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Rbi related compliances

Reema Jain (Practising Company Secretary) (82 Points)

07 August 2013

One of my client companies is taking over a mining company in Bhutan.

Remittance of Rs. 1000000 is to be sent shortly and the outward remittance to the Bhutanese Company shall be made in INR.

What are the compliances to be undertaken ?

Is it anywhere falling under FEMA Regulations ?

Any Intimation or Approval required from RBI ?

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4 Replies

AMITA KOCHER (ASSISTANT MANAGER - FINANCE) (282 Points)
Replied 07 August 2013

I think RBI has no role to play in this case.........................

Infact FEMA giudelines and AS 11 will be applicable in this case................

Reema Jain (Practising Company Secretary) (82 Points)
Replied 07 August 2013

Can you say what point in the guidelines shall be appliicable ?

As payment is being made in INR

CA. CS. Khushboo Dodhia Vora (Practicing Charatered Accountant) (125 Points)
Replied 08 August 2013

FEMA Guidelines for invrestment outside India needs to be considered and checked.

If it falls under automatic route, then only post facto reporting needs to be done or else prior RBI aproval needs to be made.

Also you need to check whether are there any specific provisions for remittance to Bhutan because in FEMA dealing with countries like Pakistan, Bangladesh, Srilanka, Nepal Bhutan is restricted in many matters.

Ritesh Jain (CA, CS in Job) (675 Points)
Replied 24 October 2017

china ltd ( a foreign co. in china) has received an order from india ltd( indian co. in india) for supply of a particular item @ 1 lakh USD. China ltd in turn places the order on bharat ltd( another indian co in india) for supplying the same item at the work place of india ltd @ INR 45 lakh .

India ltd will pay to china ltd in USD (conversion ratio assumed to be Rs 60 per USD) i. e total outflow of Rs 60 Lakh.

Whether as per FEMA or any other act is there in prohibition in such transaction as because the ultimate transaction is within country but indian outflow is Rs 15lakh extra for the goods to foreign party.

Please state whether such transactions are allowed as per indian acts such as fema etc.

Whether the case is different if china ltd has a establishment in india and they raises a invoice in INR instead of USD.