Section 67A- Rate of Exchange

[Asked by Guest]

Service Tax - Section 67A:

The Domestic Company is entered into an agreement with other Domestic Company for continueous services. The billing is done in foreign currency on the monthly basis. The payment is made by the service receiver company in foreign currency only. If Section 67A is applicable in this situation? If yes then what are the implications of the same? 

[YAGAY and SUN]

If the both companies are Indian then, why payments are being made in the Foreign Currency. Please explain it.

AI Summary

Rate of exchange affects service tax valuation where domestic parties bill and pay in foreign currency for services.
Question whether the Rate of Exchange conversion rule applies where two domestic companies supply continuous services but invoice and receive payment in foreign currency, and if so that foreign-currency invoice must be converted into domestic currency for service tax valuation and compliance.