Skip to content

CA Intermediate · Corporate and Other Laws · The Foreign Exchange Management Act, 1999

Kapoor Textiles Ltd, an exporter, ships goods worth USD 50,000 to a buyer in Germany. Under FEMA provisions on realisation of export proceeds, what is the legal position?

The exporter must take all reasonable steps to realise the full export value and bring it into India within the time prescribed by RBI regulations. The obligation covers the entire value of the goods and does not depend on the buyer being related or on any partial percentage.

  1. AThe exporter need not bring the proceeds into India
  2. BThe exporter must take all reasonable steps to realise and repatriate the full export value to India within the period prescribed by RBICorrect
  3. COnly 50% of the value must be repatriated
  4. DRepatriation is required only if the buyer is a related party

Explanation

FEMA requires an exporter to furnish declaration of export and to realise and repatriate the full value of goods to India within the period prescribed by RBI. Partial repatriation or exemptions by relationship have no basis in the Act.

Did you get it right without looking?

One question tells you little. A timed set on The Foreign Exchange Management Act, 1999 shows your real accuracy, how long you take and where you lose marks.

Practise The Foreign Exchange Management Act, 1999Free diagnostic mock

More The Foreign Exchange Management Act, 1999 questions