Payment in Foreign Currency for Sale Out Side India

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This query is : Resolved

Swatantra Singh Bhatia (Querist)

18 August 2010 We have bought some items in Germany and instructed our supplier to deliver these items to our Indian Customer in Germany. Indian Customer imports it directly without mentioning our company in Airway Bill or shipping documents.
We receive peyment in INR in India from Indian Customer and make payment in EURO to Germany Supplier.
Is it classified as high sea sale?
What documents do we need to produce to the Bank to make the payment to our supplier (A1 or A2)?
What kind of Sale Invoice will be generated?
How will it be declared in Sales Tax Returns for Sale and Purchase?

U S Sharma

U S Sharma (Expert)

19 May 2011 1) you purchased goods in germany ........ means germany issued export invoice to you..

2) you sold goods in germany itself............

- do you have any establishment in germany?
- if yes then there is no bar to do it,
- if no then you are not authorized to do this transaction in germany.

3) you are saying that indian buyer at germany received the goods,
- what is the status of indian buyer? is he resident in india or NRI resident in germany?
- if NRI, then he have to pay in forex, not in IRS
- if indian resident, then its to be treated as smuggle of goods, contraband action would be taken by customs under instructions with RBI/DGFT
- payment in indian rupees and delivery in forex at the point of export may be seen under "The Prevention of Money Laundering Act, 2002 (PMLA)"

U S Sharma

U S Sharma (Expert)

19 May 2011 to establish the high sea sales, the goods must be in transit after shipment from the port of origin/ shipment.

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