Fema

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2015 Hi All,

I have a case and need your suggestion

There is a Subsy company who is providing service to its US company and bill on him on monthly bases.

Now there were some Equipment Purchased from US from a third party and his Parent company makes the payment on subsy behalf.

Now Subsy wants to adjust this amount from his receivable from parent.

Is it possible to do as per FEMA or any other law applicable.

If yes, What all documents shall be maintain to prove such adjustments.

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 April 2015 Yes it is possible to adjust. You have to maintain documents for import of equipment(customs, bill of lading and purchase order) and proof for payment to US company who supplied equipment. Inform the adjustment to RBI.

Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2015 How to inform to RBI for adjustment?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 April 2015 I revise my reply in view of RBI notification given below. The adjustment can be done only with same person.

C.27 (B) – Set-off of export receivables against import payables : (effective from November 17, 2011).

AD category –I banks may deal with the cases of set-off of export receivables against import payables, subject to following terms and conditions:
The import is as per the Foreign Trade Policy in force.
Invoices/Bills of Lading/Airway Bills and Exchange Control copies of Bills of Entry for home consumption have been submitted by the importer to the Authorized Dealer bank.
Payment for the import is still outstanding in the books of the importer.
Both the transactions of sale and purchase may be reported separately in ‘R’ Returns.
The relative GR forms will be released by the AD bank only after the entire export proceeds are adjusted / received.
The ” set-off” of export receivables against import payments should be in respect of the same overseas buyer and supplier and that consent for ”set-off” has been obtained from him.
The export / import transactions with ACU countries should be kept outside the arrangement.
All the relevant documents are submitted to the concerned AD bank who should comply with all the regulatory requirements relating to the transactions.

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