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CGST circularMedium impact for ecommerce sellers

CBIC clarifies when rupee account receipts and set-offs meet the export of services payment condition, and Rule 96B recovery for goods

Official text · Summary prepared automatically

Document
Circular No. 263/09/2026-GST
Issued
26 Oct 2026
Effective
26 Oct 2026
Issued by
Central Board of Indirect Taxes and Customs (CBIC), GST Policy Wing
Official PDF(opens in a new tab)

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What it means for ecommerce sellers

Circular No. 263/09/2026-GST clarifies that payment for export of services received in convertible foreign exchange or in repatriable rupee (INR) accounts, such as SNRR or INR Nostro accounts, or settled by set-off of export receivables against import payables in accordance with RBI directions, fulfils sub-clause (iv) of clause (6) of section 2 of the IGST Act, 2017. For export of goods, it clarifies that the time limit for realisation of export proceeds under Rule 96B of the CGST Rules is the period prescribed in RBI FED Master Direction No. 16/2015-16, and that refund recovery under rule 96B shall not be done where the AD Bank has written off the realisation requirement. It is a clarification issued under section 168 (1) of the CGST Act, not an amendment, and is relevant to sellers who export goods or services and claim GST refunds. The circular does not address marketplace-specific payment arrangements.

Who it affects

  • Indian exporters undertaking export of services
  • Exporters of goods whose refund may be recovered under Rule 96B where sale proceeds are not realised
  • Stock brokers providing services to overseas clients (FPIs, NRIs and OCIs)
  • Indian reinsurance brokers providing broking services to foreign reinsurers
  • CBIC field formations processing GST refunds

Before and after

  • RBI conditions on set-off of export receivables against import payables

    Before
    In terms of extant RBI guidelines, set-off was allowed with certain conditions: goods against goods and services against services.
    After
    With the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 coming into effect from 1 October 2026, the circular states these conditions would not be applicable; a set-off in accordance with RBI directions is treated as fulfilling sub-clause (iv) of clause (6) of section 2 of the IGST Act.

  • Write-off of realisation requirement and refund recovery under Rule 96B

    Before
    Rule 96B, as described in the circular, provides that no recovery shall be effected where the realisation requirement has been written off, wholly or partly, by the Reserve Bank of India on merits.
    After
    The circular clarifies that where the realisation requirement has been written off, wholly or partly, by the AD Bank, recovery of refund amount under rule 96B shall not be done.

What to do

  1. An exporter of services would confirm that the export payment is received in convertible foreign exchange or in a repatriable rupee (INR) account such as an SNRR account or INR Nostro account, or any other similar account for repatriation of foreign exchange.
  2. Where export receivables are set off against import payables, an exporter would keep records showing the set-off is in accordance with the directions issued by the RBI.
  3. A stock broker paid by overseas clients through NRO accounts would note that, as per the circular, such payments should be routed through repatriable INR accounts (SNRR, NRE) to be considered to satisfy the export condition.
  4. An exporter of goods who has received a refund would track realisation of sale proceeds within the period or extended period prescribed in RBI FED Master Direction No. 16/2015-16, since unrealised amounts are liable to be deposited or recovered with applicable interest within thirty days from expiry of that period under Rule 96B.
  5. Where the AD Bank has written off the realisation requirement wholly or partly, an exporter of goods would retain the write-off record, as the circular clarifies recovery under rule 96B shall not be done in such cases.

Provisions referred to: Section 168 (1) of the Central Goods and Services Tax Act, 2017; Sub-clause (iv) of clause (6) of section 2 of the Integrated Goods and Services Tax Act, 2017; Rule 96B of the CGST Rules; Foreign Exchange Management Act (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 1 January 2016; Circular No. 202/14/2023-GST dated 27 October 2023

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Official text

As issued by Central Board of Indirect Taxes and Customs (CBIC), GST Policy Wing. Where the text starts with “Extract”, only the parts that concern ecommerce sellers are reproduced; the official PDF (opens in a new tab) is the authoritative version.

Type a word, number or section to highlight it below.

Page 1 of 4 Circular No. 263/09/2026-GST F. No. CBIC-20001/2/2026-GST Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes & Customs GST Policy Wing **** Room No. 16039, Kartavya Bhawan-01 New Delhi, Dated: 26.10.2026 To, The Principal Chief Commissioners/ Chief Commissioners (All) The Principal Director General/ Director General (All) Madam/Sir, Subject: Clarification in respect of receipt of payment for export of goods or services- reg. References have been received from the field formations seeking clarification on various issues relating to GST refunds. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law in this regard across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues detailed hereunder: 2. Receipt of foreign remittance in respect of export of services in Nostro and Special Non-Resident Rupee (SNRR) accounts: Various requests have also been received for clarification regarding admissibility of export remittances received in repatriable rupee (INR) accounts such as Special Non-Resident Rupee (SNRR) Account or Nostro account and treatment of set-off of export receivables against import payables, wherever permitted by the Reserve Bank of India (RBI) for the purposes of consideration of supply of services as per the provisions of condition (iv) of clause (6) of section 2 of the Integrated Goods & Services Tax Act, 2017 (herein after referred to as the ‘IGST Act”). 2.1 In this regard, reference is drawn to circular No. 202/14/2023-GST dated 27.10.2023, wherein it was clarified that when the Indian exporters, undertaking export of services, are paid Page 2 of 4 the export proceeds in INR from the Special Rupee Vostro Accounts of correspondent bank(s) of the partner trading country, opened by Authorised Dealer (AD) banks, the same shall be considered to be fulfilling the conditions of sub-clause (iv) of clause (6) of section 2 of IGST Act, 2017, subject to the conditions/ restrictions mentioned in Foreign Trade Policy, 2023 and extant RBI Circulars and without prejudice to the permissions/ approvals, if any, required under any other law. 2.2 As per the provisions of Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 (FEMA 14R/2023), receipt/payment for export to countries other than Nepal, Bhutan and members of Asian Clearing Union(ACU), may be done in Indian Rupees (INR) or in any foreign currency. Such payment in INR may be facilitated either through INR Nostro (Rupee Vostro) of correspondent banks or repatriable INR accounts such as Special Rupee Vostro Account (SRVA), Special Non-Resident Rupee (SNRR) etc.. Since, payments in INR are a valid mode of settlement as per FEMA regulations and Rupee Vostro and SNRR are permissible accounts for receipt of export proceeds. 2.3. Therefore, it is hereby clarified that wherever the payment for export of service made by the Indian exporters is received in convertible foreign exchange or in repatriable rupee (INR) accounts, such as SNRR Account or INR Nostro account, or any other similar account for repatriation of foreign exchange, the same shall be considered to be fulfilling the conditions of sub-clause (iv) of clause (6) of section 2 of IGST Act, 2017. Further, stock brokers provide services to their overseas clients (FPIs, NRIs and OCIs) and get paid for the services in INR. It is clarified that payment to brokers through repatriable INR accounts (SNRR, NRE) may be considered to be fulfilling the conditions of sub-clause (iv) of clause (6) of section 2 of IGST Act, 2017. In case of payments through NRO accounts, as per RBI guidelines, the same should be routed through repatriable INR accounts (SNRR, NRE) for it to be considered to satisfy the conditions stipulated under sub-clause (iv) of clause (6) of section 2 of the IGST Act, 2017. 2.4 It may also be noted that set-off transactions are a valid method of settlement under FEMA regulations. In terms of extant guidelines of RBI, set-off are allowed with certain conditions. Such set-off are allowed for goods against goods and services against services. However, with the coming into effect of the new guidelines viz. Foreign Exchange Management (Export and Import Page 3 of 4 of Goods and Services) Regulations, 2026, from October 01, 2026, these conditions would not be applicable for such transactions. Thus, as set-offs are valid mode of settlement as per FEMA regulations, it is further clarified that wherever export receivables are set-off against import payables, then as long as such set-off is in accordance with the directions issued by the RBI, the said condition of sub-clause (iv) of clause (6) of section 2 of IGST Act, shall be considered to be fulfilled. 2.5. Further, in respect of receipt of remittance by reinsurance brokers through the net retention mechanism, it may be noted that the commission charged by an Indian reinsurance broker for providing broking services to the foreign reinsurers is settled by net settlement rather than by a separate inward remittance in foreign exchange. In this scenario, as per FEMA regulations, the foreign reinsurer/broker is treated as having paid the commission/brokerage by authorizing the Indian broker to retain it out of funds prior to remittance of the net premium outside India. Under FEMA regulations, the obligation of the service exporter to realise and repatriate export proceeds is extinguished through this net retention mechanism. Thus, it may be treated as having satisfied sub-clause (iv) of clause (6) of section 2 of the IGST Act. 3. Realisation of export proceeds in case of export of goods: Attention is invited to Rule 96B of the CGST Rules, which provides that where sale proceeds of export goods are not realized, wholly or partly, within the period prescribed under the Foreign Exchange Management Act (FEMA), 1999, including any extension granted thereunder, the refund amount paid shall be liable to be deposited/ recovered, to the extent of such non-realization, along with applicable interest, within thirty days from the expiry of the said period or extended period, if any. Rule 96B further provides that no such recovery shall be effected where the requirement of realization has been written off, either wholly or partly, by the Reserve Bank of India on merits. 3.1. It is clarified that as the time limit for realization of export proceeds in India and the amount to be realized are governed under the provisions of FEMA, 1999, regarding which provisions are formulated and implemented by the RBI, therefore, the time limit for realization of export proceeds for export of goods under the IGST Act, 2017, shall be such period, or such extended period, which has been prescribed in FED Master Direction No. 16/2015-16 dated 01.01.2016 (last amended on 05.06.2026) issued by the RBI and as amended from time-to-time. It is also clarified that wherever Page 4 of 4 the requirement of realization has been written off, either wholly or partly, by the AD Bank, recovery of refund amount under rule 96B shall not be done. 4. It is requested that suitable trade notices may be issued to publicize the contents of this circular. Difficulty, if any, in the implementation of the above circular may please be brought to the notice of the Board. Yours faithfully, (Gaurav Singh) Commissioner (GST)

Questions sellers ask

Does export payment received in an SNRR or INR Nostro account count as export of services under GST?

Yes. CBIC Circular No. 263/09/2026-GST clarifies that where payment for export of services is received in convertible foreign exchange or in repatriable rupee (INR) accounts, such as an SNRR Account, INR Nostro account or any other similar account for repatriation of foreign exchange, it shall be considered to fulfil the conditions of sub-clause (iv) of clause (6) of section 2 of the IGST Act, 2017.

Can export receivables be set off against import payables and still meet the GST export of services condition?

CBIC Circular No. 263/09/2026-GST clarifies that where export receivables are set off against import payables, the condition in sub-clause (iv) of clause (6) of section 2 of the IGST Act is considered fulfilled as long as the set-off is in accordance with directions issued by the RBI. The circular notes that from 1 October 2026 the earlier RBI conditions of goods against goods and services against services would not apply.

What is the time limit for realising export proceeds of goods for GST refund purposes under Rule 96B?

CBIC Circular No. 263/09/2026-GST clarifies that the time limit for realisation of export proceeds for export of goods under the IGST Act, 2017 is the period, or extended period, prescribed in RBI FED Master Direction No. 16/2015-16 dated 1 January 2016, as amended from time to time. Under Rule 96B, unrealised amounts of refund are liable to be deposited or recovered with applicable interest.

Will GST export refund be recovered if the AD Bank writes off the export realisation?

No. CBIC Circular No. 263/09/2026-GST clarifies that wherever the requirement of realisation of export proceeds of goods has been written off, either wholly or partly, by the AD Bank, recovery of the refund amount under rule 96B of the CGST Rules shall not be done. Rule 96B itself, as quoted in the circular, already excludes recovery where the Reserve Bank of India writes off realisation on merits.

Does payment through an NRO account qualify as export of services for stock brokers under GST?

CBIC Circular No. 263/09/2026-GST states that for stock brokers paid in INR by overseas clients (FPIs, NRIs and OCIs), payment through repatriable INR accounts such as SNRR or NRE may be considered to fulfil the export condition in the IGST Act. For payments through NRO accounts, the circular states that, as per RBI guidelines, these should be routed through repatriable INR accounts (SNRR, NRE) to satisfy the condition.

Want help working out what this means for your business?

We handle GST and TDS compliance, returns and notice replies for D2C and marketplace sellers, and can walk you through how a change applies to your books.

Contact usWhatsApp us

General information only, not professional advice. The summary is ecomca’s reading of the document; the official PDF is the authoritative version, and later amendments may change it. Check the official source before you act.