POINTS OF CLARIFICATION : FOR HAVING BUSINESS RELATION WI

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 July 2010 Please clarify the following queries :
FOR HAVING BUSINESS RELATION WITH A FOREIGN RELATIVE CLIENT

A. Can a Chartered Accountant represent a Firm owned by his NRI brother-in-law ?

B. Is any permission under FCRA required for obtaining remittance from the Foreign Firm ?

C. In what Type & style of the Bank Account need be maintained by the Consultant for such purpose ?

D. Can a Consultant disburse its Client’s Pay Roll ?

E. If yes, then TAN and PAN should be in whose name ?

F. Can a Foreign Company have a PAN and TAN in India for disbursement of its Pay Roll ?

G. If yes, then what is the procedure ?

H. Can a Foreign Company
a. Be a Promoter of a Indian Company ?
b. Be a holding Company of a Indian Company ?

H Is any permission,in such a case, is required under i
i) Fema /FCRA
ii) Home Ministry,
iii) MCA

I Any other formalities ?

J. For disbursement of Pay Roll
K Who can be a Authorised Representative of a Foreign Firm ?
L What are the formalities to be observed in such a case ?

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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13 July 2010 Reply for your queries pointwise:

A What kind of representation you are talking about?? Please give more details about it.

B For this also details are required regarding what kind of transactions you are doing.

C If FCRA provisions are applicable then seprate account need to be maintained for the foreign contribution received.

D No, salary payment is the duty of the client and not your's. Moreover when a person is appointed you provide him the appointment letter so salary should be paid by the person who is employing him.

E TDS deduction liability will be with the person who is actually paying the sum or utilising the benefits.

Point D and E can never be possible as the TDS provisions and Income Tax Provisions will not be followed properly.

F Yes, a foreign company can apply for PAN and TAN in India.

G Procedure is same as in normal case i.e. Form 49A and Form 49B will be required to fill.

H On this point i can not comment until and unless or information is received from you.

Querist : Anonymous

Querist : Anonymous (Querist)

14 July 2010 Dear Shudhanshu,
Thanks for your reply.
I am furnishing more informatin pointwise to enable you to be very specific and exact about the pointwise clarifications.
A.Representation implies supervision and financial control over the NRI Brother-in Laws business interest in his Indian Firm in the capacity of a Consultant - Client relationship.

B. You may reply exactly in the light of information furnished under point (A) above.

C. In regard to Bank account, the query was if a seperate bank account need be opened for such a Consultant-Client relationship.

D.Assuming a Consultant is appointed to represt the firm, can such duty be shifted to te Consultant ?
If yes, then the TAN Deductor should be who -- the Client or the Consultant ?

E. Can a Consultant make application for
PAN & TAN on behalf of the Client.

H. What further information you need in regard to query for being a Promoter/ or Holding Company ?
The Query was very specific and < I think, needs no further related information
L & M was not answered.

Awaiting your response.

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