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TMI BlogZero rating of Export of service where consideration settled by book entryX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, We are having query regarding the scenario where we are supplying service to recipient located outside India POS is also outside India but we are not receiving the consideration in Foreign Currency due to the reason we have imported some services from the same person. We are adjusting the amount receivable against the amount payable in our books. Only difference is settled in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign currency. Whether we can claim the benefit of zero rating in this case? Whether this adjustment will fulfill the condition of amount of consideration should be received in foreign currency as specified by Sec 2(6) of IGST Act ? Thanks in advance. - Reply By Padmanathan Kollengode - The Reply = (6) export of services means the supply of any service when, (i) the sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India ; and (v) the supplier of service and the recipient of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice are not merely establishments of a distinct person in accordance with Explanation 1 in section 8 ; Considering the plain and literal meaning of Clause (iv) - the payment for such service has been received in convertible foreign exchange, in my humble opinion book adjustment will not suffice to qualify as export of service. I am fully open to contrary views. - Reply By Ganeshan K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alyani - The Reply = The mode of payment is clearly given. Either convertible foreign exchange or Indian rupees. So it cannot be book adjustment. - Reply By KASTURI SETHI - The Reply = GST laws do not permit. I agree with both experts. - Reply By Sadanand Bulbule - The Reply = Dear all Just to add on here- In terms of the award given by the International Arbitration Centers like SIAC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n settlement of dispute, can difference amount payable be adjusted mutually between the exporter and the importer? And whether such adjustment takes care Section 2[6] of the IGST Act ? Such cases are prevailing. Experts to pour fresh thoughts. - Reply By Shilpi Jain - The Reply = In the first place, the POS is outside India. In such a case there cannot be a levy of GST itself. Next, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was an RBI guideline or circular as per which the book adjustment was also regarded as payment. Please consult a FEMA expert who will be a better guide. - Zero rating of Export of service where consideration settled by book entry - Query Started By: - SAIRAM LBS Dated:- 26-9-2023 Last Replied Date:- 8-10-2023 Goods and Services Tax - GST - Got 5 Replies - GST - Discussion Forum - Knowledge Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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