CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Business outside India and Issues Relating thereto
Arjun Traders Pvt Ltd contravenes a FEMA direction on an overseas transaction. The sum involved is quantifiable at Rs 10 lakh. On adjudication under section 13(1), what is the maximum penalty, ignoring any continuing contravention?
The maximum penalty is Rs 30 lakh, because for a quantifiable contravention section 13(1) allows a penalty up to thrice the sum involved. Three times Rs 10 lakh is Rs 30 lakh. The Rs 2 lakh limit applies only where the amount is not quantifiable.
- ARs 2 lakh
- BRs 10 lakh
- CRs 20 lakh
- DRs 30 lakhCorrect
Explanation
Where the amount is quantifiable, the penalty can be up to thrice the sum involved: 3 x Rs 10 lakh = Rs 30 lakh. Rs 2 lakh applies only when the amount is not quantifiable.
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