Circular
26 Oct 2026
CBIC
Operative & In Force
263/09/2026-GST — Clarification in respect of receipt of payment for export of goods or services.
Legal Citation
CBIC Circular No. 263/09/2026-GST, dt. 26-10-2026
✦
Executive Directive & Regulatory Background
This CBIC Circular No. 263/09/2026-GST, dated October 26, 2026, provides crucial clarifications regarding the receipt of payment for export of goods and services under the GST regime, particularly concerning the fulfillment of condition (iv) of clause (6) of section 2 of the IGST Act, 2017.
Key Statutory Takeaways & Compliance Mandates
01
Objective & Uniformity of Implementation
Ensure uniformity in the implementation of GST refund provisions across field formations.
02
Export of Services & Rupee Realization
Payments for export of services received in repatriable rupee accounts (such as SNRR, INR Nostro, NRE accounts, or through net retention mechanisms by reinsurance brokers) are considered valid for fulfilling the export condition.
03
RBI-Permitted Set-Off Transactions
Set-off transactions, when permitted by RBI, are also valid modes of settlement.
04
Export of Goods & Rule 96B Relief
For export of goods, the circular aligns the time limit for realization of export proceeds with FEMA regulations and clarifies that recovery of refund under Rule 96B of CGST Rules will not be effected if the realization requirement is written off by an AD Bank.
05
GST Refund Procedures & Conditions
Streamline export-related GST compliance and refunds.
Key Procedural Changes & Industry Impact
-
Receipt of payment for export of services in repatriable rupee accounts (SNRR, INR Nostro, NRE) is now explicitly considered to fulfill the condition of 'receipt of payment in convertible foreign exchange' under IGST Act.Indian service exporters can now receive payments in specified INR accounts without jeopardizing their 'zero-rated supply' status for GST purposes, simplifying compliance and expanding payment options.
-
Set-off of export receivables against import payables, when permitted by RBI (including under the new FEMA 2026 regulations), is recognized as a valid mode of settlement for fulfilling export conditions under IGST Act.Exporters can utilize set-off mechanisms for cross-border transactions, reducing the need for actual foreign exchange remittances and potentially improving cash flow and operational efficiency.
-
The time limit for realization of export proceeds for goods under IGST Act is aligned with the periods prescribed by RBI under FEMA, 1999.This provides clarity and consistency, ensuring that GST refund recovery provisions under Rule 96B of CGST Rules are applied in sync with RBI's foreign exchange regulations.
-
Recovery of GST refund under Rule 96B for non-realization of export proceeds for goods will not be done if the requirement of realization has been written off by an Authorised Dealer (AD) Bank.This offers relief to exporters in cases where export proceeds are genuinely unrecoverable and written off by AD Banks, preventing undue recovery of GST refunds.
-
Net retention mechanism for reinsurance brokers, where commission is settled by retaining funds from net premium, is considered to satisfy the export payment condition under IGST Act.Reinsurance brokers benefit from explicit recognition of their industry-specific settlement practices, ensuring their services qualify as zero-rated exports for GST.
Statutory Provisions Interpreted & Cross-Referenced