TaxTMI 
TaxTMI 
Dear Sir,
Please suggest GST applicability on exchange gain, Rule 34 of CGST talks about rate applicability for valuation purpose ?
Thanks with Regards,
GST Applicability on Exchange gain
11 May 2020 
7 Replies 
10154 Views Asked by
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. (AI Summary)
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. (AI Summary)