My bank charged GST on an outward remittance even though there was no forex markup. How is GST on currency conversion calculated?
1 Answers
GST applies to the service of currency conversion, not to the money you send. The taxable value comes from a slab formula on the gross rupee amount converted, and 18% GST is charged on that value:
| Amount converted | Taxable value |
|---|---|
| Up to ₹1 lakh | 1% of the amount, minimum ₹250 |
| ₹1 lakh to ₹10 lakh | ₹1,000 + 0.5% of the amount above ₹1 lakh |
| Above ₹10 lakh | ₹5,500 + 0.1% of the amount above ₹10 lakh, capped at ₹60,000 |
GST = 18% of the taxable value, so the maximum GST on any single conversion is ₹10,800.
Examples:
- $100 at ₹95.41 = ₹9,541: taxable value = ₹250 (the minimum), so GST = ₹45.
- $1,500 at ₹95.43 = ₹1,43,145: taxable value = ₹1,000 + 0.5% × ₹43,145 = ₹1,215.73, so GST = ₹218.83.
This is why even a zero-markup bank shows a small GST debit. It's the same at every bank, because it's a government rate. Businesses can usually claim it as input tax credit if the bank's invoice shows up in their GSTR-2B.
Calculate it for any amount with Worthify's forex GST calculator.
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