GST on currency exchange, with a worked example

Buying foreign currency is a service. Under Rule 32(2)(b) of the CGST Rules, the taxable value is a slab amount worked out from the gross rupee value, not the whole amount. GST at 18% then applies to that taxable value.

Up to ₹1,00,000: 1% of the gross amount, with a minimum taxable value of ₹250.

₹1,00,000 to ₹10,00,000: ₹1,000 plus 0.5% of the amount above ₹1,00,000.

Above ₹10,00,000: ₹5,500 plus 0.1% of the amount above ₹10,00,000, capped at a taxable value of ₹60,000.

Suppose your notes cost ₹85,000 at the customer rate. The taxable value is 1% of ₹85,000 = ₹850. GST at 18% of ₹850 = ₹153.

For ₹2,50,000: taxable value = ₹1,000 + 0.5% × ₹1,50,000 = ₹1,750. GST = ₹315.

Your quote shows this GST line separately, so tax is never mixed into our margin.