With the increasing pace of paperless governance, Reserve Bank of India (RBI) allowed the facility to file form FC-TRS electronically on e-Biz platform vide A.P. (DIR Series) Circular No. 9 dated August 21, 2015. Filing of form FC-TRS electronically through e-biz portal is mandated discontinuing the physical filing w.e.f. February 8, 2016 vide A.P. (DIR Series) Circular No. 40 dated February 1, 2016.
SIX IMPORTANT POINTS TO REMEMBER
REGISTRATION ON E-BIZ PORTAL
Following 2 registrations are required on e-biz portal before you can file form:
Only after the above two registrations are done, the transferor/transferee/consultant can file FC-TRS.
REPORTING REQUIREMENT IN FORM FC-TRS: LEGAL PROVISION
As per the Consolidated FDI Policy 2016, reporting of transfer of shares between Residents and Non-residents and vice- versa is to be made in Form FC-TRS. The Form FC-TRS should be submitted to the AD Category – I bank, within 60 days from the date of receipt/date of payment of the amount of consideration. The onus of submission of the Form FC-TRS within the given time frame would be on the transferor / transferee, resident in India.
ACTUAL STAGE OF FILING FC-TRS WITH E-BIZ PORTAL
Case I: Sale from Non-resident to Resident
At present, since filing of FC-TRS electronically is mandated, it is practically not possible to file FC-TRS within 60 days from the date of receipt of the amount of consideration in case the sale is made from Non-resident to Resident. This is because now AD Category-I bank requires proof of submitting FC-TRS on e-biz portal before releasing the payment to the Non-resident.
Thus, practically, following steps are followed:
Six Simple Steps for Transfer from Non-resident to Resident Under e-Biz
Case II: Transfer from Resident to Non-resident
If the transfer by way of sale is made from resident to non-resident, it becomes necessary to attach FIRC for receipt of consideration from non-resident with form FC-TRS. Thus, following steps are followed for successful registration of transfer from resident to non-resident:
Six Simple Steps for Transfer from Resident to Non-resident Under e-Biz
SIX DOCUMENTS REQUIRED TO BE ATTACHED ALONG WITH THE FORM
Following documents shall be attached to the e-form FC-TRS:
Case I: Listed Companies
In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as may be amended from time to time.
It is important to note that it holds good only for off market trades of listed securities. For trading on stock exchanges by Non-residents, refer to the SEBI (Foreign Portfolio Investors) Regulations.
Case II: Unlisted Companies
As per any internationally accepted pricing methodology on arm’s length basis.
PRICING OF THE SECURITIES TRANSFERRED BY WAY OF SALE
Case I: Sale from Resident to Non-resident
The transfer shall be made at or above fair value determined as above. The minimum price shall be the fair value.
Case II: Sale from Non-resident to Resident
The transfer shall be made at or below the fair value determined as above. The maximum price shall be the fair value.