Introduction
GST export services crypto payments can trigger complex compliance issues. Therefore, exporters must grasp zero-rated rules, LUT requirements, and FIRC proof to avoid department notices. This guide highlights every step.
Understanding GST Export Services Crypto Payments
- Zero-Rated Supply Conditions: Export services qualify for 0% GST if:
- Supplier in India.
- Recipient outside India.
- Place of supply outside India.
- Payment received in convertible foreign exchange.
- Crypto as Payment: Cryptocurrency is not “foreign exchange” under FEMA.
- Implication: Crypto receipts fail requirement (4), so crypto payments lose zero-rating.
Filing LUT for Crypto Export Services
- Why Furnish LUT? It lets exporters avoid IGST payment while claiming refunds.
- Active Step: Submit Form RFD-11 before exports.
- Transition: Next, secure proof of foreign exchange receipt.
Obtaining FIRC for Crypto Payments
- Standard FIRC: AD banks issue FIRCs only for fiat.
- Crypto Challenge: Banks won’t issue FIRC on crypto.
- Solution: Convert crypto to fiat through a regulated exchange or AD bank. Then, obtain an e-FIRC.
Remediation Steps for FY 21-22 GST Notice
- Calculate & Pay IGST: 18% on each export invoice where crypto was accepted.
- Add Interest: File interest under Section 50 for delay.
- Claim Refund: Use Form RFD-01 to reclaim IGST and ITC.
- Document Conversions: Retain crypto-to-fiat transaction records and e-FIRC.
- Finally: Furnish LUT for future exports.
Ready to streamline your GST export services crypto payments compliance?
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Harshaditya Kabra
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