Overseas receivables

A private company has some receivables from its foreign customer. Can the receivable amount be converted as investment in that entity ? What are the RBI compliances.

What would be the situation if the cusotmer has already written off the payables in its books and later it has to be capitalised

Replies (2)

@ Bhagya

Receivable amount can't be converted to as investment in that entity as this is against the services rendered.

you can write off in your books if that will not be recoverable in future. otherwise you can reflect such outstanding in your books.

If that outstanding is in foreign currency , then you have convert that outstanding as per the rate of RBI on the closing of year end by Dr/Cr in the "Difference in Exchange" under Indirect Items in your books.

 

Thanks & Regards

Piyush Tanwar

CA Finalist and Internal Auditor

Mobile - 9717468521

as per FEMA guidelines, anything exported shall be realised within 180 days of the export. Failure shall be given in writing with reasons thereof.

Both cases, converting to investment and writing off shall be brought to the notice of RBI and also to the Customs if any dutydrawback had been claimed on such export, which shall have to be refunded !

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