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Indian expatriates in UAE ‘anguished’ over new service tax by Indian Govt. for sending money home

Posted on June 30, 2012
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Dubai, June 29 (ANI): Indian expatriates in the UAE have expressed their deep anguish against a new service tax on the “fees” paid by them for sending money to India, which will be levied by the Government of India.

Although, India’s Finance Ministry and Department of Revenue, which are responsible for taxes, did not make an official announcement about the move, but a senior Indian cabinet minister claimed to be aware of the new service tax being levied.

“The proposed service tax is not at all on the total remittance made by the Non-Resident Indians (NRIs) but only on the fee paid by them for sending money to India,” Gulf News quoted Overseas Indian Affairs Minister, Vayalar Ravi, as saying.

Ravi said that even as the service tax might be around 10 per cent of the fee of remittance, which will be a small amount, millions of Indian expats, including low-income workers would be affected.

“Still, I am very much concerned about this move as it will affect millions of Indians, especially the low-income workers,” he said.

Ravi said he wrote to the Prime Minister of India requesting clarification on the matter.

“I had already asked the clarification from the Ministry of Finance. Once the picture is clear, I will take it up appropriately to avoid any unnecessary burden on expatriate Indians,” the minister explained.

Sachin Menon, Partner and National Head of Indirect Taxes at KPMG in Mumbai and a prominent financial advisory in India claimed the rule will be implemented from July 1, and was introduced by the government indirectly in the Proposed Place of Provision of Service Rules in the parliament.

However, Indians in the UAE said the Government of India should withdraw the service tax.

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