Export Services

[CA.Mohammed Lakkadsha]

If a Registered GST supplier has issued a Invoice of Export of services on provision of services under LUT (Without payment of Taxes). Subsequently the exporter is not able to recover the Invoice value from the Recipient due to some dispute (deficiency of services) , The credit note is pending to issued till the date of filing of annual return. Whether such supplies can be treated as export sales to be reported under 5A of table two or such supplies will become taxable since one of condition of receipt of Invoice value in Forex has not been fulfilled.

[KASTURI SETHI]

Q. Whether such supplies can be treated as export sales to be reported under 5A of table two ?

Ans. Yes. Export of service has taken place. Export proceeds can come later. Export of proof can be produced later on. Undoubtedly condition of FIRC has to be fulfilled subsequently.

AI Summary

Export of service can be reported despite non receipt of payment; foreign exchange realization and FIRC may be furnished subsequently. Export of services invoiced under a Letter of Undertaking constitutes an export for GST reporting and may be reported under the export head even if payment in foreign exchange is not yet realized; realization and production of FIRC or equivalent proof are subsequent compliance requirements. Pending credit notes or payment disputes do not automatically convert the supply into a taxable domestic supply where the export invoice and LUT are genuine, subject to later verification of foreign exchange realization and documentary proof.