Remitting money back to India has undergone a transformation since the introduction of GST in India from 1st July 2017. The older rates have been modified replacing all the indirect taxes incurred upon the citizens by both the central and state governments.
India’s position in remittance
Indians enjoy the remittances sent from Singapore as well as other nations from friends, family, and relatives. It is worthy of mention that India is one of the leading nations to enjoy remittance. The entire amount of it is $68.91 billion as recorded in 2015, which has led to 4% of the country’s GDP. As recorded in 2015 alone, the amount of remittance sent to India by Singapore was 828 million.
Changes in the technique
GST or Goods and Service Tax are levied upon all kinds of goods and services that are provided. The method of money transferring money also is accountable as a procedure and therefore falls under taxation. The conversion of one currency into another is also a sort of service that is charged by the Banks and Foreign Exchange Dealers. Hence, one is bound to pay the service tax on Foreign Exchange conversion, which is here paid by the NRIs residing in Singapore.
The rates today
The person at the receiving end enjoys the benefit of payment either through direct cash or transfer to his/her bank account. No charge is levied upon them for withdrawing the money, be it from whichever mode. However, when it comes to the charges of the NRI – they need to pay an amount to the government which was previously fixed at 15.50%. After the initiation of GST, the changed rate has been increased to 18%. Therefore, while the beneficiary will still get the exact amount that was sent, the sender needs to take the extra burden.
Cheaper ways available
As is quite clear, sending money to India from Singapore now needs to be thought upon by the NRIs. Instead of choosing banks, many therefore prefer money transferring organizations like Western Union and INSTAREM that get the work done within a stipulated time and charges less as compared to the banks. The process is entirely secure and is used by many these days. Various modes or remittance are also available which have been mentioned before.
The problem remains
Quite normally, which ever mode of payment one might choose, the amount increases and that can prove to have quite an adverse impact on Indian economy in the long run. The service tax was previously introduced by the Indian government once in 2012, which was later withdrawn due to several protests and pressure upon the government. Right now with the current state of Indian economy where rupee stabilization is still on, such a decision can reduce the amount of remittance sent to India from Singapore by a huge level. Noting the amount of money sent to India annually from Singapore, this sudden decision might not be whole heartedly welcomed by the people residing there. Indian Diaspora settled in Singapore might get disheartened at such news and they would obviously consider several factors before making a remittance back to their native land.
No matter what, the transformation had been introduced for the benefit of the Indian mass. And the purpose of it still remains the same. Therefore, everyone should whole heartedly accept the fact and participate in the change towards progress, development and a better future. The problem of the NRIs would gradually be slowed down with time and approval. For the time being, the scale of remittance might fall down but there is no reason for worry since some middle ground can, of course, be reached which both the nations would appreciate.