REPORTING OF FORM FC-GPR TO RBI

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RBI Circular No. 40 dated 1st February, 2016; RBI has made it mandatory to report any transactions and filing of forms online in respect of issue and transfer of shares from an Indian Entity to outside India.

The Form FC-GPR comes into use whenever there is new issue of shares. The onus to submit the form or comply with the laws is on the resident entity.

Any Company or Organization receiving foreign investment must report the transaction to the RBI within a stipulated timeline. Similar to the filing of FC-TRS which is filed online, the Form FC-GPR is also required to be filed online.

The timeline is briefly described below:

  1. a) Foreign funds received
  2. b) Within 30 days of receiving the money file ARF (Advance Remittance Form) with the RBI
  3. c) RBI will issue UIN (Unique Identification Number) after submission of ARF
  4. d) Within 180 days from the date of receiving the money, allot the shares
  5. e) File FC-GPR within 30 days from the date of allocation of shares.

Before reporting the transaction, applicant needs to obtain following:

  • Unique Identification Number from RBI by reporting of Advanced Foreign Remittance.
  • KYC report for the beneficiary if the beneficiary and remitter are different entities.
  • CS certificate
  • Certificate from SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India
  • Disclaimer Certificate
  • Statutory Auditor Certificate
  • Board resolution
  • LRN(Loan Registration Number) allotted
  • Copy of FIPB approval (if required)
  • Details of Transfer of shares if any
  • No objection certificate from the remitter for the shares being allotted to the third party mentioning their relationship
  • Letter from the foreign investor explaining the reason for making subscription to shares by the remitter on his behalf
  • Copy of agreement/Board resolution from the investee company for issue and allotment of shares to the foreign investor, other than the remitter
  • Reason for delay in submission (if required)

Once all the above documents are obtained, the applicant shall duly fill the Form FC-GPR and complete it in all respects without any error, attach the Digital Signature of the applicant and upload the form online at https://www.ebiz.gov.in. In this case also, it is to be noted that merely filing the Form FC-GPR does not discharge an entity of its duties in regard to compliance of the relevant laws, the same shall be considered complete only after it is approved by the RBI.

General Instructions

  • The electronic form (Form) can be accessed from service landing page and can be filled offline
  • If you choose “Load prefill data” option while opening the form, then some fields may get prefilled with data you have filled previously while applying for this service. You may change this data if you wish.
  • The saved draft can be accessed later from “My Saved Drafts” section in Menu options. This draft is available for 3 months or until the form is submitted.
  • Field marked with * are mandatory and needs to be filled in before a form can be submitted on e-Biz portal. You may not be able to leave some of the field’s blank in the e-Form. In case you wish not to enter data in a field, please input “NA” if it is a text/description field or a 0, if it is a numeric field.
  • The e-form needs to be digitally signed using a digital signature by the applicant. If applicant wishes to make any modifications to an already signed e-Form, right-clicking on the signature field and choosing “Clear signature” will enable editing of form and any modifications can be made to the form.

Electronic Attachments:

Upload the file using the attach link and if you wish to remove any file, use the remove link.

  • Reason for delay in submission: this attachment is required if the form is submitted after 30 days from the date of receipt of funds
  • CS Certificate
  • III. Certificate from SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.
  • Disclaimer certificate
  • Statutory Auditor Certificate
  • Board resolution
  • VII. LRN(Loan Registration Number) allotted
  • VIII. Copy of FIPB approval (if required)
  • Transfer of shares details, if applicable
  • If the investor and remitter are separate entities, please provide the following documents:
  • No objection certificate from the remitter for the shares being allotted to the third party mentioning their relationship
  • Letter from the foreign investor explaining the reason for making subscription to shares by the remitter on his behalf
  •  Copy of agreement/Board resolution from the investee company for issue and allotment of shares to the foreign investor, other than the remitter
  •  KYC report for the beneficiary
  • Any other attachments: Add any other document if required.

 

Verification:

Enter the following details in this section:

  • Name of the Person
  • Name of the Place.
  • Date of signing the electronic form
  • Designation.
  • Digital Signature of Authorized signatory of the investee company.

 

Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, VALUE ADDED TAX,GOODS AND SERVICE TAX, Excise, Etc for resolving their doubts or for clarifications.

 

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CORPORATE AND PROFESSIONAL UPDATE JULY 2, 2016

 

Professional Update For the Day:

DIRECT TAX:

Income Tax : CBDT issues 3rd FAQs on Income Declaration Scheme, 2016, Circular No.25 of 2016 -Income Tax Dated 30th of June, 2016.

Income Tax : Explanation on disallowance of CSR exp. doesn’t have retro-effect, says ITAT Assistant Commissioner of Income-tax, Circle 1 (1), Bilaspur V. Jindal Power Ltd. [2016] 70 taxmann.com 389 (RAIPUR-TRIB)

Income Tax: TP provisions can be invoked even for 100% EOU enjoying tax holiday under sec. 10A Transcend MT Services (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle 16(1), New Delhi [2016] 70 taxmann.com 388 (Delhi – Trib.)

CBDT issued 3rd clarification in the form of FAQs on the Income Declaration Scheme, 2016 Vide Circular No. 25 of 2016 dated 30.06.2016

No denial of sec. 54F relief due to two houses if taxpayer had partial interest in one of the houses V.R. Usha v. Income-tax Officer, Business Ward-XV(1), Chennai[2016] 70 taxmann.com 340 (Chennai – Trib.)

INDIRECT TAX:

Excise : The liability for payment of Central excise duty will be with effect from 01.03.2016. The payment for excise duty for the month of March, April , May , June  is also extended to 31.07.2016.

Excise: The time limit for taking Central excise registration of an establishment by a jeweller  is being extended up to 31.07.2016.

Custom : Clearance of bunker fuels to Indian ship/vessel carrying containerized cargo—reg. vide Circular No. 1034/22/2016-CX dated 1st July, 2016.

Excise: CBEC has extended the time limit for taking central excise registration of an establishment by jeweler to31.07.2016. The liability for payment of central excise will be from 1st March, 2016. However the assessee jewelers may make the payment of excise duty for the months from March 2016 to June 2016 also extended upto31.07.2016. Vide Circular No. 1033/21/2016 – CX dated 01.07.2016.

Excise: Refund of tax paid on non-taxable services is also governed by time limit of section 11B Giriraj Construction v. Commissioner of Central Excise & Customs, Service Tax, Nasik [2016] 70 taxmann.com 303 (Mumbai – CESTAT)

Excise: Extension of time-limit for refund claim would also be applicable on time-barred claims Nobel Art & Craft House v. Commissioner of Central Excise, Jaipur-II [2016] 70 taxmann.com 315 (New Delhi – CESTAT

OTHER UPDATES

RBI: The Reserve Bank of India has released the Financial Stability Report (FSR) June 2016The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. Besides, the Report also discusses issues relating to development and regulation of the financial sector.

Companies  (Removal of difficulties) Third Order, 2016 released by MCA. MCA order dated 30.06.2016.

KEY DATES

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016

“Dreams are the seeds of change. Nothing ever grows without a seed and nothing ever changes without a dream. Dream on, move on and change the world.”

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com  E: info@carajput.com  T: 011-233-4-3333, 9-555-555-480 Continue reading

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

STARTUP INDIA PORTAL HAS BEEN FINALLY LAUNCHED

STARTUP INDIA PORTAL HAS BEEN FINALLY  LAUNCHED

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  • Information Availability: The portal and mobile app provide up-to- date information on various notifications/ circulars issued by various Government ministries/ departments, towards creation of a conducive ecosystem for Startups. The portal and mobile app provide information regarding incubators and funding agencies recognized for the purpose of recommending Startups (as part of Startup recognition application). A comprehensive list of FAQs is also available to help Startups, Incubators and Funding Agencies use the portal and mobile app more effectively.
  • Startup India Hub:The Startup India Hub, which has been established within Invest India, will be a single point of contact for the entire Startup ecosystem which would enable exchange of knowledge. The Hub will work in a hub and spoke model with Governments, VCs, Angel Funds, Incubators, Mentors, etc. It will assist Startups through their lifecycle, on all aspects, such as providing mentorship, incubator facilities, IPR support, funding etc. The Hub will be operational from 10:00 AM to 5:30 PM on working days and can be reached via the toll free number: 1800115565 or the email ID: dipp-startups@nic.in
  • Application for Startup Recognition:Entities that fulfill the criteria as per the definition of “Startup” and are incorporated/ registered in India, can obtain recognition as a “Startup” to avail various benefits listed in the Startup India Action Plan. The process of recognition is simple and user friendly and involves a single page application form that a user can fill either through a web interface or through mobile app. Formats of the recommendation/ support letters that need to be attached as part of the application form have been published on the portal and mobile app.
  • Real Time Startup Recognition: A real time recognition certificate is provided to Startups on completion of the application process. A digital version of the final certificate of recognition is available for download, through the portal and mobile app. A request for certificate of eligibility for tax exemptions from Inter-ministerial Board will be made simultaneously by selection of a simple option.
  • Verification of Recognition Certificate:The certificate of recognition is verifiable through the portal and mobile app by entering the Startup Recognition/ Certificate Number.
  • Approval of Inter-Ministerial Board: DIPP has also setup an Inter-Ministerial Board to verify the eligibility of Startups opting to avail Tax and IPR related benefits and to provide a certificate of eligibility to innovative Startups.

LINKS

  • Official site startup India portal : http://startupindia.gov.in/
  • To download mobile app of start up : http://startupindia.gov.in  /download-app.php

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 9, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 9, 2016

29

DIRECT TAX

IT: There cannot be a notice for re-assessment inasmuch as the question of re-assessment arises only when there is an assessment in the first instance – M/s Standard Chartered Finance Ltd. Vs. CIT, Bangalore & Anr (2016 (3) TMI 150 – Supreme Court)
IT – VDS’ 2016: Cases where notices have been issued or search has taken place or individuals against whom Govt. has prior information from another Country won’t be eligible for scheme.
INCOME ACCRUEL OF INTREST :Where assessee was following mercantile system of accounting, once interest amount had been credited to assessee and tax had also been deducted by payer, assessee could not take plea of not offering it as income on ground that he had not actually received same – [2016]  (Mumbai – Trib.)
• CBDT notifies 15% depreciation allowance on Oil Wells. Notification 13/2016.

INDIRECT TAX

ST: Management Maintenance and Repair Services – Whether notional interest to be taken as value of service – prima facie case is against the appellant since Notional interest is to be included in the value of services – Satya Prakash Builders Pvt. Ltd. Vs. CCE&ST, Jaipur-I (2016 (3) TMI 137 – CESTAT New Delhi
• 6% Tax on online advertisement / Google Tax, Such provisions are applicable from 1st June, 2016.The levy clearly is targeted to tax various online advertisements companies like YouTube , Google , Facebook , Twitter etc.

OTHER UPDATES

Bank Branch Statutory Audit: Banks have received the lists from RBI and commenced sending emails to the prospective Auditors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

PROFESIONAL UPDATES JANUARY 19, 2016

PROFESIONAL UPDATES JANUARY 19, 2016

Untitled32

STARTUP INDIA: Hon’ble PM Modi launches Startup India Program on Sat, 16 JAN 2016 to boost innovation based business with many incentives and ease of doing business.

  • Income Tax exemption for First 3 years.
  • Fund of ₹ 10,000 Crore (with ₹ 2,500 crore each year) to be invested in Startups in next 4 years and a Credit Guarantee Fund for ₹ 500 crore each year for next 5 years.
  • Capital Gain exemption if Startups invest capital by selling their personal assets.
  • 80% Rebate in registering Patent.
  • Easy Exits in 90 days.
  • Self-certification compliances.
  • No kind of Inspection for first 3 years.
  • Incubation program to be started in 5 Lac Schools and setting up of 35 new Incubation Centres.
  • No Govt. intervention in Startups.
  • A scheme for Women Entrepreneur to be announced soon.
  • A group of lawyers to be setup who will help resolving Patent related problems for free.
  • 7 New Research Parks to be started with a fund of ₹ 100 crore each.
  • Organizing Startup Fest all over India and abroad regularly.
  • Mobile App based registration for Startups from April 1, 2016.
  • Atal Innovation Mission (AIM) for encouraging Innovation among Startups.

The following are the Conditions for taking benefits of Startup Scheme:

1)It must be an entity registered/incorporated as

2) Five years must not had elapsed from the date of incorporation/registration.

3)  Annual turnover (as defined in the Companies Act, 2013) in any preceding financial year must not exceed Rs. 25 crores.

4)Startup must be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

5)The Startup must aim to develop and commercialise:

  •   A new product or service or process;
  • A significantly improved existing product or service or process,  that will create or add value for customers or workflow.

6)The Startup must not merely be engaged in:

  • Developing products or services or processes which do not have potential for commercialization; or
  • Undifferentiated products or services or processes; or
  • products or services or processes with no or limited incremental value for customers or workflow

7)The Startup must not be formed by splitting up, or reconstruction, of a business already in existence.

8) The Startup has obtained certification from the Inter-Ministerial Board, setup by DIPP to validate the innovative nature of the business and

  • Be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator established in a post-graduate college in India; or
  • Be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
  • Be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator recognized by GoI; or
  • Be funded by an Incubation Fund/Angel Fund/ Private Equity Fund/ Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
  • Be funded by GoI as part of any specified scheme to promote innovation; or
  • Have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.

* DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

TAXES AND FINANCE UPDATE NOVEMBER 16, 2015

INDIRECT TAXES http://pdicai.org/images/arrow3.gif EXCISE

Untitled71ACBEC revises arrest, prosecution norms

Nov 02, 2015

The Central Board of Excise and Customs (CBEC) has revised the monetary limits for arrest and its guidelines for prosecution in matters relating to offences punishable under Customs, Central Excise and Service Tax laws. Its circulars (dated October 23) prescribe threshold limits, due sanction from senior officers, procedures to be followed, monitoring disciplines and procedure for withdrawal of complaints.In Customs matters, the CBEC says arrest in respect of an offence should be effected only in exceptional situations.

FINANCIAL MANAGEMENT http://pdicai.org/images/arrow3.gif COMMODITIES

 

Big correction in coriander

Nov 02, 2015

Coriander prices have tanked over 20 per cent in the last two weeks on the National Commodity and Derivatives Exchange (NCDEX). They are currently trading at Rs. 9,391 per quintal. This sharp and sudden fall took the markets by surprise. The trigger for the huge fall came after unconfirmed reports stating that the Securities and Exchange Board of India (SEBI) has asked the NCDEX to provide historical price data of the commodity. This made the market nervous and the contract witnessed panic selling thereafter.The ripple effect had the contract hitting the lower circuit for three consecutive days. Following this, the NCDEX has increased the margin for the coriander futures contract with effect from Thursday last week.

FINANCIAL MANAGEMENT http://pdicai.org/images/arrow3.gif CORPORATE WATCH

 

Granules India net zooms 40% in Q2

Nov 02, 2015

Granules India has posted a net profit of Rs. 31 crore for the second quarter ended September 30, 2015, a 40 per cent rise over the Rs. 22 crore it posted in the corresponding quarter last year.The company’s revenue rose 19 per cent to Rs. 366 crore.Operating margin improved by 204 basis point to 19.2 per cent from 17.2 per cent.Giving a business break up for the second quarter on a consolidated basis, the company stated that Active Pharmaceutical Ingredients (APIs) contributed 44 per cent, Pharmaceutical Formulation Intermediaries (PFIs) 27 per cent and Finished Dosages 29 per cent. Geography-wise, the regulated markets contributed 55 per cent and the rest of the world 45 per cent.
 

MERGER & ACQUISITION – NATIONAL

 

Reliance Communications, Sistema to merge in all-stock deal

Nov 02, 2015

Anil Ambani-owned Reliance Communications is merging the telecom business of Sistema Shyam Teleservices (SSTL) with itself in a cashless deal worth around Rs 4,500-5,000 that will lead to the first major consolidation in the intensely competitive sector since 2009.”SSTL will get around 10% stake in the combined entity, but no board seat and no veto powers,” a person directly involved in the deal said. ET had first reported on May 20 that Reliance Communications (RCom) is holding talks on a possible takeover of SSTL in an all-stock deal that could give the latter’s shareholders a stake of around 10% in the merged entity.

 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com  or call at 011-233 433 33

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

INDUSTRY HIGHLIGHT FOR THE MONTH OF NOVEMBER

Bulls say India is the ‘next China’ OCT 28, 2015

Untitled35TODAY UPDATE :

The bulls say India is the ‘next China’. Odds are they are right, if not today then within a decade or so. But even if this proves to be right in terms of growth, India is a very different country than China on many fundamental dimensions, demography and democracy being key. But most importantly, China has been built on infrastructure, investment and manufacturing, while India has barely scratched the surface on all three.

India began its economic reform in the early 1990s, more than a  ..

Read more at: 

http://economictimes.indiatimes.com/articleshow/49548115.cmsutm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

NEW DELHI: SpiceJetBSE 6.22 % today announced discount sale offering fares starting as low as Rs. 749/- base fare (excluding taxes) for the domestic sector and Rs. 3,999/- all in for the international sectors respectively. More than 3,00,000 lakh seats are available on this sale!

Tickets on sale can be booked October 27 and October 29, 2015, for travel between February 1, 2016, and October 29, 2016.

“The all inclusive one-way fare applicable on direct flights encompasses all ..

Read more at:
http://economictimes.indiatimes.com/articleshow/49547906.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

“Follow the pundits”, is a strategy many investors looking to making a fortune on the stock markets swear by. There are several investors in the United States who have built the ‘Buffett portfolio’, following the strategy of Warren Buffett. The cornerstone of Warren Buffett’s investment philosophy is to identify stocks that pass the ‘basic screen test’. Inspired by Buffett, ET Intelligence Group trained its gaze on Dalal Street stocks to find winners in the basic screen test. In what comes as  ..

Read more at:
http://economictimes.indiatimes.com/articleshow/49515324.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

NEW DELHI: Crossing a significant milestone in negotiations for the 36-aircraft Rafale fighter deal, India and France have firmed up an understanding on the offsets segment under which the French have agreed to invest 50 per cent of the deal’s worth in related sectors.

The offsets deal was clinched in the last few days, people aware of the matter told ET. Even as the deal was being reached, French aircraft manufacturer Dassault had already reached out to Indian companies in the defenc ..

Read more at:
http://economictimes.indiatimes.com/articleshow/49487260.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

NEW YORK: The United States is the best partner for Prime Minister Narendra Modi’s ” Make in India” campaign as the two nations seek to reinforce their strategic interests through commerce, a senior US government official said Tuesday.

Under Secretary of Commerce Stefan Selig said that because the US produces “the best manufacturing exports” India will have “no better partner” in its bid to make the country “an elite manufacturing hub on the global stage.”

Briefing reporters he ..

Read more at:
http://economictimes.indiatimes.com/articleshow/48982795.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

CHENNAI: India’s atomic power company Nuclear Power Corporation of India Ltd (NPCIL) is likely to restart its first 1,000 MW unit at Kudankulam Nuclear Power Project (KNPP) only in December this year, said a source.

The source, not wanting to be named, told IANS: “The first unit is expected to restart generation only in December. The second unit may take longer time to start power generation.”

The NPCIL is building two 1,000 MW atomic power plants with Russian equipment at  ..

Read more at:
http://economictimes.indiatimes.com/articleshow/49548253.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com  or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

AN ANALYSIS ON BUSINESS RESTRUCTURING-DEPRECIATION ON GOODWILL-

AN ANALYSIS ON BUSINESS RESTRUCTURING-DEPRECIATION ON GOODWILL

Untitled35RESTRUCTURING of existing businesses, mergers and acquisitions has become a regular feature of India Inc. Businesses now a days do not simply run with the help of tangible assets in the nature of land, building, plant, machinery, equipments etc., but derives value from ownership of various intangibles, like, brand name, skills of employees, technology, contracts, know-how etc. It is at times the latter category of assets owned by the business houses, which provides higher value to the business in the event of restructuring than the former category.

In such an eventuality, substantial portion of consideration paid on acquisition of business is attributable towards acquisition of such intangibles vis-à-vis tangible assets belonging to that business.

The amount paid on acquisition of business is a capital expenditure and is not an allowable business deduction. The deduction is, however, available for capital expenditure resulting in acquisition of assets on deferred basis by way of depreciation.

Section 32 of the Income-tax Act, 1961(‘the Act’) provides for business deduction by way of depreciation on tangible and intangible assets acquired by an assessee and reads as under:

“Depreciation.

  • In respect of depreciationof–
  • buildings, machinery, plant or furniture, being tangible assets;
  • know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed–…”

Clause (i) of the aforesaid section enumerates extensive category of tangible assets eligible for depreciation under that section. Clause (ii), however, provides that depreciation is admissible on knowhow, patents, copyrights, trade-marks, licenses, franchises or any other business or commercial right of similar nature, being intangible assets acquired on or after1.4.1998.

Clause (ii) of section 32, which provides fors depreciation on intangible asset as been a subject matter of debate and varying interpretations, which causes hardship to an assessee making payment towards intangible assets on acquisition/restructuring of businesses.

In this article, the author seeks to analyze the aforesaid provisions of clause (ii) of section 32 of the Act and address whether the same provides restrictive list of intangible assets eligible for depreciation in comparison to extensive list of tangible assets.

Section 32(1)(ii) of the Act provides for depreciation on knowhow, patents, copyrights, trademarks, licenses and franchises. The aforesaid category of assets is succeeded by residual category, viz., ‘business or commercial rights of similar nature’. The issue that arises for consideration is whether intangible assets/rights, which are not in the nature of former six specified assets is eligible for depreciation under section 32 of the Act within the terms of residual category.

In the author’s view, use of the words ‘of similar nature’ in the residual category as well as by applying principle of interpretation of ejusdem generis, it is clear that intangible asset/right must be in the nature of six category of assets preceding the residual category to qualify for depreciation under section 32 of theAct.

But what is the nature of these six assets- whether they are same or different?

In order to answer the aforesaid question, it would be pertinent to understand the meaning of aforesaid six specific intangible assets referred to in section 32(1)(ii) of theAct:

I  ‘Know-how’-

  • any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil-well or other sources of mineral deposits (including searching for discovery or testing of deposits for the winning of access thereto). (Explanation 4 to section 32 of theAct)

II  Patents-

  • A grant of right to exclude others from making, using or selling one’s invention. (Black’s Law Dictionary (Sixth Edition), page no.1125)

III  Trademarks

 a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours (Section 2(1)(zb) of the Trade Marks Act,1999)

IV  Copyrights-

  • An intangible, incorporeal right granted by statute to the author or the originator of certain literary or artistic productions, whereby he is invested, for a specified period, with the sole and exclusive privilege of multiplying copies of the same and publishing and selling them. (Black’s Law Dictionary (Sixth Edition), page no.336)

V  ‘Licenses’-

 (i) permission to act; (ii) a right or permission granted in accordance with law by a competent authority to engage in some business or occupation, to do some act, or to engage in some transaction which, but for such license, would be unlawful; (iii) formal permission from local authorities, and (iv) a document embodying such permission or evidencing the license granted. (Webster’s Third New International Dictionary, 1996edn. Vol II, p1304)

IV ‘Franchises’-

 “Franchise” means right to market a particular product or service, granted by the company that owns the brand name relating to the product or service. (K.G. Aiyer’s Judicial Dictionary, 13th ed.,2001)

On perusal of the meaning of the aforesaid six categories of intangible assets it  would be noted that aforesaid intangible assets are not of the same kind and are distinct from one another. The nature of assets, viz., know-how, patents, copyrights, in the author’s view, is different from the nature of trade- mark, licenses and franchises. The former category of assets are in the nature of intellectual property rights. The assets, viz.,trade-mark and franchise are, in the author’s view, relatable to brand-name of an assessee as opposed to intellectual property rights. Similarly, the nature of asset in the form of license is clearly distinct from the aforesaid  category ofassets.

In the author’s view, as a result of distinct nature of each specified asset, restrictive meaning cannot be provided to each asset and genus of all the aforesaid six assets should be seen to test whether an asset qualify for depreciation under section 32(1)(ii) of the Act within the residual category of ‘business or commercial rights’. The fact that after the specified intangible assets, the words ‘business or commercial rights of similar nature’ has been additionally used, clearly demonstrates that theLegislature did not intend to provide for depreciation only in respect of specified intangible assets but also to other categories of intangible assets, which was neither feasible nor possible to exhaustively enumerate. In the author’s view, the specified categories fall in the genus of intangible assets that form part of the tool of trade of an assessee facilitating smooth carrying on of thebusiness.

For instance, ‘know-how’ relating to manufacturing would assist in carrying on manufacturing activities. Similarly, license granted to carry on manufacturing activity in a particular area / industry assists an assessee to carry on manufacturingactivity

in that area / industry. Non-existence of both the aforesaid assets will be an impediment in carrying on of the manufacturing activitiessmoothly.

In light of the aforesaid discussion, intangible asset/right of the genus which facilitates carrying on smooth business on acquisition and non-acquisition of same provides impediment to carrying of such business shall be eligible for depreciation under section 32(1)(ii) of the Act under the category of ‘business or commercial right of similarnature’.

The aforesaid view also finds support from the following decisions of various benches of Tribunal discussed in shorthereunder:

  • Guruji Entertainment Network Ltd. v. ACIT: In that case the assessee was engaged in the business of production and telecasting of television serials. The assessee acquired business of a sole proprietorship firm viz. Guruji Film, which was also engaged in the business of production of TV serials, documentary ad-films, The assessee attributed consideration paid towards acquisition of business in two parts, viz., (i) goodwill and (ii) tangible assets. The assessee claimed depreciation on the amount recorded as goodwill in the books of account on the ground that same represented intangible assets of the transferor firm, viz., copyright, licenses, telecast rights of episodes of various T.V. serials, ad-films etc. It was contended by the assessee that consideration was paid towards acquisition of aforesaid intangible rights, which was simply nomenclatured as goodwill in the books of account, and were in substance in the nature of ‘business and commercial rights’ eligible for depreciation under section 32(1)(ii) of the Act. The assessing officer disallowed depreciation on the ground that depreciation under the said section was not admissible on intangible assets in the nature ofgoodwill.

On appeal, the Tribunal held that the assessee was entitled to depreciation on intangible assets in the nature of copyrights, telecast rights, commercial rights, etc. as the same are necessary for smooth carrying of acquired business and are eligible for depreciation under section 32(1)(ii) of the Act within the category of ‘business or commercial right of similarnature’.

  • Skyline Caterers (P) Ltd. v. ITO:(2007-TIOL-517-ITAT-MUM)In that case the assessee was engaged in the business of providing catering, housekeeping and allied services. During the relevant previous year, the assessee took over catering business of proprietorship firm viz., Skyline Caterers. The aforesaid business included catering contract with Hindustan Lever Ltd. (HLL), which was also acquired by the assessee on acquisition. The amount of consideration attributable towards intangible right in the nature of contract with HLL was reflected as goodwill in the books of assessee on which depreciation was claimed under section 32 (1)(ii) of the Act on the ground that same represented commercial right. The assessing officer disallowed depreciation on the ground that same was not admissible on intangible assets in the nature of goodwill.

On appeal, the Tribunal held that the right obtained by the assessee under the contract with HLL was in the nature of commercial right and was an important tool to

carryon the business of catering. The amount of consideration allocated towards  such right, even though represented in the books under the head ‘goodwill’, was in substance in the nature of ‘business or commercial rights’ prescribed in section 32(1)(ii) of the Act and was entitled to depreciation under that section.

  • It has been held likewise in the recent decision of Delhi bench of Tribunal in the case of Hindustan Coca Cola Beverages (P) Ltd.: ITA No.1884/D/2006.

It would be pertinent to point out that a contrary interpretation of provisions of

Section 32(1)(ii) of the Act has been recently adopted by the Mumbai High Court in the case of CIT v. Techno Shares and Stocks Ltd.: ITA No. 971/2006 & 218/2007.

In that case the issue for consideration before the Mumbai High Court was whether stock-exchange membership card, being an intangible asset, is eligible for depreciation under section 32(1)(ii) of the Act. It was contended that stock-exchange membership card falls within the meaning of either ‘license’ or ‘business or commercial right of similar nature’ and is eligible for depreciation under the aforesaid section.

The Mumbai High Court, however, while rejecting the contention of the assessee held that assets in the nature of know-how, trade-marks, franchises, copyrights are in the nature of intellectual property rights and the asset in the form of license must be in the nature of intellectual property rights only to fall within the provisions of section 32(1) (ii) of the Act. Similarly, it was held that asset in the nature of intellectual property right only would fall within the residuary category of ‘business or commercial rights’ for the purposes of depreciation under section 32. It was held that since stock-exchange membership card was not in the nature of intellectual property rights, same was not eligible for depreciation.

In the author’s view, though a contrary interpretation of provisions of section 32(1)(ii) has been provided by the Mumbai High Court, however, meaning of the words ‘trade- mark’ and ‘franchises’ have not been correctly appreciated before restricting the scope of six specified intangible assets to intellectual property rights only. The trade- marks and franchises, as discussed supra, are assets relatable to brand name as opposed to intellectual property rights simpliciter and, therefore, restricting the scope of intangible assets to intellectual property rights in order to qualify for depreciation is contrary to the provisions of section 32 and other stated decisions.

Depreciation on‘goodwill’

 Another fallout of the aforesaid controversy is whether depreciation is admissible on acquisition of ‘goodwill’. In the author’s view, whatever interpretation may the given to provisions of section 32(1)(ii) of the Act, viz., whether genus of six specified intangible assets is in the nature intellectual property rights or tool of trade of business, ‘goodwill’ will be eligible for depreciation under thatsection.

Goodwill of a business, which in the author’s view is synonymous with the brand name of that business, is in the nature of intellectual property right just like patent, copyrights, trade-mark and is also an important tool of trade of business. The only distinction between goodwill and aforesaid specified assets is that they are protected under specific statues like, Trade-Marks Act, Patents Act, Copyright Act etc., unlike goodwill, which is not protected under any specific statute. However, goodwill is defendable under the general law and, therefore, in the author’s view, falls within the nature of trademark, patent, trade-mark, etc… The goodwill of a business is also an important tool of trade of business. Any destruction to the goodwill of a business may cause prejudice to the smooth functioning of the business and on that ground falls within the genus of specified intangible assets and consequentially, in the author’s view, qualifies for depreciation under section 32(1)(ii) of the Act.

The Mumbai bench of Tribunal in the recent decision of Kotak Forex Brokerage Limited v. ACIT: ITA No. 2692/Mum/.2007 has also held that depreciation is admissible ongoodwill.

In that case, assessee acquired foreign exchange business for a consideration comprising payment towards goodwill of that business, being use of the name of seller. The assessee claimed depreciation on the amount paid towards goodwill under section 32(1)(ii) of the Act. The aforesaid claim of depreciation was disallowed by the assessing officer on the ground that ‘goodwill’ is not specified under section 32(1)(ii) of the Act.

On appeal, the Tribunal held that ‘goodwill’ or ‘reputation of name of the business’ is a kin to assets in the nature of know-how, patents, copyrights, trademarks, etc., as all these assets, like goodwill, come into existence by experience and reputation and would qualify for depreciation within the residuary category of ‘business or commercial right’ under section 32(1)(ii) of the Act. The relevant observations of the Mumbai Tribunal are as under:

Business or commercial rights are rights obtained for effectively carrying on the business or commerce. Commerce is a wider term, which encompasses business in its fold. Therefore, any right which is obtained for carrying on the business effectively and profitably, has to fall within the meaning of intangible asset. The definition further provides that the business or commercial rights should be of similar nature as know-how, patents, copy rights, trademarks, licenses, franchises etc. all these are the assets which are not manufactured or produced overnight but are brought into existence by experience and reputation. They assume importance in the commercial world as they represent a particular benefit or advantage or reputation built over a period of time and customers associate with such assets. Similarly, goodwill is nothing but positive reputation built by a person/company/business-house over a period of time. Thus, goodwill is a ‘business or commercial right of similar nature.’ As seen from the agreement of sale between Shri Uday S. Kotak and the assessee company formerly known as Komaz Financial Services Ltd., we find that the name ‘Kotak’ has tremendous importance as the assessee company was to be benefitedby

the usage of the said name and it has gone as far as amending its name by including Kotak in its name. Therefore, it is of commercial value for which the assessee has paid the amount of Rs.1.88 crores as goodwill.

  1. Once it is held that the goodwill is also an intangible asset of the similar nature referred to in clause [ii] of section 32[1] of the Act, the depreciation is consequently allowable on the same.……..”

The aforesaid decision, therefore, supports that goodwill is a kin to six specified assets and shall be eligible for depreciation under section 32(1)(ii) of theAct.

Conclusion

 The provisions of section 32(1)(ii) of the Act at present are subject to varying interpretation by the assessee as well as the tax authorities, which is causing substantial litigation on the issue before higher judicial forums. The aforesaid debate also causes impediment to business restructuring. It is desirable that legislature comes out with clear provisions in order to remove ambiguity and avoid hardship to assessee’s by virtue of enormous litigation on the point.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact:info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CHANGES IN FDI POLICY

Significant Changes Introduced In Foreign Director Investment Policy 

31The consolidated FDI policy document is a single reference point for investors and regulators. The first such consolidation was released in March, 2010 after which it has been updated every six months. This’ Circular 2 of 2011’-is the fourth edition of the consolidated policy document.

The significant changes introduced in FDI Policy edition of the Circular are:

Exemption of construction-development activities in the education sector and in old-age homes, from the general conditionality’s in the construction-development sector:

FDI into construction development activities in the education sector and in respect of old-age homes has been exempted from the conditionality imposed on FDI in the construction development sector in general i.e. minimum area and built-up area requirement; minimum capitalization requirement; and lock-in period. This conditionality’s perhaps posed a constraint to FDI coming into these areas since educational institutions like schools, colleges, universities etc. as well as old-age homes have their own special requirements which do not necessarily fit these conditionality’s. This step should augment the educational infrastructure in the country and bring it up to global standards. Similarly, with growing urbanization, there is an increasing demand for old-age homes to cater to the needs of senior citizens. The physical infrastructure in this area also is short of the requirements. Hence, it has also been decided to exempt old-age homes also from the general conditionality’s applicable to the construction development sector.

Inclusion of ‘apiculture’, under controlled conditions, under the agricultural activities permitted for FDI:

FDI has been allowed up to 100% under the automatic route in apiculture under controlled conditions. Apiculture is an important agro-based industry and has the potential of bringing in high economic returns with comparatively low levels of investment. Being a decentralized activity, it does not bring pressure on land and can flourish as a household activity in villages. The activity has the potential of large scale income generation with some infusion of capital and technology. This liberalization would not only provide the desired thrust to the sector but would also bring in international best practices to upgrade the product and the methods of production.

Inclusion of ‘basic and applied R&D on bio-technology pharmaceutical sciences/life sciences’, as an ‘industrial activity’, under industrial parks:

FDI up to 100%, under the automatic route, is permitted in existing and new industrial parks. Under the existing regime, industrial parks cover specified sectors. The coverage has been expanded to specifically include research and development in bio-technology, pharmaceutical and life sciences, given the urgent need to augment research and development infrastructure in these areas as also expand the production facilities.

Notification of the revised limit of 26% for foreign investment in Terrestrial Broadcasting/ FM radio:

The Foreign Investment limit for FM radio has been enhanced to 26% from the earlier 20%. This change ensures conformity of the foreign investment limit in this sector with other similar activities in the Information & Broadcasting sector.

Liberalizations of conversion of imported capital goods/machinery and pre-operative/pre-incorporation expenses to equity instruments:

Conversion of imported capital goods/machinery and pre-operative/pre-incorporation expenses to equity instruments had been permitted in the last Circular on FDI Policy, effective 1 April, 2011. It was stipulated that such conversions must be made within a period of 180 days of the date of shipment of capital goods/machinery or retention of advance against equity and that payments made through third parties would not be allowed. This conveyed the sense that the onus of conversion is on the investor with no allowance for the FIPB process involved. This has been clarified through the present amendment, under which the time limit for making applications for such conversions will be 180 days. Further, payments for pre-operative/incorporation expenses can now be made directly by the foreign investor to the company or through a bank account, opened by the Foreign Investors, as provided under the FEMA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific

circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 95555554890

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

ADVANTAGE OF FOREIGN INWARD REMITTANCE CERTIFICATION (FIRC)

ADVANTAGE OF FOREIGN INWARD REMITTANCE CERTIFICATION (FIRC)

18FOREIGN INWARD REMITTANCE CERTIFICATE (FIRC)

1. Introduction

 Foreign Inward Remittance Certificate (FIRC) is a document that provides proof of inward remittance to India. Such remittance could be either on account of Foreign Direct Investment (FDI) or towards export receivables or towards sale of securities by resident to a non resident. It is treated as documentary evidence by most of the statutory authorities for confirming the validity of the convertible foreign exchange received by the beneficiary.

2. Purpose

When a beneficiary receives fund from outside India, it will be credited to his account only through an Authorized Dealer (normally a Bank). (Authorized dealer means an authorized person by the Reserve Bank of India to deal in foreign exchange or in foreign securities under the Foreign Exchange Management Act). If the bank, in which the beneficiary has an account, is not an Authorized Dealer, then the remittance needs to be received by the beneficiary through an Authorized Dealer. Based on the information provided by the beneficiary upon receipt of foreign remittance, the banker issues FIRC stating the purpose of receipt i.e. towards equity investment, advance against export of services / goods, capital expenditure etc.

3. Relevance

 A few cases where FIRC assumes importance

  1. In case of Issue of Shares to a Foreign Entity/person, FIRC is a proof for receipt of share application money.
  2. Similarly it is also proof that share purchase consideration has been received by a resident seller, in case of transfer of shares by a resident Indian to a non-resident buyer.
  3. In case of export of services there is no Service tax to be paid, subject to Export of Services Rules. Here again FIRC becomes a documentary proof for exports made and remittances received thereof in freely convertible foreign exchange.
  4. In case of export promotion schemes like Advance Licensed, EPCG (Export Promotion Capital Goods) etc., FIRC is one of the important documents to be submitted to DGFT as a proof of export made.   

4. Contents and issue procedure 

FIRC normally contains the following details:

  • Name of the beneficiary
  • Whether the amount is paid by cash or by crediting the beneficiary’s a/c
  • Name and address of the remitted
  • Name and address of the remitting bank
  • DD/TT No/Cheque No
  • Foreign Direct Investment amount in Foreign currency
  • Equivalent rupee amount (in figures as well as words)
  • In favour of whom the amount has come
  • Exchange rate applied
  • Purpose of the remittance as stated by beneficiary

It is signed by the Authorized signatory of the AD bank and countersigned by one more person.  As a procedure, this Certificate is issued to the address of the account holder, normally within a period of 15 days from the date of credit of funds to beneficiary’s account. FIRC must be kept in safe custody since issue of duplicate involves certain complicated procedure which is time consuming.

Generally there is confusion about which bank should issue FIRC in case the inward remittance has come into the beneficiary’s account through more than one bank.  In our practical experience and as per clarifications received from RBI as well as provisions under FEMA, the first bank that receives the inward remittance in convertible foreign exchange must issue the FIRC since it would have the details of the overseas remitting bank.

5. Conclusion

As explained above, FIRC assumes great importance in respect of remittances received from outside India.  Therefore, it is critical that beneficiaries follow up with the banks and obtain the FIRC immediately after credit of inward remittance.  Particular attention needs to be paid to “purpose of Foreign Direct Investment” because any wrong mention of this has serious implications in terms of remittance, usage and accounting of the same.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)