Export of service - payment not received - write off

[Mohideen A]

In case of export of services and the payment is not received and the company decides to write off the receivables (in accordance with provisions of FEMA) then is there any implications for GST for the write off. The original invoice was recorded as Zero rated under LUT.

[Rajagopalan Ranganathan]

Sir

According to rule 96 A(1)(b) of CGST Rules,2017 exporter has to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange or in Indian rupees, wherever permitted by the Reserve Bank of India.

Therefore in your case since the payment is not received within one year from the date of export invoice you have to pay IGST at appropriate rate along with interest.

[DR.MARIAPPAN GOVINDARAJAN]

I concur with the views of Shri Rajagopalan.

[Himansu Sekhar]

GST will be payable on the export value.

AI Summary

Export of services payment failure requires IGST payment with interest when foreign exchange not received.
If payment for exported services is not received in convertible foreign exchange (or permitted rupees) within one year of the export invoice, the exporter must pay IGST and the interest specified under section 50 within fifteen days after that one year expiry, unless a further period is allowed by the Commissioner; zero rating under a Letter of Undertaking does not eliminate this obligation.