Chandrasekhar Kutty, Founding Partner, Sashthi Taxlegal Advisory Services LLP | GST Litigation • Advisory • Appellate Representation | Hosur • Bengaluru
27 October 2026
CBIC has widened the ways in which the “receipt of payment” condition in section 2(6)(iv) of the IGST Act can be satisfied for export of services, and has tied the realisation period for export of goods under rule 96B of the CGST Rules to RBI’s FEMA directions.
Export of services: what now counts as payment received
- Payment received in convertible foreign exchange, or in repatriable INR accounts such as SNRR accounts, INR Nostro (Rupee Vostro) accounts, or any similar account meant for repatriation of foreign exchange. This extends Circular 202/14/2023-GST, which had covered only Special Rupee Vostro Accounts.
- Stock brokers paid in INR by FPIs, NRIs and OCIs through repatriable accounts (SNRR, NRE). Payments through NRO accounts qualify only if routed through a repatriable account as per RBI guidelines.
- Set-off of export receivables against import payables, so long as the set-off follows RBI directions. From 01.10.2026, the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 remove the earlier goods-against-goods and services-against-services restriction.
- Reinsurance brokers who retain their commission out of the premium before remitting the net amount abroad: the net retention mechanism is treated as payment received, since the FEMA obligation to realise and repatriate is extinguished through it.
Export of goods: rule 96B
The time limit for realising export proceeds is whatever RBI prescribes in FED Master Direction No. 16/2015-16 dated 01.01.2016 (last amended 05.06.2026), including extensions. Where the AD Bank writes off the realisation requirement wholly or partly, no recovery of refund is to be made under rule 96B. The rule itself speaks only of a write-off by RBI; the circular gives the AD Bank write-off the same effect.
Litigation angle
Refund rejections and demands founded on the narrow reading that only a foreign currency inward remittance qualifies are now untenable. Exporters whose refunds were rejected on this ground, particularly IT and ITES service providers paid through SNRR accounts and brokers servicing FPIs, should revisit those orders.
What exporters should do now
- Revisit rejected refund claims where the only objection was the mode of receipt.
- File fresh refund claims within the section 54 limitation, citing Circular 263/09/2026-GST.
- Where a rule 96B recovery has been proposed, check whether an AD Bank write-off or an RBI extension covers the shortfall.
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Source: CBIC Circular No. 263/09/2026-GST dated 26.10.2026, F. No. CBIC-20001/2/2026-GST. This article is for general information and does not constitute professional advice. Readers should obtain specific advice before acting on any matter discussed here.