Zero rating of Export of service where consideration settled by book entry

[Vaishnavi Bubesh]

Dear Experts,

We are having query regarding the scenario where we are supplying service to recipient located outside India & POS is also outside India but we are not receiving the consideration in Foreign Currency due to the reason we have imported some services from the same person.

We are adjusting the amount receivable against the amount payable in our books. Only difference is settled in foreign currency.

Whether we can claim the benefit of zero rating in this case?

Whether this adjustment will fulfill the condition of "amount of consideration should be received in foreign currency" as specified by Sec 2(6) of IGST Act?

Thanks in advance.

AI Summary

Export of services: book entry adjustments generally do not qualify as foreign exchange receipt for zero rating entitlement.
Zero-rating depends on receipt of payment in convertible foreign exchange or permitted rupee remittance; ledger or book adjustments offsetting receivables and payables generally do not satisfy the statutory payment requirement for export of services. While the place of supply being outside India negates domestic GST levy, any reliance on central bank guidance or arbitration-based mutual adjustments to characterize book entries as payment must be validated under foreign exchange (FEMA) rules before claiming zero-rating.