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In a partial manner notification is applicable to the existing FDI. It is expected from the company that company provide all the details of existing FDI in the prescribed format and prescribed manner as available with this notification.
SMF gives the facility related to reporting of total foreign investment in an Indian entity and also provide facility related to investment in investment vehicle to the person outside India.
Before any implementation of this process, Reserve Bank of India will provide specific format from 28.06.2018 to 12.07.2018 to Indian entities for input the data of foreign investment.
Before the implementation of Single Master Form (SMF), RBI would provide an interface of specified format called Entity Master File (EMF) to Indian entities for input the data of total foreign investment.
From 28.06.2018 to 12.07.2018 RBI will made available this interface of EMF in their website.
The Indian entities who will not qualify the pre-requisite requirement will not able to receive any foreign investment in India and those Indian entities will be considered as non-compliant of Foreign Exchange Management Act (FEMA), 1999 and regulations.
For any subsequent foreign investments, an integrated reporting structure of various types of foreign investment introduced which will be called SMF.
The format of SMF is given in Annex 2 of said notification. While the format of the form has been provided as Annex 2 to the circular, RBI is yet to notify the form.
Once notified, the form will be available in the master direction on reporting as well as on the website for the entities to file it as and when required.
ENTITY INCLUDES
For filing registration form valid entity user is required by every entity. So now question arise
Entity user is that person who is authorized by entity for register an entity in entity master of firm application. An entity user is the only person who can update the detail of foreign investment of an entity.
Every company have only one entity user and if entity want to change the entity user then entity have to contact to the RBI helpdesk.
A person can be entity user of more than one entity but entity user requires separate registration for every entity.
The entity should also require reporting indirect foreign investment received by the entity. The entity shall provide the details of all foreign investment received till the current date.
This will also be inclusive of all foreign investment, irrespective of the fact that the regulatory reporting to RBI for the same has been made or not or whether the same has been acknowledged or not.
In case if entity has received foreign investment and is willing to make the filing in the SMF, being made available from August 01, 2018, the same shall not be included in the foreign investment details.
Total Paid-up capital of company on fully diluted shares.
Fully diluted shares mean the total number of shares that would be outstanding if all possible sources of conversion are exercised. It includes:
FOR LLP – Total capital contribution in LLP.
The integration of the extant reporting structures is a positive move made by RBI to simplify and rationalize reporting for foreign investment in India.
This crucial amendment is in line with the SEBI circular which was issued for the listed companies for monitoring FDI limits.
There may be certain practical difficulties before implementation of the new form for the Indian entities to collate details on foreign investment.
especially as the window for uploading such data on the RBI interface is open for only 15 days.
Now severe consequences attached to non-filing, Indian entities having foreign investment must prepare to submit the information timely.
For query or help, contact: singh@carajput.com or call at 09811322785/4 9555 5555 480)
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