13 August 2016
please give me the Idea about the service tax on the foreign currency conversion. 1. I have remitted USD 194405.25 @ 66.7675 through bank (i.e.Rs. 12979952.53). please give me the exact calculation about caption subject and other bank charges.? 2. Guide me about how accounting entry is done ? 3. can we claim the service tax credit charge by the bank ??
13 August 2016
Service tax on Sale and Purchase of Foreign exchange to others: As per Rule 6(7B) of Service Tax Rules Person Liable to pay service tax has option to pay service tax at full rate on value of services. The Service Tax payable is as Follows. 1. 0.14 % of Gross Amount of Currency Exchanged for an Amount up to Rs. 1 Lacs subject to minimum Rs.35 and 2. Rs. 140 and 0.07% of Gross Amount of Currency Exchanged for an Aount Exceeding Rs. 1 Lacs and Upto Rs.10 Lacs and 3. Rs. 770 and 0.014% of the gross amount of currency exchanged for an amount exceeding Rs.10 Lacs subject to maximum amount Rs. 7000 In your Case 1. The Service Tax amount is 770+(11979953*.014%)=Rs. 2447+0.05%SBC+0.05%KCC and bank charges is depends on bank 2. You can take made same entries as made for Expenses and 3. You can get Cenvat credit for as it falls as Input services
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