If you’re going to travel overseas, you will have to pay more for foreign currency notes that you purchase at home as the customs department is lobbying to levy GST on import of foreign currency notes in the country. Banks have been left puzzled by customs department decision of imposing integrated GST (IGST) on consignments of foreign currency notes since they are exempt from basic customs duty. The banks are seeking a clarification from the government with respect to the same.
Imports of foreign currency could attract 12% IGST if the government rules in favour of the customs department which would make these notes pricier. As per a notification under GST, rupee note transfers to RBI are categorically exempt however that is not the case in relation to banks.
The lack of clarity pertaining to the issue has led to has led to foreign currency consignments getting stuck. “Stocks have been held up at the ports as there is a lack of clarity on the issue,” said a bank official. The bank officials are of the view that money doesn’t qualify as ‘goods’ as defined by law under the new GST regime so therefore, should not come under the purview of the tax ambit.