Service tax on extra receipt due to foreifn exchange variation

[Sanjeev Sharma]

If we receive an extra amount due to foreign exchange variation, then whether service tax is payable on that extra amount received on account of fluctuation ? Similarly, for amount short received due to foreifn exchange variation ?? 

AI Summary

Debate on taxing extra amounts from foreign exchange fluctuations under Section 67A and Rule 11 of Service Tax Rules. A discussion on whether service tax is applicable to extra amounts received due to foreign exchange fluctuations highlights differing opinions. One viewpoint suggests that if the original amount was taxable, then the additional amount from exchange rate changes should also be taxed. However, others argue that once the value of a service is determined under Section 67A of the Finance Act, any subsequent gain or loss from exchange rate fluctuations should not affect the taxable value. Amendments to Service Tax Rules in 2014 introduced Rule 11, aligning the applicable exchange rate with generally accepted accounting principles on the taxation point date.