Input Tax Credit – CA Inter Tax Study Material

Leave a Comment / CA Intermediate / By / March 4, 2023

Input Tax Credit – CA Inter Tax Study Material is designed strictly as per the latest syllabus and exam pattern.

Input Tax Credit – CA Inter Taxation Study Material

Question 1.
Bharat Associates Pvt. Ltd. purchased machinery worth ₹ 9,00,000 (excluding GST) on 20-07-2017 on which it paid GST @ 18%. It availed the ITC. On 05-03-2018 it sold the machinery for ₹ 7,00,000 (excluding GST) to Hindustan Associates Pvt. Ltd. The GST rate on sale is 18%. What will be the course of action for Bharat Associates Pvt. Ltd. to follow under CGST Act, 2017? [May 2018 Old Course, 4 Marks]
Answer:
If capital goods or plant and machinery on which input tax credit (ITC) has been taken are supplied outward by a registered person, he must pay an amount that is higher of the following:
(a) ITC taken on such goods reduced by 5% per quarter of a year or part thereof from the date of issue of invoice for such goods or
(b) tax on transaction value.
Accordingly, the amount payable on supply of machinery by Bharat Associates Pvt. Ltd. Shall be computed as follows:

ITC taken on the machinery (₹ 9,00,000 × 18%)1,62,000

Amount (₹)
Less: ITC pertaining to the period of usage of the capital goods 24,300
(₹ 1,62,000 × 5%) × 3 quarters
Amount of reduced ITC based on percentage points (A) 1,37,700
Duty leviable on transaction value (₹ 7,00,000 × 18%) (8) 1,26,000
Amount payable towards disposal of machinery is higher of (A) and (8) 1,37,700

Input Tax Credit – CA Inter Tax Study Material

Question 2.
Harshgeet Pvt. Ltd. a registered supplier is engaged in the manufacture of taxable goods. The company provides the following information pertaining to GST paid on the purchases made/input services availed by it during the month of July, 2018 :

Sr. No. Particulars GST Paid
(1) Raw Material (To be received in September, 2018) 2,50,000
(2) Membership of a club availed for employees working in the factory 1,45,000
(3) Inputs to be received in 5 lots, out of which 3rd lot was received during the month. 80,000
(4) Trucks used for transport of raw material 40,000
(5) Capital Goods (out of 3 items, invoice for 2 items is missing and GST paid on that item is ₹ 80,000.) 1,50,000

Determine the amount of Tax Credit available with Harshgeet Pvt. Ltd. for the month of July, 2018 by giving the necessary explanation for treatment of various items. All the conditions necessary for availing the ITC have been fulfilled. [Nov. 2018 Old Course, 5 Marks]
Answer:
Computation of ITC available with Harshgeet Pvt. Ltd. for the month of July, 2018

Particulars Note GST Paid
Raw Material (1) Nil
Membership of a club availed for employees working in the factory (2) Nil
Inputs to be received in 5 lots (3) Nil
Trucks used for transport of raw material (4) 40,000
Capital Goods (5) 1,50,000
Total ITC available 1,10,000

Notes:

  1. ITC not available as raw material is not received in July, 2018
  2. Blocked credit in terms of section 17(5) of the CGST Act, 2017
  3. In case of goods received in lots, ITC can be taken only upon receipt of the last lot
  4. ITC of GST paid on motor vehicles is allowed only when used, interalia, for transportation of goods in terms of section 17(5) of the CGST Act, 2017
  5. ITC of GST paid on items for which invoice is missing is not available. So, ITC of ₹ 80,000 is not available

Input Tax Credit – CA Inter Tax Study Material

Question 3.
Jamku Ltd. a registered person is engaged in the business of spices. It provides following details for GST paid during October, 2018:

SI. No. Particulars GST paid (₹)
1 Raw spices purchased:
♦ Raw spices used for furtherance of business 50,000
♦ Raw spices used for personal use of Directors 20,000
2 Electric machinery purchased to be used in the manufacturing process. 25 000
3 Motor vehicle used for transportation of the employee 55,000
4 Payment made for material and to contractor for construction of staff quarter 1,25,000

Determine the amount of ITC available to Jamku Ltd. for the month of October, 2018 with all related workings and explanations.
All the conditions necessary for availing the ITC have been fulfilled. [May 2019 Old Course, 4 Marks]
Answer:
Computation of ITC available with Jamku Ltd. for the month of October, 2018

Particulars Note ITC (₹)
Purchase of Raw spices for furtherance of business (1) 50,000
Purchase of Raw spices for personal use of Directors (2) Nil
Electric machinery purchased to be used in the manufacturing process. (1) 25,000
Motor vehicle used for transportation of the employee (3) Nil
Payment made for material and to contractor for construction of staff quarter (4) Nil
Total ITC available for the month October, 2018 75,000

Notes:
(1) Every registered person is entitled to take credit of input tax charged on any supply of goods to him which are used or intended to be used in the course or furtherance of his business.

(2) ITC is not available on goods used for personal consumption.

(3) ITC on motor vehicles can be availed, inter alia, when they are used for making the taxable supply of transportation of passengers. In the given case, since the supplier is in the business of spices, it cannot avail credit on motor vehicle used for transportation of the employee. Thus, ITC on motor vehicle used for transportation of the employee is blocked credit.

(4) ITC is not available on goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.

Input Tax Credit – CA Inter Tax Study Material

Question 4.
Dina Ltd., a registered supplier from Maharashtra, is in the manufacturing of Passenger auto. The company provides the following details of purchases made/services availed by it during the month of March 2019:

Sl. No. Particulars GST Paid (₹)
i Purchase of Iron which is as a raw material [Goods were received in two instalments, first one in March 2019 and the second instalment was received in April 2019] 2.50,000
ii Purchase of accessories which were delivered directly to the Dealers of the company. Only invoice was received by Dina Ltd. 90,000
iii Purchase of Bus (Seating capacity 15) for the transportation of employees from their residence to company and back 1,97,000
iv Input tax credit on general insurance taken on a car used by Executives of the company for official purposes 5,200
v Payment made to M/s Tasty Caterers for providing daily breakfast & lunch to the employees of the company, as a voluntary staff welfare measure 54,700

You are required to determine the eligible Input Tax Credit available to M/s. Dina Ltd. for the month of March 2019, by giving brief explanations for treatment of various items. Subject to the information given above. All the other conditions necessary for availing input tax credit have been fulfilled. [Nov. 2019 Old Course, 5 Marks]
Answer:
Computation of input tax credit (ITC) available with Dina Ltd. for the month of March 2019

Particulars Note ITC (₹)
Purchase of Iron which is as a raw material (1) ‘ Nil
Purchase of accessories which were delivered directly to the Dealers of the company (2) 90,000
Bus for the transportation of employees from their residence to company and back (3) 1,97,000
General insurance taken on a car used by Executives of the company for official purposes (4) Nil
Payment made to M/s Tasty Caterers for providing daily breakfast & lunch to the employees of the company (5) Nil
Total ITC available for the month October, 2018 2,87,000

Notes:
(1) When inputs are received in instalments, ITC can be availed only on j the receipt of last instalment. Hence, since last instalment is received j in April 2019, ITC cannot be availed in March 2019.

(2) Goods delivered to another person on the direction of the registered person by way of transfer of documents of title or otherwise, either ; before or during the movement, are deemed to have been received by such registered person. Thus, ITC is available to the registered person, on whose order/direction the goods are delivered to a third person.

(3) ITC on motor vehicles for transportation of persons with seating capacity more than 13 persons (including the driver) used for any purpose is allowed.

(4) ITC on motor vehicles for transportation of persons with seating capacity less than or equal to 13 persons (including the driver) is blocked except when the same are used for (i) making further taxable supply of such motor vehicles (ii) making taxable supply of transportation of passengers (iii) making taxable supply of imparting training on driving such motor vehicles. Further, ITC is not allowed on services of general insurance relating to such ineligible motor vehicles.

Since, the car is not used for any of the eligible purposes, ITC thereon is blocked and thus, ITC on general insurance taken on such car is also blocked.

(5) ITC on outdoor catering is blocked except (i) in the case of sub-contracting, ie. when such service is used by the taxpayer who is in the same line of business (ii) when such service is provided by the employer to its employees under a statutory obligation.

Since the company is not an outdoor caterer and it is providing such services to its employees as a voluntary staff welfare measure, ITC on such outdoor catering services is blocked.

Input Tax Credit – CA Inter Tax Study Material

Question 5.
Documents based on which ITC is taken should contain at least certain details. What are they? [Nov. 2019 Old Course, 4 Marks]
Answer:
The documents based on which ITC is taken should contain at least the following details:

  1. Amount of tax charged
  2. Description of goods or services
  3. Total value of supply of goods and/or services
  4. GSTIN of the supplier and recipient
  5. Place of supply in case of inter-State supply

Question 6.
Fun Pharma Private Limited, a registered supplier is engaged in the manufacture of taxable goods. The company provides the following information of GST paid on the purchases made/input services availed by it during the month of September 2017:

Particulars Amount (₹)
(i) Purchase of cabs used for the transportation of its employees Nil
(ii) Inputs consisting of three lots, out of which first lot was received during the month Nil
(iii) Capital Goods 2,50,000
(iv) Outdoor catering service availed on Women’s day Nil

Determine the amount of Input Tax Credit available with M/s Fun Pharma Private Limited for the month of September 2017 by giving necessary explanations of treatment of various items. All the conditions necessary for availing the input tax credit have been fulfilled. [May 2018, 4 Marks]
Answer:
Computation of input tax credit (ITC) available with Fun Pharma Private Limited
(for the month of September, 2017)

Particulars Note Amount (₹)
Purchase of cabs used for the transportation of its employees (1) Nil
Inputs consisting of three lots, out of which first lot was received during the month (2) Nil
Capital Goods (3) 2,50,000
Outdoor catering service availed on Women’s day (4) Nil
Total ITC 2,25,000

Notes:
(1) Section 17 of CGST Act, 2017 provides that ITC on motor vehicles can be availed, inter alia, when they are used for making the taxable supply of transportation of passengers ie., if the taxable person is in the business of transport of passengers. In the given case, since the supplier is a manufacturer, it cannot avail credit on cabs used for transportation of its employees.

(2) When inputs are received in instalments, ITC can be availed only on receipt of last instalment in terms of section 16 of CGST Act, 2017.

(3) ITC cannot be taken on missing invoice. The registered person should have the invoice in its possession to claim ITC vide section 16 of CGST Act, 2017.

(4) ITC on outdoor catering is specifically disallowed unless the same is used for making outward taxable supply of the same category or as an element of the taxable composite or mixed supply in terms of section 17 of CGST Act, 2017.

Input Tax Credit – CA Inter Tax Study Material

Question 7.
CANWIN Ltd., a registered supplier, is engaged in the manufacture of Tanks. The company provides the following information pertaining to GST paid on the purchases made/input services availed by it during the month of January 2018:

Particulars Amount in (₹?)
(i) Purchase of Machinery where debit note is issued 1,15,000
(ii) Input purchased was directly delivered to Mr. Joe, a job worker and a registered supplier 80,000
(iii) Computers purchased (Depreciation was claimed on the said GST portion under the Income-Tax Act, 1961) 50,000
(iv) Works Contract services availed for construction of Staff quarters within the company premises 4,25,000

Determine the amount of ITC available to M/s. CANWIN Ltd. for the month of January 2018 by giving brief explanations for treatment of various items. Subject to the information given above, all the conditions necessary of availing the ITC have been fulfilled. [Nov. 2018, 4 Marks]
Answer:
Computation of input tax credit (ITC) available with CANWIN Ltd. for the month of January 2018

Particulars Note Amount in (₹)
Purchase of Machinery w here debit note is issued (1) 1,15,000
Input purchased was directly delivered to Mr. Joe, a job worker and a registered supplier (2) 80,000
Computers purchased and depreciation was claimed on the GST portion (3) Nil
Works Contract services availed for construction of Staff quarters within the company premises Nil
Total ITC 1,95,000

Input Tax Credit – CA Inter Tax Study Material

Notes:

  1. Input tax credit on goods purchased on the basis of debit note which is a valid document is allowed.
  2. Where depreciation has been claimed on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component is not allowed.
  3. Input tax credit on works contract services supplied for construction of an immovable property is specifically disallowed except where it is an input service for further supply of works contract service.
FEMA -Direct investment Outside India – Economic, Business and Commercial Laws Important Questions

FEMA -Direct investment Outside India – Economic, Business and Commercial Laws Important Questions

Leave a Comment / CS Executive / By / March 4, 2023

FEMA -Direct investment Outside India – Economic, Business and Commercial Laws Important Questions

Question 1.
An Indian company engaged in the financial sector is interested in making an investment in the banking business abroad. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [June 2010 (l Mark)]
Answer:
As per Regulation 6(1) of the FEM (Transfer or Issue of Foreign Securities) Regulation, 2004, an Indian Party may make an investment in Joint Ventures (JV)/Wholly Owned Subsidiaries (WOS) subject to conditions specified in Regulation 6(2).

Thus, an Indian company can make direct investment in a joint venture outside India subject to compliance with the above-stated provisions.

Question 2.
An Indian resident wants to purchase foreign securities by making | remittances from his resident foreign currency (RFC) account. Advice with f reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [June 2010 (1 Mark)]
Answer:
As per Regulation 4 of FEM (Transfer or Issue of Foreign Securities) Regulations, 2004, a person resident in India may purchase foreign security out of funds held in RFC Account.

Thus, an Indian resident can purchase foreign securities by making remittances from his RFC Account.

Question 3.
Shyam, an Indian resident, wishes to acquire qualification shares for becoming a director of a company outside India and the consideration is the US $ 30,000. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [Dec 2011 (1 Mark)]
Answer:
As per Regulation 24 of the FEM (Transfer or Issue of Foreign Securities) Regulations, 2004, a person resident in India being individual may acquire foreign security as qualification shares issued by an entity incorporated outside India for holding the post of a director in the entity.

Conditions:

  1. The extent of acquiring the qualification shares is as per the law of the host country where the entity is located.
  2. The limit of remittance for acquiring such qualification shares shall be within the overall ceiling prescribed for the resident individuals under the Liberalized Remittance Scheme in force at the time of acquisition.

Thus, Shyam can acquire foreign securities as qualification shares issued by a company incorporated outside India for holding the position of a director subject to compliance with the above-stated provisions.

Question 4.
Aadarsh Education Society, engaged in the education sector, intends to make an investment in the education sector in a joint venture in the USA. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [June 2012 (1 Mark)]
Answer:
As per Regulation 9A of the FEM (Transfer or Issue of Foreign Security) Regulations, 2004, Registered Trusts and Societies engaged in the manufacturing/educational sector satisfying the criteria as per Schedule III may invest in the same sector in JV/WOS outside India with the prior approval of the RBI.

Thus, the Aadarsh Education Society, engaged in the education sector can make the investment in the education sector in a joint venture in the USA by taking prior approval of RBI.

Question 5.
Rajiv, a person resident in India, wishes to acquire foreign securities as qualification shares issued by a company incorporated outside India for holding the position of a director in the company. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [Dec 2012 (1 Mark)]
Answer:
As per Regulation 24 of the FEM (Transfer or Issue of Foreign Securities) Regulations, 2004, a person resident in India being individual may acquire foreign security as qualification shares issued by an entity incorporated outside India for holding the post of a director in the entity.

Conditions:

  1. The extent of acquiring the qualification shares is as per the law of the host country where the entity is located.
  2. The limit of remittance for acquiring such qualification shares shall be within the overall ceiling prescribed for the resident individuals under the Liberalized Remittance Scheme in force at the time of acquisition.

Thus, Shyam can acquire foreign securities as qualification shares issued by a company incorporated outside India for holding the position of a director subject to compliance with the above-stated provisions.

Question 6.
Ashok, a person resident in India, has been offered bonus shares of the value of US $ 20,000 by a company incorporated outside India. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [Dec. 2012 (1 Mark)}
Answer:
As per Regulation 4 of the FEM (Transfer or Issue of Foreign Security) Regulations, 2004, a person resident in India may acquire bonus shares on the foreign securities.

Thus, Ashok may acquire bonus shares of the value of US$ 20,000 of a company incorporated outside India.

Question 7.
An Indian company intends to make direct investment in a joint venture outside India. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [Dec. 2012 (1 Mark)]
Answer:
As per Regulation 6(1) of the FEM (Transfer or Issue of Foreign Security) Regulations, 2004, an Indian Party may make an investment in Joint j Ventures (JV)/Wholly Owned Subsidiaries (WOS) subject to conditions j specified in Regulation 6(2).

Thus, an Indian company can make direct investment in a joint venture j outside India subject to compliance with the above-stated provisions.

Question 8.
Zenith Ltd., a foreign company is interested in purchasing its shares issued to some of its employees, who are residents in India, under the ESOP scheme. Advice with reference to relevant provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder. [June 2013 (1 Mark)]
Answer:
As per the RBI circular, foreign companies are permitted to repurchase the shares issued to residents in India under any ESOP Scheme provided:

  1. The shares were issued in accordance with provisions of FEMA.
  2. The shares are being repurchased in terms of the initial offer document.
  3. An annual return is submitted through the Authorized Bank giving details of remittances/beneficiaries, etc.

Thus, Zenith Ltd., a foreign company can re-purchase the shares issued to its employees; who are residents in India, under the ESOP scheme.

Question 9.
What is direct investment outside India? Discuss the regulations in respect of acquisition and transfer of immovable property outside India. [Dec. 2016 (7 Marks)]
Answer:
Direct investment outside India means investments, either under the Automatic Route or the Approval Route, by way of contribution to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase or private placement or through the stock exchange, signifying a long-term interest in the foreign entity (JV or WOS).

As per Section 6(4) of the Foreign Exchange Management Act, 1999, a person resident in India may hold, own, transfer or invest in foreign currency, foreign security, or any immovable property situated outside India if such currency, security, or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.

Provisions relating to the transfer of immovable property outside India are contained in the FEM (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015.

Restriction on acquisition or transfer of immovable property outside India [Regulation 3]: No person resident in India shall acquire or transfer any immovable property situated outside India without general or special permission of the RBI.

Acquisition and transfer of immovable property outside India [Regulation 5]:
1. A person resident in India may acquire immovable property outside India
(a) By way of gift or inheritance from a person referred to in Section 6(4) of the Act, or referred to in Regulation 4(b);

(b) By way of purchase out of foreign exchange held in Resident Foreign Currency (RFC) account maintained in accordance with the FEM (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015;

(c) Jointly with a relative who is a person resident outside India, provided there is no outflow of funds from India.
1. A person resident in India may acquire immovable property outside India, by way of inheritance or gift from a person resident in India who has acquired such property in accordance with the foreign exchange provisions in force at the time of such acquisition.

2. A company incorporated in India having overseas offices may acquire immovable property outside India for its business and for residential purposes of its staff, in accordance with the direction issued by the Reserve Bank of India from time to time.

Explanation: ‘Relative’ in relation to an individual means husband, wife, brother or sister, or any lineal ascendant or descendant of that individual.

Question 10.
What are the obligations of the Indian Party which have made direct investment outside India? [Dec. 2018 (4 Marks)]
Answer:
An Indian Party which has made direct investment outside India is required to comply with the following:
1. Receive share certificates or any other documentary evidence of investment in the foreign JV/WOS as evidence of investment and submit the same to the designated AD within 6 months.

2. Repatriate to India, all dues receivable from the foreign JV/WOS, like dividend, royalty, technical fees, etc.

3. Submit to the RBI through the designated Authorized Dealer, every year, an Annual Performance Report in Part III of Form ODI in respect of each JV or WOS outside India set up or acquired by the Indian party.

4. Report the details of the decisions taken by a JV/WOS regarding diversification of its activities/setting up of step down subsidiaries/ alteration in its shareholding pattern within 30 days of the approval of those decisions by the competent authority concerned of such JV/ WOS in terms of the local laws of the host country. These are also to be included in the relevant Annual Performance Report.

5. In case of disinvestment, sale proceeds of shares/securities are to be repatriated to India immediately on receipt thereof and in any case not later than 90 days from the date of sale of the shares/securities, and documentary evidence to this effect is to be submitted to the RBI through the designated Authorized Dealer.

6. Submit an Annual Performance Report (APR) in Form ODI Part III to the RBI by 30th of June every year in respect of each Joint Venture (JV)/Wholly Owned Subsidiary (WOS) outside India set up or acquired by the Indian Party/Resident Individual.

Question 11.
State the sources within which the Indian mutual funds registered with SEBI are permitted to invest in overseas direct investment. [June 2019 (5 Marks)]
Answer:
As per Regulation 6C of the FEM (Transfer or Issue of Foreign j Security) Regulations, 2004, Mutual funds registered with the SEBI may 1 invest within specified limits, in the shares or rated bonds/fixed income securities of an overseas company listed on a recognized stock exchange or in exchange-traded funds or in other securities as may be stipulated by j the RBI from time to time.

Every transaction relating to the purchase and sale of foreign security by mutual funds shall be routed through the designated branch of an authorized dealer in India.

Indian Mutual Funds registered with SEBI are permitted to invest within the overall cap of US$ 7 billion in:

  • ADR/GDR of the Indian and foreign companies.
  • Equity of overseas companies listed on recognized overseas stock ex-changes; initial and follow on public offerings for listing at recognized overseas stock exchanges.
  • Foreign debt securities- short term as well as long term with rating not below investment grade – in the countries with fully convertible currencies.
  • Money market investments not below investment grade; repost where the counterparty is not below investment grade.
  • Government securities where countries are not rated below investment grade.
  • Derivatives traded on recognized stock exchanges overseas only for hedging and portfolio balancing with underlying as securities.
  • Short-term deposits with banks overseas where the issuer is rated not below investment grade.
  • Units/securities issued by overseas Mutual Funds/Unit Trusts registered with overseas regulators.

Question 12.
What is the eligibility criteria for overseas investment by proprietorship concerns and registered trust [Dec 2019 (4 marks)]
Answer:
Proprietorship Concerns: The proposal for overseas direct investment (or financial commitment), by a proprietorship concern/unregistered partnership firm in India, are to be considered by the Reserve Bank under the approval route are subject to the following terms and conditions:
(a) The proprietorship concern/unregistered partnership firm in India is classified as ‘Status Holder’ as per the Foreign Trade Policy issued by the Ministry of Commerce and Industry, Government of India from time to time.

(b) The proprietorship concern/unregistered partnership firm in India has a proven track record, ie., the export outstanding does not exceed 10% of the average export realization of the preceding 3 years and consistently high export performance.

(c) The Authorised Dealer bank is satisfied that the proprietorship concern/ unregistered partnership firm in India is KYC compliant, engaged in the proposed business, and has turnover as indicated.

(d) The proprietorship concern/unregistered partnership firm in India has not come under the adverse notice of any Government agency like the Directorate of Enforcement, Central Bureau of Investigation, Income-tax Department, etc., and does not appear in the exporters’ caution list of the Reserve Bank or in the list of defaulters to the banking system in India.

(e) The amount of proposed investment (or financial commitment) outside India does not exceed 10% of the average of last 3 years export realization or 200% of the net owned funds of the proprietorship concern/ unregistered partnership firm in India, whichever is lower. Registered Trusts: Registered Trusts engaged in the educational/hospital sector are allowed to make an investment (or financial commitment) in the same sector(s) in a JV/WOS outside India, with the prior approval of the Reserve Bank.

Eligibility Criteria for Trust:

  • The Trust should be registered under the Indian Trusts Act, 1882.
  • The Trust deed permits the proposed investment overseas.
  • The proposed investment should be approved by the trustee.
  • The AD Category -1 bank is satisfied that the Trust is KYC (Know Your Customer) compliant and is engaged in a bona fide activity.
  • The Trust has been in existence at least for a period of 3 years.
  • The Trust has not come under the adverse notice of any Regulatory/ Enforcement agency like the Directorate of Enforcement, Central Bureau of Investigation (CBI), etc.

Economic, Business and Commercial Laws Questions and Answers