1. Title of the Document
| Document Title | Clarification in respect of receipt of payment for export of goods or services |
| Document Number | Circular No. 263/09/2026-GST (F. No. CBIC-20001/2/2026-GST) |
| Issuing Authority | Central Board of Indirect Taxes & Customs (CBIC), GST Policy Wing, Department of Revenue, Ministry of Finance |
| Date of Document | 26.10.2026 |
| Relevant Provisions | Section 168(1) of the CGST Act, 2017; Section 2(6)(iv) of the IGST Act, 2017; Rule 96B of the CGST Rules, 2017; Circular No. 202/14/2023-GST dated 27.10.2023; FEMA, 1999; Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 (FEMA 14R/2023); Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026; RBI FED Master Direction No. 16/2015-16 dated 01.01.2016 |
2. Summary of the Document
The Central Board of Indirect Taxes and Customs (CBIC), GST Policy Wing, has issued Circular No. 263/09/2026-GST dated 26.10.2026 under section 168(1) of the CGST Act, 2017. It responds to references from field formations on GST refunds, concerning the modes of receiving consideration for export of services and the period for realisation of export proceeds for export of goods, to secure uniform implementation of the law.
Sub-clause (iv) of clause (6) of section 2 of the IGST Act, 2017 requires payment for export of services to be received in convertible foreign exchange or in Indian rupees wherever permitted by the RBI. The Board recalls Circular No. 202/14/2023-GST dated 27.10.2023, which accepted INR receipts from Special Rupee Vostro Accounts, and notes that FEMA 14R/2023 permits settlement of exports to countries other than Nepal, Bhutan and Asian Clearing Union members in INR or any foreign currency, including through INR Nostro (Rupee Vostro) or repatriable INR accounts such as SRVA and SNRR.
Accordingly, payment for export of services received in convertible foreign exchange or in repatriable INR accounts, such as SNRR, INR Nostro or any similar account for repatriation of foreign exchange, shall be considered to fulfil the said condition. Stock brokers paid in INR by overseas clients (FPIs, NRIs and OCIs) through repatriable SNRR or NRE accounts are likewise covered, while NRO account payments must, as per RBI guidelines, be routed through SNRR or NRE accounts to qualify.
The circular also recognises set-off of export receivables against import payables as a valid FEMA settlement. Noting that the earlier like-for-like set-off conditions would not apply with the coming into effect of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 from 01.10.2026, the Board clarifies that a set-off in accordance with RBI directions satisfies the condition. Likewise, an Indian reinsurance broker’s commission retained out of premium under the net retention mechanism, which FEMA treats as extinguishing the realisation obligation, satisfies the condition.
For export of goods, rule 96B of the CGST Rules requires recovery of refund with interest, to the extent sale proceeds are not realised within the FEMA period including extensions, save where the RBI writes off realisation on merits. The Board clarifies that the realisation period shall be that prescribed in RBI FED Master Direction No. 16/2015-16 dated 01.01.2016 (last amended on 05.06.2026), as amended, and that no recovery under rule 96B shall be made where realisation has been written off, wholly or partly, by the AD Bank.
Legal Takeaway: The circular aligns the GST export conditions with the FEMA and RBI framework. Exporters whose refunds under section 54 of the CGST Act read with section 16 of the IGST Act were denied solely because consideration came through repatriable INR accounts, set-off or net retention, or who face rule 96B recovery despite an AD Bank write-off, may rely on this circular, binding on officers under section 168(1), in replies and appeals, supported by bank documents evidencing RBI compliance.
3. Tabular Summary
| S. No. | Issue | Para | Provision | Clarification | Conditions | Applies To | Practical Impact |
|---|---|---|---|---|---|---|---|
| 1 | Export remittance received in SNRR / INR Nostro / similar repatriable INR account | 2.2, 2.3 | Sec. 2(6)(iv) IGST Act; FEMA 14R/2023 | Treated as fulfilling the payment condition for export of services | Account must be repatriable; FTP 2023 and RBI conditions | Exporters of services | Refunds cannot be denied merely because proceeds are in INR |
| 2 | Stock brokers paid in INR by FPIs, NRIs and OCIs | 2.3 | Sec. 2(6)(iv) IGST Act | Payment through repatriable INR accounts (SNRR, NRE) qualifies | Routed through SNRR or NRE accounts | Stock brokers | Brokerage from overseas clients eligible as export |
| 3 | Payments from NRO accounts | 2.3 | Sec. 2(6)(iv) IGST Act; RBI guidelines | Qualifies only if routed through repatriable INR accounts | Routing through SNRR / NRE as per RBI guidelines | Service exporters receiving NRO funds | Direct NRO receipts may not qualify |
| 4 | Set-off of export receivables against import payables | 2.4 | Sec. 2(6)(iv) IGST Act; FEM (Export and Import of Goods and Services) Regulations, 2026 | Set-off treated as fulfilling the payment condition | Set-off must accord with RBI directions | Exporters with import payables | Set-off no longer a ground for refund rejection |
| 5 | Reinsurance broker commission settled by net retention | 2.5 | Sec. 2(6)(iv) IGST Act; FEMA | Retention out of premium treated as receipt of consideration | Net settlement as recognised under FEMA | Indian reinsurance brokers | Separate inward remittance not required |
| 6 | Time limit for realisation of export proceeds (goods) | 3, 3.1 | Rule 96B CGST Rules; FEMA, 1999 | Period as per RBI FED Master Direction No. 16/2015-16, as amended | Including extended period, if any | Exporters of goods | Rule 96B period aligned with RBI timelines |
| 7 | Write-off of realisation requirement | 3, 3.1 | Rule 96B CGST Rules | No recovery of refund where AD Bank writes off realisation | Write-off, wholly or partly, by AD Bank | Exporters of goods | Ground to resist rule 96B recovery |
Download the Document: Circular No. 263/09/2026-GST dated 26.10.2026
Disclaimer: Prepared by Team GSTIndiaguide.com. This summary is for information and does not constitute legal advice. Refer to original notification, judgement, circular or other documents for reference.
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