Service tax invoice raised in doller $

[Yatin Bhopi]

Dear expert

We have received bills from shipping line company for recovering manifest charges. They have issue bill in
Dollar and they are registered under service tax. They have charged service tax (in Dollar).

my query is: 1. whether service provider can issue invoice in dollar? if yes then whether we can avail CENVAT on these invoices

[NANDAKUMAR PANICKER]

Yes, when the contract is entered in foreign currency, then it is possible that the bill could be raised in foreign currency. In this case, please request the service provider to mention the exchange rate in the invoice itself for the purpose of value for the payment of service tax. Then you can also account the same using the same exchange rate in your books of accounts and avail the Cenvat credit accordingly

[YAGAY andSUN]

Dear Yatin,

In addition to the above reply, you may take the foreign currency rate as disclosed by the Central Government on bi -monthly basis for conversion.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

AI Summary

Foreign currency invoicing: record exchange rate on invoice to determine service tax value and claim Cenvat credit. A service provider can issue an invoice in foreign currency when the contract is in that currency; the invoice should state the exchange rate so that the value for service tax is determinable. The recipient may use the invoice exchange rate to account for the transaction and avail Cenvat credit, or alternatively use the bi monthly foreign exchange rate published by the Central Government for conversion into domestic currency.