Export to outside india, FEMA

[N Balachandran]

Sir,

We have received the order from Customer who is located outside india for supply of equipment for steel Plant. we would like to export these items from India. We are placing the order to Vendor who is located in India and advising them to export directly to our end customer Mentioning A/C Our company's Name. The invoice by Indian Vendor on us will be done in US $ and inturn , we will bill to customer in US $.

My query is :

1. Since we are located in india and Vendor also located in India, Can we place the purchase in Foreign Currency ( US $ ) on Vendor?

2. Can Vendor export the Equipment directly to customer and raise invoice on us? will it attract any tax in India?

Regards

N.Balachandran