TaxTMI 
TaxTMI 
Applicability of GST on forex fluctuation in respect of exam fee paid to foreign bodies
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....pplicability of GST on forex fluctuation in respect of exam fee paid to foreign bodies<br> Query (Issue) Started By: - Mith Moh Dated:- 1-7-2026 Last Reply Date:- 2-7-2026 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>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 ....
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....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 subsequent....
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....ly 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 ....
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....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? Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: Foremost the fees collected as pure agent under Rule 33 and is outside the purview of value of supply. The surplus if retained would be considered as supply by the G....
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....ST department and you will have to remit GST on the same. You may adopt the cum-tax formula as provided in Rule 35. Nevertheless, ethically the coaching centre has no locus standi to retain the surplus. Reply By Sadanand Bulbule: The Reply: The retained forex fluctuation is liable to GST at 18% under SAC 998397 (or 996112), as the retention of gains prevents it from qualifying as a tax-exe....
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....mpt pure agent reimbursement. Reply By VENU K: The Reply: Under Rule 33(d), a pure agent must receive 'only the actual amount incurred to procure such goods or services.' The judiciary has strictly interpreted this 'actuals' requirement. In your case, ABC does not remit the 'exact' amount collected from students due to the retention of forex gains. By retaining the sur....
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....plus, ABC receives an amount exceeding the actual cost incurred. This 'value addition' or 'margin' is fatal to the pure agent claim. If the conditions of Rule 33 are not satisfied, the amount cannot be excluded from the value of taxable supply. To restore 'Pure Agent' status for the principal fee, ABC would need to pass on both gains and losses to the students, ensuring ....
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....only the 'actual' cost is recovered. Otherwise, considering the way the department interprets the provisions, there is a very big risk of getting huge tax demand on the entire amount collected from students. Strictly my opinion. Reply By Shilpi Jain: The Reply: Further facts need verification and examination before replying. Looks like the exclusion from taxation in terms of pure a....
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....gent may be difficult.<br> Discussion Forum - Knowledge Sharing ....