In case of a limited co. if foreign debtors' balances are over a year old, is it necessary to write it off or do we need to file any application to RBI regarding the same if they are unrecoverable? Does it have any implication under FEMA?
In case of a limited co. if foreign debtors' balances are over a year old, is it necessary to write it off or do we need to file any application to RBI regarding the same if they are unrecoverable? Does it have any implication under FEMA?
Hi Riz,
According to my opinion ,as far as FEMA is concerned , refer the RBI notification no:RBI/2012-13/435 dated March 12, 2013 on “Write-off” of unrealized export bills – Export of Goods and Services – Simplification of procedure. Refer the link below:
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=7886&Mode=0
The company can "write off", only after complying with the above procedure. However , the company can make a provision for bad and doubtful debts for the relevant financial year.
Naveen Fintech Pvt Ltd
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