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FOREX TRANSACTION MODEL

USD 10000 invoice raised to Party on 1-4-2017

Material shipped on Board (B/L Date) is 10-4-2017

Party made Payment on 20-4-2017

Amount Received at our Bank - USD 9980

My question is, how to account this transaction.

1. In Tally, which should be the invoice date as entered, whether the invoice raised date or Shipped on Board Date as Invoice Date.

2. Which USD : INR Exchange rate should be used for making Invoice Entry in Tally, whether as per Custom Bill Rate or prevailing Exchange rate on the date of shipment (B/L Date)

3. We receive always USD 20-50 short per remittance, how to Account this short of amount, whether Dollar Collection Charges or some other means.

4. USD 9980 received is converted in INR and credited to our Account on 20-04-2017, on this date exchange rate is different than on 10-4-2017, which results in FOREX GAIN/LOSS. How to handle it and difference will liable to gst.

Kindly solve our queries.

[YAGAY andSUN]

RBI reference rate would be taken.

Short payment would be treated as Bank Charges.

[DR.MARIAPPAN GOVINDARAJAN]

Thanks Yagay for your reply.

AI Summary

Foreign exchange accounting: use RBI reference rate, treat short remittances as bank charges and record forex gain or loss. Advisory responses recommend using the RBI reference rate for exchange rate determination and treating routine short foreign currency receipts as Bank Charges, with remittances recorded net of such charges and foreign exchange gain or loss recognised on conversion at receipt; the replies do not resolve the invoicing date choice or GST consequence of forex differences.