In this case also, instead of normal service tax @ 15% on his commission,, money changer has the option to pay service tax as follows
Suppose $ 1000 is sold by customer @ 65/$
Calculation As per Rule 2B
Assuming RBI Reference Rate is 65.4/$
In this case,
Commission Amount is (65.4-65)*1000=.4*1000=400
Service tax is charged @ 15% on this 400 i.e. Rs 60
Hence,in this case,customer knows commission earned by Money changer Service
Calculation As per Rule 7 (b)
Service Tax is payable @ 0.15% (Minimum 37.5) on conversion upto 1 lacs
Hence,in this case,customer is not able to know how much commission is earned by Money changer Service
Which option to be chosen?
If Service tax is to be recovered from customer, second option is better
Option to be exercised at beginning of year within 1 month
(i.e.for 2016-17,option to be excercised by 30 April 2016)
The option once exercised cannot be withdrawn during the remaining part of the financial year.