Money orders, postal services not liable to service tax

New Delhi, July 4 (UNI) The government today clarified that services such as money orders, operation of savings accounts, and issue of postal orders, which are in the nature of banking and other financial services provided by the Department of Posts, are not liable to service tax.

''The Department of Posts is not considered as a service provider similar to a bank or a financial institution and therefore such services provided by Department of Posts are not liable to service tax,'' a Finince Ministry statement said.

It said banking and other financial services provided by a banking company or a financial institution or a non-banking financial company or any other service provider similar to a bank or a financial institution are liable to service tax under under section 65(105)(zm) read with section 65(12) of the Finance Act, 1994.

UNI YJ RA RK2031