Service tax on foreign exchange gain

Queries 1136 views 1 replies

Hi......

As per Service Tax Rules, Service Tax is payable on gross amount charged for taxable services provided or to be provided. When a service provider provides service in India but raises invoicce in foriegn currency, it is the amount in foriegn currency that we consider as the gross amount charged. However, when the invoice is realised, there may be forex gain or loss and such gain or loss is also attributable to the foreign currency invoice and as such the net amount realised in INR is finally taken as the gross amount charged and chargeable to service tax accrodingly.

 

Please advise / comment on the above.

 

Thanks.

Replies (1)

Gross Amt charged = Amt billed in Foreign currency * Exchange Rate (as notified by CBEC u/s 14 of Customs Act,1962....See 67 of FA,1994....


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