Question:

Regarding Service Tax applicable to NRIs with effect from 1st July, 2012. Could you please explain whether the service tax will be charged on the amount NRIs send to bank account? (i.e.if INR1.00 lakh is sent, whether bank will charge 12.35% on this amount)
- Suresh Thampi

Answer:

no. service tax will be applicable only if the bank has levied any charges on account of the money transfer. for exammple, if the bank has charged rs 100 as their service charges, only rs 12.36 can be levied. this has been confirmed by Dr Manmohan Singh to Chief Minister Mr Oommen Chandy as well as Mr Vayalar Ravi as per media reports.
K.C Joseph Varghese FCA
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