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Payment in INR on behalf of a Foreign Customer

This query is : Resolved

KAMAL SETHI (Querist)
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18 August 2008 Dear Sir,

Kindly clarify, can we make a payment in INR to Indian Company on behalf of a foreign customer and then later on claim the currency through debit note from Foreign Customer? Will the payment be a violation of FEMA ACT?

Thanks

CA Abhishek Tyagi

CA Abhishek Tyagi (Expert)
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18 August 2008 The payment on behalf of the foreign customer should not be made from the indian company untill & unless it is for a legitimate business purpose. Other provisions of Income tax act & other laws should also to be taken care of.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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24 December 2010 Yes the FEMA Act doesn't allow the same.

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