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Exchange rate for export of service

mvramana (Student) (279 Points)

01 May 2020  
Dear Forum,
As per Rule 34 of CGST Act, exchange rate for the purpose of determination of value of export of services is the rate of exchange determined as per the generally accepted accounting principles for the date of time of supply in terms of Sec.13.

my query:

what is the rate that is generally accepted accounting principles..?

Which rates whether RBI declared rates or the rates applicable to goods as notified under Customs law, are to be considered..??

 9 Replies

Pankaj Rawat (GST Practitioner) (51638 Points)
Replied 03 May 2020

RBI rates are considered.

Actually the rule 34 has been Substituted by Notification 17/2017 CT (r) till then read as follows " The rate of Exchange for the determination of the value of taxable goods or services or both shall be the Applicable reference rate for that currency as determined by RBI on the date of time of supply in respect of such supply in term of Section 12 or as the case may be , section 13 of the Act"

mvramana (Student) (279 Points)
Replied 03 May 2020

Dear Pankaj Rawat,

Thank you for your reply.

My comments:

As you roughly said that the Rule 34 has been substituted by NN 17/2017 CT (Not CTR as you mentioned in you commemts) starting that for export supply of googs, the Ex.Rate as declared u/s.13 of Customs Act i.e., CBIC ex.rate whereas RBI ex. rate is applicable for export supply of services.

But, as per you, RBI ex. rate is applicable for both the export supplis of goods as well as services.

Could you please revert with your views..!!


Pankaj Rawat (GST Practitioner) (51638 Points)
Replied 03 May 2020

Yes you are correct It's Notification 17/2017 CT , Not CT rate. (Thanks for correcting me)

> Yes Export of Goods the exchange rate on shipping bill is taken from Custom (Published on weekly basis) . Refer Section 14 of custom act .
Kindly Note Section 13 of Custom Act prescribe 'Duty on Pilfered Goods"

> On export of Services , Generally Exporter takes the Exchange rate of RBI . But As there is no hard & fast rule in opting exchange rate of RBI only , So you can also take Custom rate of Exchange for Export of Services, The difference can adjusted Under Head "FLUCTUATION IN EXCHANGE"
Note : Many small exporter of Services also take the Bank Exchange Rate also.

> RBI exchange rate is also adopt by Money Exchange to determine value of supply of Services in relation to purchase or sale of Foreign currency.(Refer Rule 32(2) of CGST Act )
1 Like

CA Altamush Zafar (GST Consultant) (11003 Points)
Replied 03 May 2020

Export of Services does not concerns customs at all. The rate of exchange should be RBI rates

mvramana (Student) (279 Points)
Replied 03 May 2020

Yes Mr.Pankaj Rawat it is Sec.14 of Customs Act
it's typo

But this app does not allow to post immediately after posting one reply by same person and we have to wait and can do next posting only after some one gives any reply.
In fact it is a flaw in this App.

Resulting to our discussion, we agree:
For Expert supply of goods, CBIC rate; and
For Export supply of services, RBI rate.

Other point you brought w.r.t Rule 32(2):

Money Exchanger etc., have no other option except to take RBI rate.
In fact, He has to consider only RBI rate.
Because, the said rule talks about the determination of VALUE OF THE SUPPLY OF SERVICES and it does not talk about which exchange rate need to considered.

The activity of buying and sale of currency other than INR is a Service as per Sec.2(102) of CGST Act. And hence the RBI exchange rate only has to be adopted.

Further, as per your observations as noted above, small exporters making export services are taking Banker Exchange Rate.

As per me, Banker also shall adopt RBI rate. But the problem is for small exporters and ours duty is to check the time of supply which is more relevant for GST perspective for such export supply of service.

Any contra view, please revert🙏

Pankaj Rawat (GST Practitioner) (51638 Points)
Replied 04 May 2020

Dear mvramana
yes you are correct banker is adopt the RBI rates only but add bank commission to it & there is no harm in taking the same.

Dear Zafar :
I knew that you do not consider the custom rate on Export of Services & thanks to remind me that export Services are nothing to do with custom . So can you quote any section or Notification that for export Services you cannot opt for custom exchange rate .

CA Altamush Zafar (GST Consultant) (11003 Points)
Replied 04 May 2020

Dear Mr Rawat,

The query is solved. The first answer answer you gave was also RBI rate (just scroll above). Why do you want to argue on things which have consensus.

jatin gupta (2 Points)
Replied 05 September 2020

What's the difference between cbec notified rates and rbi reference? and why is there a difference in the amount in both cases?


ABHISHEK (Student) (410 Points)
Replied 25 August 2021

how to find rbi reference rate for a particular date say 11 july 2021

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