Regarding Transfer of remittance
This query is : Resolved
29 January 2009
Sir but would u pls tell me is it possible to transfer the remittance in USD.What would i show in my account books regarding this.
30 January 2009
In general current account transaction are free in India. So, you can remit any trade & business expenses on invoice.
However to remit money in other transaction, like payment of bill for education, health etc., there are limits of remitance. Contact your bank and ask them how much money you can remit in what head.
In your account books you should show what you are remitting for, otherwise it will be a violation of FEMA. For still smarter people, Prevention of Money Laundering Act has been enacted. So you should be careful.
However to remit money in other transaction, like payment of bill for education, health etc., there are limits of remitance. Contact your bank and ask them how much money you can remit in what head.
In your account books you should show what you are remitting for, otherwise it will be a violation of FEMA. For still smarter people, Prevention of Money Laundering Act has been enacted. So you should be careful.
01 February 2009
Dear,
This depends on nature of Exp.u can remit in any currency.depends its what? consultancy,Import,Child education or other purpose.Accounts book will have simple entry as per bank advise,Better for process & Limit talk to your banker
This depends on nature of Exp.u can remit in any currency.depends its what? consultancy,Import,Child education or other purpose.Accounts book will have simple entry as per bank advise,Better for process & Limit talk to your banker
01 February 2009
my purpose is if i am unable to export some item and i already got the advance for that, in this case could i transfer the remittance to the manufacturer exporter of that item in india.
20 July 2025
Got it! You’ve received an advance from a foreign buyer for an export item, but if you’re unable to export that item yourself, you want to know if you can transfer that advance remittance (in USD) to the actual manufacturer/exporter in India who will do the export. Here’s the scoop:
1. Is transferring the remittance in USD possible?
Yes, you can transfer foreign currency (like USD) to an Indian exporter/manufacturer from your bank account, as long as it is a legitimate business transaction.
Since you received the advance in your account, you can pay the manufacturer/exporter for supplying or exporting the goods.
This is essentially a payment against goods or services and qualifies as a current account transaction, which is generally permitted.
2. Accounting Treatment
In your books, you should clearly record the transaction:
When you receive the advance:
Debit Bank Account (USD or INR equivalent)
Credit Advance from Customer (Liability)
When you pay the manufacturer/exporter:
Debit Purchases/Cost of Goods Sold (for the value of the item)
Credit Bank Account (USD or INR equivalent)
This way, the advance you received is matched by the purchase cost paid to the manufacturer.
3. Regulatory Aspects (FEMA, RBI)
Since it is a current account transaction (trade-related), it is allowed as per FEMA guidelines.
You should provide proper invoices and documentation for the goods and payments.
Inform your bank about the nature of the transaction. They may ask for relevant documents such as invoices, purchase orders, and export documentation.
4. Additional points
If the exporter/manufacturer exports the goods directly to the foreign buyer, then you act as an intermediary, so your books will reflect that.
Make sure all parties comply with export documentation and customs requirements.
Summary:
Yes, you can transfer the advance remittance in USD to the manufacturer/exporter in India if you are unable to export yourself. Just ensure the transaction is properly documented and recorded in your books as purchase/payment against the advance.
1. Is transferring the remittance in USD possible?
Yes, you can transfer foreign currency (like USD) to an Indian exporter/manufacturer from your bank account, as long as it is a legitimate business transaction.
Since you received the advance in your account, you can pay the manufacturer/exporter for supplying or exporting the goods.
This is essentially a payment against goods or services and qualifies as a current account transaction, which is generally permitted.
2. Accounting Treatment
In your books, you should clearly record the transaction:
When you receive the advance:
Debit Bank Account (USD or INR equivalent)
Credit Advance from Customer (Liability)
When you pay the manufacturer/exporter:
Debit Purchases/Cost of Goods Sold (for the value of the item)
Credit Bank Account (USD or INR equivalent)
This way, the advance you received is matched by the purchase cost paid to the manufacturer.
3. Regulatory Aspects (FEMA, RBI)
Since it is a current account transaction (trade-related), it is allowed as per FEMA guidelines.
You should provide proper invoices and documentation for the goods and payments.
Inform your bank about the nature of the transaction. They may ask for relevant documents such as invoices, purchase orders, and export documentation.
4. Additional points
If the exporter/manufacturer exports the goods directly to the foreign buyer, then you act as an intermediary, so your books will reflect that.
Make sure all parties comply with export documentation and customs requirements.
Summary:
Yes, you can transfer the advance remittance in USD to the manufacturer/exporter in India if you are unable to export yourself. Just ensure the transaction is properly documented and recorded in your books as purchase/payment against the advance.
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