RBI Tightens Monitoring of Liberalised Remittance Scheme (LRS) for Overseas Money Transferring

RBI Tightens Monitoring of Liberalised Remittance Scheme (LRS) for Overseas Money Transferring

The Reserve Bank today tightened reporting norms for the Liberalised Remittance Scheme (LRS) under which an individual can transfer up to USD 2,50,000 abroad in a year.

Declaration made by the Remitter

The LRS transactions are currently permitted by banks based on the declaration made by the remitter.

The monitoring of adherence to the limit is confined to obtaining such a declaration without independent verification, in the absence of a reliable source of information.

"In order to improve monitoring and also to ensure compliance with the LRS limits, it has been decided to put in place a daily reporting system by AD banks of transactions undertaken by individuals under LRS, which will be accessible to all the other ADs," the RBI said in a notification.

To Upload Daily Transaction-Wise Information 

Now banks will be required to upload daily transaction-wise information undertaken by them under LRS.

Under the LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.

Individuals can avail of foreign exchange facility for the purposes within the limit of USD 2,50,000 only.

The scheme was introduced on February 4, 2004, with a limit of USD 25,000.

The LRS limit has been revised in stages consistent with prevailing .

Courtesy - Indian Express 

SEIS Benefits on your Foreign Exchange Earnings under FTP 2015 - 2021 - Benefits for Service Exporters and Product Exporters

SEIS Benefits on your Foreign Exchange Earnings under FTP 2015 - 2021 - Benefits for Service Exporters and Product Exporters

What is SEIS ?

Service providers of eligible services shall be entitled to duty credit scrip at notified rates on the net foreign exchange earned. Duty credit scrips can be used for the payment of custom duties, excise duties, service tax on procurement of services, custom duty in case of default in fulfillments of export obligation under Advance Authorization/EPCG, etc.,

 Further, the SEIS scheme has given relaxation to the actual user condition and duty credit scrips and goods imported using duty credit scrips are freely transferable. Duty credit scrip would be valid for a period of 18 months from the date of issue

As per new FTP announced on 1st April’ 15; you shall be eligible for benefits under the SEIS Scheme against the Services earned in Foreign Exchange/ Deemed Foreign Exchange.

Who are All Eligible for Claiming the Benefits ?

For Company / LLP

Service Providers of notified services, located in India are eligible for the Service Exports from India Scheme. To be eligible, a service provider (Company / LLP / Partnership Firm) should have a minimum net free foreign exchange earnings of USD15000 in the preceding financial year to be eligible for duty credit scrips.

For Partnership & Individual Service Providers

For proprietorships or individual service providers, a minimum net foreign exchange earnings of USD10,000 in the preceding financial year is required to be eligible for the scheme. Also, in order to claim reward under the SEIS scheme, the service provider shall have to have an active Import Export Code (IE Code) at the time of rendering such services for which rewards are claimed.

Eligible Service Providers for SEIS Scheme

1	Professional Services
2	Research and Development Services
3	Rental/Leasing Services without Operators
4	Audiovisual Services
5	Construction and Related Engineering Services
6	Educational Services
7	Environmental Service
8	Health and Social Services
9	Tourism and Travel Services
10	Recreational, Cultural and Sporting Services
11	Other Business Services

What Service we are Providing ?

We do apply and get the Issuance of SEIS Scrip from the Government/ DGFT in your favour as per the prescribed guidelines of the FTP.

The scrips, if preferred so, may be transferred/sold to anybody in advance at best rate, which will be paid immediately against delivery of Scrip along with Transfer Letter duly attested by your Bankers and the Sale Invoice.

We do charge our commission for processing and preparing the Application for SEIS Scrip only after issuance of the same in your favour; except your direct payment of Governmental fee for it, as per Policy.

The Foreign Exchange Management (Cross Border Merger) Regulations, 2018

The Foreign Exchange Management (Cross Border Merger) Regulations, 2018

NO PRIOR APPROVAL IS REQUIRED FROM RBI IF CROSS BORDER MERGER IF IT IS IN COMPLIANCE WITH THE FEMA 389/ 2018-RB dated 20 March, 2018.

Section 234 of the Companies Act, 2013 (notified with effect from 13 April, 2017) provided for the cross border merger of Indian and foreign companies. Further, Companies (Compromises, Arrangements and Amalgamation) Rules, 2016, as amended by the Companies (Compromises, Arrangements and Amalgamation) Amendment Rules, 2017 (Co. Rules) were issued. Section 234 provides for prior Reserve Bank of India (RBI) approval in case of cross border merger.

On 26 April, 2017, the RBI issued draft regulations relating to cross border mergers for comments from the public. The Foreign Exchange Management (Cross Border Merger) Regulations, 2018 have now been notified vide notification no. FEMA 389/ 2018-RB dated 20 March, 2018 and are effective from the date of notification. As per the Regulations, merger transactions in compliance with these regulations shall be deemed to have been approved by RBI, and hence, no separate approval should be required. In other cases, merger transactions should require prior RBI approval.

The Cross Border Regulations, 2018 Makes International Merger And Acquisition Transactions More Flexible

The notification of FEMA regulations laying down the framework in relation to cross border mergers is an extremely positive development, which should facilitate international merger and acquisition transactions. Given that the guidelines deal with a new set of transactions, they are likely to evolve based on practical experience, as may be encountered in the due course of time.

The Salient Ingredients of the RBI Regulations are:

The Meaning of Inbound Merger

The resulting company (or transferee) is in India in case of inbound merger.

The Meaning of Outbound Merger

The resulting company (or transferee) is a foreign company in case of outbound merger.

Procedure to be followed by an Indian Company

 In an inbound merger, the Indian company can issue securities in compliance of pricing guidelines and within the limits of applicable sector cap and applicable regulations under Foreign Management Act, 1999 (FEMA).

Compliances under ECB Regulations

A period of two years is provided for compliance with External Commercial Borrowings (ECB) Regulations in respect of loans, borrowings or guarantees of the transferor company outside India.

Other Criteria

Further any asset not permitted to be acquired under FEMA needs to be disposed off twenty-four months immediately after merger.

Deemed Branch Office

 Offices of foreign company will be deemed to be branch office of Indian company post-merger.

Outbound Merger

The resident Indian is allowed to hold securities issued on the basis of fair market value and in terms of Liberalized Remittance Scheme (LRS) of RBI in the case of an outbound merger.

Foreign company can hold assets in India in subject to compliance of FEMA. Offices of Indian company post-merger will be deemed to be branches of the foreign company post-merger.

VALUATION

 Valuation of the Indian company and the foreign company to be conducted by Valuers who are members of a recognized professional body and further to be ensured that such valuation is in accordance with internationally accepted principles on accounting and valuation.

REPORTING TO RBI

 The resultant company and/or the companies involved in the cross border merger shall be required to furnish reports as may be prescribed by RBI.

CERTIFICATION

 A certificate from the Managing Director/Whole Time Director and Company Secretary, if available, of the company concerned ensuring compliance to these Regulations shall be furnished along with the application to be made to the NCLT for approval of the scheme.

Regulatory actions in respect of Non-Compliances under FEMA

 Regulatory actions, if any, with respect to non-compliance, contravention under FEMA shall be completed prior to merger by the companies involved in cross border merger.

Compensation

Compensation by the resultant company, to a holder of a security of the Indian company or the foreign company, as the case may be, may be paid, in accordance with the scheme sanctioned by the NCLT.