can an indian co. bill to an indian co. in dollars in india itself ?
And the payment is made by the purchasing Co. in RS. to the selling companies bank but in accounts it is converted into dollars at tht days exchange rate.
And can we have foreign exchange revaluations on such dollars at the year end ?
Can a transaction be routed this way.
Pls tell me with reference to relevant sections of any law/act
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Replies (1)
| Originally posted by :Kushal | ||
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can an indian co. bill to an indian co. in dollars in india itself ?
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Sec 2(n)(i) of FEMA explain a foreign excahnge means a "deposit, credit and BALANCE PAYABLE IN FOREIGN CURRENCY" covers a bill drawn in Dollars. Bill is an authenticated document that acknowledge a debt or a balance payable .So a bill denominated in Dollar is a foreign Exchange too and drawn upon by a Resident another Resident in India is prohibited.
Also to ur second query ,even the payment made by purchasing co by Rupees to Selling Co bank A/C , the bank has no authority to convert those in to Dollar.Because the various A/Cs which credit or convert from $ to Rs or vice versa (EEFC,FCNR etc) are regulated by FEMA that restricts some specific credit or debit to this A/Cs where your domestic receipt cannot be converted to Dollar.Read defination/regulation for EEFC and other such A/Cs in FEMA
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