Customs duty paid on supplier invoice

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2013 Hi all,

One of my clients is importing material from its holding company, resident of Malaysia which in turn gets material from its supplier. Malaysian company had instructed its supplier to deliver goods directly to the India. And the customs duty is being paid by the Indian co. on that supplier invoice and imports the goods. However few days later malaysian holding company is sending the purchase invoice with its markup.So the purchase amount as per customs authorities and the purchase value in the books of accounts are differing. Kindly clarify how to resolve the issue.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

07 August 2013 As per para 2.40 of the Foreign Trade Policy,

All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realised in freely convertible currency.

However export proceeds against specific exports may also be realized in rupees provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of ACU or Nepal or Bhutan.
Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting the bank service charges) on account of this transaction would be taken as export realization under export promotion schemes of FTP.

Contracts for which payments are received through Asian Clearing Union (ACU)] shall be denominated in ACU Dollar. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and Invoices can be denominated in Indian rupees against EXIM Bank / Government of India line of credit.

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