Industry & Economy
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Taxation
FIEO wants service tax waiver to continue on services paid in forex
K.R.Srivats
New Delhi
,
Oct. 6
THE Federation of Indian Export Organisations has urged the Finance Ministry to retain the existing service tax exemption on taxable services for which payments are received in convertible foreign exchange.
In its submission on the draft rules on `export of taxable services', the Federation has held that the withdrawal of exemption would affect hotels, tourism, hospitals and education sectors in respect of those (buyers of services) who travel to India to consume such services. "The levy of service tax would make service exports under Mode 2 (consumption abroad) uncompetitive," a senior FIEO official said.
The Finance Ministry had recently hinted that the existing service tax exemption on taxable services for which payments are received in convertible foreign exchange would be withdrawn as soon as the rules spelling out the meaning of `export of taxable services' are finalised.
Revenue department officials are, however, sceptical whether the suggestion of the federation would find acceptance among the decision makers, as the forex reserves position of the country is quite strong.And, the current thinking is in favour of doing away with service tax exemption on taxable services for which payments are received in convertible foreign exchange.
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