The UPA government has decided to charge 12.36 per cent service tax from July 1 onwards on the fees paid by NRIs sending money to their country.
This service tax will be deducted from the remittances sent by employees, including many poor labourers, from the Gulf, the US and other places. This approach is the antithesis of the Government’s policy of encouraging exporters, who bring foreign exchange to India.
Non-resident Indians transfer more than $65 billion annually to dependents in India. These remittances account for more than 3 per cent of India’s GDP and have been instrumental in reducing the current account deficit by shoring up the country’s foreign exchange reserves.
States such as Kerala, Tamil Nadu and Punjab are among the regions worldwide that depend heavily on international remittance. The share of NRI remittance in the State’s net domestic product is 31 per cent in Kerala, 13 per cent in Punjab and 7 per cent in Tamil Nadu.
2 comments:
it is not 12.36% , its only 0.1236%
ie; if someone send 10,000 has to pay Rs.12.36.
I think media did this typo error.
The image that goes with the blog post is misleading.
The service tax is on fee charged by banks for transfer of the money and not the amount itself. So, the tax will be nominal and not Rs. 123/Rs. 1000. The tax will vary depending on the fee collected by banks but would be only a few rupees/ Rs. 1000.
It may be noted that Kerala Govt. spends large sums on NRK welfare while NRK income is exempted from IT.
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