Fema Query
This query is : Resolved
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?
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?
15 July 2011
Yes , company B can remit the amount in foreign currency to company A on the basis of invoice raised. It is allowed under FEMA.
As per facts stated by you, Company A shall not be liable to tax in India.
The printer in EPZ shall be entitled to show the export of goods supplied to Company B.
Anuj
0-9810106211
As per facts stated by you, Company A shall not be liable to tax in India.
The printer in EPZ shall be entitled to show the export of goods supplied to Company B.
Anuj
0-9810106211
16 July 2011
Dear Mr.Anuj Gupta
Thanks for your reply. Kindly also clearify whether the overseas company A will in such circumstances will be considered as PE or Not.
Thanks & Regards
S.M.Gulati
Thanks for your reply. Kindly also clearify whether the overseas company A will in such circumstances will be considered as PE or Not.
Thanks & Regards
S.M.Gulati
16 July 2011
Only if the distributor in india is doing business only for Company A.
Anuj
+91-9810106211
Anuj
+91-9810106211
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