Circular 263: Export Proceeds for GST Refunds — SNRR, Nostro, Set-Off and Rule 96B
CBIC Circular 263/09/2026-GST: payments in SNRR and INR Nostro accounts, set-off, reinsurance brokers and Rule 96B realisation for GST export refunds.
Key takeaways: gst export proceeds
- GST export proceeds in convertible foreign exchange or repatriable INR accounts such as SNRR or INR Nostro satisfy the export of services condition.
- Set-off made in accordance with RBI directions is accepted.
- For goods, unrealised proceeds trigger repayment within thirty days under Rule 96B, but an AD bank write-off is treated as a write-off.
Table of contents
CBIC’s Circular No. 263/09/2026-GST, dated 26 October 2026, clarifies issues on receipt of payment for exports of goods and services, which affect GST refunds. It is issued under section 168(1) of the CGST Act.
Export of services: what counts as payment in convertible foreign exchange
For an export of services, condition (iv) of section 2(6) of the IGST Act requires payment in convertible foreign exchange or, where permitted by the Reserve Bank of India, in Indian rupees. The circular clarifies:
- Receipts in convertible foreign exchange, or in repatriable INR accounts such as SNRR, INR Nostro or similar accounts, satisfy the condition.
- Stock brokers paid in INR by overseas clients (FPIs, NRIs, OCIs) satisfy the condition if payment comes through SNRR or NRE accounts. Payments through NRO accounts must be routed through SNRR or NRE accounts, per RBI guidelines.
- Set-off is a valid FEMA settlement method. From 1 October 2026, the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 remove the earlier conditions (goods against goods, services against services). Set-off made in accordance with RBI directions satisfies the condition.
- Reinsurance brokers: where commission is settled by net retention, the foreign reinsurer is treated as having paid by authorising the Indian broker to retain it before the net premium is remitted abroad. The condition is treated as satisfied.
- Earlier, Circular 202/14/2023-GST (27 October 2023) had clarified that INR received from Special Rupee Vostro Accounts of correspondent banks of a partner trading country satisfies the condition, subject to the Foreign Trade Policy and RBI circulars.
Export of goods: realisation under Rule 96B
- If export proceeds are not realised within the period allowed under FEMA (including extensions), the refund must be deposited or recovered to the extent of non-realisation, with interest, within thirty days of expiry of the original or extended period.
- No recovery applies where the realisation requirement is written off.
- The time limit is governed by FEMA; for goods it is the period in FED Master Direction No. 16/2015-16 dated 1 January 2016 (last amended on 5 June 2026), as amended from time to time.
- The circular treats a write-off by the authorised dealer (AD) bank (not only by the RBI, which Rule 96B refers to) as a write-off for the purpose of Rule 96B, so no recovery applies.
Related: GST refund changes from November 2026 and Circular 264 on Rule 96(10). Exporters can get help from our GST services.
What to do next about gst export proceeds
Review how gst export proceeds affects your business: note the effective date, check your records and software, brief your team and keep a copy of the official text on file. Where the position is unclear for your case, take professional advice before filing or changing your process.
Official sources for gst export proceeds
Always read the original text. You can find notifications, circulars and rules on the CBIC Tax Information Portal and file returns and applications on the GST Portal. This guide on gst export proceeds is a summary and is not a substitute for the official text.
Frequently asked questions
Is payment into an SNRR account acceptable for export of services?
Yes. The circular says receipts in repatriable INR accounts such as SNRR or INR Nostro accounts satisfy the condition.
Is set-off accepted?
Yes, if made in accordance with RBI directions, which the circular treats as a valid FEMA settlement method.
What is the time to repay the refund if export proceeds are not realised?
Thirty days from the expiry of the original or extended realisation period, with interest, under Rule 96B.
This article is for general information only and is not tax, legal or financial advice. It is based on the text of the notification or circular as published by CBIC. Rules, rates and criteria change, so confirm the latest position with the official source or a professional before acting.
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