We have small firm,during 2016 we have paid booking advance US$10380 to our China Vendor. So many follow ups till date said vendor not supplied any consignment.
How to close said amount in our Banker as fer FEMA Act.
07 July 2024
If you have paid an advance of US$10,380 to your China vendor in 2016 and have not received any consignment despite follow-ups, here's how you might proceed to close this outstanding amount as per FEMA (Foreign Exchange Management Act) regulations:
1. **Documentary Evidence**: Gather all relevant documents related to the transaction, including invoices, payment records, correspondence with the vendor regarding non-supply of consignment, and any other relevant communications.
2. **Declaration of Non-Receipt**: Prepare a declaration or affidavit stating that despite multiple follow-ups, the vendor has not fulfilled their obligation to supply the consignment against the advance payment made in 2016.
3. **Reporting to Bank**: Approach your bank where the advance payment was remitted under the Liberalized Remittance Scheme (LRS). Provide them with copies of all relevant documents and the declaration of non-receipt of consignment.
4. **Bank's Procedure**: The bank will review the documents and your declaration. They may require additional information or may proceed with initiating the process to close the transaction under FEMA regulations.
5. **Resolution**: Depending on the bank's internal procedures and FEMA guidelines, they will take steps to either reverse the transaction or close it in accordance with FEMA provisions for non-receipt of goods or services against advance payments.
6. **Legal Advice**: If needed, seek legal advice from a professional familiar with FEMA regulations to ensure compliance and proper closure of the transaction.
By following these steps and working closely with your bank, you can initiate the process to close or reverse the advance payment made under FEMA regulations due to non-fulfillment of the vendor's obligations.
CAclubindia
