Merchandise export receivables can't be set off against service import dues

You may remit the amount against the import of services separately and ask the buyer abroad to remit the full payment against your export bill

Q. We have exported certain goods to a customer in Germany. We had also imported certain services from them. Can the customer set off the amount receivable for the services against the amount payable for the goods and remit the net amount?

No. AP (DIR) Circular no. 8 dated December 12, 2020 of RBI revised the instructions for banks allowing set-off of export receivables against import payables. Para 3 stipulates several conditions for allowing the set-off. One of the conditions says that “set-off of export receivables against goods shall not be allowed against import payables for services and vice versa”.