Question : Modifications in Foreign Exchange Regulations

(a) The details of remittances/private transfers by Indian workers abroad/nonresident Indians during each of the last three years and the current year, country-wise;
(b) The steps taken by the Government to further enhance the flow of foreign remittances through this route to India;
(c) Whether the Government has imposed service taxes on such remittances causing hardships to poor unskilled workers, I so, the details thereof and the reasons therefor; and
(d) The action taken/proposed to be taken by the Government in this regard?

MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHR IJAYANT SINHA)
(a) The details of remittances/private transfers by Indian workers abroad/Non-Resident Indian as recorded in India’s balance o payments statistics are as follows
Table 1: Remittances (Private Transfers) received by India
Year Gross Net
2012-13 67,627 64,342
2013-14 69,638 65,481
2014-15 69,831 66,275

Country-wise information on remittances is not available, Survey based region-wise information on remittances/private transfers as provided by RBI is at Annex.
(b) To further enhance the flow of foreign remittances to India, it has been decided to amend the definition of Non Resident Indian as contained in the FDI policy, and also to provide that for the purposes of FDI policy, investment by NRIs under Schedule 4 of FEMA (Transfer or issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents. Further Non-resident Indians are allowed to subscribe, through banking channel and on non-repatriation basis, to chit funds, without limit subject to the conditions stipulated by the Reserve Bank of India. I
(c) Remittances being a transaction in money do not constitute “service” for the purpose of levy of service tax. Therefore, remittances per se do not attract serve tax, Service tax would apply only to a taxable activity, if any, undertaken in the taxable territory, by a service provider in relations to such remittances.
(d) Does not arise in view of reply to (c) above.


Annex referred to in part (a) of Lok Sabha Unstarred Question No. 3193 to be answered on Friday, August 7, 2015
Region-wsie Distribution of Private Transfer
Receipts in India
Period Gulf Countries North America South America Europe Africa East Asia Others Total
1 2 3 4 5 6 7 8 9
2009-10 16,431 15,934 2,197 10,446 1,731 2,250 4,647 53,636
2010-11 20,506 19,097 1,449 6,794 1,618 3,734 2,421 55,618
2011-12 24,382 22,706 1,723 8,078 1,923 4,440 2,878 66,129
2012-13 24,934 23,220 1,762 8,260 1,967 4,541 2,943 67,627