LEVY OF SERVICE TAX ON ACTIVITIES INVOLVED IN RELATION TO INWARD REMITTANCES

The foreign money transfer service operator (MTSO), conducts remittances to beneficiaries in India by appointing Indian Banks/financial entities as their agents in India who provide agency/representation service to MTSO’s for providing their service to a beneficiary in India.

The commission or fee is paid by the MTSO to agents for their services. The agents in India can also appoint sub agents to reach the beneficiary and all such agents & their sub agents fall under the category of intermediary service provider and hence liable to service tax.

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