Question ID : 532

FEMA provisions for maintenance of foreign currency accounts

Our client is the busess of Multi-Level Marketg. All their suppliers are out dia, all of whom are Associted Enterprises. The suppliers are credited whenever purchase is made. The company also has this concept of Top-up sales viz. sales are effected out dia for which payment is received by the company from which the transaction origates. But the movement of goods would be from dia. This is done to allow foreign nationals to earn commission on sales effected by their downles dia. the dian companys books, the foreign companys account is debited for the value of the sale. Kdly crify on the followg:
(i) Can the foreign currency receivables be adjusted agast foreign currency payables under FEMA?
(ii) Would there be any FEMA viotion for the above mentionaed top-up sales? '

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