
CBEC said, "Concerns have been expressed in various fora regarding the leviability of service tax on the remittance of foreign currency in India from overseas."
It added, "remittance comprises money, the activity does not comprise a 'service' and thus not subjected 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.
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.
Kerala, Punjab, Tamil Nadu and Andhra Pradesh have maximum number of emigrants mostly in the Gulf.
Whether SEBI or IB acknowledges it or not in their report, tainted stock broker Ketan Parekh has been active in the markets all the time. Here is a clip from 2009 featuring Moneylife Managing editor Sucheta Dalal
A news report says that the Intelligence Bureau (IB) has unearthed a major scam in the stock market by tainted stockbroker Ketan Parekh. However, the same thing was said by market regulator Securities and Exchange Board of India (SEBI) in June 2009 as well.
According to Sucheta Dalal, Managing Editor, Moneylife, the government does not care about any report either from IB or from SEBI. "This (Ketan Parekh back in the market) bogey is on for a year. The 'Intelligence' Bureau bleats every month with very same names like KS Oils. They tap phones with impunity, submit reports routinely, but nothing happens. Ketan's 14 year ban will soon end, but have we heard about the Finance Ministry or SEBI order to start fresh investigations? Nope. Meanwhile IB-CBI-ED and others know about all the filmy companies where former cronies of Harshad Mehta and Ketan Parekh are working. A big one is involved the GDR scam that SEBI is ostensibly investigating -- this is the case where a GM of SEBI demanded Rs25 lakh as bribe," she said.
On 5 June 2009, the SEBI banned 26 entities alleged 'connected' with Ketan Parekh which had traded in Cals Refineries, Confidence Petroleum India, Bang Overseas, Shree Precoated Steels and Temptation Foods. In doing so, the regulator officially declared what was well known to the market, as Moneylife repeatedly pointed out-that Ketan Parekh has been active in the market and in manipulating the prices of small and medium scrips, despite the 14-year ban imposed on him and his associates in 2003.
In fact, Moneylife has pointed out he was rumoured to be active even in 2003 when SEBI first barred him from the market following the Joint Parliamentary Committee (JPC) report that named him as the central figure in the scam of 2000.
"Surprisingly, the govt and the opposition are studiously silent on the whole issue. And in the meanwhile Ketan has been permitted to go on a holiday to London. His wife and kid live there anyway and are believed to have taken British citizenship. Meanwhile, Madhavpura Mercantile Coop Bank of Ahmedabad has finally been shut down. This is the bank that Ketan Parekh and cronies looted for over Rs1,000 crore and have not been punished for it at all. The bank is in LK Advani's parliamentary constituency. Have YOU heard his thundering silence after its closure? The great Indian opposition - BJP was busy manipulating to keep it alive when the scam happened," said Ms Dalal.
According to the news reports a few days ago, the IB report submitted to government officials names companies like Dewan Housing, Goenka Diamond, Orchid Chemical, IVRCL, Pantaloon, TBZ IPO and GMR Infra as targeted by the KP and associates.
However, is it something really new? Sucheta Dalal, managing editor of Moneylife has been saying this and more throughout the years. Here is one of her interview done by CNBC TV18 which talks about the active involvement of Ketan Parekh in the stock markets...
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