Clarification on service tax on inward remittance

Sumit Grover (Chartered Accountant )     14 October 2014

Sumit Grover
Chartered Accountant  
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Vide Circular 180/06/2014 – ST, dated 14th Oct'14, following issues have been clarified by CBEC:

1) No service tax is payable on foreign currency remitted to India from overseas.

2) Services provided by agent or the representation service provided by an Indian entity/ bank to a foreign money transfer service operator (MTSO) in relation to money transfer falls in the category of intermediary service, therefore the same shall be subject to service tax.

3) Sub-agents all under the category of intermediary services as well.

4) Service tax would apply on the services provided by way of currency conversion by a bank /entity located in India (in the taxable territory) to the recipient of remittance in India

5) Amount charged separately, if any, by the Indian bank/entity/agent/sub-agent from the person who receives remittance in the taxable territory, for the service provided by such Indian bank/entity/agent/sub-agent, also falls in the ambit of service tax.

The aforesaid circular may be accessed from the link hereinbelow:


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@VaibhavJ (Believe!! Live your dreams!)     14 October 2014

Believe!! Live your dreams! 
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Thanks for sharing imp info..

varun (partner)     15 October 2014

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is paypal service charges covered under new circular?


dinesh sehgal   26 February 2016

dinesh sehgal

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Dear Sumit, 

Can you help me in understanding the service tax on foreign inward remittance. 

I am into animation business and I am working from India but most of my clients are from outside India, I provide animation services to them and in return they pay me in Dollars. So am I eleigible for paying the service Tax on my income from these clients ? Pls Help Thanks !

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