Service tax Applicability of foreign exchange profit

[Joycee Joseph]

Sir,

  I am a tour operator. I received USD from Foreign countries and i remit the service tax asper the receipt of USD date. But profit arises at the time of converting USD into Indian rupee. these profit is taxable or not?. or its shown as foreign exchnage profit in P&L account

AI Summary

Tour operator queries tax on USD to INR conversion profits; opinions vary on service and income tax applicability. A tour operator inquired about the taxability of profits from converting USD to Indian Rupees. Respondents provided varied opinions: one suggested potential service tax liability, while another clarified that profits are taxable but not under service tax, as no services are provided. It was noted that service tax applies to currency conversion charges, not the conversion profit itself. Another respondent emphasized that service tax is for services rendered, not profits, suggesting that income tax might apply instead. The discussion concluded with gratitude for the shared insights.