Friday, September 9, 2016

Valuation in case of Money Changer services

In case of sale and purchase of foreign currency the consideration of money changer is included in the selling / buying rates. Valuation of the services in such cases shall be determined as under –

i. Value of services shall be equal to the difference between selling / buying rate and the RBI reference rate multiplied by total units of currency.

ii. If RBI reference rate is not available, value shall be 1% of gross amount of Indian rupees provided or received by the person changing the money.

iii. If neither of the currencies exchanged in Indian rupees, the value shall be equal to 1% of the lesser of the two amounts the person would have received by converting any of two currencies into Indian Rupees on that day at the reference rate provided by RBI.

As is expected from the new GST regime that it will bring uniformity, simplification to tax management and eventually higher GDP growth, yet there seems to be so many challenges ahead in view the vast applicability of GST law and diversified administrative agencies across the states.

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