A GST-registered money changer buys USD 2,000 at ₹30 per dollar. The RBI reference rate is unavailable. The money changer applies Rule 32(2)(a) and has not opted for the slab method. What is the…
Question and options
A GST-registered money changer buys USD 2,000 at ₹30 per dollar. The RBI reference rate is unavailable. The money changer applies Rule 32(2)(a) and has not opted for the slab method. What is the taxable value of the money-changing service?
₹60,000
₹1,400
₹600
₹30,000
Answer and explanation
Under Rule 32(2)(a) of the CGST Rules, 2017, the value of a currency exchange is the difference between the buying or selling rate and the RBI reference rate, multiplied by the units; where the reference rate is unavailable, it is 1% of the gross amount of Indian rupees provided or received. Here that is 1% of ₹60,000 (2,000 × ₹30), or ₹600; the gross ₹60,000 is not the value.
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