MODE OF CURRENCY FOR BUSINESS FROM EOU TO EOU

[Guest]

As per GST Rule, it is understood that all transactions between EOU to EOU is taxable and such business would be treated on par with DTA. As regards payment, I need to know whether it is mandatory for EOU to make payment to other EOU only in terms of foreign currency or it can be paid in Indian Rupee. Please clarify.

AI Summary

Payments Between Export Oriented Units Can Be Made in INR, No Foreign Currency Required for EOU Transactions A discussion on a forum addressed whether payments between Export Oriented Units (EOUs) must be made in foreign currency or if Indian Rupees (INR) are permissible. Three contributors agreed that payments can be made in INR. The law does not require foreign currency for EOU to EOU transactions, and the Reserve Bank of India (RBI) allows payments from an Export Earners' Foreign Currency (EEFC) account. However, one contributor suggested that transactions within India should ideally be in INR, as foreign currency is not generated when transferring between EEFC accounts.