Is there any restriction on the Susdiary Company for Paying Advance against Goods to be purchased from the holding company...?. Does it require any board intervention ..?
KPB (SERVICE) (40 Points)
25 July 2009Is there any restriction on the Susdiary Company for Paying Advance against Goods to be purchased from the holding company...?. Does it require any board intervention ..?
Deepika singh
(CS & MBA)
(46 Points)
Replied 27 July 2009
Hi,
The advance recieved by the company against any order for the supply of goods cannot be considered either as a Loan, borrowing or a deposit, as defined under the Act. So, the restrictions on the Board under Section 292 is not applicable in the present case. Thus, there is no restriction on the company to accept such advance from its subsidiary. Further, it also does not require any Board intervention.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
CAclubindia
