19 November 2009
There is a wrong receipt from out side india to a Pvt ltd in India , instead of sending to the hodling compnay of the Pvt Ltd in India , by mistake made the fund transfer to Pvt Ltd. Now the Pvt ltd wants to payback the money to the party who made the payment . Is there any legal voilation in FEMA ( if the transfer is supported by the documents as required by the Registered Delaer i,e Pvt Ltd Banker). Or is it required to be supported by any CA certificate. if so what is the procedure to be followed to send back the money as the receipt not related to the private limited.
19 November 2009
If the bank has already converted the foreign exchange, depending on the quantum RBI has delegated powers on the AD to make remittances.However you will have to go through the process of obtaining Form 15CA and 15CB and refunding money does not attract TDS.
However, meticulous banks, especially our Nationalised Banks ask us the purpose for which we receive remittances before converting and crediting our accounts. Normally they have to record Inward remittances like advance against export shipments separately from other trade remittances and personal remittances received. Chances are they may not have converted the funds. You can instruct them not to claim the money from their Nostro Account and instruct their correspondent bank where they maintain their account to return the funds the same route through which it came. Then you will not lose in exchange and there is no permission required in FEMA for this action.
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