F.NO.354/59/2006-TRU

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

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Circular No. 83/1/2006-ST
4^th July, 2006.

Sub: Levy of service tax on banking and financial services – Services provided by Department of Posts - Reg.

            I am directed to say that the scope of levy of service tax on “banking and other financial services” defined under section 65(12) of the Finance Act, 1994 and classifiable as taxable service under section 65(105)(zm) of the Finance Act, 1994 has been examined in the context of certain services provided by the Department of Posts.    

2.         The issue is whether or not services such as money orders, operation of bank accounts, issue of postal orders provided by Department of Posts are liable to service tax under section 65(12) read with section 65(105)(zm) of the Finance Act, 1994, as amended.