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Liability of 'money changers' to pay service tax under 'banking and other financial service'
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....iability of 'money changers' to pay service tax under 'banking and other financial service' <br>News and Press Release<br>Dated:- 13-3-2007<br><BR>Service tax is leviable on foreign exchange (forex) broking service under the category of 'banking and other financial service'. In terms of the provisions of the Finance Act, 1994, foreign exchange broker includes a money changer (authorized dealer of ....
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....foreign exchange). In this context, a question has arisen as to whether the service provided by a money changer in relation to exchange of foreign currency is a forex broking service for applicability of service tax levy under 'banking and other financial services'. Earlier the board has vide its instruction letter F. No. 341/44/2005-TRU, dated 6.10.2005 had clarified that, "In view of the stat....
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....utory provisions, the services provided by money changers in relation to foreign exchange is covered under Banking and financial services as defined under 65(12) of the Finance Act and leviable to service tax under Section 65(105)(zm) or Section 65(105) (zzk) of the Finance Act, 1994." Now, after one and half year from the date of above said circular the board has realized that the captioned circ....
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....ular was erroneous and issued a new circular no. 92/3/2007 dated 12-03-2007 clarifying that, "Board is of the view that service tax is not leviable on money changing per se, as such activity does not fall under the category of foreign exchange broking." Now a question of million does arise that, who would compensate the assessee who has suffered adversely (mentally and financially) due to the wro....
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....ng clarification issued earlier?<BR> News - Press release - PIB....