TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 1253
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.... 2. The facts relevant for the purpose are that the respondent Bank is engaged in purchase and sale of foreign currency for the customers/merchant and also for the proprietary purposes i.e. merchant trading and proprietary trading. Former transactions are being done on behalf of their customers, whereas proprietary transactions are being done interse the Bank. It is mentioned by the appellant that with regard to merchant trading, service charges are being recovered from the customers on which service tax is being paid. Also, since the bank earn profit on difference of exchange rate of the purchase and sale of foreign currency that the Service Tax is being deposited on the profit. However, regarding proprietary transactions the Bank enters i....
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....as raised a consolidated invoice covering all the transactions of a particular month with a scheduled Bank and that the consolidated invoice is not out of the ambit of the invoice in respect of the consideration charged for all the transactions of purchase or sale of the foreign currency. Accordingly, the Bank was required to pay the Service Tax at the rate as specified in Section 66 of the Finance Act on the ground of consideration shown in the invoice raised to various scheduled Banks in respect of such transactions. 5. We have heard ld. D.R. Shri A. Jain for the Revenue and Shri Sanjay Khemani, C.A. for the assessee. 6. The appellant - Department has submitted that there is no dispute as far as the classification of service is concerne....
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....rate of .25% of the gross amount of money exchange. Appeal is accordingly, prayed to be rejected. 8. After giving thoughtful consideration of the submissions of the parties and perusing the entire record, we are of the considered opinion that the Bank is admittedly involved in 2 kinds of foreign currency exchange transactions. (1) the merchant transactions i.e. purchase and sale of the foreign currency is being done for the customers against some service charges received from customers (buyers and sellers) on which the Bank admittedly is paying the Service Tax. The another apparent admitted fact is that in these merchant transaction the Bank is earning profit on the difference of exchange rate of the purchase and sale of foreign currency ....
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....ale of foreign currency include 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 separately. * As per Section 65 (105) (zm) of Finance Act, taxable service is defined to mean any service provided or to be provided to any person by a banking company or a financial institution including a non-banking financial institution or any other body corporate. * The cumulative reading of both these provisions makes it clear that it is only the sale and purchase of foreign currency, by the bank which is taxable service for the purpose of levy of Service Tax and it is apparently immaterial to whom or with whom such sale/ purchase is being made. * ....
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....ion to purchase or sale of foreign currency including money changing provided by a foreign exchange broker including an authorised dealer in foreign exchange or an authorised money changer as referred in sub-clauses (zm) and (zzk) of Clause (105) of Section 65 of the Act, shall have the option to pay an amount calculated at the rate of .25% of the gross amount of currency exchanged towards discharge of the Service Tax liability instead of paying Service Tax at the rate specified in said Section 66 of the Act. Provided, no such option shall be available where the consideration for the service provided or to be provided is shown separately in the invoice /bill or as the case may be issued by the service provider. * Rule 2(b) of Service Tax ....