Rule 4 - Expenditure incurred in Indian currency deemed to have been incurred in foreign exchange - Expenditure-tax Rules, 1987

Expenditure incurred in Indian currency deemed to have been incurred in foreign exchange. 4. For the purposes of clause (a) of the Explanation to section 5, any expenditure incurred or any payment made in Indian currency, obtained by conversion of foreign exchange into Indian currency, shall be deemed to have been incurred or, as the case may be, made in foreign exchange in the cases and in the circum stances mentioned below :— (i) where the payment in respect of any expenditure in curred in a hotel has been made out of Indian currency obtained by conversion of foreign exchange brought into India through an authorised dealer by a travel agent on behalf of a foreign tour ist or a group of foreign tourists; (ii) where the payment in respect of any expenditure in curred in a hotel has been made in the manner referred to in clause (i), by an airline on behalf of a foreign tourist or a group of foreign tourists : Provided that the travel agent or, as the case may be, the air line furnishes to the hotel a certificate in Form No. 1 at the time of payment in respect of such expenditure; and (iii) where the payment in respect of any expenditure incurred in a hotel has been made by a national of Czechoslovakia, German Democratic Republic, Poland, Romania and the USSR : Provided that the foreign national furnishes to the hotel a certificate in Form No. 2 at the time of payment in respect of such expenditure. Explanation .—For the purposes of this rule,— (i) "airline" and "travel agent" respectively mean an airline or travel agent which holds a valid licence granted under section 32 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), by the Reserve Bank of India; and (ii) "authorised dealer" shall have the meaning assigned to it in clause (b) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973).