Export of Services payments not received in foreign currency - Refund eligibility

[Krishnamurthy V]

Sir,

For export of services, one of the conditions stipulate that payments are to be received in convertible foreign currency. Suppose, export of services done through online, payments are received through Paypal, deposited in servie providers' Bank account in Indian currency, whether ITC refund can be claimed in this case. Please advice.

AI Summary

Can ITC refunds be claimed for exported services paid in INR via PayPal? CBIC Circular No. 88/07/2019-GST clarifies. A query was raised regarding the eligibility for claiming an Input Tax Credit (ITC) refund when payments for exported services are received in Indian currency through platforms like PayPal. The discussion referenced CBIC Circular No. 88/07/2019-GST, which clarifies that while export invoices can be in Indian Rupees, export proceeds must typically be realized in freely convertible currency. However, payments in INR are permissible under certain conditions, such as through a freely convertible Vostro account, and subject to RBI approval. The discussion concluded that ITC refund claims are possible under these circumstances.