Parliamentarian Shashi Tharoor has sought Prime Minister Manmohan Singh’s intervention to put on hold the proposal for imposing service tax on overseas remittances fees levied by banks that takes effect on July 1.
In a letter to the prime minister, the former UN undersecretary general said a more detailed examination of the adverse implications of the move, especially for the millions of non-resident Keralities working in ordinary jobs in the Gulf region, was needed.
“It has generated tremendous resentment across Kerala,” Tharoor said.
“This is a shortsighted measure which risks diverting remittances to hawala channels and tempting otherwise law-abiding citizens to indulge in undesirable malpractices. At a time when the country needs to attract inward remittances and investment, any measure which discourages these should not be contemplated.”
India proposes to charge 12.36 per cent service tax, including additional cess on it, on the fees paid to banks while sending money back home.
This service tax will be deducted from the remittances sent by the diaspora.
In a letter to the prime minister, the former UN undersecretary general said a more detailed examination of the adverse implications of the move, especially for the millions of non-resident Keralities working in ordinary jobs in the Gulf region, was needed.
“It has generated tremendous resentment across Kerala,” Tharoor said.
“This is a shortsighted measure which risks diverting remittances to hawala channels and tempting otherwise law-abiding citizens to indulge in undesirable malpractices. At a time when the country needs to attract inward remittances and investment, any measure which discourages these should not be contemplated.”
India proposes to charge 12.36 per cent service tax, including additional cess on it, on the fees paid to banks while sending money back home.
This service tax will be deducted from the remittances sent by the diaspora.