Service Tax for Money Changers

One of my friends dealing in Money Exchange [Franchisee], with an annual turnover ofone crore wants to know whether he needs to register with Service Tax Dept.    Total turnover one crore is the total value of foreign currency purchased [No sale is effected as the franchisee is not allowed to sell currency]

Taxable value to be treated as difference between the rate at which currency is exchanged with customer & RBI reference rate at that time for that currency will beone lakh only annualy.

Request clerification

Replies (3)

PROVISION IN THIS REGARD FROM 1/4/2011 ARE AS FOLLOW

SERVICE TAX IS PAID ON THE BASIS OF GROSS AMOUNT OF MONEY EXCHANGED -

 0.1% UPTO 100000 (MIN-25)

100+0.05% ON AMOUNT ABOVE 100000 UP TO 1000000

550+0.01% ON AMOUNT IN EXCESS OF 1000000 (MAX-5000)

 

 

 

Service tax is applicable on d commision of the exchange , i think 1 %

HE CAN ALSO GO FOR COMPOSITION SCHEME AND PAY 0.25% OF GROSS CURRENCY EXCHANGED. AND REDUCE LIABILITY OF ST

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