Service tax on RBI

By | December 9, 2013

Service tax on RBI

Taxable services provided or to be provided by RBI – as per Notification No. 22/2006-Service Tax under sub-section (1) of section 93 of the Finance Act, 1994 any services which are provided or to be provided by RBI to any person is exempt from the levy of service tax i.e. covered under the negative list entry.

Nature of services provided by RBI

  • To provide services of agent and advisor to central government and state government in india.
  • To help the government to float new loans and to manage public debt. RBI makes loans and advances to the states and local authorities.
  • To maintain banking accounts of all scheduled banks.

Taxable services provided to RBI – if taxable services are provided to RBI by any person, then such services shall be liable to levy of service tax. Service provider who is providing taxable services to RBI is required to charge, collect and deposit service tax to central government in respect of taxable services.

But if taxable services provided or to be provided to RBI when service tax liability is required to be discharged by RBI under reverse charge mechanism then also it will exempt from levy of service tax.

After reading of all above provision we can conclude that RBI is exempt from payment of service tax i.e. RBI is not liable for payment of service tax in any situation.

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