GST on exchange rate flutuation gain

[Kaustubh Karandikar]

Against supply of services for export, the amount is received by the supplier in foreign currency. There is a gain in this transaction to the supplier due to exchange rate fluctuation. Is the supplier liable to pay GST on the gain due to exchange fluctuation? If no under which provisions?

[SANJAY JAIN]

As per CGST Rule34, the exchange rate prevailing at the time of supply will be used for tax invoice purpose. There is no liability to pay the GST on any gain due to exchange rate fluctuation. Such exchange rate gain/loss will be a reconciliation items in Form 9C

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Sanjay.

[Ganeshan Kalyani]

GST is not applicable on exchange rate fluctuation.

[ARPITHA SS]

Sir Rule 34 states only about the valuation of the supply related to export which is related to foreign currency transaction.

but this case is excess of the collection out of the supply made due to currency rate fluctuation.

As per income tax its other income or indirect income and we pay tax for the same. where as in GST also it will be the income only know? we need not to pay tax on that??

AI Summary

Exchange rate fluctuation gain not subject to GST; valuation uses exchange rate at time of supply and is reconciled. Under GST invoice valuation, the exchange rate prevailing at the time of supply is used to determine taxable value; subsequent gains or losses from exchange rate fluctuation are reconciliation items and are not treated as separate GST-taxable supplies, and such gains are recorded in return reconciliations like Form GSTR-9C.