Realization of Export service proceeds in INR

[gururaj Bhat]

Dear Sir/Madam,

I hope you are well and keeping safe.

Case : A company is into 100% export of services to USA, but they are receiving the proceeds in INR. Banker is providing MT 103 form as proof of foreign inward remittance.

My Query :

1. To constitute the definition of export - should the export proceeds to be received in foreign currency or INR?

2. As the export received in INR in this case are we liable to pay GST @ 18 % ?

3. Whether MT 103 can be used as FIRC for GST refunds on accumulated ITC.

Looking forward for your valuable suggestions

Thanks & Regards,

Gururaj

AI Summary

Export proceeds realization must be in foreign exchange or RBI permitted INR; refunds require BRC or FIRC proof.
Realization of export of services must occur in convertible foreign exchange or in INR where RBI permits; this determines refund entitlement and GST treatment. For refund claims under Rule 89(2)(c), exporters must submit invoice details along with the relevant Bank Realization Certificate or Foreign Inward Remittance Certificate. Guidance notes emphasize realization through a vostro account as normative, while banks' MT 103 forms may be used operationally but BRC/FIRC remain the prescribed documentary proof for processing export-related refunds.