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Fema (special case)

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(Querist)
12 February 2013 If a company is resident in India having balance account in foreign bank an it is transferring the amount from the account to subsidiary outside India directly. Amount has not entered in India.

Whether FEMA is applicable?
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Nikhil Kaushik

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Nikhil Kaushik (Expert)
12 February 2013 Dear Saurin,

What is the purpose of the proposed transfer?
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saurin

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saurin (Querist)
12 February 2013 To pay to creditors of subsidiary company.
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Nikhil Kaushik

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Nikhil Kaushik (Expert)
12 February 2013 saurin,

can we discuss the same over email?
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CA. Anuj Gupta

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CA. Anuj Gupta (Expert)
19 February 2013 Here first question is how the Indian Company is holding account outside India. Is it a star exporter and the prescribed guidelines have been met before opening Bank account outside India.

Also the advisable and correct route as per FEMA and TP provisons shall be to transfer the money to subsidiary and then pay its creditors.

The amount thus paid can be shown as ODI or loan as per the requirements of the case.

Anuj
femaquery@gmail.com
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