If importer is of indian origin and Mr. X has purchased from him on HIGHSEAS Basis , Case - I - Mr. X is paying in INR to impoter / Case - II Mr. X is paying directly to foreign seller in USD or other currency. Your view on the treatment in" notes of accounts" for both the cases is appreciated .
others :
1. In case II - If Mr. X was to give the importer Rs. 5500 INR on invoice ( purchase price of importer was USD$ 10 - INR 5000 CIF at certain exchange rate + 500 comm. ) . At the time of payment ( without having LIBOR fixation ) in consideration for 10 USD Mr. X has to pay 5500 INR. Is any money payable to impoter now.
2. If expenditure on money transfer in case is borne by Mr. X , can the expenses will be allowed in his books.
regards
Since Mr.X has purchased from Indian Importer on 'High Sea Sales Basis', he will be required to pay the Customs Duty when the goods arrive on Indian Territory and he will receive the Exchange Control Copy of Bill of Entry. This will remain same in both the cases whether he makes payment to the the foreign seller in foreign exchange or to the Indian Importer in Indian Rupees. The CIF Value of Imports of Goods needs to be shown in the Notes to Accounts in both the cases.
Others :
Q 1. is not clear ? Please elaborate.
Q 2. Expenditure incurred on money transfer incurred by Mr. X can be debited to Bank Charges / Finance Charges. The same shall be an allowable expenditure for Income Tax purpose also.
CAclubindia
