S. 297 - Contract contract between an Indian Co., and its wholly owned subsidiary incorporated outside India

[shankar shankar]

Dear Friends,
whether S.297 is applicable for a contract between an Indian Co., and its wholly owned subsidiary incorporated outside India?

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CS K.Sankara Subramanian,

            B.A.B.L., ACS
Cethar Energy Limited, Trichy.

[N G Omkar]

Dear Mr. Sankar,

Sec 297 is not applicable for transaction between a company and a body corporate. Hence transaction between Indian Co., and its wholly owned subsidiary incorporated outside India are not covered under this section.

Regards...Omkar

shankar shankar <shankar...@gmail.com> Sent by: csmy...@googlegroups.com 20/06/2011 11:59 AM Please respond to csmy...@googlegroups.com

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[R V SECKAR]

Hello,

If the foreign subsidiary is also a public limited company , then section 297 will not be attracted.

If the sale  is made at the present market value and if it is cash and carry basis , then section 297 will not be applicable.

The section 297 speaks about Indian companies and there is no mention about foreign companies and hence , I think that section 297 will not be applicable .


As per CARO instructions as under section 297 will not be applicable to foreign companies.

Companies should be Indian Companies: A contract that an Indian Company enters into with a Private / Public Company incorporated outside India (where a Directors a Director or Member) for sale or purchase of goods or for a providing / availing a service will not be covered under this Section, as a Foreign Company is a Body Corporate as defined in Section 2(7) of the Companies Act, 1956 and the provisions of Section 297 are applicable only to transactions with a Company as defined in Section 3 of the Act, which is restricted to a Company incorporated in India.

Regards

R.V.Seckar

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R.V.Seckar

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[shankar shankar]

Dear Mr. N. G. Omkar and Mr. R. V. Seckar, thank you very much for the crisp replies.

[Bidu Bhusan Dash]

Thanks a lot Seckar sir

Thanks

[shankar shankar]

Dear Mr. N. G. Omkar and Mr. R. V. Seckar,

Based on the explanations given by you, I think though S.297 is not applicable to such contracts, S.299 will be applicable as S.299 (3) (a) uses the word 'Body Corporate'
Is it correct?

On Mon, Jun 20, 2011 at 12:20 PM, Bidu Bhusan Dash <bidub...@gmail.com> wrote:

Thanks a lot Seckar sir

Thanks

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[N G Omkar]

Dear Mr. Shankar,

Yes, your understanding is correct.

Regards...Omkar

shankar shankar <shankar...@gmail.com> Sent by: csmy...@googlegroups.com

20/06/2011 12:25 PM Please respond to csmy...@googlegroups.com

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