Forex payments process gets much tougher from July 1, 2009

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NEW PROCEDURE FOR EFFECTING FOREX REMITTANCES TO NON-RESIDENTS AND FOREING COMPANIES, EFFECTIVE FROM JULY 1, 2009 1. The Government has issues a Notification dated March 25, 2009, specifying the new procedure to be adopted by Companies for effecting remittances to Non-Residents and Foreign Companies, under Section 195 of the Income tax Act, 1961 which will come into force from July 1, 2009. 2. A new Rule 37BB has been added, as per which, the person effecting payment to a Non-Resident or a Foreign company should obtain a certificate from a Chartered Accountant in Form 15CB, format of which is enclosed. 3. The payer shall have to file the Form 15CA electronically to the website designated by the Income-tax Department and thereafter, a signed printout of the said form shall be submitted prior to remitting the payment. 4. The Form 15CA would have to be signed by the person competent to sign the Return of Income. 5. The Director-General of Income-tax (Systems) shall specify the procedures. formats and standards for ensuring secure capture, transmission of data and shall also be responsible for the day-to-day administration in relation to furnishing the information in the manner specified" These new procedures would make the whole process of effecting foreign remittances by Indian Companies extremely procedural and cumbersome. Chartered Accountants who sign certificates in Form 15CB would now need to be extremely careful and vigilant in terms of the information required to be provided in the Certificates. Companies would need to plan well in advance, of the dates of the forex payments. A copy of the Notification No. 30/2009 dated March 25, 2009, along with the formats of Forms 15CA and 15CB, as issued by the Government, is enclosed. #doc