Forigen exchange

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This query is : Resolved

siddartha k s (Querist)

12 December 2013 Hello !!

One of my client is dealing with software business and they frequently go outside India for business purposes..for this purpose they buy Foreign currency to meet expenses there (from company only) At the time of buying they will issue a letter stating that "this currency will be used only for business purposes"..

However My Questions are:

1) Can an any employee use the same currency for his personal purpose ??? If so is he liable to repay the same to the company in Foreign Currency or in INR ???

2) If Company Receives the same in INR means will it leads to sale of Currency (Indirectly) ??? and treatment of Service tax claimed on it as input ??

3) Purchasing currency on behalf of employees and receives money will it leads to violation of FEMA Act ??

Note :
1. No Profit on sale of Currency has been made..
2. Company Doesn't have Registration for sale of Currency.. Kindly help me out

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Vishal D Shah

Vishal D Shah (Expert)

13 December 2013 It should buy Forex from authorised dealer. Unutilised Forex should be returned back to dealer. Forex for employees should be seperately obtained.

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