Fema questions

This query is : Resolved

CA Siddesh Jagdale (Querist)
Follow

10 November 2014 Hi All,

I have few question in respect of FEMA for Account out standing payable & Netting off with receivable.
(I) Can we set off International Accounts Payable with Receivable (same Party)(out standing since 6 years in Books) .

(II) is any condition is there for outstanding money needs to pay withing 6 month. if we not paid within 6 month are we required to take RBI permission for delay in payment (Import).

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

10 November 2014 You can set it right provided the terms of PAYMENT so provide. The company should give you the details as to the terms of payment.

CA Siddesh Jagdale

CA Siddesh Jagdale (Querist)
Follow

10 November 2014 It is the subsidiary & parent company transaction.
IF we set-off is any permission of RBI or Documents needs to be submit...?

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

10 November 2014 Dont set it off if it is holding and subsidiary company transaction, for the simple reason of transfer pricing provisions.

CA Siddesh Jagdale

CA Siddesh Jagdale (Querist)
Follow

10 November 2014 So if we are not paying & not taking set-off (say more than 12 months o/s) is RBI permission is required ???

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

10 November 2014 Was the permission sought for at the time of IMPORT?

CA Siddesh Jagdale

CA Siddesh Jagdale (Querist)
Follow

10 November 2014 Basically we are a IT company & we bill for development service (CPM Model) to parent company.Same time we need to pay them for license sale in India as royalty.

there is no physical import & no such permission obtained.

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

10 November 2014 RBI permission is NOT required for delay in payment beyond 12 months.