This circular provides clarity on when export proceeds received in Indian Rupees can satisfy the condition under Section 2(6)(iv) of the IGST Act for a service to qualify as an export of services. It explains that one of the mandatory conditions for export status is receiving payment in convertible foreign exchange or in INR wherever permitted by RBI. RBI’s 2022 circular and the Foreign Trade Policy 2023 allow settlement of international trade in INR through Special Rupee Vostro Accounts maintained by authorised banks.

When an Indian exporter of services receives payment in INR from the balances held in such Special Rupee Vostro Accounts of the partner country’s correspondent bank, the receipt is treated as compliant with Section 2(6)(iv). This applies provided all RBI and Foreign Trade Policy conditions are met and any required approvals under other laws are obtained.