Foreign Exchange Management (Current Account Transactions)
Rules, 2000
GSR 381(E), dated 3-5-2000 - In exercise of the powers conferred by section 5
and sub-section (1) and clause (a) of sub-section (2) of section 46 of the
Foreign Exchange Management Act, 1999, and in consultation with the Reserve
Bank, the Central Government having considered it necessary in the public
interest, makes the following rules, namely :—
(1) These
rules may be called the Foreign Exchange Management (Current Account
Transactions) Rules, 2000.
(2) They shall come into
effect on the 1st day of June, 2000.
In these rules, unless the context otherwise requires,—
(a) “Act”
means the Foreign Exchange Management Act, 1999 (42 of 1999);
(b) “Drawal” means drawal of foreign
exchange from an authorised person and includes opening of Letter of Credit or
use of International Credit Card or International Debit Card or ATM Card or any
other thing by whatever name called which has the effect of creating foreign
exchange liability;
(c) “Schedule”
means a schedule appended to these rules;
(d) the words and expressions not defined
in these rules but defined in the Act shall have the same meanings respectively
assigned to them in the Act.
Prohibition on drawal of Foreign Exchange.
Drawal of foreign exchange by any person for the following purpose is
prohibited, namely :
(a) a
transaction specified in the Schedule I; or
(b) a
travel to Nepal and/or Bhutan; or
(c) a
transaction with a person resident in Nepal or Bhutan :
Provided that the prohibition in clause (c) may be exempted by RBI
subject to such terms and conditions as it may consider necessary to stipulate
by special or general order.
Prior approval of Government of India.
No person shall draw foreign exchange for a transaction included in the
Schedule II without prior approval of the Government of India :
Provided that this Rule shall not apply where the payment is made out of funds
held in Resident Foreign Currency (RFC) Account 1[***] of the remitter.
Prior approval of Reserve Bank.
No person shall draw foreign exchange for a transaction included in the
Schedule III without prior approval of the Reserve Bank :
Provided that this Rule shall not apply where the payment is made out of funds
held in Resident Foreign Currency (RFC) Account 1[***] of the remitter.
2[(1) Nothing contained in rule 4 or rule 5 shall apply to drawal made
out of funds held in Exchange Earners’ Foreign Currency (EEFC) account of the
remitter.
(2) Notwithstanding
anything contained in sub-rule (1), restrictions imposed under rule 4 or rule
5 shall continue to apply where the drawal of foreign exchange from the
Exchange Earners’ Foreign Currency (EEFC) account is for the purpose specified
in items 10 and 11 of Schedule II, or items 3, 4, 11, 16 and 17 of Schedule III
as the case may be.]
3[Use
of International Credit Card while outside India.
Nothing contained in rule 5 shall apply to the use of International
Credit Card for making payment by a person towards meeting expenses while such
person is on a visit outside India.]
(See Rule 3)
1. Remittance out of lottery winnings.
2. Remittance of income from racing/riding, etc., or any other hobby.
3. Remittance for purchase of lottery tickets, banned/prescribed
magazines, football pools, sweepstakes etc.
4. Payment of commission on exports made towards equity investment
in Joint Ventures/Wholly Owned Subsidiaries abroad of Indian companies.
5. Remittance of dividend by any company to which the requirement
of dividend balancing is applicable.
4 [6. Payment of commission on exports under Rupee
State Credit Route, except commission up to 10% of invoice value of exports of
tea and tobacco.]
7. Payment related to “Call Back Services” of telephones.
8. Remittance of interest income on funds held in Non-resident
Special Rupee Scheme a/c.
(See Rule 4)
|
|
Purpose
of Remittance |
Ministry/Department
of Govt. of India whose approval is required |
|
1. |
Cultural
Tours |
Ministry
of Human Resources Development (Department of Education and Culture) |
|
2. |
1[Advertisement
in foreign print media for the purposes other than promotion of tourism,
foreign investments and international bidding (exceeding US$ 10,000) by a
State Government and its Public Sector Undertakings. |
Ministry
of Finance, Department of Economic Affairs] |
|
3. |
Remittance
of freight of vessel charted by a PSU |
Ministry
of Surface Transport (Chartering Wing) |
|
4. |
Payment
of import 2[through
ocean transport] by a Govt. Department or a PSU
on c.i.f. basis (i.e., other than f.o.b. and f.a.s. basis) |
Ministry
of Surface Transport (Chartering Wing) |
|
5. |
Multi-modal
transport operators making remittance to their agents abroad |
Registration
Certificate from the Director General of Shipping |
|
6. |
3[***] |
|
|
7. |
Remittance
of container detention charges exceeding the rate prescribed by Director
General of Shipping |
Ministry
of Surface Transport (Director General of Shipping) |
|
8. |
Remittances
under technical collaboration agreements where payment of royalty exceeds 5%
on local sales and 8% on exports and lump sum payment exceeds US $ 2 million |
Ministry
of Industry and Commerce |
|
9. |
Remittance
of prize money/sponsorship of sports activity abroad by a person other than
International/National/State Level sports bodies, if the amount involved
exceeds US $ 100,000 |
Ministry
of Human Resource Development (Department of Youth Affairs and Sports) |
|
10. |
Payment
for securing Insurance for health from a company abroad |
Ministry
of Finance (Insurance Division) |
|
11. |
Remittance
for membership of P & I Club |
Ministry
of Finance (Insurance Division) |
(See Rule 5)
1. Remittance
by artiste e.g., wrestler, dancer, entertainer etc. (This restriction
is not applicable to artistes engaged by tourism related organisations in India
like ITDC, State Tourism Development Corporations etc. during special
festivals or those artistes engaged by hotels in five star categories, provided
the expenditure is met out of EEFC account).
2. Release of
exchange exceeding US $ 1 [10,000] or
its equivalent in one calendar year, for one or more private visits to any
country (except Nepal and Bhutan).
2 [3. Gift remittance exceeding US$ 5,000 per
remitter/donor per annum.
4. Donation exceeding US$ 1 [10,000]
per remitter/donor per annum.]
5. Exchange facilities exceeding US $ 3 [1,00,000] for
persons going abroad for employment.
6. Exchange facilities for emigration
exceeding US $ 3 [1,00,000] or amount
prescribed by country of emigration.
4 [7. Remittance for maintenance of close relatives
abroad,
5 [(i) exceeding net salary (after deduction of taxes,
contribution to provident fund and other deductions) of a person who is
resident but not permanently resident in India and—
(a) is a citizen of a foreign State other than Pakistan; or
(b) is a citizen of India, who is on deputation to the office or
branch or subsidiary or joint venture in India of such foreign company,]
(ii) exceeding US$ 3 [1,00,000] per year
per recipient, in all other cases.
Explanation
: For the purpose of this item, a person resident in India on account of
his 6 [employment
deputation of ] a specified duration (irrespective of length thereof)
or for a specific job or assignment, the duration of which does not exceed
three years, is a resident but not permanently resident.]
8. Release of foreign exchange, exceeding US $
25,000 to a person, irrespective of period of stay, for business travel, or
attending a Conference or specialised training or for maintenance expenses of a
patient going abroad for medical treatment or check-up abroad, or for
accompanying as attendant to a patient going abroad for medical
treatment/check-up.
9. Release of exchange for meeting expenses
for medical treatment abroad exceeding the estimate from the doctor in India or
hospital/doctor abroad.
10. Release of exchange for studies abroad
exceeding the estimates from the institution abroad or US $ 7 [1,00,000] 8 [per
academic year], whichever is higher.
11. Commission to agents abroad for sale of
residential flats/commercial plots in India, exceeding 5% of the inward
remittance.
12. Short-term credit to overseas offices of
Indian companies.
13. Remittance for advertisement on foreign
television by a person whose export earnings are less than Rs. 10 lakhs during
each of the preceding two years.
14. Remittances of royalty and payment of lump
sum fee under the technical collaboration agreement which has not been
registered with Reserve Bank.
1 [15. Remittance exceeding US $ 2 [1,000,000], per
project, for any consultancy service procured from outside India.]
16. Remittances for use and/or purchase of trade
mark/franchise in India.
3 [17. Remittance exceeding US $ 1,00,000, by an
entity in India by way of reimbursement of pre-incorporation expenses.]
4 [18. Remittance of hiring charges of transponders.]
[K1]Words “or Exchange Earners’ Foreign Currency (EEFC) Account” omitted by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K2]Words “or Exchange Earners’ Foreign Currency (EEFC) Account” omitted by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K3]Inserted by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K4]Inserted by the FEM (Current Account Transactions) (Amendment) Rules, 2003, w.e.f. 15-1-2003.
[K5]Substituted by the FEM (Current Account Transactions) (Second Amendment) Rules, 2003, w.e.f. 1-5-2003.
[K6]Item 2 substituted by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001. Earlier item 2 was amended by the FEM (Current Account Transactions) (Amendment) Rules, 2000, w.e.f. 9-8-2000.
[K7]Inserted by FEM (Current Account Transactions) (Fourth Amendment) Rules, 2003, w.e.f. 27-10-2003.
[K8]Omitted by FEM (Current Account Transactions) (Amendment) Rules, 2002, w.e.f. 22-10-2002
[K9]Substituted for “5,000” by the FEM (Current Account Transactions) (Second Amendment) Rules, 2002, w.e.f. 17-12-2002.
[K10]Items 3 and 4 substituted by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K11]Substituted for “5,000” by the FEM (Current Account Transactions) (Second Amendment) Rules, 2002, w.e.f. 17-12-2002.
[K12]Substituted for “5,000” by the FEM (Current Account Transactions) (Third Amendment) Rules, 2003, w.e.f. 5-9-2003.
[K13]Substituted for “5,000” by the FEM (Current Account Transactions) (Third Amendment) Rules, 2003, w.e.f. 5-9-2003.
[K14]Substituted, by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K15] Substituted by the FEM (Current Account Transactions) (Second Amendment) Rules, 2003, w.e.f. 1-5-2003.
[K16]Substituted for “5,000” by the FEM (Current Account
Transactions) (Third Amendment) Rules, 2003, w.e.f. 5-9-2003.
[K17]Substituted for “employment of” by the FEM (Current Account Transactions) (Second Amendment) Rules, 2003, w.e.f. 1-5-2003.
[K18]Substituted for “30,000” by the FEM (Current Account Transactions) (Third Amendment) Rules, 2003, w.e.f. 5-9-2003.
[K19]Inserted, by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K20]Substituted by the FEM (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2003, w.e.f. 18-6-2003.
[K21]Substituted for “100,000” by the FEM (Current Account Transactions) (Third Amendment) Rules, 2003, w.e.f. 5-9-2003.
[K22]Inserted by the FEM (Current Account Transactions) (Amendment) Rules, 2001, w.e.f. 30-3-2001.
[K23]Inserted by FEM (Current Account Transactions) (Amendment) Rules, 2002, w.e.f. 22-10-2002.