Question ID : 40417

Setting off of Export Proceeds

An Indian Company exports software services to its holding company in USA. Holding Company settles the invoice as per terms. From current year, holding company decides to allocate some common costs to its subsidiaries located across the globe. Accordingly, a proportion is apportioned to Indian Subsidiary. This expense will hit Indian Subsidiary's Profit and loss account. Let know whether export proceeds realizable by the Indian Subsidiary can be netted off with this expense under FEMA Regulations. Also let know, if Indian Subsidiary has to pay GST on this expense.