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FC-GPR

K R Ramesh (Service) (201 Points)

13 July 2009

Can any body please help me with an query on FC-GPR filing.

Clause No 7

7. Portfolio and Other Investment (PIS)

It talks about the any other type of investments in terms of Trade Credits, loans other than Direct Investment made.

My query is, If we had taken an approx 3-4 times advance against the monthly exports services, do we need to show this under this category? If yes then under which para number.

Please revert back

Thanks

Ramesh

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5 Replies

Ajay Mishra (Company Secretary) (74337 Points)
Replied 13 July 2009

Dear Mr. Ramesh

REPORTING OF FDI

(i) Reporting of Inflow

(a) An Indian Company receiving invest from outside India for issuing shares under the FDI scheme, should report the details of the amount of consideration, to the Regional office concerned of the Reserve Bank not later than 30days from the date of receipt in the advance.

(b) Indian company are required to report the details of the receipt of the amount of consideration for issue of shares through an AD Category-I bank, together with the copy of the FIRC evidencing the receipt of the remittance along with the KYC report on the non-resident investor from the overseas bank remitting the amount.

(ii) 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.

(iii) Reporting of Issue of Shares

(a) After issue of shares the Indian company has to file Form FC-GPR not later than 30 days from the date of issue of shares.

(b) Part-A of Form FC-GPR has to be dully filled up and signed by MD/Director/Secretary of the Company and submitted to the Authorised Dealer(AD) of the company, who will forward it to the RBI.

(c) The report of the receipt of consideration as well as Form FC-GPR have to be submitted by the AD bank to the Regional office concerned of the RBI under whose jurisdiction the Registered office of the company is situated.

(d) Part-B of Form FC-GPR should be filed on an annual basis by the Indian Company, directly with the “Advisor, Balance of Payment Statistical Division, Department of Statistics and Information Management, RBI, C9, 8^th Floor, Bandra-Kurla Complex, Bandra (E), Mumbai-400051”. This is an annual return to be submitted by 31^st July every year, pertaining to all investments by way of direct/portfolio investments/re-invested earning/ others in the Indian company during the previous years.

I think, FC-GPR Part A and PART B is filed with RBI by company issued shares / convertible debenturs/ preference shares under the FDI scheme, but not for amount advance for export services.

Views of other experts solicated.

Best Regard

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K R Ramesh (Service) (201 Points)
Replied 13 July 2009

Dear Mr. Ajay Mishra

Thanks for your reply, here we have received the advance not as an Investment or for issue of shares. It is an advance against the services which will be adjusted against subsequent Invoices. It is not a loan also which would be repaid back, it just an advance which will adjusted susequently.

if you see the FORM FC-GPR clause 9 (see below)

9. Other Investment

9.1 Trade Credit

9.1.1 Short Term

9.1.2 Long Term

9.2 Loans

9.3 Others

9.3.1 Short Term

9.3.2 Long Term

It says investment, Trade Credit, Loans & Others.

In our case it is not falling under Trade Credit, Loans but do we need to show this advance under OTHERS but this is not Investment also.

This is the confusion & the query.

Please advise

Thanks & Regards

Ramesh

Ajay Mishra (Company Secretary) (74337 Points)
Replied 13 July 2009

Dear Mr. Ramesh

In Point No. 9 which includs "others" lelating to investment not specified in above mentioned category.

If u simply read form FC-GPR, it is a kind of reporting to RBI for amount of consideration received from a persion resident outside India by Indian company after issue of shares not for advance received against export.

Regards