Difference Between Fera And Fema Pdf
FEMA became an act on the 1st day of June, 2000. FEMA was introduced because the FERA didn’t fit in with post-liberalisation policies. A significant change that the FEMA brought with it, was that it made all offenses regarding foreign exchange civil offenses, as opposed to criminal offenses as dictated by FERA. Fera & fema[1] 1. What is FERA?The Foreign Exchange Management Act, 1999, (FEMA) is an Act to consolidate and amend the law relatingto Foreign Exchange, with the objective of facilitating external trade and, payments and for promoting theorderly development and maintenance of the foreign exchange market in India.(1) This Act may be called the Foreign Exchange Regulation Act, 1973.(2) It. Difference Between FERA and FEMA (with Comparison Chart) - Key. Foreign Exchange Management Act, 1999 (FEMA) emerged as a. Over the old Foreign Exchange Regulation Act, 1973 (FERA). Foreign Exchange Regulation Act, shortly known as FERA, was introduced in the year 1973. Read more:FERA & FEMA in India, FERA, FEMA, Information about FERA, Information about FEMA, Importance of FEMA in India, Importance of FERA in India, why FEMA adopted in India Previous Story. Difference between FERA and FEMA (Foreign Exchange Regulation Act and Foreign Exchange Management Act) RBI will also regulate offer of a guarantee or surety in the matter of debt, obligation or other liability incurred by an Indian and owed to a person resident living outside India. Foreign Exchange Management Act (FEMA) FERA and FEMA - Comparison. SIMILARITIES; DIFFERENCES; CHANGES / PROGRESSION FROM FERA TO FEMA - A STEP AHEAD; Similarities. The similarities between FERA and FEMA are as follows: The Reserve Bank of India and central government would continue to be the regulatory bodies.
- Difference Between Fera And Fema Pdf
- Difference Between Fera And Fema Pdf Online
- Difference Between Fera And Fema Pdf Pdf
Table of Contents
Main Difference
DDP and DDU both are the internationally known terms. These are among the many international commercial terms which are approved by the ICC. DDP and DDU are the terms used in international trade and transactions. Both of these terms are incoterms but there are many differences between the two. DDP stands for “Delivery Duty Paid” while DDP stands for “Delivery Duty Unpaid”. You have to face these terms when you have to do shopping on the internet. If DDU is mentioned against the item you want to purchase, it means that delivery duty is unpaid so you have to pay all the importing charges and taxes from your pocket in addition to the actual price of the item. If DDP is mentioned against the item you want to purchase, it means that delivery duty is paid, thus all type of importing burden, delivery charges, duties and taxes have been paid.
Difference Between Fera And Fema Pdf
What is DDP?
FEMA provide the basic legal framework. Under section 46, it empowers the Central Government to make the rules. Under section 47, it empowers RBI to make the regulations. Its main powers are with the Central Government and the RBI. State the difference between FERA and FEMA. Answer:- The difference between FEMA and FERA are as follows.
DDP is internationally known term approved and recognized by the ICC. It relates to the international trade and transactions. DDP stands for “Delivery Duty Paid”. When you have to do online shopping, you may find the term DDP against your desired item. It means that delivery duty for your country have been paid already including all duties, taxes and delivery charges, thus you only have to pay for the actual price of the item.
What is DDU?
DDU is internationally known term approved and recognized by the ICC. It relates to the international trade and transactions. DDU stands for “Delivery Duty Unpaid”. When someone is going to purchase something online, he may get to face the acronym of DDU against the item to be being purchased. It is showing that delivery duty is unpaid and you need to pay for it including delivery charges, all duties, taxes and importing burden.
Key Differences
- DDP stands for “Delivery Duty Paid” while DDU stands for “Delivery Duty Unpaid”.
- In DDU transaction, all the duties and taxes are paid by the seller unless the product is reached in the buyer’s country. In DDP transaction, all the duties and taxes are to be paid by the buyer until it get reach to the buyer.
- Items against DDP are preferable for buyer as compare to DDU.
- Items against DDU are not preferable.
- Both DDP and DDU are the acronym in three words with only difference in there is of “Paid” and “Unpaid”.
In the budget of 1997-98, the government had proposed to replace FERA-1973, by FEMA (Foreign Exchange management act). FEMA was proposed by the both house of the parliament in Dec. 1999. After the approval of president, FEMA 1999 has come into force w.e.f. June, 2000. Under the FEMA, provisions related to foreign exchange have been modified and liberalized so as to simplify foreign trade. Government hopes that the FEMA will make favourable development in the foreign money market.
Foreign Exchange Regulation Act (FERA), 1973
Foreign Exchange Regulation Act (FERA) was promulgated in 1973 and it came into force on January 1, 1974. Section 29 of this Act referred directly to the operations of MNCs in India. According to the Section, all non-banking foreign branches and subsidiaries with foreign equity exceeding 40 per cent had to obtain permission to establish new undertakings, to purchase shares in existing companies, or to acquire wholly or partly any other company.
An Act to consolidate and amend the law regulating certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency, for the conservation of the foreign exchange resources of the country and the proper utilisation thereof in the interests of the economic development of the country.
Features of FERA:
(1) This Act may be called the Foreign Exchange Regulation Act, 1973.
(2) It extends to the whole of India.
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(3) It applies also to all citizens of India outside India and to branches and agencies outside India of companies or bodies corporate, registered or incorporated in India.
Difference Between Fera And Fema Pdf Online
(4) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
According to these guidelines, the principal rule was that all branches of foreign companies operating in India should convert themselves into Indian companies with at least 60 per cent local equity participation. Furthermore all subsidiaries of foreign should bring down the foreign equity share to 40% or less. The actual impact of this act was completely negative on the economic development of the country, because it tied the hands of big corporate houses to expand their business, so it was felt by the policy makers that there should be some relaxation in the act so that the economic development through industrialization can be speed up in the country.
Foreign Exchange Management Act (Fema), 1999
The Foreign Exchange Management Bill (FEMA) was introduced by the Government of India in Parliament on August 4, 1998. The Bill aims 'to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Among the various objectives of the Foreign Exchange Management Act (FEMA), an important one is to revise and unite all the laws that relate to foreign exchange. Further FEMA targets to promote foreign payments and trade in the country. Another important motive of the Foreign Exchange Management Act (FEMA) is to encourage the maintenance and improvement of the foreign exchange market in India.
Features of the FEMA
The following are some of the important features of Foreign Exchange Management Act:
a. It is consistent with full current account convertibility and contains provisions for progressive liberalisation of capital account transactions.
b. It is more transparent in its application as it lays down the areas requiring specific permissions of the Reserve Bank/Government of India on acquisition/holding of foreign exchange.
c. It classified the foreign exchange transactions in two categories, viz. capital account and current account transactions.
d. It provides power to the Reserve Bank for specifying, in , consultation with the central government, the classes of capital account transactions and limits to which exchange is admissible for such transactions.
e. It gives full freedom to a person resident in India, who was earlier resident outside India, to hold/own/transfer any foreign security/immovable property situated outside India and acquired when s/he was resident.
f. This act is a civil law and the contraventions of the Act provide for arrest only in exceptional cases.
g. FEMA does not apply to Indian citizen’s resident outside India.
Difference Between Fera And Fema Pdf Pdf
Difference between FERA and FEMA
FEMA: A Major Departure from FERA
As is clear from the name of the Act itself, the emphasis under FEMA is on 'exchange management' whereas under FERA the emphasis was on 'exchange regulation' or exchange control. Under FERA it was necessary to obtain Reserve Bank's permission, either special or general, in respect of most of the regulations there under. FEMA has brought about a sea change in this regard and except for Section 3 which relates to dealing in foreign exchange, etc., no other provisions of FEMA stipulate obtaining Reserve Bank's permission.
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