Thiruvananthapuram: Lok Sabha MP from Thiruvananthapuram Shashi 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 on 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 `1,236 for every `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.