Dubai: The Indian Government has not started levying the proposed 12.36 percent service tax on the fee paid by Non-Resident Indians (NRIs) for sending money back home.
The new service tax by India's Ministry of Finance and its Department of Revenue was supposed to come into force from Sunday, July 1.
Money exchange centres and prominent Indian banks operating in the United Arab Emirates said that they had not received any official communication about the proposed tax.
"Since the money exchange centres working in the UAE do not come under the jurisdiction of the Indian tax regulations, we don't expect any official communication from the Government of India but from the corresponding banks," an official at the Foreign Exchange and Remittance Group - UAE, said.
According to The Gulf News, some also suggested that the Indian Government might have put the move on hold due to widespread protests from politicians and NRI organizations across the globe.
Vayalar Ravi, the minister of Indian Overseas Affairs, said that he was concerned about the proposed tax as it would affect millions of low-income Indian expatriates.
According to the report, he has approached Prime Minister Dr. Manmohan Singh, who is in charge of the Ministry of Finance, to get clarification about the proposed tax.
Meanwhile, India's Ministry of Finance did not make any official announcement about the proposed tax.