10 December 2011
An indian resident company has an agreement with a non resident company ( a subsidiary of holding company of indian company ). The agreement is wrt rendering few services by the indian company for the project entered by the non resident company in India. The indian company doesnt have any link with project , it just renders services such as supply of human resources , taking care of payment of local suppliers etc., for the non resident company for free flow of transactions without any trouble. The indian company raises a debit note for the non resident for the expenses met and the same is reimbursed by the non resident company each month. In order to meet with the expenses , the non resident has given an advances in order to avoid undue burden on the indian company. Given the facts, can you pls go through the same and let me know if there is any fema regulation on the refund of the advance received as the project has been completed and the expenses have been totally reimbursed by the non resident company. Does the transaction has to be viewed from any other prospect other than fema???
11 December 2011
Let the foreign company raise debit note for the balance amount. And Indian company make remittance based on it. Even ca certificate shall indicate refund made.
CAclubindia
