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Service Tax for Wire Transfer to India

advmfsheikh
Active Member
Paridhi P Member Since: Jun 27, 2016
1 of 4

Hi,

 

I wanted to know about deductions on Wire Transfer. For Example, if I withdraw $1000 from Upwork through Wire Transfer method, I'll have to pay a Wire Transfer Fee of $30 to Upwork. But, apart from this fee, when the funds are remitted in my Indian Bank Account (SBI), Do I have to pay any service taxes? If yes, what percentage/amount will be deducted as service tax in Indian Bank as per the Income Tax Regulations in India. Also, are there any other deductions apart from the Upwork Wire Transfer Fee and Service Tax?

vladag
Community Manager
Vladimir G Community Manager Member Since: Oct 31, 2014
2 of 4

Hi Paridhi,

 

Please check with your bank about any additional fees you might incur, as Upwork only charges the fixed fee you mentioned. This Help article contains more information about Wire Transfer transactions.

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advmfsheikh
Active Member
Paridhi P Member Since: Jun 27, 2016
3 of 4

Thanks for your help Vladimir. I have contacted the bank. They haven't responded to me yet. That's why I wanted to check with Indian Freelancer's as to how much service tax they actually paid for their transactions. 

anantladha
Active Member
Anant L Member Since: May 6, 2015
4 of 4

Let's consider GST implication on LFT if anyone is confused --

 

As per law under erstwhile Service Tax and now under Goods & Service Tax (GST) export of services was exempt and now Zero Rated Sales.

 

All contracts via UpWork to any contractor outside India will be eligible for the Exemption and Now Zero rated sale, since the -

1. Service Provider is from Taxable Territory (India)

2. Service Recipient is from Non-Taxable Territory (Outside India)

3. There isn't any relationship between 1 & 2. or not been controlled by 'Distinct Person'

4. Consideration received is in Convertible Foreign Exchange.

 

To clarify - All LBT (local bank transfers directly in INR) is as well considered as Convertible Foreign Currency, even though it's not spefically mentioned under the law, but as per earlier Tribunal, CESTAT and Court Decrees/Orders, if the first three conditions of the export of services is sufficed, and the consideration is paid in Local Currency or INR to the service provider by the third party dealer of the Service Recepient, it will be deemed to be Convertible Foreign Currency.

 

The defination of Convertible Foreign Currency is laid out under the Notification No. FEMA 9/2000-RB and FEMA 14/2000-RB dated May 3, 2000 issued by RBI under Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 (“FEMA Notifications”)

 

 

A decided case law - Sun-Area Real Estate Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai-I [2015-TIOL-956-CESTAT-MUM]

 

So, under the GST law, the FEMA defination continues, and LBT remains the cheapest way to transfer funds.

 

Regards,

Anant 

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