Dear Friends,
I have a small query on reporting requirements to RBI.
During the financial year 2010-11 and 2011-12, we have imported certain permissable capital equipment, for our on-going project in Andhra Pradesh from our principal supplier M/s. Sembwang Shipyard Pte. Ltd, Singapore. In fact, the same reported in our B/s as related parties.
As per the payment terms, importer has to settle the payment within sixty days from the date of receipt of the equipment. 70% of the payment was made on time and the balance is due for payment.
Subsequently, we as the importer explained the situation to our supplier indicating the reasons contributed for non-payment and sought for a further credit period of another 48 months from the date of receipt of shipment. Basing on our request, the supplier has extended a fresh credit period of 48 months as against 2 months as per the purchase order.
The supplier also agreed NOT to charge any interest / inflation cost / escalation cost on the Capital Equipments supplied to us, because the supplier is one of the major shareholder of the importing company
Now my question :
1). If the supplier makes the payment well within 3 years, from the date of shipping, is it mandatory to report the same to RBI through the AD or NOT ?
2). In case, the importer fails to repay well within 3 years from the date of shipment, will the entire transaction comes under the purview of ECB or not ? (The supplier decided NOT to charge any inflation/interest/escalation/penalty)
3). Any support document / reference material pls.
I am eagerly waiting for the opinions & responses, as I need to conclude my opinion to my statutory auditors.
Regards
Kiran
CAclubindia
