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Foreign exchange earning and impact on business process

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Krishna Murthi

70 Points Posted on 26 March 2023

I run a proprietary technical consultancy in India and come under GST exempted limit. Now I have an opportunity to earn consultancy in foreign currency and even that total value including local earnings will be well under GST exemption limit. I don’t file GST returns nor charge GST to my clients. I regularly file my ITR3 as required.

Please let me know what all I need to do or follow in terms of GST, Foreign exchange earnings and income tax implications.

I also have the option to opt for billing as an individual rather than a firm.

Replies (4)

Quick Summary

This discussion addresses the implications of earning foreign exchange for a proprietary technical consultancy in India that falls under the GST exemption limit. It clarifies that no GST registration is required if total earnings (domestic and foreign) remain below Rs. 20 lakhs. The advice covers receiving forex into a current account and the option of billing as an individual versus a firm, with a Chartered Accountant offering further guidance.

Pankaj Rawat

GST Practitioner

29904 Points Posted on 26 March 2023

In Regards to GST law you are not liable to obtain registration.
yes you can do billing in individual capacity.

Krishna Murthi

70 Points Posted on 27 March 2023

Dear Rawatji,

thanks for clarification. Do I need to register with any body or how to receive forex in to my current account?

I wish to have a detailed discussion and also wish to reward your time and advice. Please guide me.

CA Sorav Gupta

Chartered Accountant

328 Points Posted on 27 March 2023

If the professional fees during the year will be less than Rs. 20 lakhs including domestic and export services, then there is no need for GST registration.

The billing has to be done as an individual or firm, depends on various factors such as other income, the quantum of fees, NP ratio & nature of expenditure.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards
CA. Sorav Gupta
(Practicing Chartered Accountant)