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Taxation Assam Ministry of Finance Assam Goods and Services Tax Act, 2017

Clarification relating to export of services sub-clause (iv) of the Section 2 (6) of the IGST Act 2017

01-Nov-2023 | 147/2023-GST

Government of Assam has issued a clarification regarding the export of services according to sub-clause (iv) of Section 2(6) of the IGST Act 2017.

Clarification:

Export of services is defined in clause (6) of section 2 of the IGST Act. For a service to qualify as an export of service, it needs to meet five conditions:

The supplier of service is located in India.
The recipient of service is located outside India.
The place of supply of service is outside India.
Payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.
The supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.
Sub-clause (iv) focuses on the mode of payment. It states that the payment for such service must be received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.

The Reserve Bank of India, in its A.P. (DIR Series) Circular No.10 dated 11th July 2022, clarified that an additional arrangement has been put in place to facilitate invoicing, payment, and settlement of exports / imports in Indian Rupees (INR). This step aims to promote global trade with a focus on exports from India and to support the growing interest of the global trading community in using INR. However, authorized dealer banks must obtain prior approval from the Foreign Exchange Department of the Reserve Bank of India, Central Office in Mumbai before implementing this mechanism.

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