Rule 6A of Service Tax Rules 1994

[CABALRAM PANDEY]

Dear Experts,

Please clarify the meaning and actual sense of the law maker for the clause (e) of Sub-rule (1) of Rule 6A, as mentioned below:-

The payment for such Services has been received by the provider of service in convertible foreign exchange.

In my opinion this line wants to say that payment has already been received by Service Provider in CFE,

please enlighten my limited knowledge.

Thanks & Regards

Ca Balram Pandey

[YAGAY andSUN]

Receipt of CFE is the precondition of getting the export benefits.

[sanjeev bajaj]

Whether the adjustment of the receipt of services against the payment of import in foreign currency tantamount to receipt of amount in convertible foreign currency for that services. Please clarify ?

[YAGAY andSUN]

 

Liberalization of Export/Import procedures "Set-off" of export receivables against import payables   The Reserve Bank of India has been allowing requests from the exporters through their Authorised Dealer Category 1 banks for "set-off" of export receivables against import payables in respect of the same overseas buyer and supplier subject to certain terms and conditions. It has now been decided to delegate the power to Authorised Dealer Category – I banks to allow such set off with immediate effect. Detailed instructions in this regard have been issued in AP(DIR Series) Circular No. 47 dated November 17, 2011

[sarjerao ghadge]

Sir.

It is the proof that Service is provided on foreign land and Export obligation has fulfilled by getting the country foreign exchange.

S.D.GHADGE.

AI Summary

Receipt in convertible foreign exchange required: export of services qualifies only after actual forex receipt or authorised set off. Clause (e) of sub rule (1) of Rule 6A conditions export treatment on actual receipt of payment in convertible foreign exchange by the service provider; invoicing or provision abroad alone is insufficient. Practically, such receipt may include realizations effected through authorised dealer bank mechanisms, including permitted set off arrangements, and evidence of foreign exchange collection demonstrates fulfillment of the export requirement for service tax purposes.