Bank charges against export invoices

Parthasarthy (None) (36 Points)

04 November 2009  

An exporter making shipment for total of US$10,000 filed invoice and shipping bill with customs on 15th May. The date of invoice is also 15th May. Customs used a custom buying rate for dollar fixed by them for the month of May and the exporter has shown the value of sale on the same day converted to Rupee at the rate mentioned in the shipping bill. Container is loaded next day at the factory and sealed by the excise department. It is then sent to the custom area for loading. Bill of lading dated 21 May is issued. Payment term is 90 days from B/L date and State Bank of India sends documents to Buyer's Bank. Payment is made by buyer on July 20 and their bank sends the dollars to State Bank of India New York. However, only $9970 is received. The buyer has paid full $10000 and his bank charge. the deduction of $30 is in between by State bank of India New York and is as per arrangement between their India Office and New york office.
1) Is it in order to enter invoice value as per custom rate of exchange on date of filing the document or does one have to take the SBI rate of any other date for filing the documents (date of container being sealed by excise).
2) After payment is received, SBI applied TT Buying rate that is slightly more than the Custom rate initially applied. however amount received is $ 30 less. Do we apply the rate on the full invoice value and then account the $30 difference? Will the difference in exchange rate increase invoice amount accounted. Both ways the amount works out slightly more than the amount with custom rate.

The $30 Bank charge is taken by SBI new York. Their head office is in India. Is any amount of income accruing to them in India for this $30 and if so how much is the TDS u/s 195 that has to be grossed and paid. SBI Branch in India also deducted seperate charges for the collection that included their fees and courier charges. For purpose of Service Tax,is the deduction of $30 treated as reduction of Invoice value or does one have to deposit $3.09 service tax for import of banking service.