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

Exporters Must Pay IGST with Interest if Payment Not Received for Zero-Rated Services per Rule 96A(1)(b) CGST Rules In a discussion forum regarding the export of services, a query was raised about the Goods and Services Tax (GST) implications when payment for exported services is not received and the receivables are written off according to FEMA provisions. The original invoice was zero-rated under a Letter of Undertaking (LUT). Respondents clarified that under Rule 96A(1)(b) of the CGST Rules, 2017, if payment is not received within one year, the exporter must pay Integrated GST (IGST) with interest. All respondents agreed that GST is payable on the export value in such cases.