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Presentation  on  Foreign Exchange  Management Act, 1939

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04/26/10 By Akash Saxena

Foreign Exchange Management Act, 1939

INTRODUCTION
Ø Foreign Exchange Management Act was 1st introduced in September, 1939 in INDIA. Ø Ø For the smooth functioning FEMA was converted into Foreign Exchange Regulation Act in 1973. Ø
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year later FERA was replaced in FEMA by the few problems in 1st June, 2000.
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Cont……
Ø Ø Specially the Foreign Exchange Regulation was firstly introduced in 1947 and converted in FERA in 1973 and in the end replaced by FEMA in June 1st , 2000. Ø
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Uses of FEMA
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Ø This act was introduced for the foreign exchange regulation on outside the India by the Indian companies and in India by the Foreign companies. Ø Ø The FEMA was introduced specially for facilitate the external trade and payments.

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Cont……
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Ø FEMA had assigned the RBI for the administration of this Act and working with Central Government Employees for holding the enquires. Ø Ø
ØSpecially

the FERA was introduced for the control of all the economic activities by the proper utilization of Foreign Exchange resources.

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Foreign Exchange
04/26/10 By Akash Saxena

Ø Foreign exchange means the dealings of import and export from our country to another country or from other country to our country by the currency of the other country and our nation. Ø Special points for foreign exchange: vDeposits vCheques vCredit vBills Payable vBills receivable
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Foreign Currency
04/26/10 By Akash Saxena

Ø Foreign currency means any currency other than Indian currency.  (OR) Ø According to Section 6(4) a person resident in India may hold, own transfer or invest in foreign currency situated outside India, if such currency was acquired , held or owned by such person when he was residing outside India or inherited from a person who was residing outside India.

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Foreign Security
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Ø Foreign security means any security in the form of shares, bonds, stocks, debentures or any other instruments expressed in foreign currency.  (OR) Ø According to Section 6(4) a person resident in India may hold, own transfer or invest in foreign security or property situated outside India, if such security or property was acquired , held or owned by such person when he was residing outside India or inherited from a person who was residing outside India.
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Person
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ØA person includes:
qAn individual qA company qA firm qAn association of person or body of individuals qAny agency qOffice or branch owned or controlled by such person.

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Authorized Person
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Ø According to Section 2(c) an authorized person means an authorized dealer, moneychanger, or any other person authorized under the act to deal in foreign exchange. Ø Ø An authorization Under this section shall be in writing and shall be subject to the conditions laid down therein. Ø Ø An authorization under sub section (1) may be revoked by the Reserve Bank Of India at any time if the RBI is satisfied. Ø

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Person Resident in India
Ø A person residing in India for more than 182 days during the course of the proceeding financial year but does not include: 1. A person who has gone out of India or who stays outside India in either case: I. For taking up employment outside India. II.For carrying on outside India a business or vacation outside India. III.For any other purpose, if it is indicated that his intention to stay outside India for an uncertain period. 11 4.
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Cont……
04/26/10 By Akash Saxena

2. A person who has come or stays in India, in either case: I. For taking up employment in India. II.For carrying a business or vacation in India. III.Any office, branch or agency in India owned or controlled by a person resident outside India. IV.For any other purpose if is indicated that his intention to stay in India for an uncertain period. 3. Person resident outside India means a person who is not resident in India.
 

I.

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Extend and Application of FEMA
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Ø It applies to all over India expect Jammu & Kashmir. Ø Ø It applies to all branches.

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Few important Branches
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 

1.

of RBI shall deal in or transfer any foreign exchange.
 

Dealing in Foreign Exchange: No person accept with the general or special permission

Holding of Foreign Exchange:  Without the permission of RBI no person resident in India shall hold, own or transfer any foreign exchange or acquire any immovable property outside India.

2.

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Cont……
04/26/10 By Akash Saxena

Export of Goods & Services:  Before exporting the goods & services shall have to take the permission of Reserve Bank Of India. And every information should be true. 4. Realization & Repatriation of Foreign Exchange:  (The native returning to the native place.) A person resident in India shall take all the reasonable step to realize and repatriate the Foreign Exchange but only under the consideration of RBI.
 

3.

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Contravention & Penalties
04/26/10 By Akash Saxena

1. Penalties for Contravention: Ø Under FEMA the penalties is thrice the sum involved . Ø Ø If the contravention continue then the penalty of Rs. 5000 per day shall be imposed.
 

2. Enforcement of orders on adjudicating Authority (AA): Ø If a person fails to make payment of penalty within 90 days then he is liable for civil imprisonment. Ø

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Cont……
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Ø Ø The civil imprisonment is up to 3 years.(If the penalty has not been given by the person in time) Ø Ø In case of non payment the imprisonment can be exceed according to the desire of the authority. Ø Ø The arrest warrant can also be issued by the authority. Ø

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Appeal & Adjudication
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1. Adjudicating Authority (AA): Ø The central government is empowered to appoint adjudicating authority for holding inquiries in their respective area only on a complement make in writing. Ø Ø Authorities have a powers of civil court. Ø Ø All the complaints are to be disposed of finally with in one year, otherwise the reasons are to be given in writing.

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Cont……
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2. Appeal to Special Director: Ø The central government appoints special director. Ø Ø All the appeals as per the order of adjudicating authority. Ø Ø The appeal shall be filed within the 45 days from the receipt of the order.

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Cont……
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3. Appellate Tribunal: Ø It is established by the central government to hear appeals against the Adjudicating Authority & Special Director. Ø Ø The appeal shall be filed within the 45 days from the receipt of the order of AA or SD. Ø Ø

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Cont……
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3. Appellate Tribunal: Ø The Appellate Tribunal is not bound by the procedure late down by the court of civil procedure. Ø Ø It shall be guided by the principle of natural justice and shall has powers to lay down their own procedure. Ø

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04/26/10 By Akash Saxena

THANK YOU  &  HAVE A NICE DAY

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