Service tax on remittances

Ministry of Finance, Central Board of Excise and Customs has clarified that no service tax is appliable on remittances from abroad in foreign currency. The "service" as defined in section 65B(44) of the Finance Act, 1994 excludes transaction in money. Since remittance amounts to transaction in money, the service tax becomes not applicable. Any fee or conversion charges levied by the foreign banks or by their Indian counterparts to the foreign banks are also out of the ambit of the service tax because the place of rendering the service is outside India and therefore the Place of Provision of Services Rules 2012 does not apply to that service. A welcome clarification from the CBEC, but I wonder why it is issued as a circular by the CBEC and not as a notification by the service tax department.

I would also wonder if the CBEC would clarify how "acting" becomes a service and actors have to pay service tax on their acting!! Bizarre!!

A copy of the CBEC circular can be found here