Overview Fema
Overview of Foreign Exchange Management Act and Regulations
The Beginners Study Course on Foreign Exchange Management Act
May 09, 2013
WIRC
CA Manoj Shah
2
Transition from Foreign Exchange Regulation Act, 1973 to Foreign Exchange Management Act, 1999
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Post liberalization (i.e. New Industrial policy of 1991) there was need to remove shackles of regulatory and legal provisions. Need to consolidate and amend the law relating to foreign exchange with the objectives of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. Need to take various steps to make ‘New Industrial Policy’- workable and meaningful. Industrial licensing was made pragmatic and objective-oriented. It was decided to review provisions of Foreign Exchange Regulation Act, 1973 (FERA).
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•
3
Transition from Foreign Exchange Regulation Act, 1973 to Foreign Exchange Management Act, 1999
•
Intention was to bring provisions of FERA in line with emerging trends of liberalization so as to remove obstacles in the inward flow of foreign exchange and foreign investment. Accordingly, on June 1, 2000, the Foreign Exchange Management Act, 1999 (FEMA) brought in force to replace the then existing FERA. It is an act to manage the foreign exchange of India as opposed to FERA which was enacted to regulate/control the foreign exchange.
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4
Structure of FEMA
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Applies to the whole of India and all branches, offices and agencies outside India which are owned or controlled by a person resident in India. FEMA has 49 sections of which 9 (section 1 to 9) are substantive and the rest are procedural/ administrative Section 46 of FEMA grants power to Central Government to makes rules to carry out the provision of FEMA Section 47 of FEMA grants power to RBI to make regulations to implement its provisions and the rules made there under RBI is entrusted with the administration and
The Beginners Study Course on Foreign Exchange Management Act
May 09, 2013
WIRC
CA Manoj Shah
2
Transition from Foreign Exchange Regulation Act, 1973 to Foreign Exchange Management Act, 1999
•
Post liberalization (i.e. New Industrial policy of 1991) there was need to remove shackles of regulatory and legal provisions. Need to consolidate and amend the law relating to foreign exchange with the objectives of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. Need to take various steps to make ‘New Industrial Policy’- workable and meaningful. Industrial licensing was made pragmatic and objective-oriented. It was decided to review provisions of Foreign Exchange Regulation Act, 1973 (FERA).
•
•
•
•
3
Transition from Foreign Exchange Regulation Act, 1973 to Foreign Exchange Management Act, 1999
•
Intention was to bring provisions of FERA in line with emerging trends of liberalization so as to remove obstacles in the inward flow of foreign exchange and foreign investment. Accordingly, on June 1, 2000, the Foreign Exchange Management Act, 1999 (FEMA) brought in force to replace the then existing FERA. It is an act to manage the foreign exchange of India as opposed to FERA which was enacted to regulate/control the foreign exchange.
•
•
4
Structure of FEMA
•
Applies to the whole of India and all branches, offices and agencies outside India which are owned or controlled by a person resident in India. FEMA has 49 sections of which 9 (section 1 to 9) are substantive and the rest are procedural/ administrative Section 46 of FEMA grants power to Central Government to makes rules to carry out the provision of FEMA Section 47 of FEMA grants power to RBI to make regulations to implement its provisions and the rules made there under RBI is entrusted with the administration and