15 April 2014
in my opinion this can be done, there is no tax incidence for this transaction, indian govt. will welcome such type of transaction. however if amount to be paid is huge then it is better to have the transaction under the eye of FEMA consultant
15 April 2014
Thanks. But how do I close the transaction booked in Indian subsidiary if Foreign parent company pays directly to the vendor. If the vendor is service vendor dont you think tax complication arise?
15 April 2014
transaction is regarded as holding subsidiary, from accounting perspective amount paid by foreign co. will be considered as loan payable to foreign co. to the extent of over and above of holding ratio. To the extent of holding ratio, part in liability, no tax implication. Income tax liability arise under income from other sources if it is paid otherwise stated above.
15 April 2014
Is it possible for a subsidiary to raise credit note on vendors and close the books. Vendors can raise a invoice on foreign holding company for their payment. Is this permissible?
17 April 2014
Is it possible for a subsidiary to raise credit note on vendors and close the books. Vendors can raise a invoice on foreign holding company for their payment. Is this permissible?
CAclubindia
