TMI BlogLevy of service tax on activities involved in relation to inward remittances from abroad to beneficiaries in India through MTSOsX X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Board of Excise Customs, on the above subject is reproduced below for information, guidance and necessary action. Vide circular No 163/14/2012-ST, dated 10th July, 2012, on the issue of levy of service tax on the activities involved in the inward remittance it was clarified that there is no service tax per se on the foreign exchange remitted to India from outside for the reason that money does not constitute a service and that conversion charges or fee levied for sending such money would also not be liable to service tax as the person sending money and the company conducting the remittance are both located outside India, It was also clarified that the Indian bank or financial institution who provides service to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Step 3: C t may avail service of a sub-agent (D). (D' charges fee/commission from 'C' Step 4: 'C' or 'D' as the case may be, delivers the money to 'E' and may charge a fee from (E 3. Clarifications have been sought as to whether such agents (referred in Step 2 above)a would fate in the category of intermediary, and if so, whether service tax would be leviable on the commission/fee amount charged by such agents. Clarifications have also been Sought as to whether the services provided by sub agent (referred in step 3 4 above) are leviable to service tax and on certain other related issues. 4. The issues discussed above have been examined and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as mentioned in point 2 above, by an intermediary/agent located In India (in taxable territory) to MTSOs located outside India? Service provided by an intermediary is covered by rule 9 (c) of the Place of Provision of Service Rules, 2012. As per this rule, the place of provision of service is the location of service provider. Hence service provided by an agent, located in India (in taxable territory), to MTSO is liable to service tax. The value of intermediary service provided by the agent to MTSO. is the commission or fee or any similar amount, by whatever name called, received by it from MTSO and service tax is payable on such commission or fee. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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