CIR. NO. 92/03/2007- ST, DT. 12/03/2007
- Document type
- Circular
- Reference no.
- H
- Dated
- Category
- Service Tax Circulars-Year 2007
Liability of "money changers" to pay service tax under "banking and other financial service"
Liability of "money changers" to pay service tax under "banking and other financial service"-reg.
2. The issue has been examined by the Board. It was noted that money changing and foreign exchange broking are two distinct activities. Money changing is an activity of sale and purchase of foreign exchange at the prevalent market rates. On the other hand, foreign exchange broking is the activity performed as an intermediary, on a commission/brokerage basis, for facilitating the clients who wish to buy or sell foreign exchange. The foreign exchange broker providing foreign exchange broking service does not hold title to the foreign exchange. Accordingly, 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.
3. The instruction issued earlier vide letter F. No. 341/44/2005-TRU, dated 6.10.2005 stands superceded.
4. Trade and field formations may be advised accordingly.
5. Hindi version will follow.
(Gautam Bhattacharya)
Commissioner (Service Tax)