14 July 2011
An overseas company(A) dealing in educational books & materials has appointed a distributor in India company (B) on a non exclusive basis for selling of the books to Indian schools & institutions.
Company A has contracted with a printer in India to print the books on its behalf and deliver them to company B for sales. Printer raises an invoice on company A for the work done and company A pays in foreign exchange. For these books delivered by printer to company B , company A raises an invoice on company B in US $.
Can company B remit the amount in foreign currency to company A on the basis of invoice raised? Is it allowed by FEMA?
Will this transaction be covered under deemed income of company A?
In case the printer is in EPZ , then what will be the scenario?
CAclubindia
