Foreign Exchange billing and payment

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Querist : Anonymous

Querist : Anonymous (Querist)

17 March 2010 I would like to seek your help in providing me solution to my following two problems

Question No.1

Our client is Indian gov. organisation with turnkey project. For one of the item we are procuring material from India but contract with client is in USD and country of origin is India can we bill and collect money in USD?

If answer is no than please suggest under which act or notification

Question No.2

Problem is similar to question no.1 only difference is that country of origin as per contract is outside India

Can we bill and collect money in USD as per contract

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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17 March 2010 As per my opinion for both situation you can raise bill/collect in USD and for the purpose of service tax the euivalent amount of INR would be considered at applicable exchange rate as on the date of payment ( receipt in your hand).

However for the purpose of VAT, if you have office in India, I am not sure and will get back after checking.

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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17 March 2010 If you are charging VAT or CST in your bill I think it would be prudent to put the value in INR beside USD for charging TAX as applicable (at contractual conversion rate or rate as on date of sale).

However if the sale is export in your hand,assuming you are not having office in India or selling from foreign office then this is not relevant.

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