Applicability of GST on forex fluctuation in respect of exam fee paid to foreign bodies

[Mith Moh]

ABC offers professional coaching for courses like ACCA and CMA USA, which involve internationally recognized certifications in the field of finance and accounting. As part of the enrolment process, students need to pay various fees, including course registration fees, material fees, and subscription fees, directly related to ACCA, IMA USA etc. These fees are often paid in foreign currency to the respective institutions based outside India, leading to foreign exchange fluctuations due to currency conversion. The fee is collected from students in INR and is subsequently paid to the foreign bodies. Due to variations in foreign exchange rates, there are differences between the initial invoiced amount and the final settlement amount at the time of actual payment. The fluctuation is not passed on to the students, ABC retains any amount received as part of forex fluctuation and pays itself any additional amount arising on account of forex fluctuation. Since ABC is merely facilitating the exam fee payment, whether the amount retained on account of forex fluctuation is liable to GST? if So what is the SAC and GST Rate for the same?

AI Summary

Foreign exchange fluctuation in exam fee remittances raises the question of GST liability on retained conversion differences. GST treatment of foreign exchange fluctuation arising in the payment of exam and related fees to foreign certification bodies is in issue where a coaching provider collects fee amounts from students in INR, remits them in foreign currency to overseas institutions, and retains any surplus or bears any shortfall arising from currency conversion differences. The central question is whether the amount retained by the provider on account of forex fluctuation, in the course of facilitating payment to foreign bodies, constitutes a supply liable to GST, and if so, the appropriate classification and rate.