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FEMA

J. Manivannan (Advocate & IP) (242 Points)

31 August 2009

Dear All,

Kindly enlighten me!

What are the consequences on non-compliances of FC-TRS under FEMA and RBI norms?

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3 Replies

Ashis Mahapatra (Consultant-Tax & FEMA/FDI) (183 Points)
Replied 01 September 2009

Originally posted by :M.J.Mani Vannan
"	Dear All, Kindly enlighten me! What are the consequences on non-compliances of FC-TRS under FEMA and RBI norms?	"

Non compliances of FC-TRS is contravention of FEMA and the parties to transfer may called for compounding where RBI authorities charge penalty looking upon the gravity and grounds of non compliances. At extreme adverse case RBI has the authority to fine up to Three times of the sum involved in such transfer. However to avoid undue hardship, RBI use to fine up to a reasonable amount which varies from case to case.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 01 September 2009

Dear Mr. M.J. Mani Vannan

If you read section 13 of Chapter IV of Foreign Exchange Management Act, 1999, which says, if any person contravene any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the power under this Act, or contravenes any condition subject to which an authorization is issued by the RBI, he shall upon adjudication, be liable to a penalty up to trice the sum involved in such contravention where such amount is quantifiable or up to two lakh rupees where the amount is not quantifiable, and where such contravention is continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which contravention continues.

Regards