Refund of share application money to FDI

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2010 Dear All,

As per circular on FDI - share has to be alloted with in 180 days from the date of share application money received from FDI.
Any unalloted money has to refund back immidiatly.

Now if company allot shares in every 180 days and

1) After 1st allotment Rs91 left for allotment.

2) After 2nd allotment Rs7 left for allotment.

3 ) After 3rd allotment Rs3 left for allotment.

My question is

a) Is it necessory to transfer back these odd Rs?

b) If yes, can we transfer back total Rs 101 all together?

c) What is the best mode to transfer back such small value?

Regds

Ajay Mishra

Ajay Mishra (Expert)
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29 December 2010 Hi

Time frame within which shares have to be issued

The equity instruments should be issued within 180 days from the date of receipt of inward remittance or by debit to the NER/FCNR (B) account of the non-resident investor. In case the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or the date of debit to the NER/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by onward remittance through normal banking channels or by credit to the NER/FCNR(B) account, as the case may be. Non-compliance with the above provision would be reckoned as a contravention under FEMA and could attract penal provisions. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the Reserve Bank, on the merits of the case.

I will suggest you to allot full shares against consideration and intimate the same in Form-FCGPR to RBI within 30 days. If any amount is balanced with you, you should intimate RBI about the amount outstanding with Form FC-GPR.There is no need to transfer back.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2010 Sir what answer one should give if RBI ask "what will you do with the balance available with you"

Regds

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Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2011 Ajay Sir, Can you please guide on this?

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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09 March 2011 I don't think practically there is any need to transfer the said money in one go and the same be done for Rs.101/- .

The maximum penalty leviable shall be rs. 303/-

Anuj
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