CBIC Clarifies GST Treatment of Export Payments, INR Receipts and Set-Off Transactions:

The Central Board of Indirect Taxes and Customs (CBIC) has clarified the GST treatment on payments for export of services and goods including payments made in Indian rupees through specified bank accounts, adjustment of export and import dues and recovery of refunds where export proceeds are not realized.

CBIC has clarified that payments received by Indian exporters for services will be considered as fulfilling the payment conditions under IGST Act, 2017 when received in convertible foreign exchange or through repatriable Indian rupee (INR) accounts. These include Special Non-Resident Rupee (SNRR) accounts, INR Nostro accounts and other similar accounts that allow foreign exchange to be repatriated.

The clarification also pertains to stockbrokers providing services to overseas clients including Foreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). The payments received by the stockbrokers in Indian Rupees in repatriable accounts like SNRR and NRE accounts will be considered to satisfy the prescribed conditions under the IGST Act. However, payments made through Non-Resident Ordinary (NRO) accounts are eligible only if transferred through repatriable INR accounts such as SNRR or NRE accounts.

CBIC has also given clarity on how to deal with set-off transactions where export receivables are adjusted against import payables rather than settling them through separate payments. Such transactions are permitted under the Foreign Exchange Management Act (FEMA), subject to applicable RBI guidelines. Earlier, certain conditions applied to set-offs between goods and services. However, with the new Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, coming into effect from October 1, 2026, these conditions will no longer apply.

Accordingly, CBIC has clarified that where export receivables are adjusted against import payables, the payment condition under the IGST Act will be considered fulfilled, provided the set-off is carried out in accordance with the directions issued by the Reserve Bank of India (RBI).

For complete information refer to the following circular: