Punjab Congress on Sunday said the decision to charge service tax on foreign remittances fee was a "grave injustice" to NRIs and questioned chief minister Parkash Singh Badal's "silence" over it.
"The NDA government led by Modi this year started charging a service tax of 12.36 per cent on foreign remittances fee which is a grave injustice to NRIs," former Punjab chief minister Rajinder Kaur Bhattal said here.
Bhattal said in Union Budget 2012 there was a proposal to tax the NRI remittances fee and Badal had opposed the idea by writing to the then Prime Minister.
Later in July 2012, UPA government issued a clarification that there will be no service tax on NRI remittances fee, she said.
However, the Modi government through a circular dated October 14, 2014, cancelled the old circular and service tax on foreign remittances is now charged at 12.36 per cent, she claimed.
Bhattal questioned Badal's "silence" on the issue. "NDA is forcing Badal to keep quiet and tolerate the
injustice to NRI families and the NRIs," she said.
Bhattal warned the central government that the decision will negatively impact the NRI plans to remit money to India as the additional transaction cost will drive them towards illegal money channels like hawala or to invest in countries other than India.
A majority of Punjabis send money from abroad to their families, she said, adding they send remittances on regular intervals to sustain the families back home.
"Now after the burden of this levy, an additional cost has to be borne by these persons every time," she said.