Indian travellers travelling to foreign destinations might have to shell out more on the currency notes they buy before leaving the country. According to the latest reports, customs department is planning to charge GST (Goods and Services Tax) on the import of currency notes in the country. The department has already sent its proposal to the government, which is pending a decision.
According to the proposal, the customs department has proposed a 12% tax on the import of foreign currency notes. If this proposal is accepted, the currency notes will get up to 12-15% costlier in the coming time. This will impact the travellers coming to Indian and Indian travellers travelling to foreign destinations alike.
Such consignments, including the ones carrying foreign currency notes, are exempted from the basic customs duty. Customs department has proposed a 12% IGST (Integrated Goods and Services Tax) on these consignments. The proposal is currently sent to the government to seek its views on the same.
Currently, a notification under GST has exempted rupee notes from GST, however, there is no such mention about the foreign currency notes.
Following this, the consignments having foreign currency notes have stuck on the ports. The government is yet to make its decision on the same and that has created more confusions in the minds of people involved in the matter. The banks have requested the government officials to make a decision soon over this. Bank officials have also stated that currency notes do not qualify as goods or services and should be exempted from GST, the final decision, however, rests with the government.
In a statement in 2003, the government had exempted import duty and taxes on the currency notes. Banking authorities have been vocal about pointing that out and requesting the government to keep currency exempted from GST. According to the authorities, the definition excludes currency and securities while including all sorts of movable properties.