Fema rbi aspect

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2013 An Indian company (I Co.) receives advance fees from overseas of say USD 100 (as per FIRC). Accordingly, based on prevailing exchange rate, INR 5,500 is credited in the bank account of the I Co.

Now, contract is terminated (say within six months) and I Co. has to refund the advance fees.

My query is as to whether as per FEMA regulations, I Co. has to remit INR 5,500 actually received in its bank account or I Co. has to remit USD 100 (as per FIRC) i.e., INR 6,200 (as per conversion rate today).

C.A. HIREN

C.A. HIREN (Expert)
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18 October 2013 Dear Sir,
You have to remit USD 100 only to your overseas customer. Now, the difference of Rs. 6200 and Rs. 5500 will be recognsied as forex difference in your books of accounts.