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B.Com 1st Year Foreign Exchange Management Act 2000 Short Notes

B.Com 1st Year Foreign Exchange Management Act, 2000 Short Notes :- This post is very useful for all the student. you will get full information Topic wise Chapter Wise Question Answer Definitions And Main Provisions Notes Available in over site parultech.com

B.Com 1st Year Foreign Exchange Management Act 2000 Short Notes
B.Com 1st Year Foreign Exchange Management Act 2000 Short Notes

SHORT ANSWER QUESTIONS

B.Com 1st Year Foreign Exchange Management Act 2000 Short Notes

Q.1. Write a short note on ‘FEMA’.

Or State the main objects of “FEMA’.

Ans. FEMA: Reserve Bank of India controls foreign trade practices through Foreign Exchange Control  (2014) 

Act. It was the first formal legislative measure to control the foreign exchange and was replaced by Foreign Exchange Regulation Act. 1974. also called as ‘FERA’. Then, government continued a lask force to review FERA so as to encourage globalisation and economic liberalisation. On the recommendations of the task force Foreign Exchange Management Bill. 1994 was introduced in t passed by Lok Sabha and Rajya Sabha in 1999, and on June 1, 2000, in place of FERA, Foreign Exchange Management Act (FEMA), 1999 came into force. This act is of great significance from the point of view of foreign trade and foreign exchange. 

1. FEMA extends to the whole of India, later on.

2. It shall apply to all branches, offices and agencies outside India owned or controlled by a person who is residing in India.

3. It shall come into force on such date as the Central Government may by notification in the official  gazette appoint. However, different dates may be appointed for the different provisions of this act.

This act came into force on June 1, 2002 by a gazette notification of the Central Government. Objects: The main objects of ‘FEMA’ are as follows: 

1. It aims at consolidating and amending the law relating to foreign exchange so as to facilitate external trade and payments.

2. It promotes the orderly development and the maintenance of foreign exchange market in India.

Q.2. Explain current account transaction under FEMA. (2015)

Ans. Current Account Transaction: It means a transaction other than a capital account transaction and generally include: 

1. Payments due as interest on loans and as net income from investments.

2. Payments due in connection with foreign trade other current business, services and short transactions & credit facilities in the ordinary course of business.

3. Remittances for living expenses of parents, spouse and children residing abroad.

4. Expenses in connection with foreign travel, education and medical care of parents, spouse and the children. Any person may sell or draw foreign exchange to or from an authorized person if such sale is a current account transaction provided that the Central Government may in public interest and in consultation with the Reserve Bank impose such reasonable restrictions for current transactions as prescribed. 

Q.3. Explain capital account transaction under FEMA. 

Ans. Capital Account Transaction: Any person authorised person for a capital account transaction: 

1. The Reserve Bank may specify any class or classes of capital account transactions that are permissible and can also specify the limit upto which foreign exchange shall be dismissible for such transactions.

2. Without prejudice to the generality of the provision of Sub-section (2) the Reserve Bank ma restrict or regulate: 

(a) Transfer or issue of any foreign security by a person resident in India or outside India.

(b) Transfer or issue of any security or foreign security by any person resident outside India.

(C) Any borrowing or lending in foreign exchange in whatever form or by whatever namo called.

(d) Deposits between persons resident in India and persons resident in India and persons resident outside India.

(e) Acquisition or transfer of immovable property in or outside indla.

(f) Giving of guarantee or surety in respect of any debt, obligation or other liability increased .

4. A person who is resident outside India may hold, own, transfer or invest in India currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in india or inherited from a person residing in India.

 5. The reserve bank may be regulation, prohibit, restrict or regulate, establishment of a branch, office, in India relating to such branch, office or other place or business.

Q.4. Write a note on authorised person under FEMA.

Ans. Authorised Person Under FEMA

 1. The Reserve Bank may on an application authorise any person to be known as authorised person to deal in foreign exchange or in foreign securities as an authorised dealer or.in any other manner as it deems fit. (2015) 

2. An authorisation shall be in writing and shall be subject to the conditions laid down therein.

3. An authorisation may be revoked by the Reserve Bank at any time if Reserve Bank is satisfied that it is in public interest to do so or the authorised person has failed to comply with the condition subject to which the authorisation was granted or has contravened any of the provisions of the act or any rule, regulation, notification, direction or order made.

4. An authorised person shall in all his dealings in foreign exchange or foreign security comply with such general or special directions or orders as the Reserve Bank may think fit to give and except an authorised person shall not engaged in any transaction that involve any foreign 

exchange or foreign security which is not in conformity with the terms of his authorisation.

5. An authorised person shall before undertaking any transaction in foreign exchange required that person to make such declaration and to give information as will satisfy him that the ot involve and is not designed for the purpose of any contravention.

6 Any person other than authorised person who has acquired or purchased foreign exchange for any purpose does not use it to authorised person within the specified period of using foreign exchange so acquired or purchased for any other purpose.

Q.5. Write a short note on ‘Contravention and penalty’ under FEMA. 

Ans. Following penalties are provided in the event of contravention of the provisions of the Act:

1. If any person contravene any rule, regulation, notification contravene any rule, regulation, notification or order issued in exercising 

under this act or contravenes any condition to which an authorisation is issued by powers under this act or contravenes any codition to which an authorisation is issued by the Reserve Bank he shall be liable to a penalty upto the sum involved in such contravention where such amount is quantifiable. (2014) 

2. Any adjudicating authority and judging any contravention may if he thinks Fit in addition to  penalty which he may impose for such contravention direct that any currency, security or any other money or property in respect of which the contravention has taken place shall be confiscated to the Central “Government and further direct that the foreign exchange holding if any of the persons shall be brought back into india or shall be retained outside india in accordance with the directions made in this behalf.

 The property related to above shall include: (a) Deposits into bank where the said property is converted into such deposits.

(b) Indian currency where the said property is converted into that currency. 

(c) Any other property which has resulted out of the conversion of that property.

Q.6. What are the provisions regarding the appointment of Adjudicating Authority?

Ans. The provisions regarding the appointment of Adjudicating Authority are as follows: 

1. The Central Government may appoint as many officers of the Central Government as it may think fit as the Adjudicating Authorities for holding any enquiry in the manner prescribed after giving the accused person alleged to have committed contravention under section.

2. The Central Government while appointing the Adjudicating Authorities also specify in the order published in the official gazette their respective jurisdictions.

3. No Adjudicating Authority shall hold an enquiry under Sub-section (1) except upon the complaint in writing made by any officer who is authorised by a general or special order by the Central Government.

4. The said person may appear either in person or a chartered accountant of his choice for presenting his case before the Adjudicating Authority.

5. Every Adjudicating Authority shall have the same person of a civil court which are conferred on the Appellate Tribunal and all proceedings before it shall be deemed to be judicial proceedings and shall be deemed to be a civil court for the purpose of Sections 345 and 346 of the code of Criminal Procedure, 1973.

6. Every Adjudicating Authority shall deal with the complaint and endeavour shall be made to dispose off the complaint finally written one year from the date of receipt of the complaint, provided that the complaint cannot be disposed off within the same period, thé Adjudicating Authority shall record periodically the reasons for not disposing off the complaint within the said period.

Q.7. Discuss the composition of Appellate Tribunal.

Ans. The provisions regarding the composition of Appellate Tribunal are: 

1. Appellate Tribunal consists of a Chairperson and such number of members as the Central Government may deem fit.

2. The jurisdiction of the Appellate Tribunal may be exercised by the benches thereof. Bench may be:

(a) Constituted by the Chairperson with one or more members as the Chairperson may deem fit. 

(b) Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other places as the Central Government may in consultation with the Chairperson.

(c) The Central Government shall notify the areas in relation to which each bench of the Appellate Tribunal may exercise jurisdiction.

3. The Chairperson may transfer a member from one bench to another bench notwithstanding any thing contained in Sub-section (2).

4. If at any stage of the hearing of any case or matter it appears to the Chairperson or a member that the case or matter is of such a nature that it ought to be heard by a bench which is consisting of two members, the case or the matter may be transferred by the Chairperson to such bench as the Chairperson may deem fit which is according to section 20(4) of FEMA, 1986.

Q.8. Discuss the procedure and powers of the Appellate Tribunal and the Special Director.

Ans. The powers of the Appellate Tribunal and the Special Director include the following: 

1. The Appellate Tribunal and the Special Director shall not be bound by the procedure that is laid down by the code of civil procedure, 1908 but shall be guided by the principles of natural justice.

2. The Appellate Tribunal and the Special Director shall have the same powers as are vested in the civil court under the code of civil procedure, 1908 for the purposes of discharging its functions under this act.

These powers are as follows: 

(a) Receiving evidence on affidavits.

(b) Requiring the discovery and production of documents.

(c) Requisitioning any public record or document or copy of such record.

(d) Summoning and enforcing attendance of any person and examining him on oath.

(e) Issuing commissions for the examining of witnesses or documents.

(f) Receiving its decisions.

(g) Dismissing a representation of default. 

(h) Setting aside any order of dismissal of any representation of default.

3. An order made by the Appellate Tribunal and the Special Director shall be executable by them as a decree of civil court and for this, the Appellate tribunal and the Special Director shall have all the powers of a civil court. The Appellate Tribunal and the Special Director may transmit any order made by it to a civil court having local jurisdiction and such court shall execute the order as if it were a decree made by court.

5. All the proceedings before the Appellate Tribunal and the Special Director (Appeals) shall be deemed to be judicial proceedings within the meaning of Section 228 of the Indian Penal Code, 1860. 

Q.9. Discuss about the powers of Central Government to make rules and regulations.

Ans. Powers of Central Government to Make Rules: These are as follows: 

1. The Central Government make rules to carry out the provisions of this act. 

2. Without prejudice to the generality of the foregoing power, the rules may provide for:

(a) Imposition of reasonable restrictions on current account transactions. 

(b) Manner in which the contravention may be compounded. ledger

(C) Manner of holding an enquiry by the adjudicating authority.

(d) Form of appeal and fee for filing such appeal. 

(e) Salary and allowances payable to and the other terms and conditions of service of the Chairperson and other members of the Appellate Tribunal.

(f) Salary and allowances payable to and the other conditions of 

service of the officers employees of the Appellate Tribunal and officer of the Special Director,

(g) Additional matters in respect of which the Appellate Tribunal and the Special Director may exercise the powers of a civil court.

(h) The authority or person and the way in which the document may be authenticated.

Powers of Central Government to Make Regulations 

These are as follows: 

1. Reserve Bank may make regulations to carry out the provisions of this Act.

2. Without prejudice to the generality of the foregoing power, such regulations may provide. 

(a) Permissible classes of capital account transactions, limits of admissibility of foreign exchange for such transactions and prohibition, restriction or regulation of certain capital account transactions. 

(b) The period and the manner of repatriation of foreign exchange.

(C) The manner and the form in which the declaration is to be furnished. 

(d) The limit upto which any person may possess foreign currency or foreign costs.

(e) The class of persons and the limit upto which the foreign currency account may or operated

(f) The limit upto which foreign exchange acquired may be exempted. 

(g) The limit upto which foreign exchange acquired may be retained under Clause (e) of section 9.

(h) Any other matter which is required to be or may be specified. So, every rule and regulation made under this act must be laid as soon as may be after it is made before each house of parliament while it is in session for a total period of thirty days may be comprised in one session or in the more successive sessions.

Q.10. Write a short note on repeal and saving. 

Ans. Repeal and Saving

1. Foreign Exchange Regulation Act, 1974 is repealed and the Appellate Board constituted under Section (10) of Section 52 of the said act shall stand dissolved.

2. On the dissolution of the said Appellate Board, the person appointed as Chairman of the Board and every other person appointed as member and holding office shall vacate their respective offices.

3. No court shall take cognizance of an offence under the repealed act and no adjudicating officer shall take notice of any contravention notwithstanding anything contained in any other law.

4. All offences committed under the repealed act shall continue to be governed by the provisions of the repealed act as if that act had not been repealed. 5. Any appeal preferred to the Appellate Board but not disposed of before the commencement of this act shall stand transferred to and shall be disposed off by the Appellate Tribunal constituted under this Act.

6. Anything done or any actions taken or purported to have been done or taken including any ification, inspection, order or notice made or issued or any appointment, confirmation or declaration made or any license, permission, authorisation or exemption granted or any executed or any direction given under the act hereby repealed shall be deemed to have been done or taken under the corresponding provisions of this act .

7. Every appeal from any decision or order of the Appellate Board under Sub-section (3) or Sub section (4) of Section 52 of the repealed act shall if not filed before the commencement of this act be filed before the high court within a period of sixty days of such commencement provided that the high court may entertain such appeal after the expiry of said period of sixty days. 

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