Inter company transaction between foreign holding and indian

Dear Friends,

I need your advice on below matter:
 
" India Company needs to make some payment in India. It is a running company. But due to unavailability of signatories the payment was done from the personal account of an employee in Holding Company out of India.The payment was done directly from employee account  to India Vendor account."
 
I need the solution on how to book this transaction:
 
in my views" it can be shown as intercompany transaction and Foreign Company will raise a dr. note on India company and India company will pay to foreign company against that dr. notewhich in turn will pay to its employee."
 
Does this transaction complies with the requirements of FEMA?
 
I oblige your reply.
 
Thanks
Cherry

Replies (1)

Yes, you can considered is intercompany transaction, and keep the following points in mind

1. obtaioned the balance confirmation from the vendor to confirm that he has received the money in foreign currency.

2. received the propper debit note in foreign currency amount it will be asked by bank when you remit the money and also under the fema, rbi ask the resaon of remit the money from india.

3. Whether form No. 15 CB is requried while making the remittance, i not confirm about that.

 

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