INR deposit received for Exports of Services to US Customer

Hey Ashwin! Great question about export of services and receipt of payment in INR directly.

Key points on Export of Services and IGST 0%:

1. Export of services under GST means:

   • Supplier is in India

   • Recipient is outside India

   • Place of supply is outside India

   • Payment is received in convertible foreign exchange or in INR wherever permitted by RBI

2. Payment in INR received for export of services is allowed under RBI’s guidelines (Liberalised Remittance Scheme) if it’s received through proper banking channels.

3. Whether IGST 0% applies or not?

   • GST law does not mandate that the payment must be received in foreign currency. It says payment can be received in convertible foreign exchange or in INR wherever permitted by RBI.

   • So, receiving INR directly from foreign buyer’s bank account in India is acceptable if routed through banking channels as per RBI norms.

What matters most:

• Invoice raised with 0% IGST citing export of services

• Place of supply outside India (US)

• Recipient outside India (US)

• Payment received in INR routed through banking channels (even if pre-converted before receipt)

Your case:

• USD 320 from Bank of America (Philadelphia) sent to your Indian current account as INR deposit

• This means money was converted outside India before sending or paid in INR directly by foreign bank

• As long as the payment is routed through banking channels and RBI guidelines are followed, it qualifies as export of services for GST with 0% IGST.

Important:

• Maintain proof of receipt of payment through banking channels.

• Maintain contract, invoice and bank statements as documentary evidence for export and 0% IGST claim.

Summary:

Receiving INR directly in your Indian bank from a foreign customer’s foreign bank account is acceptable for export of services under GST and IGST @ 0% can be applied.