Question ID : 41056

EXPORT OF SERVICE AND RECEIVING OF REMITTANCE

A Pvt. Ltd. Co. is creating websites and accounting systems for clients based in USA & Europe. These are treated as export of service. Company raised invoice on say 01-April-2020. Now the question is : (1) What is the maximum time limit to receive the sales proceeds in convertible foreign exchange?" so that the above Invoice can continue to be treated as export of service. (2) Is there any change in the time limit for receiving convertible foreign exchange? Thanks

Answer ID : 81125

The maximum time limit prescribed under CGST, Act 2017 is ONE year for realization of export proceeds. However this period can be extended by the Commissioner of CGST. But as per RBI, Time line for realization is prescribed under FEMA is 9 months. This can be extended by the Authorized Dealer banker up to SIX months. Therefore the exporter has to keep both the time lines in their mind and action should be in harmonization with the provisions of both the laws of the land.

Answer ID : 81131

RBI notification was issued on 1sr April 2020 for extending the period from 9 month to 15 months. from the date of export, However it was applicable for export made up to or on July 31, 2020. However under the Foreign trade policy you can avail the benefit of export incentive irrespective of when the amount has been realised.

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