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TMI BlogFOREIGN EXCHANGE MANAGEMENT (MANNER OF RECEIPT AND PAYMENT) REGULATIONS, 2023X X X X Extracts X X X X X X X X Extracts X X X X ..... FOREIGN EXCHANGE MANAGEMENT (MANNER OF RECEIPT AND PAYMENT) REGULATIONS, 2023 - By: - Mr. M. GOVINDARAJAN - FEMA - Foreign Exchange Management - Dated:- 20-1-2024 - On 21.12.2023 the Reserve Bank of India notified The Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 , ( Regulation for short) vide Notification No. FEMA14 R/2023-RB , in supersession of Foreign Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange Management (Manner of Receipt and Payment) Regulations, 2016 . These regulations came into effect from 20.12.2023. These regulations are grounded in the Foreign Exchange Management Act, 1999 , and seek to streamline and regulate transactions involving foreign exchange in India. Authorized bank The expression authorized bank is defined as a bank including a co-operative bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (other than an authorized dealer) authorized by the Reserve Bank to maintain an account of a person resident outside India. Authorized person The Reserve Bank may, on an application made to it in this behalf, authorize any person to be known as authorized person to deal in foreign exchange or in foreign securities, as an authorized dealer, money changer or off-shore banking unit or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other manner as it deems fit. Restrictions Regulation 3 provides that no person resident in India shall make or receive payment from a person resident outside India unless otherwise provided in the Act or rules or regulations or directions issued under the Act. However, the Reserve Bank of India may permit a person resident in India to make or receive the payment under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Such payments made through the Authorized bank or authorized person. Transactions The Regulations provide two types of transactions - one trade transactions and the others transactions other than trade transactions. Trade transactions The export or import of eligible goods and services are called as trade transactions. The receipts and payments to these trade transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions shall be made as detailed below- Nepal and Bhutan - the payments in relation to trade transactions are to be made only in Indian rupee. The said payment may be made in foreign currency in case exports are made from India to Nepal, the importer in Nepal the payment may be made in foreign currency since the importer in Nepal has been permitted to make payment in foreign currency. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Member countries of ACU (Asian Clearing Union) other than Nepal and Bhutan - The receipts and payments may be made in respect of trade transactions to the member countries of ACU other than Nepal and Bhutan, through ACU mechanism or as per the directions issued by the Reserve Bank of India to authorized dealer from time to time. Countries other than ACU - The receipts and payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be made in respect of trade transactions to the countries other than ACU by Indian rupees or foreign currency. The receipts and payments may also be made in a manner as may be provided in the extant Foreign Trade Policy framed by the Central Government. Transactions other than trade transactions The receipts and payments to the transactions other than trade transactions ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be made to- Nepal and Bhutan - in Indian rupees; in case of overseas investment payment may also be made in foreign currency; Other countries - in Indian rupees or in foreign currency. Current Account transactions The payment and receipt in India for any current account transaction, other than a trade transaction, between any person resident in India and a person resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent outside India, who is on a visit to India, may be made only in Indian Rupees. Any payment or receipt under these regulations may also be made by debit/ credit to a bank account maintained in terms of the rules, regulations or directions issued under the Act. Conclusion The above said regulations aim to bring greater clarity and structure to foreign exchange transactions in Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. Businesses engaged in international trade or financial transactions need to align their processes with these new regulations to ensure compliance. It s crucial for entities to understand the nuances of these regulations to avoid legal complications and to facilitate smoother international transactions. - Scholarly articles for knowledge sharing authors experts professionals Tax Management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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