India Has Decided To Impose Service Tax on NRI Remittances. So NAPA Tears And Urges Its Immediate Withdrawal
Indian Diaspora is upset over India’s decision to impose service tax on their remittances.
Satnam Singh Chahal executive director Of North American Punjabi Association (NAPA) said that it is surprising that when many countries are offering incentives for legal fund transfer, India is imposing tax on NRI remittance to India and this tax will not only discourage to India Diaspora for sending the money to India but also this move of the Indian government could affect the low-paid NRIs badly as financial institutions will not bear the imposed extra costs.
Even though NRIs are not directly taxed, indirectly it will affect us as the Indian banks and other intermediaries will increase their fees. To cover the increased costs, outside banks, agents and money exchanges will increase the chargeable fee/commission to NRIs.Said Chahal.
Chahal. added. 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 is located outside India. In terms of the Place of Provision of Services Rules, 2012, such services are deemed to be provided outside India and thus not liable to service tax,” the agency had said in a circular dated July 10, 2012..NAPA demanded immediately withdrawal of more tax on NRI remittance