If you've tied up with a Swiss tour operator to holiday in the Alps, you need not worry about being charged service tax here. The government has decided to exempt individuals receiving and consuming taxable services abroad from service tax. The relief for individuals comes after this year's Budget sought to cast the tax net wider to include a tax on import of services. The tax will now be charged on the beneficiary if he receives a service from a provider based overseas.

In tax law, a tax on import of services is called "reverse charge." Under this, the service tax has to be paid by the Indian recipient of services that has been rendered by a foreign supplier. In other words, the beneficiary is deemed to be the service provider. The reverse charge would be imposed on all services that are in the service tax net. However, individuals will not have to pay service tax on any service they consume abroad if it is for personal consumption.