GST Applicability on Exchange gain

[Ashiesh Prremji]

Dear Sir,

Please suggest GST applicability on exchange gain, Rule 34 of CGST talks about rate applicability for valuation purpose ?

Thanks with Regards,

[KASTURI SETHI]

Foreign exchange gain on what account ? Pl. elaborate your query.

[KASTURI SETHI]

Are you talking of foreign exchange gain due to rate fluctuations, if it is so, GST is not applicable.

[Ashiesh Prremji]

Yes Sir exactly it was due to rate fluctuation. Thanks for your Reply!

[YAGAY andSUN]

Please also check Rule 32 of CGST Rules 2017.

[Ganeshan Kalyani]

GST is not applicable on the gain arisen out of fluctuation in exchange rate. I agree with Sri Kasturi Sir's view.

[YAGAY andSUN]

Agreed, but if such fluctuation is from e.g. providing currency exchange services, then GST is applicable on such transactions.

[Guest]

Why Forex Gain / Loss is exempt..?? Whether any Notification or Schedule III exemption for Same??

AI Summary

GST on foreign exchange gain: rate fluctuation accounting gains are not taxable; service margins for currency exchange are taxable. Foreign exchange gain due solely to currency rate fluctuations is not subject to GST where it is an accounting/valuation movement and not consideration for a supply. Valuation rules (noted references to Rule 34 and Rule 32 of the CGST Rules) are relevant but do not render incidental forex variance taxable. Conversely, exchange margins or fees arising from providing currency exchange services are consideration for supply and attract GST, requiring reference to notifications or Schedule provisions for authoritative clarity.