Import of goods in bill to ship to model in FEMA

[Shravan Gehlot]

In the context of a bill-to-ship-to model where goods have been ordered and imported from a foreign country for our customers, with the payment made by us, but the goods have not been received by us (they have been received directly by our customers), what are the implications under the FEMA (Foreign Exchange Management Act) regulations?

AI Summary

Exploring Bill-to-Ship-to Model Under FEMA: Legal Implications and Merchanting Trade Clarifications In a discussion on the implications of the bill-to-ship-to model under the Foreign Exchange Management Act (FEMA), a query was raised regarding goods ordered and imported for customers, with payment made by the inquirer, but received directly by the customers. One response explained that in merchanting trade, goods are sent directly from a foreign seller to a third-country buyer, not entering India, and referenced a specific circular for further details. Another response clarified that since goods are received in India, the situation does not fall under merchanting trade. Further references and questions on the model's legal validity were also discussed.