FEMA guidelines
This query is : Resolved
Sonnal Khandaray
(Querist)
17 November 2020
Hi All,
My company is importing goods from a country with whom there is a provision of DTAA. Importer has granted trade credit of 5 years. Goods are in non capital goods category. I have an agreement with the overseas supplier for the same. Is there any FEMA guidelines for such a long credit period? Whether ECB guidelines get applicable? What will be reporting requirements and interest implications for the same? I am not paying any interest for the same.
My company is importing goods from a country with whom there is a provision of DTAA. Importer has granted trade credit of 5 years. Goods are in non capital goods category. I have an agreement with the overseas supplier for the same. Is there any FEMA guidelines for such a long credit period? Whether ECB guidelines get applicable? What will be reporting requirements and interest implications for the same? I am not paying any interest for the same.
CA R SEETHARAMAN
(Expert)
18 November 2020
Deferred payment arrangements (including suppliers’ and buyers’ credit) upto five years, are treated as trade credits for which the procedural guidelines as laid down in the Master Circular for External Commercial Borrowings and Trade Credits may be followed.
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