Royalty remittance

This query is : Resolved

reuben perumal (Querist)
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13 October 2011 Sir/Madam

I would like to know, in case of a trademark licensing agreement between an indian company and foreign company, for the payment of royalty as per the rbi circular (RBI/2009-10/465 A. P. (DIR Series) Circular No. 52)it can be done for how much ever amount without the approval of rbi through authorised dealer banks. For the tax purposes the company has to comply with the procedure detailed in CBDT Circular No. 4/2009 dated 29 June 2009, by filling form 15 ca & form 15cb. My query is if the agreement between the companies are quarterly payment of royalty and the indian company makes default in payment for the last two quarters. in the next financial company wishes to make the back payments and the fresh payments. what will be the accounting treatment for the back payments made? will it be accounted in the current financial year?

Please someone answer my query at the earliest as it would be really helpful for me.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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31 October 2011 I am not clear how Royalty for previous financial year can be paid in current financial year.

Also there shall be Transfer pricing issues in the said transaction.

Anuj
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