Foreign exchange broking services

I had a doubt regarding the explanation given under banking and other financial services. Which goes as follows

"For the purposes of this clause, it is hereby declared that purchase or sale of foreign currency, including money changing includes purchase or sale of foreign currency, whether or not the consideration for such purchase or sale, as the case may be, is specified seperately."

My doubt is with respect to the part in bold. So, if 100$ are convereted into rupees at $1=Rs. 50 and the bank charges Rs. 100 as service charge. What is the service tax implication? should we apply that 0.1% slab rate on the gross as well as 10.3% of Rs. 100. If so doesnt it amount to double taxation on the same transaction?

Replies (2)

bank converted $ in to Rupee @ 50/- per $ and the RBI rate of $ for that day was 50.20

so 0.20*100=20/- + charged by bank = 120 is liable for service tax @ 10.3%

Money changers have two option to calculate service tax liability :

1. Charge .5% on gross Amount received/paid in INR.

 

                                                      or

2. Charge service tax @ 10.3% on commission Amt if it is shown seperately in invoice.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
17 September 2026
Chartered Accountant

Dass Gupta & Associates

Gurgaon

CA

View Details
Company
16 September 2026
Internal Audit - Team Lead

Consulting & Beyond

Chennai

CA

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details