FEMA - import and export

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alpesh mehta (Querist)

26 October 2007 i would like to know
1. whether a company can export and import goods in Indian Rupee (INR). ?

2. a company having import from and export to the same party outside India, can make net payment or receive net payment or do they have to settle the invoices individually ?

Shalishkumar

Shalishkumar (Expert)

26 October 2007 01. Yes a company can export or import goods in Indian Rupees.

02. It is better to settle invoices indidually. A company can carry out business through EEFC A/C., to avoid currency fluctuation loss.

With prior permission a company can make net payment or receive new payment also on quarterlt basis.

alpesh mehta

alpesh mehta (Querist)

27 October 2007 part 1 : can you provide some reference to the section of the act or any case law to support the response.

part 2 : whose PRIOR permission we need to take and why?
my explanation is this : lets say a company has import of usd 50,000 from party X and then a export of usd 10,000 to the same party X. so whay should the company risk sending money and receiving back next day (apart from for ex fluctuation)

Srinath A. N.

Srinath A. N. (Expert)

27 October 2007 Government will keep track of import & Export details on product wise.

alpesh mehta

alpesh mehta (Querist)

30 October 2007 even if govt wants to keep track product wise - there is no link with payments. so my question remains why and from whom we need to take permission

Srinath A. N.

Srinath A. N. (Expert)

31 October 2007 You will not import & export the same goods. Since you are importing one goods & exporting some other goods whether to same party or different, still government need track how much goods has been imported & exported (both value as well as quantity).

kumar arumugam

kumar arumugam (Expert)

31 October 2007 net of payment cant be done. both should be dealt separately.

alpesh mehta

alpesh mehta (Querist)

01 November 2007 firstly the question is WHY it cant be done? is there any reason? government will know the imports and exports when the goods leave or come in and NOT when payments are being made.

secondly, what if i am importing and exporting the same goods - then can i make net payment ?

kumar arumugam

kumar arumugam (Expert)

01 November 2007 in one case foreign exchange goes out and in another foreign exchange comes in, that is the reason.

imported goods has to go thru a value addition and then only it can be exported. what is the meaning of importing and exporting the same goods, just incurring import duty, without any value addition by processing of goods.

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