Clarification - export services - realisation in foreign exchange

[Suhit Aggarwal]

Whether in export of service it is must to receive export realisation in convertible foreign exchange? In some cases service exporter ask importer to remit exact amount and importer remit money from abroad in rupee. The FIRC in this case will not show any foreign currency.Will it be counter valid for export of services?

AI Summary

Service exporters must receive payments in convertible foreign exchange for tax exemption; rupee payments don't qualify. A query was raised regarding the requirement for service exporters to receive payments in convertible foreign exchange to qualify for service tax exemption. The issue highlighted instances where importers remit payments in rupees instead of foreign currency, resulting in a Foreign Inward Remittance Certificate (FIRC) that does not reflect foreign currency. The response clarified that to claim the exemption from service tax, the payment must be received in convertible foreign exchange. Payments received in rupees do not qualify for this exemption.