Rural Development and Planning Minister K C Joseph told the Assembly on Wednesday that the propaganda about service tax being levied on NRI remittances was not true in the strict sense, for the fact that the 12.
5 per cent tax was only on the commission on deposits sourced and it was borne by the banks.
But there is every reason to fear that the burden would be passed on to customers, he said.
Replying to a submission moved by T N Pratapan (Congress), the minister said the matter had been taken up with the Prime Minister during the recent visit of the Chief Minister and Cabinet colleagues.
It is the firm view of the State Government that the service tax should not be loaded on the hard earned money of NRIs in any manner, he said