CBIC Acknowledges Rupee Receipts and Set-Offs as Qualifying Service Exports

The Central Board of Indirect Taxes and Customs clarified that service export proceeds collected in Indian rupees through Special Non-Resident Rupee accounts or Nostro accounts satisfy the criteria for export of services. Additionally, transactions involving approved set-offs and net retention mechanisms now officially qualify under the same classification.

Service providers often navigate complex remittance structures where foreign earnings are settled through specialized rupee accounts or offset against matching overseas expenses. This policy stance validates these standard commercial practices, ensuring businesses do not lose export benefits due to non-traditional settlement mechanics.

Exporters should audit their billing and settlement mechanisms to ensure alignment with the approved account types and set-off guidelines. Financial teams must maintain robust documentation supporting rupee receipts and net retention calculations to substantiate tax positions during audits.