Law applicability - FEMA, VAT

[BAL KRISHAN GARG]

Sir, A is having TIN no.in Delhi and he is having one office space out of india in bangkok.Now he has some deal whereby he wants to purchase from eaurope and sell in Dubai .What are the legal complications here as the goods will not come in india the material will be sent directly from eaurope to Dubai . the payment will be made in our favour by the purchasing party and the payment will be made from our account to the seller . now the question is whether there is any law applicability relating to the deal with regard to FEMA , VAT , etc . BAL KRISHAN GARG

[Rama Krishana]

Since this a international transaction, the provisions of VAT can not be applied to these transactions. The provisions of FEMA are not prohibiting such transactions unless there are foreign exchange outgoing which may require prior approval if exceeding the maximum permissible limit. You are also requested to submit your understanding and view on this issue to discuss and explore this issue further.

AI Summary

VAT non applicability for direct offshore sales; foreign exchange rules may require approval for outbound remittances. Where goods are purchased abroad and sold directly to a foreign buyer without entering India, domestic VAT does not apply because the supply occurs outside Indian territory. FEMA does not bar such transactions per se, but outward remittances or foreign exchange outflows tied to the purchase may require reporting or prior approval if they exceed permissible limits under the foreign exchange rules.