On October 26, 2026, the Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 263/09/2026-GST, addressing critical operational queries regarding the receipt of payment for the export of goods and services as outlined in the CBIC Circular 263/09/2026-GST.
The circular provides much-needed clarity on realizing export proceeds through repatriable rupee accounts (such as SNRR and Nostro accounts), the validity of set-off transactions against import payables, reinsurance net retention mechanisms, and export realization timelines under Rule 96B, as per the CBIC Circular 263/09/2026-GST.
Below is an in-depth summary prepared by Sagar S Gupta & Co to guide exporters, stock brokers, and financial consultants regarding the CBIC Circular 263/09/2026-GST.
1. Export of Services: Acceptance of Rupee Remittances (SNRR & Nostro Accounts)
For a supply of services to qualify as an “export of service” under Section 2(6) of the IGST Act, 2017, one mandatory condition is that “payment for such service has been received by the supplier in convertible foreign exchange or in repatriable rupee accounts”.
- Permissible Modes: Under FEMA (Manner of Receipt and Payment) Regulations, receipts for exports can be processed in Indian Rupees (INR) or foreign currency via INR Nostro (Rupee Vostro) accounts or repatriable INR accounts such as Special Rupee Vostro Accounts (SRVA) and Special Non-Resident Rupee (SNRR) accounts.
- Clarification: Payments received by Indian exporters in convertible foreign exchange or repatriable rupee accounts (SNRR or INR Nostro accounts) fully satisfy the condition under Section 2(6)(iv) of the IGST Act.
- Stock Brokers & Overseas Clients: Stock brokers providing services to overseas clients (FPIs, NRIs, and OCIs) and getting paid in INR through repatriable accounts (SNRR, NRE) satisfy Section 2(6) requirements. Payments through NRO accounts must be routed through repatriable INR accounts (SNRR, NRE) to qualify.
2. Validity of Set-Off Against Import Payables
- FEMA Alignment: Under FEMA regulations, setting off export receivables against import payables is a recognized method of settlement.
- Transition under 2026 Regulations: While previous guidelines restricted set-offs (e.g., goods-against-goods or services-against-services), the new Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (effective October 1, 2026) streamline these provisions.
- GST Admissibility: The circular clarifies that wherever export receivables are set off against import payables in accordance with RBI directions, the condition of receipt of payment under Section 2(6)(iv) of the IGST Act is considered fully fulfilled.
3. Reinsurance Brokers: Net Retention Mechanism
- Net Settlement: Indian reinsurance brokers providing services to foreign reinsurers often settle commissions through a net retention mechanism rather than receiving separate inward remittances.
- FEMA Compliance: Under FEMA, the foreign reinsurer treats the commission as paid by authorizing the Indian broker to retain it from funds prior to remitting net premiums outside India.
- GST Standing: This extinguishment of the realization obligation via the net retention mechanism under FEMA satisfies Section 2(6)(iv) of the IGST Act.
4. Realization Timelines & Write-Offs for Export of Goods (Rule 96B)
- Rule 96B of CGST Rules: Mandates the recovery of IGST refunds (along with interest) within 30 days if export sale proceeds are not realized within the timeframe prescribed under FEMA.
- Governing Timelines: Realization timelines and extension periods are governed strictly by RBI’s FED Master Direction No. 16/2015-16 (last amended June 5, 2026).
- Write-Off Relief: If the requirement of realization has been written off, either wholly or partly, by the Authorised Dealer (AD) Bank (or RBI), recovery proceedings under Rule 96B shall not be enforced.
Summary Matrix: Export Payment & Refund Compliance
| Operational Scenario | CBIC Stance / Compliance Guideline |
| SNRR / Nostro / Vostro Payments | Fully valid for export of services under Section 2(6)(iv) IGST Act. |
| Brokerage via NRO Accounts | Must be routed through repatriable accounts (SNRR/NRE) to qualify. |
| Set-Off of Receivables | Valid as long as executed in accordance with RBI/FEMA norms. |
| Reinsurance Net Retention | Recognized as valid realization of export proceeds. |
| Export Goods Realization | Governed by RBI Master Directions; write-offs by AD Banks exempt Rule 96B recovery. |
Contact Sagar S Gupta & Co today to safeguard your export tax credits and ensure seamless GST refund realizations.
On October 26, 2026, the Central Board of Indirect Taxes and Customs (CBIC) issued a series of eight pivotal circulars (Circular Nos. 257/03/2026-GST to 264/10/2026-GST). These circulars operationalize key recommendations from the 57th GST Council Meeting, bringing much-needed uniformity, procedural clarity, and taxpayer relief across registration, adjudication, pre-deposits, Input Service Distributor (ISD) mechanisms, banking sector compliance, motor vehicle credits, and export refunds.
Below is a consolidated executive summary prepared by Sagar S Gupta & Co outlining the core takeaways from each circular.
| Number | Date | Category |
| 264/10/2026-GST | 26-Oct-2026 | Clarification in respect of the omission of rule 96(10) of the Central Goods and Services Tax Rules, 2017. |
| 263/09/2026-GST | 26-Oct-2026 | Clarification in respect of receipt of payment for export of goods or services. |
| 262/08/2026-GST | 26-Oct-2026 | Clarification on Input Tax Credit admissibility to authorised agents appointed by manufacturers for sale of motor vehicles, pursuant to Circular No. 231/25/2024-GST dated 10.09.2024. |
| 261/07/2026-GST | 26-Oct-2026 | Clarification on issues related to provisions of section 17(4) of the Central Goods and Services Tax Act, 2017. |
| 260/06/2026-GST | 26-Oct-2026 | Clarification on issues pertaining to Input Service Distributor. |
| 259/05/2026-GST | 26-Oct-2026 | Clarification on various issues pertaining to the amount paid as pre-deposit as per sub-section (6) of section 107 or sub-section (8) of section 112 of the CGST Act |
| 258/04/2026-GST | 26-Oct-2026 | Clarification on issues related to demand, adjudication and appeal proceedings under the CGST Act, 2017. |
| 257/03/2026-GST | 26-Oct-2026 | Guidelines for the handling of applications for GST registration. |
Disclaimer
This article is published for educational and informational purposes based on CBIC Circular No. 263/09/2026-GST dated October 26, 2026. Exporters and businesses are advised to consult the tax professionals for tailored advisory.