By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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In view of the FEMA notifications issued by RB I, payment received in
Indian rupees is deemed to be convertible foreign exchange.
Facts:
The
Appellant received Indian rupees against export of services. The
Commissioner (Appeals) rejected the refund claims filed on the ground
that payment is not received in convertible foreign exchange. Further,
the second issue involved is whether the security and air travel
services can be considered as input service for providing output
service.
Held:
The Tribunal observed that when a
person receives in India payment in rupees from the account of a bank
situated in any country outside India maintained with an authorised
dealer, the payment in rupees shall be deemed to have repatriated the
realised foreign exchange in India as per Regulation 3 made u/s. 47 of
the Foreign Exchange Management Act, 1999. Further, FIRCs were produced
which are statutorily provided in the case of receipt or remittance of
foreign exchange specifically certifying that the payment is in
convertible foreign exchange. Further, relying on the decision of J.B.
Boda and Company Private Ltd., vs. Central Board of Direct Taxes AIR
1997SC 1543, the refund claims were sanctioned. In respect of input
services the Tribunal noted that they had direct nexus with the output
services and are considered eligible input services.
