FOC material, FEMA

[Amit Apshankar]

I want openion on below case under FEMA

If overseas parent commpany send raw material for export purpose only to it's subsadiry located in India on FOC basic . Indain subsadiary by using these raw material manufacturer finished product which is later export to parent company . In time of relaisation of export earning parnt comapny deduct raw material cost and realise remaing amount..

During the course of operation Indain subsadiry used some FOC material (supply by parent company) for its domestic sale ,and also paid the amount to sister cocern on that poration. 

This transaction is vaild under the frame work of the FEMA.

AMIT

Posts / Replies

[Pradeep Khatri]

Under FEMA, such transactions are not allowed.  Such transactions would land you in deep trouble.  DRI can investigate such transactions which voilates the provisions of FEMA.