I was charged service tax for a recent SBI Remit transaction. I have never been charged service tax before. I logged a ticket with remit.onlinesbi.com and got the answer. Looks like this is a tax for Foreign Currency conversion which will be paid to Government.
Here is the response for my ticket
Service Tax for conversion of Foreign Currency to Indian Currency or Vice-versa is payable to the Government of India, Ministry of Finance. The service tax rates with effect from 1st Day of April, 2011 are as follows:
1. Service Tax is calculated as below:
a. 0.1% of the gross amount of currency exchanged for an amount of Rs1,00,000, subject to minimum of Rs25/- ; and
b. Rs100 and 0.05% of the gross amount of currency exchanged for an amount of rupees exceeding 1,00,000 and up to 10,00,000; and
c. Rs550 and 0.01% of the gross amount of currency exchanged for an amount of rupees exceeding 10,00,000; subject to a maximum amount of Rs5,000
2. Education cess @ 3% on service tax is also applicable for every transaction.
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