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: