51 FAQs on Foreign Exchange Management Act (FEMA), 1999 in India

(i) FEMA, 1999 to be called as Foreign Exchange Management Act, 1999.

(ii) FEMA, 1999 is applicable to whole of India including Jammu and Kashmir.

(iii) (a) FEMA, 1999 is applicable to 100% branches + offices + agencies in India + Outside India (both) owned or controlled by resident in India

(b) FEMA, 1999 is applicable to any contravention as committed by Resident of India in India + outside India (both).

2. Meaning of Adjudicating Authority (Section-2a)

2A. Meaning of Authorized Person (Section-2c)

2B. Meaning of Authorized Officer (Section-2cc)

2C. Meaning of Capital Account Transaction (Section-2e)

2D. Meaning of Chartered Accountant (Section-2g)

2E. Meaning of Competent Authority (Section-2gg)

2F. Meaning of Currency (Section-2h)

2G. Meaning of Currency Notes (Section-2i)

2H. Meaning of Current Account Transaction (Section-2j)

(i) Payment against foreign trade + other current business + services + short–term banking + credit facilities (all) in ordinary course of business.

(ii) Payment against interest on loans + net income from investment

(iii) Remittance against living expenses of parents + spouse + children (all) residing Outside India

(iv) Expenses against foreign travel + education + medical care of parents + spouse + children (all) residing Outside

2I. Meaning of Directorate of Enforcement (Section-2k)

2J. Meaning of Foreign Exchange (Section-2n)

(i) Deposits + credits + balances as payable in any foreign currency

(ii) Drafts + travellers cheques + letter of credits + bill of exchanges as expressly drawn in Indian currency but payable in any foreign currency

(iii) Drafts + travelers cheques + letter of credits + bill of exchanges as drawn by banks + institutions + persons as located outside India but payable in Indian currency

2K. Meaning of Foreign Security (Section-2-o)

2L. Meaning of Indian Currency (Section-2q)

2M. Meaning of Person (Section-2u)

(i) Individual

(ii) Hindu undivided family (HUF)

(iii) Indian (Domestic) Company

(iv) Partnership Firm + LLP (both)

(v) Association of Persons (AOP) + Body of Individuals (BOI) incorporated + non incorporated (both)

(vi) Artificial Juridical Persons (AJP) not included in preceding sub-clauses from (i) to (v).

(vii) Agency + office + branch (any) owned or controlled by any person in preceding sub-clauses (i) to (vi).

2N. Meaning of Person Resident in India (Section-2v)

(i) Person not resident in India to include the person as residing in India for minimum 182 day during preceding financial year but does not include the followings:-

(a) For taking up employment outside India

Or

(b) For carrying a business or vocation outside India

Or

(c) For any other purpose where circumstances are indicating his intention to stay outside India for uncertain period.

(ii) Person has come to India + stay in India (both):-

(a) For taking up employment in India

Or

(b) For carrying a business or vocation in India

Or

(c) For any other purpose where circumstances are indicating his intention to stay in India for uncertain period.

(ii) Any person + body corporate as registered + incorporated (both) in India

(a) Any office + branch + agency in India as owned or controlled by person resident outside India.

(b) Any office + branch + agency outside India as owned or controlled by person resident in India.

2-O. Meaning of Repatriate to India (Section-2y)

(i) Selling of foreign exchange to authorized person in India in exchange for INR

Or

(ii) Holding of realized amount in account with authorized person in India as permitted by RBI + to include the use of realized amount for discharge of debt + other liability as denominated in foreign exchange + expression as repatriation is construed accordingly

2P. Meaning of Reserve Bank (Section-2z)

2Q. Meaning of Security (Section-2za)

2R. Meaning of Transfer (Section-2ze)

(B) Regulation and Management of Foreign Exchange (Chapter-II)

3.Dealing in foreign exchange + etc. (Section-3)

(i) Any person is permitted for dealing + transferring in foreign exchange + foreign security (both) under general or special permission of RBI.

(a) Any payment is permitted to non–resident of India under general or special permission of RBI.

(b) Any receipt is permitted from non–resident of India under general or special permission of RBI.

(c) Any financial transaction for creation + transfer of right to acquire any asset outside India from non–resident of India.

4. Holding of foreign exchange + etc. (Section-4)

5. Current Account Transaction (Section-5)

6. Capital Account Transaction. (Section-6)

(i) Any resident of India is permitted to sell + to draw in foreign exchange for capital account transaction under general or special permission of RBI.

(ii) Any resident of India is permitted to hold + own + transfer + invest in foreign currency + foreign security + immovable property as located outside India where currency + security + property (all) acquired + held + owned when he was resident outside India + inherited from resident outside India

(iii) Any resident outside India is permitted to hold + own + transfer + invest in Indian currency + security + immovable property as located in India where currency + security + property (all) acquired + held when he was resident in India + inherited from resident in India.

7. Export of goods and services (Section-7)

(i) Export of goods

(a)Exporter of goods is required to furnish a declaration with RBI in from + in manner as specified by RBI + any other authority (both) containing the true and correct material particulars + amount of 100% value of export

(b) Exporter of goods is required to furnish the other information’s as required by RBI for ensuring the realizations of export proceed by exporter.

(c) Exporter of goods is required to furnish to RBI the reasons against reduction in value of goods + delay (both) if any.

(ii) Exporter of Services

8. Realization + repatriation (both) of foreign exchange (Section-8)

9. Exemption from realization + repatriation in specified cases (Section-9)

(i) Where Resident of India is in possession of foreign currency + foreign coins in limit as prescribed by RBI.

(ii) Where Resident of India is having the foreign currency account in limit as prescribed by RBI for class of persons.

(iii) Where foreign exchange is acquired or received before July 08, 1947 + income as arising or accruing on foreign exchange as held outside India under general or special permission as granted by RBI.

(iv) Where Resident of India is holding the foreign exchange outside India in limit as prescribed by RBI as received through gift or inheritance from Non resident of India + income arising or acquiring on foreign exchange (both).

(v) Where Resident of India has acquired the foreign exchange through employment + business + trade + vocation + services + honorarium + gifts + inheritance + any other legitimate receipt in limit as prescribed by RBI.

(vi) Where Resident of India has any other receipt in foreign exchange as prescribed by RBI.

(C) Authorized Person under FEMA, 1999 (Chapter – III)

10. Powers of RBI for authorizing an Authorized Person (Section-10)

(i) Powers of RBI

(a) RBI is permitted to authorize a authorized person to deal in foreign exchange or in foreign security as authorized dealer + money changer + off–shore banking unit + in any other manner.

(b) RBI is required to issue the authorization in writing + be subjected to conditions as laid down in authorization.

(c) RBI is permitted to revoke the authorization as granted at any time where RBI is satisfied that continuity of authorization is having negative criteria’s :

(d) RBI is not permitted to revoke the authorization without giving a reasonable opportunity of making a representation against revocation before RBI.

(ii) Rights of Authorized Person

(iii) Duties of Authorized Person

(a) Authorized person is not permitted to engage in transaction as involving in foreign exchange or foreign security not in conformity with terms of authorization

(b) Authorized person is required to satisfy that transaction is not involving + not designed for purpose of contravention or evasion of provisions + any rule + regulation + notification + direction + order as made + issued (both) by RBI under RBI Act, 1934

(iv) Duties of other person (Non authorized person)

(a) Non authorized person is required to use the foreign exchange for same purpose as declared in declaration as filed with authorized person

(b) Non authorized person is required to surrender the foreign exchange to authorized person where uses of foreign exchange is not made for same purpose as declared in declaration as filed with authorized person.

11. Powers of RBI to issue directions to authorized person (Section-11)

(i) RBI is permitted to give the directions to authorized person for making payment + doing or desisting from any act against foreign exchange + foreign security (both) for securing the compliances with provisions of Act + rules + regulations + notifications + directions as made + issued (both) by RBI under RBI Act, 1934.

(ii) RBI is permitted to direct the authorized person to furnish the information’s + in any manner for ensuring the compliances with provisions of Act + rules + regulations + notifications + directions + orders as made + issued (both) by RBI under RBI Act, 1934.

(iii) RBI is required to give a reasonable opportunity for hearing the authorized person where authorized person is contravening the directions as given + failed to file the return as directed by RBI

(iii) RBI is permitted to impose a maximum penalty not exceeding INR 10 thousand + additional penalty not exceeding INR 2 thousand per day where contravention is continuing.

12. Powers of RBI to inspect the authorized person (Section-12)

(i) RBI is permitted to inspect at any time through officer of RBI as specially authorized in writing:

(a) For verifying the correctness of statements + information’s + particulars as furnished to RBI.

(b) For obtaining any information + particulars where authorized person is failed to furnish as called by RBI.

(c) For securing the compliance with provisions of Act + rules + regulations + directions + orders as made + issued under RBI Act, 1934.

(ii) Authorized person is required to produce books + accounts + any other document + to give statements + to furnish information’s against affairs of authorized person in time + in manner (both) desired by officer of RBI.

(D) Contravention and Penalties (Chapter – IV)

13. Penalties (Section-13)

(i) Quantum of penalties

(a) Any person is liable to pay a penalty not exceeding 300% where amount of contravention is quantifiable against contravention of rules + regulations + directions + orders as made + issued under RBI Act, 1934

or

(b) Any person is liable to pay a penalty not exceeding INR 2 lac where amount of contravention is not quantifiable against contravention of rules + regulations + directions + orders as made + issued under RBI Act, 1934

(c) Any person is liable to pay a penalty not exceeding INR 5 thousand per day where contravention is continuing

(ii) Penalty for acquiring in foreign exchange + foreign security + immovable property (any) located outside India (Section-13(1A))

(a) Any person is liable to pay a penalty not exceeding the 300% against amount as involved in contravention

(b) RBI is permitted to confiscate the foreign exchange + foreign security + immovable property (any) located in India against penalty as levied for contravention under FEMA, 1999

(c) However penalty to be levied on value in aggregate is exceeding threshold limit as prescribed under section 37A(1) of FEMA, 1999

(iii) Powers of Adjudicating Authority of RBI (Section-13(1B))

(a) Adjudicating authority is permitted after recording the reasons in writing for recommending for initiation of prosecution to Directorate of Enforcement

(b) Directorate of Enforcement is permitted after recording the reasons in writing for directing for prosecution through filing a Criminal Complaint against guilty person by officer not below the rank of Assistant Director

(iv) Prosecution for contravention (Section-13(1C))

(a) Any person is liable for prosecution where acquired in foreign exchange + foreign security + immovable property (any) located outside India in aggregate value as exceeding the limit as prescribed under section 37A(1) in addition to penalty

(b) Imprisonment after proceeding for prosecution not to exceed the 5 year + penalty (both).

(v) Powers of Court (Section-13(1D))

13A. Powers of Adjudicating Authority against confiscation (Section 13(2))

(i) Adjudicating authority is permitted to direct to Govt. to confiscate the currency + security + other money + any other property (all) against contravention in addition to penalty

(ii) Meaning of any other property:

(a) Include deposit in bank where contravened property is converted into deposit

(b) Include Indian currency where contravened property is converted into currency

(c) Include any other property where contravened property is converted into any other property

14. Enforcement against order as issued by Adjudicating Authority (Section 14)

(i) Imprisonment against failure to make payment of penalty (Section 14(1))

(ii) Issue of order for arrest + detention against defaulter (Section 14(2))

(a) Where defaulter is obstructing the recovery of penalty + dishonestly transferred or concealed or removed any part of his property.

Or

(b) Where defaulter has refused or neglected to pay the penalty after issue of notice for payment of penalty

(iii) Issue of Warrant for arrest of defaulter (Section 14(3))

(iv) Issue of Warrant for arrest against non appearance (Section 14(4))

(v) Execution of arrest warrant by other adjudicating authority (Section 14(5))

(vi) Appearance of defaulter before adjudicating authority (Section 14(6))

(a) Officer as arresting the defaulter is required to bring the defaulter before adjudicating authority as soon as practically possible in 24 hour of arrest excluding time as required for journey.

(b) Officer as arresting the defaulter is not required to bring the defaulter before adjudicating authority where defaulter has made 100% payment against penalty + interest + cost of arrest (all) to officer as arresting the defaulter.

(vii) Hearing of defaulter before adjudicating authority (Section 14(7))

(viii) Discretion of adjudicating authority during enquiry (Section 14(8))

(ix) Powers of adjudicating authority (Section 14(9))

(x) Release of defaulter by adjudicating authority (Section 14(10))

(xi) Period for civil prison against defaulter (Section 14(11))

(a) Maximum civil prison is permitted as not exceeding 3 year when certificate of demand is exceeding 3 crore.

Or

(b) Maximum civil prison is permitted as not exceeding 6 month where certificate of demand is not exceeding 3 crore.

(c) Officer-in-charge of civil prison is permitted to release from detention (civil prison) when amount as mentioned in warrant is paid by defaulter.

(xii) Release of defaulter from detention (Section 14(12))

(a) Release of defaulter from detention is not permitted for discharging the outstanding liability against pending demand in arrear

But

(b) Release of defaulter from detention is eligible for not to arrest under certificate of demand when already released under section 14 (11) of FEMA, 1999.

(xiii) Execution of detention order (Section 14(13))

14A. Powers of RBI to recover the outstanding penalty (Section 14A)

(i) Adjudicating authority is permitted to issue an order in writing to authorize the officer of Directorate of Enforcement as not below the rank of Assistant Director to recover outstanding amount of penalty from person as failed to make 100% payment against penalty as imposed under section 13 in 90 day from date of service of notice for payment of penalty.

(ii) Officer of Directorate of Enforcement is permitted to exercise 100% powers as conferred with Income tax authority for recovery of tax under Income tax Act, 1961 (43 of 1961) + procedure as laid down under 2nd Schedule of Income tax Act, 1961 for recovery of outstanding penalty

15. Powers of RBI for compounding against contravention (Section 15)

(i) RBI is permitted to compound the contravention in 180 day from date of receipt of application by Directorate of Enforcement or officer of Directorate of Enforcement or officer of RBI (any) authorized by govt.

(ii) RBI is required as not to permit any further proceeding to be initiated or to be continued where process of compounding already completed against person who committed the contravention.

(E) Adjudication and Appeal (Chapter – V)

16. Appointment of adjudicating authority (Section-16)

(i) Powers of Govt. to appoint adjudicating authority (Section -16(1))

(a) Govt. is permitted to appoint the adjudicating authority through publication in official gazette for holding an enquiry + in manner as prescribed after giving reasonable opportunity of being heard before imposing any penalty

(b) Adjudicating Authority is permitted to direct to furnish a bond or guarantee for payment of penalty + subject to condition already mentioned in order for furnishing bond or guarantee where contravener is likely to abscond or likely to evade in any manner against payment of penalty if levied.

(ii) Powers for publication against appointment of authority (Section -16(2))

(iii) Powers for holding enquiry by adjudicating authority (Section -16(3))

(iv) Rights of contravener before adjudicating authority (Section -16(4))

(v) Powers of adjudicating authority (Section -16(5))

(a) 100% proceedings before adjudicating authority to be deemed as judicial proceedings within meaning under section 193 + 228 (both) of Indian Penal Code (45 of 1860).

(b) 100% proceedings before adjudicating authority to be deemed as civil court within meaning under section 345 + 346 (both) of Code of Criminal Procedure, 1973 (2 of 1974)

(vi) Duties for disposal of complaint by adjudicating authority (Section -16(6))

(a) Adjudicating Authority is required to dispose the complaint as expeditiously as possible + endeavour to dispose the complaint as maximum in 1 year from date of receipt of complaint.

(b) Adjudicating Authority is required to record the reasons in writing for not disposing the complaint in 1 year where adjudicating authority cannot complete the disposal of complaint in 1 year.

17. Appeal to Special Director (Appeals) (Section-17)

(i) (a) Govt. is permitted to appoint 1 or more than 1 special director (appeals) to hear the appeals against orders of adjudicating authorities through notification

(b) Govt. is required to specify the matter + places (both) to be heard by Special director (appeal) through notification

(ii) Contravener as aggrieved by order as issued by adjudicating authority as Assistant director or Deputy Director of Enforcement is permitted to file an appeal before special director (appeals)

(iii) (a) Contravener is required to file a appeal in 45 day from date of order is received in specified form + be verified in manner + payment of fee (all) prescribed

(b) However Special Director (Appeals) is permitted to entertain for filling the appeal after expiry in 45 day where satisfied that sufficient cause is available for not filling in 45 day.

(iv) Special Director (Appeals) is required to give reasonable opportunity of being heard + to pass an order as confirming or modifying or setting aside the matter as appealed

(v) Special Director (Appeals) is required to send a copy of order to appellant + to Adjudicating Authority (both).

(vi) Special Director (Appeals) is having the same powers of civil court as conferred on Appellate Tribunal under section 28(2)

(a) 100% proceedings be deemed to be judicial proceedings within meaning of sections 193 + 228 (both) of Indian Penal Code (45 of 1860)

(b) 100% proceedings be deemed to be civil court for purposes of sections 345 + 346 (both) of Code of Criminal Procedure, 1973 (2 of 1974).

18. Appellate Tribunal (Section-18)

(i) Appellate Tribunal is constituted under section 12(1) of Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976) through Finance Act, 2017 (7 of 2017)

(ii) Appellate Tribunal is permitted to exercise the jurisdiction + powers + authority (all) conferred under FEMA, 1999

19. Appeal before Appellate Tribunal (Section-19)

(i) (a) + any aggrieved person (both) permitted to file an appeal against order as issued by Adjudicating Authority or by special director (appeals) before appellate tribunal

(b) Person as appealing against order of Adjudicating Authority or Special Director (Appeals) for levying any penalty is required to deposit an amount of fee as notified by Govt.

(c) Appellate Tribunal is permitted to waive the fee as subject to put the conditions to safeguard the realization of penalty.

(ii) (a) Appeal be filed in 45 day from date of receipt of order by aggregate person or by Govt. in specified form + to be verified + payment of fees as prescribed by Govt.

(b) Appellate Tribunal is permitted to entertain an appeal after expiry of 45 day where satisfied that appellant has sufficient cause for not filing in 45 day.

(iii) Appellate Tribunal is required to give reasonable opportunity of being heard before confirming or modifying or setting aside the order under appeal.

(iv) Appellate Tribunal is required to send a copy of order to appellant + adjudicating authority or special director (appeals) both.

(v) (a) Appellate Tribunal is required to conclude as expeditiously as possible + endeavour be made to dispose the appeal in 180 day from date of receipt of appeal:

(b) Appellate Tribunal is required to record the reasons in writing for not disposing the appeal in 180 day.

(vi) Appellate Tribunal is permitted to call the records to examine the legality + propriety + correctness of order as passed by Adjudicating Authority under section 16 against any proceeding.

20. Composition of Appellate Tribunal (Section-20)

21. Qualifications for appointment of Special Director (Appeals) (Section-21)

(i) That appointee be member of Indian Legal Service (ILS) + already held a post in grade 1 of service

Or

(ii) That appointee be member of Indian Revenue Service (IRS) + already held a post equivalent to Joint Secretary in of India (Govt.).

22. Term of office of Special Director (Appeals)(Section-22)

23. Terms + Conditions of service of Special Director (Appeals) (Section-23)

24. Vacancies for Special Director (Appeals) (Section-24)

25. Resignation and Removal for Special Director (Appeals) (Section-25)

26. Member to act as Chairperson in certain circumstances (Section-26)

27. Staff of Special Director (Appeal) (Section-27)

(i) Govt. is required to provide a office for Special Director (Appeals) + officers + employees (all) needed.

(ii) Officers + employees of office of Special Director (Appeals) to discharge the functions under general superintendence of Special Director (Appeals).

(iii) Salaries + allowances + other terms + conditions of service of officers + employees of office of Special Director (Appeals) be prescribed by Govt.

28. Procedure + powers of Tribunal + Special Director (Appeal) (Section-28)

(i) (a) Appellate Tribunal + Special Director (Appeals) both are not bound to obey the procedure as laid down under Code of Civil Procedure, 1908 (5 of 1908)

but

(b) Appellate Tribunal + Special Director (Appeals) both are bound to obey the principles of natural justice + other provisions of FEMA, 1999

(c) Hence Appellate Tribunal + Special Director (Appeals) both are permitted to prepare own procedure.

(ii) Appellate Tribunal + Special Director (Appeals) both are permitted for same powers as vested in civil court under Code of Civil Procedure, 1908 (5 of 1908) during trying a suit against following matters:

(a) For summoning + enforcing (both) attendance of any person + examining on oath

(b) For requiring the discovery + production of documents (both)

(c) For receiving an evidence on affidavit

(d) For requisitioning any public record or document or copy of record or document from any office subject to provisions of sections 123 + 124 (both) of Indian Evidence Act, 1872 (1 of 1872),

(e) For issuing commissions for examination of witnesses + documents (both)

(f) For reviewing the decisions

(g) For dismissing a representation of default + deciding as ex–parte (both)

(h) For setting aside any order of dismissal of any representation for default or any order passed

(i) For any matter to be prescribed by Govt.

(ii) Orders by Appellate Tribunal + Special Director (Appeals) both to be executable as decree of civil court + Appellate Tribunal or Special Director (Appeals) both have 100% powers as Civil court.

(iii) Appellate Tribunal + Special Director (Appeals) both are permitted to transmit any order to civil court having local jurisdiction + civil court is required to execute the order similar as executed by civil court.

(iv) 100% proceedings as held before Appellate Tribunal + Special Director (Appeals) both to be deemed as judicial proceedings within meaning of sections 193 + 228 of Indian Penal Code (45 of 1860) + Appellate Tribunal to be deemed as civil court for sections 345 + 346 (both) of Code of Criminal Procedure 1973 (2 of 1974).

29. Distribution of business amongst Benches (Section-29)

30. Powers of Chairperson to transfer cases (Section-30)

31. Decision to be by majority (Section-31)

32. Rights of appellant to take assistance of legal practitioner (Section-32)

(i) Appellant is permitted to take an assistance of legal practitioner or chartered accountant or govt. to appoint presenting officer for filling a appeal + appearing in person before Special Director (Appeals)

(ii) Govt. is permitted to authorize 1 or more than 1 legal practitioners or chartered accountants or any officer to act as presenting officer to present the case before Special Director (Appeals).

33. Officers + employees + etc. (all) deemed as public servant (Section-33)

34. Powers of Civil courts under FEMA, 1999 (Section-34)

(i) Civil court is not permitted to entertain any suit or proceeding against any matter where Adjudicating Authority or Appellate Tribunal or Special Director (Appeals) empowered under FEMA, 1999

(ii) Civil court is not permitted to determine + to provide an injunction against any action already taken or to be taken by Adjudicating Authority or Appellate Tribunal or Special Director (Appeals) empowered under FEMA, 1999

35. Appeal by aggrieved person before High court (Section-35)

(F) Directorate of Enforcement (Chapter – VI)

36. Directorate of Enforcement (Section-36)

(i) (a) to establish a Directorate of Enforcement with Director + officers (both).

(b) These officers are known as officers of Directorate of Enforcement under FEMA, 1999.

(ii) Govt. is permitted to authorize the Director of Enforcement or Additional Director of Enforcement or Special Director of Enforcement or Deputy Director of Enforcement to appoint the officers of Directorate of Enforcement as below the rank of Assistant Director of Enforcement.

(iii) Govt. is permitted to impose the terms and conditions for officers of Directorate of Enforcement against powers + discharge the duties as conferred or imposed under FEMA, 1999.

37. Powers of officers of Enforcement for search + seizure + etc. (Section-37)

(i) Directorate of Enforcement + officers of Directorate of Enforcement as not below the rank of Assistant Director are permitted to take up the investigations against contraventions as conferred under section 13 of FEMA, 1999.

(ii) Govt. is permitted to authorize any officer or class of officers already posted in Central Govt. or State Govt. or RBI as not below the rank of Under Secretary in Govt. to investigate any contravention as conferred under section 13 of FEMA, 1999.

(iii) Officers of Directorate of Enforcement are permitted to exercise the powers as conferred on Income tax authorities under Income–tax Act, 1961 (43 of 1961) + subject to limitations as laid down under Income–tax Act, 1961.

37A. Provisions for assets held outside India in contravention (Section-37A)

(i) (a) Authorized Officer as prescribed by Govt. is permitted to order + seize the equivalent value of assets as situated in India through recording the reasons in writing about suspected foreign exchange + foreign security + immovable property (all) situated outside India in contravention as conferred under section 4 of FEMA, 1999

(b)Authorized Officer is not permitted to seize the assets where aggregate value of foreign exchange + foreign security + immovable property (all) situated outside India are not exceeding the value as prescribed by RBI.

(ii) Authorized Officer is required to place the order of seizure + relevant material before Competent Authority as appointed by Govt. in 30 day from date of seizure.

(iii) Competent Authority to dispose the petition in 180 day from date of seizure through confirming or setting aside the seizure order after giving an opportunity of being heard to representative of Directorate of Enforcement + aggrieved person (both).

(iv) (a) Competent Authority is permitted to confirm the continuity of seizure of equivalent amount as mentioned in order till disposal of adjudication of proceedings before Adjudicating Authority

(b) Adjudicating Authority to pass an appropriate direction in adjudication order about further action against seizure.

(c) Competent Authority or Adjudicating Authority is permitted to pass an appropriate order or setting aside of seizure after giving a reasonable opportunity of being heard to aggrieved person where aggrieved person already disclosed the facts about foreign exchange + foreign security + immovable property (any) + bring back into India (both)

(v) Aggrieved person is permitted to appeal before Appellate Tribunal against order as passed by Competent Authority.

38. Powers of other than officers of Directorate of Enforcement (Section-38)

(i) Govt. is permitted to authorize any officer of custom + central excise + police + officer of Central govt. or state govt. (any) to exercise the powers + discharge the duty of Director of Enforcement or officer of Directorate of Enforcement under FEMA, 1999

(ii) Abovementioned officer is permitted to exercise the powers as conferred on income–tax authorities under Income–tax Act, 1961 (43 of 1961) + subject to conditions + limitations as laid down by Govt.

(G) Legally acceptance of documents as received by RBI (Chapter – VII)

39. Presumption against document as received in certain cases (Section-39)

(i) Where any document is produced + furnished (both) by any person + seized from custody or control of any person under FEMA, 1999 or any other law

(ii) Where any document is received from any place as located outside India

But

Duly authenticated by authority or person + in manner as prescribed outside India for investigation of any contravention as alleged under FEMA, 1999.

(a) Where presumed except contrary is proved that signature + every other part of document in handwriting of any particular person or court be reasonably assumed that document is executed.

(b) Where admitted the document in evidence beside not duly stamped if document is otherwise admissible as evidence

40. Suspension of Operation under FEMA, 1999 (Section-40)

(i) Govt. is permitted to suspend or relax the provisions of FEMA, 1999 through notification for indefinite period or definite period where certain permissions already granted are not in public interest

(ii) (a) Every notification already issued under section 40 of FEMA, 1999 be laid before lower + upper (both) House of Parliament

(b) Both Houses are permitted for making any modification in notification

41. Powers of Govt. for giving direction to RBI (Section-41)

(i) Govt. is permitted from time to time to give any direction to RBI under FEMA, 1999 as general or special (any) direction

(ii) RBI is required to comply the direction as given by govt. during discharge of function under FEMA, 1999.

42. Contraventions of FEMA provisions by companies (Section-42)

(i) (a) Company’s officer as in-charge for fulfilling the compliances of FEMA, 1999 is liable against contraventions of rules + notifications + directions + orders + to be punished with imprisonment + fine (both).

(b) However company’s officer as in-charge for fulfilling the compliances is not liable against contraventions of rules + notifications + directions + orders under FEMA, 1999 where company’s officer is able to prove that contravention took place without knowledge or had 100% exercised due diligence to prevent the contravention.

(ii) Company’s officer like director + manager + company secretary + any other officer having consent or connivance (any) against contravention is liable for prosecution + fine (both) under FEMA, 1999

(iii) Meaning of company + director (both) under FEMA, 1999

(a) Meaning of company

Include body corporate + partnership firm + LLP + Association of Individuals (AOI) + Body of individuals (BOI) all

(b) Meaning of director

Include a partner for partnership firm + designated partner for LLP (both).

43. Rights + Obligations of legal representative of deceased person (Section-43)

(i) 100% rights + obligations + liabilities + proceedings + etc. under section 13 to be transferred to legal representative of contravener after death or insolvency under FEMA, 1999

(ii) However legal representative is not liable for obligations + liabilities + proceedings + etc. beyond the inheritance estate (assets).

44. Restrictions (Bar) against legal proceedings by contravener (Section-44)

45. Powers of Govt. for removing the difficulties (Section-45)

(i) (a) Govt. is permitted to remove the inconsistency in provisions of FEMA, 1999 through issuing of order

(b) Govt. is not permitted for issuing of order after expiry 2 year from date of commencement of FEMA, 1999.

(ii) Govt. is required to lay down the order before 2 House of Parliament as after or before an issuing of order.

46. Powers of Govt. for making rules under FEMA, 1999 (Section-46)

(i) Govt. is permitted for making rules to carry out the provisions of FEMA, 1999 through issue of order.

(ii) Govt. is permitted for making rules under following matters:

(a) For imposition of reasonable restrictions on current account transactions (section 5)

(b) For deciding the manner against contravention to be compounded (section 15(1))

(c) For deciding the manner of holding an inquiry by Adjudicating Authority (section 16(1))

(d) For deciding the form + fee for filing of appeal (sections 17 + 19)

(e) For deciding the salary + allowances + terms + other conditions of service of Special Director (Appeals) (section 23)

(f) For deciding the salaries + allowances + other conditions of service of officers + employees of office of Special Director (Appeals) (section 27(3))

(g) For deciding the additional matters against Appellate Tribunal + Special Director (Appeals) to be exercised the powers of civil court (section 28(2)(i))

(h) For deciding the authority + person + manner against document to be authenticated (section 39(ii))

(i) For deciding any other matter as required to be prescribed.

47. Powers of RBI for making regulations under FEMA, 1999 (Section-47)

(i) RBI is permitted for making the regulations to carry out the provisions of act + rules as made + issued under FEMA, 1999.

(ii) RBI is permitted for making regulations under following matters:

(a) For deciding the permissible classes of capital account transactions + limits of admissibility of foreign exchange for transactions + prohibitions + restrictions + regulations against certain capital account transactions (section 6)

(b) For deciding the manner + form for declaration to be furnished (section 7(1) (a))

(c) For deciding the period + manner (both) against repatriation of foreign exchange (section 8)

(d) For deciding the limit against holding of foreign currency + foreign coin (section 9(a))

(e) For deciding the class of persons + limit against foreign currency account to be held + operated (section 9(b))

(f) For deciding the limit against foreign exchange as acquired to be exempted (section 9(d))

(g) For deciding the limit against foreign exchange as acquired to be retained (section 9(e))

(h) For deciding the any other matter if required to be prescribed.

(iii) Now Govt. is permitted for deciding against capital account transactions where RBI was previously not permitted before notification of provisions under section 6 + 47 of FEMA, 1999.

48. Rules + regulations to be laid before 2 House of Parliament (Section-48)

(i) 100% rules + regulations (both) made under FEMA, 1999 to be laid before 2 House of Parliament after approval by RBI in 30 day.

(ii) 2 House of Parliament are permitted for making any modification in rules + regulations.

49. Repeal + saving of Foreign Exchange Regulation Act, 1973 (Section-49)

(i) Foreign Exchange Regulation Act (FERA), 1973 (46 of 1973) is repealed + Appellate Board as constituted under section 52(1) of FERA, 1973 to be dissolved.

(ii) (a) Chairman of Appellate Board + members (both) to vacant the office an immediately

(b) Chairman + members (both) not to be entitled for claiming any compensation for premature termination from office + contract of service (both)

(iii) (a) Courts are not permitted to take cognizance of offence under repealed FERA, 1973

(b) Adjudicating officer is not permitted to give any notice against contravention under section 51 of FERA, 1973 after expiry 2 year from date of commencement of FEMA, 1999.

(c) 100% offences as committed before repealing to be governed under FERA, 1973.

(v) No effect against following matters after repealing of FERA, 1973:

(a) Against any action is taken or purported to be taken + rules + notifications + inspections + orders + notices as made + issued (both) + appointments + confirmations + declarations as made + licenses + permissions + authorizations + exemptions as granted + documents + instruments as executed + directions as given under FERA, 1973 except the provisions as inconsistent with FEMA, 1999.

(b) Against appeal as preferred to Appellate Board under section 52(2) of FERA, 1973 but not disposed before commencement of FEMA, 1999 to be transferred + to be disposed by Appellate Tribunal as constituted under FEMA, 1999

(c) Against appeal for decision + order of Appellate Board under section 52(3)+(4) of FERA, 1973 to be filed before high court in 60 day from date of commencement of FEMA, 1999 where appeal is not filed before commencement of FEMA, 1999

(d) However High Court is permitted to entertain the appeal after expiry 60 days where high court is satisfied that appellant was prevented by sufficient cause from filing appeal within 60 day.

50. Important Master Directions as issued by RBI in 8 year (2015 to 2022)

51. Important Master Circulars as issued by RBI in 3 year (2020 to 2022)

S. No

(Author can be reached at email address [email protected] or on Mobile No. 9811081957)

Disclaimer : The contents of this article are solely for informational purpose. Neither this article nor the information’s as contained herein constitutes a contract or will form the basis of a contract. The material contained in this article does not constitute or substitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this article to ensure its accuracy at the time of publication. Satish Agarwal assumes no responsibility for any error which despite all precautions may be found herein. We shall not be liable for direct, indirect or consequential damages if any arising out of or in any way connected with the use of this article or the informations as contained herein.