26 September 2014
There is a company that has accounts payable in foreign currency for more than 3 years. They also have exports against which they have receivables for more than 9 months. These are the limits set as per RBI to pay and collect the foreign currency. Should the statutory auditor qualify the report on this issue? Will the company be held liable if the foreign currency is not settled in time.
26 September 2014
Te company has payables in foreign currency for more than 3 years. As per the Master circular of RBI on imports here is the data:
“B.5.1. Time limit for Normal Imports (i) In terms of the extant regulations, remittances against imports should be completed not later than six months from the date of shipment, except in cases where amounts are withheld towards guarantee of performance, etc. (ii) AD Category – I banks may permit settlement of import dues delayed due to disputes, financial difficulties, etc. Interest in respect of delayed payments, usance bills or overdue interest for a period of less than three years from the date of shipment may be permitted in terms of the directions in para C.2 of Section III below.”
As per Master circular on Exports,“It is obligatory on the part of the exporter to realize and repatriate the full value of goods or software to India within a stipulated period from the date of export, as under:
(i) Units in SEZ…. (ii) … (iii) … (iv) … (v) In all other cases(applicable to our entity): With effect from April 01, 2013 this period of realization and repatriation to India has been brought down to nine months from the date of export.” The company I am refering to has exports against which amount receivable is outstanding for more than 9 months.
Should this be reported in the audit report? Please let me know if I am still not clear.
26 September 2014
that is why I said report the matter. But I dont think, unless the amounts involved are really big, it should result in a qualified report. an emphasis should suffice
CAclubindia
