Sale proceeds received and spent in foreign bank account

[chandrashekar Mahadevappa]

Hi All,

Need your guidance on the below issue:

A software company has a branch office in USA for sales and marketing. The USA branch office holds a bank account for payment of salaries and other expenses.

The company received payments from customers in to the foreign bank account. The company used a small portion of such receipts towards salaries and other expenses in USA.

Please let me know the implications under FEMA since the export proceeds were used in USA without bringing the money in to India.

[DR.MARIAPPAN GOVINDARAJAN]

Your query is to be elaborative still more. Whether the customers are Indian customers. Whether the services of foreign branch office are rendering in India?

AI Summary

Export proceeds used abroad raise FEMA compliance questions and require factual clarification on customers and service location.
Whether use of export receipts held in a foreign bank account by a US branch for local expenses gives rise to FEMA implications. Facts: Indian software company's US branch received customer payments into a foreign account and used part for salaries and expenses in the USA. The respondent requests clarification whether customers are Indian and whether the branch's services were rendered in India to assess FEMA consequences.