Central Government notifies FEMA (Current Account Transactions) (Amendment) Rules, 2023 [Read Notification]
Central Government – FEMA – Rules – FEMA (Current Account Transactions) (Amendment) Rules – Amendment – Taxscan
Central Government – FEMA – Rules – FEMA (Current Account Transactions) (Amendment) Rules – Amendment – Taxscan
The Central Government notified the amendment of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 on 16th May 2023 and has the same enforcement date.
The government has amended the rules within the powers conferred by section 5 and sub-section (1), clause (a) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999.
The rules shall be named as Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023. As per the current amendment, the Central Government has omitted the Rule 7 of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
Rule 7 of FEMA (Current Account Transactions) Rules, 2000 :
“Use of International Credit Card while outside India - Nothing contained in rule 5 shall apply to the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India.”
Rule 5 of FEMA (Current Account Transactions) Rules, 2000 :
"Prior approval of Reserve Bank - Every drawal of foreign exchange for transactions included in Schedule III shall be governed as provided therein :
Provided that this rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter".
According to what can be deduced from reading Rules 5 and 7, it is not necessary to seek prior permission from the Reserve Bank of India before using an international card to pay for expenditures while visiting another country.
The Indian government, however, has removed this amendment's inclusion of such a rule. In order to use the International Cards while travelling outside of India, people must first obtain the authorization of the Reserve Bank of India.
By Notification No. G.S.R.33(E) dated 15.01.2003, the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2003 included Rule 7.
Presently, the government has removed the same law through the current notification G.S.R. 369(E) dated 16.05.2023 after 20 years and it is no longer in effect.
Additionally, Indians who are considering travelling overseas to make a visit must obtain permission in advance from the Reserve Bank of India in order to use their International Cards to pay for their expenses.
To Read the full text of the Order CLICK HERE
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