Uttarakhand AAR held that the value of goods supplied within India and billing is done in foreign currency, shall be determined under Rule 34 of Central Goods and Service Tax (CGST) Rules, 2017 and rate of exchange for imported goods as notified by the Board under Section 14 of the Customs Act, 1962 shall be applicable.
The applicant, Bharat Heavy Electricals Limited entered into the agreement with Chief Engineer/Projects-II, Tangedco, Chennai for engineering, procurement & construction of ” 2 x 660 MW Coal based Udang-udi Supercritical Thermal Power Project-I”. The contract price is in three currencies viz Rupees, US Dollar and Euro. The certain supply to the said contract is being made by the applicant wherein billing on a customer is to be done in foreign currency and since the customs declare exchange rate under two categories, one is for import and second is for export,
The applicant sought the ruling on the issue that in the case where goods are supplied within India and billing is to be done in foreign currency, which exchange rate to be applied rate prescribed for export of goods or for import of goods?
The authority consisting of the members Vipin Chandra and Amit Gupta ruled that the value of goods supplied within India and billing are done in foreign currency, shall be determined under Rule 34 of Central Goods and Service Tax (CGST) Rules, 2017 and rate of exchange for imported goods as notified by the Board under Section 14 of the Customs Act, 1962 shall be applicable.
“In exercise of the powers conferred by Section 14 of the Customs Act, 1962, the Government of India issued notification time to time to determine the rate of exchange of conversion of the foreign currencies relating to imported and export goods. In this context, we have perused the letter dated 23.12.2019 of the applicant wherein they intimated the authority that normally the foreign currency price in the contract is to cover imported content of the material used in setting up of Power Station in India wherein Indian company usually imported goods, make foreign currency payment to their supplier, in turn, foreign currency from the customer,” the ruling said.
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