Big relief on form 15CA & 15CB compliances

More Relaxed form 15CA and 15CB compliances w.e.f 01.04.2016

No more form 15CA and 15CB required for import payments

Recently CBDT amended the rules requiring form 15ca and 15cb for foreign remittance in view of reducing the burden of compliances.

The amended Rules will become applicable from 01.04.2016.

The significant changes under the amended Rules 37BB are:

  • No Form 15CA and 15CB will be required to be furnished by an individual for remittance which do not requiring RBI approval under its Liberalised Remmittace Scheme (LRS)
  • Further the list of payments of specified nature mentioned in Rule 37 BB which do not require submission of Forms 15CA and 15CB has been expanded from 28 to 33 including payments for imports.
  • A CA certificate in Form No. 15CB will be required to be furnished only in respect of such payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds Rs. 5 lakh. (which was earlier 2,50,000/-)

For more information refer Notification No. G.S.R. 978(E) dated 16th December, 2015

Form 15CA & 15CB exemption list:-

Sl. No. Purpose code as per RBI Nature of payment
(1) (2) (3)
1 S0001 Indian investment abroad-in equity capital (shares)
2 S0002 Indian investment abroad-in debt securities
3 S0003 Indian investment abroad-in branches and wholly owned subsidiaries
4 S0004 Indian investment abroad-in subsidiaries and associates
5 S0005 Indian investment abroad-in real estate
6 S0011 Loans extended to Non-Residents
7 S0202 Payment for operating expenses of Indian shipping companies operating abroad.
8 S0208 Operating expenses of Indian Airlines companies operating abroad
9 S0212 Booking of passages abroad – Airlines companies
10 S0301 Remittance towards business travel.
11 S0302 Travel under basic travel quota (BTQ)
12 S0303 Travel for pilgrimage
13 S0304 Travel for medical treatment
14 S0305 Travel for education (including fees, hostel expenses etc.)
15 S0401 Postal services
16 S0501 Construction of projects abroad by Indian companies including import of goods at project site
17 S0602 Freight insurance – relating to import and export of goods
18 S1011 Payments for maintenance of offices abroad
19 S1201 Maintenance of Indian embassies abroad
20 S1202 Remittances by foreign embassies in India
21 S1301 Remittance by non-residents towards family maintenance and savings
22 S1302 Remittance towards personal gifts and donations
23 S1303 Remittance towards donations to religious and charitable institutions abroad
24 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
25 S1305 Contributions or donations by the Government to international institutions
26 S1306 Remittance towards payment or refund of taxes
27 S1501 Refunds or rebates or reduction in invoice value on account of exports
28 S1503 Payments by residents for international bidding. ]

Five more newbie transactions added to exemption list w.e.f 01.04.16:-

29 S0101 Advance payment against imports

(a big relief to importers since it will reduce hindrances for expediting on making payment to their overseas suppliers)

30 S0102 Payment towards imports-settlement of invoice
31 S0103 Imports by diplomatic missions
32 S0104 Intermediary trade
33 S0190 Imports below Rs.5,00,000/- (For use by ECD offices)

What is Liberalised Remittance Scheme (LRS) ?

Under the Liberalised Remittance Scheme, (hereinafter referred to as the Scheme/LRS) resident individuals are allowed to remit upto USD 250,000 per financial year (April-March) for any permitted current or capital account transactions or a combination of both without approval of RBI.

Individuals can avail of foreign exchange facility for the following purposes within the limit of USD 250,000 only. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India.

  1. Private visits to any country (except Nepal and Bhutan).
  1. Gift or donation.
  2. Going abroad for employment.
  3. Emigration.
  4. Maintenance of close relatives abroad.
  5. Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/check-up.
  6. Expenses in connection with medical treatment abroad.
  7. Studies abroad.
  8. Any other current account transaction.

However, for item numbers as mentioned at (iv)[ emigration], (vii)[expenses in connection with medical treatment abroad] and (viii)[studies abroad], individuals may avail of exchange facility for an amount in excess of the overall limit prescribed under the LRS, if it is so required by a country of emigration, medical institute offering treatment or the university respectively.

The permissible capital account transactions by an individual under LRS are:

i) opening of foreign currency account abroad with a bank;
ii) purchase of property abroad;
iii) making investments abroad;
iv) setting up Wholly owned subsidiaries and Joint Ventures abroad;
v) extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 2013.

For more info refer RBI circular no 106

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