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Convertible Foreign Exchange

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This query is : Resolved

Prashant Kothari (Querist)

11 November 2008 According to Service Tax Notification No. 28/2005-Service Tax), if we render services to any overseas customer and receive the remittance against these services in convertible foreign exchange it is treated as Export of Services. We Have had decided to switch from invoicing in Foreign currency to invoicing in INR (to avoid any exchange loss) by doing so it became liable to pay the service tax of 12.36% on the invoice amount.
Kindly suggest the recent case laws, circullar or notification (either HC,SC or of Tribunal) indicating that even receipts in INR is allowed.

Kindly do the needful asap

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

11 November 2008 Even if you bill it in INR, the remittance if it is in convertible foreign exchange is what is the criterion, in my opinion.

CA Shailesh +91 9393926464

CA Shailesh +91 9393926464 (Expert)

12 November 2008 Yes. the remittance will be in convertible foreign exchange equivalent to INR quoted in the bill. Ur transactions are still, covered under the ambit of "Export of Services"

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