We are working as sub contractor for one IT infrastructure project at Mozambique country it was started in mid of 2009, we have contract with indian X company and X company have contract with Mozambique government,X company paid advance of $30,000 equilant of Rs.1.4crs ($30000*Rs.48/-) in initial stage and asked us to adjust against the invoices based on service, when we are raising invoice to customer considering service value of $10000@ present forex rate, my question is we need to apply for advance adjustment present forex rate or old forex rate. Please clarify us its urgent because our customer is come back and saying that we have to apply old forex rate for advance and adjust accordingly.
29 May 2013
If your billing is in USD, then you have to adjust the USD you received as advance from the USD value of the invoice you are raising now. The exchange loss will be to your account. You cannot claim the difference between Rs. 55 per USD and Rs. 48 per USD from X today for the advance amount.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
29 May 2013
Dear Srivathsan, Thanks for your value feed back we are billing like this
Services charges $2000 Rs.1,10,000.00 Less: Advance 5% $ 100 Rs. 5500.00 Amount $1900 Rs.1,04,500.00 Service Tax@12.36% Rs.12,916.00 Grand Total Rs.1,17,416.00
29 May 2013
The billing is correct as you are being paid in INR by company X. It would be incorrect if you used $100 x 48 = Rs. 4800 to adjust the advance.
CAclubindia
