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of <h1>Understanding Rule 32(2) CGST: How Foreign Currency Exchange is Taxed in India with Two Valuation Options</h1> The determination of the value of supply for the purchase or sale of foreign currency, including money changing, is governed by Rule 32(2) of the CGST Rules. Under Option 1, if a currency exchange involves Indian Rupees, the taxable value is the difference between the buying/selling rate and the RBI reference rate, or 1% of the gross amount if no RBI rate is available. For exchanges between foreign currencies, it's 1% of the lower amount when converted to Indian Rupees. Option 2 offers an alternative valuation method based on transaction amounts, with specific rates and thresholds. Examples illustrate these calculations.
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