In what would seem like a harebrained idea, govt. is going to charge 12.36% service tax on NRI remittances starting July 1. Rs1236 plus 3% education cess on service tax will be charged on every Rs 10,000 remitted. This is cheating of the first kind seen anywhere in the world. What right does GOI has to impose such an high service tax on remittances when much of this is earned outside of India?. All the more incentive for the people to wire money through Hawala channels and at the same time govt. will lose more foreign currency which will in time lead to rupee depreciation further. I think govt. is fullly not aware of the implications this will cause. UPA govt. you rock and roll. Put service tax on NRI remittances on hold: Shashi Tharoor THIRUVANANTHAPURAM: Lok Sabha MPShashi Tharoor has urged Prime Minister Manmohan Singh to put on hold the service tax on remittances by non-resident Indians (NRIs). In his letter to the prime minister Wednesday, Tharoor pointed out that the decision to impose 12.36 per cent service tax on remittances to India by NRIs with effect from July 1 has generated tremendous resentment across Kerala. "The imposition of the service tax will adversely affect millions of Keralities, especially those working in low-paid jobs in the Gulf region. This tax of Rs 1,236 for every Rs 10,000 sent home will be an unbearable burden on these ordinary people... and their dependent families at home," he said. He called for keeping the decision in abeyance pending a more detailed examination of the "adverse implications" of the move. Tharoor argued that this was a short-sighted measure which risked diverting remittances to hawala channels and tempting otherwise law-abiding citizens to indulge in undesirable malpractices. "At a time when the country needs to attract inward remittances and investment, any measure which discourages these should not be contemplated," he said in the letter. According to the latest study by the Centre for Development Studies, the total remittances in Kerala in 2011 was estimated at Rs 49,695 crore compared to Rs 43,288 crore in 2008. The study also revealed that the number of Kerala emigrants living abroad in 2011 was estimated at 2.28 million, up from 2.19 million in 2008.