money changer service tax return

[satbir singhwahi]

A money changer is registered under banking and finance services category. While filing service tax return for  Oct 12 to march 2013.Rate of service tax was mentioned as.12 in Bi.15 as for Rupees1 lac transaction they have the option to pay 120 . However return was rejected because of the reason that this rate is not valid for Banking and finance services category. This category is  not covered in notification relating to abatement also. Should value  of Services provided be taken as one tenth of original value .Specific rates are applicable and to be shown in B1.16. This is  in terms of Rule 6, sub-rule 7B whish is reproduced herebelow.

(7B). The person liable to pay service tax in relation to purchase or sale of foreign currency, including  money changing, shall have the option to oay an amount calculated at the following rate  towards discharge of his service tax liability instead of paying service tax at the rate specified in  section 66B of  Chapter V of the Act, namely:]
(a) [0.12 per cent. of the gross amount of currency exchanged for an amount up to rupees 100,000,  subject to the minimum amount of [rupees 30] and;
(b) rupees [120 and 0.06 per cent. of the gross amount of currency exchanged for an amount of rupees  exceeding rupees 100,000 and up to rupees 10,00,000; and
(c) rupees [660 and [0.012] per cent.] of the gross amount of currency exchanged for an amount of  rupees exceeding 10,00,000, subject to maximum amount of rupees [6000]:

Kindly guide how data be filled in ST-3

[DR.MARIAPPAN GOVINDARAJAN]

Have you got clarified and filed the return ST-3?

[satbir singhwahi]

Sir

no reply received till date. But hv filed return by taking amount of service tax and grossed up taking 12.36.Pls guide.

AI Summary

Presumptive service tax option for money changers inapplicable to banking category when filing ST returns A money changer registered under the banking and finance services category attempted to use the presumptive rates option for foreign currency exchange but faced return rejection because those rates were deemed inapplicable to the banking and finance category and not covered by the abatement notification; the core operative question concerns eligibility to elect the presumptive payment option and the correct reporting and gross-up treatment in the ST-3 return.