Foreign missions exempted

The government has exempted from service tax all services to foreign diplomatic missions and consular posts in India of official use.

The relief also covers services extended to diplomatic mission agents and consular officials posted in india. The exemption covers their families too.

The decision to exempt diplomatic missions, effective from May 23 this year, came after discussions on the issue between the department of revenue and the Ministry of External Affairs.

"It was observed that the present service tax exemption scheme to foreign missions and consulates and their personnel is selective and not flexible enough to be useful for negotiations with other countries, to the extent of providing or modifying the tax concessions on reciprocal basis," a CBEC circular said.

At present, "service specific exemptions" are available to certain specified foreign missions and consulates, while the United Nations and some other international organisations enjoy a general exemption.

A relatively flexible exemption system is available in respect of excisable goods for foreign diplomatic missions and consular posts in India.