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

Pure agent treatment for forex gains on exam fees may fail when surplus is retained
GST liability is discussed where a coaching centre collects exam-related fees from students in INR and pays foreign bodies in foreign currency, creating exchange-rate gains or losses. The main question is whether the surplus retained from forex fluctuation can remain outside GST as a reimbursement or whether it becomes part of taxable supply. The discussion focuses on the pure agent conditions under Rule 33 and notes that retention of forex gains weakens that claim because the amount recovered exceeds the actual cost incurred.