Payment for the Purchase of Capital Asset : FEMA

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This query is : Resolved

Quick Summary

A company is purchasing heavy machinery from a Japanese vendor for business promotion and testing, but it will remain in the seller's warehouse in Japan and will never be imported into India. They need guidance on making payments to the vendor based solely on an invoice, as no Bill of Entry will be filed. The query also seeks clarification on GST implications and whether RBI approval is needed for the foreign exchange remittance under FEMA regulations.

harshad

harshad (Querist)

27 August 2020 Dear Team,
We are about to purchase a Heavy Machinery from vendor in Japan. The machinery will not be delivered to India but will be stored in the warehouse of the seller itself. the seller will charge the rent from us for storing this machinery in their warehouse. This machine will be capitalized in our books of accounts. As the machinery is not physically coming into India , there will be no Bill of entry (BOE) filed. how can we make payment to vendor in Japan for selling us the machinery based on the Invoice only. what are the GST implications on this transaction.