Abu Dhabi: Indian expatriates in the UAE expressed their deep anguish on Friday against a new service tax on the “fees” paid by them for sending money to India, to be levied by the Government of India.
India’s Ministry of Finance and its Department of Revenue which are responsible for taxes did not make an official announcement about the move. But a senior Indian cabinet minister told Gulf News yesterday that he was aware of the new service tax.
“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,” Vayalar Ravi, the minister of Overseas Indian Affairs, said over the phone from New Delhi.
‘Small amount’
He said the service tax may be around 10 per cent of the fee of remittance, which will be a small amount.
“Still, I am very much concerned about this move as it will affect millions of Indians, especially the low-income workers.”
Ravi said he wrote to the Prime Minister of India yesterday 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.
A prominent Indian financial consultant based in Mumbai who is closely following government’s financial rules and regulations told Gulf News yesterday that the parliament has already passed the proposal last month to levy a 12.36 per cent service tax on the “fees” paid by NRIs for sending money back home.
Assistance
This rule which will be implemented from July 1, was introduced by the government indirectly in the Proposed Place of Provision of Service Rules in the parliament, said Sachin Menon, Partner and National Head of Indirect Taxes at KPMG in Mumbai, a prominent financial advisory in India.
Indians in the UAE said the Government of India should withdraw the service tax. “Though we send foreign exchange to India, we don’t get any support or assistance from the government,” said VTV Damodaran, a social worker in Abu Dhabi. Even if the tax is a small amount now, it can be gradually increased, so we should nip it in the bud, he said.
E.R. Joshi, a school teacher and social worker said this could be a test dose to test the waters.
“if we don’t protest against such tax proposal , the government may impose more burden on expatriates who are not organised enough to influence political decisions,” he said.
