Creditors for imports

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K Venkatraman

Service

42 Points Posted on 21 August 2012

Dear Friends,

A Indian company imports spares from a company in US. Before the Indian company could make the payment against imports after the mutually agreed credit period, the US company is sold/merged.There is no claim from the merged entity till date. Further the identity of the merged company is not known. All subsequent communications to the US company remain unanswered. The unpaid import outstandings are over 3 years old as on 31.03.2012. Can the Indian company write back the amount in its books. Being an outstanding against imports, what kind of compliance is required from the Indian company before the write back of the outstandings in the books of account?

Replies (3)

CA. Subhash Dangi

Chartered Accountant

1440 Points Posted on 21 August 2012

Outstandings against Imports:

Check and ensure that the submission of tax invoice, original bill of entry and other custom clearances to the designated bank branch after importing the spares from US compnay as it was A1 Payment. Complaince of above is must if A1 payment is exceeded the maximum limit prescribed by RBI.

If all statutory compliance is duly fulfilled, then u can writeback the outstandings in your books of accounts as per your compnay policies.

K Venkatraman

Service

42 Points Posted on 21 August 2012

What is the limit prescribed by RBI for compulsory submission of documents. In this case since the payment has not been made against imports, it is obvious that documents would not have been submitted to the bankers/AD.Under the circumstances what is the best course of action before write back of import creditors?

CA. Subhash Dangi

Chartered Accountant

1440 Points Posted on 21 August 2012

There is not clarity in your both queries. In first case U stated that A Indian company imports spares from a company in US. In second quiry u are stating that payment not against imports.

what exactly is ur doubt?