authorised in this behalf by the Central Government in such manner as may be prescribed. However, no contravention shall be compounded unless the amount involved in such contravention is quantifiable. Where a contravention has been compounded, no proceeding can continue or be initiated against the person in respect of the contravention so compounded.
Q28. Mr. G., an Indian national desires to obtain Foreign Exchange on current account transactions for the following purposes:
(i) Payment of commission on exports made towards equity investment in wholly
owned subsidiary abroad of an Indian company.
(ii) Remittance of hiring charges of transponder. (iii) Remittance for use of trade mark in India.
Advise G whether he can obtain Foreign Exchange and, if so, under what
conditions? fC.A. (Final) Nov. 2001J
.9Lns. Under Section 5 of the Foreign Exchange Management Act, 1999, certain Rules have been framed for drawal of foreign exchange on current account. According to the said rules, drawal of foreign exchange for certain transactions is prohibited. In respect of certain transactions drawal of foreign exchange is permissible with the prior approval of the Central Government. In respect of some of the transactions, prior permission of RBI is necessary for drawal of foreign exchange.
(i) In respect of item No.1, Le., payment of commission on exports made towards equity investment in wholly owned subsidiary abroad of an Indian company is prohibited.
(m Orawal of foreign exchange for remittance of hiring charges of transponder,
can be made with the prior approval of the Central Government.
(iii) So far as remittance for use of Trade Mark in India is concerned, the necessary
foreign exchange can be obtained with the prior permission of the Reserve
Bank of India.
In the case of (ii) and (iii) above, approval of concerned authority is not required if the payment is made out of funds held in Resident Foreign Currency (RFC) Account or Exchange Earner's Foreign Currency (EEFC) Account of the remitter. Alternatively, foreign exchange can be drawn from an authorised person.