Advance Remittance Form
Advance Remittance Form
What is Remittance? In simple terms, remittance can be explained as a letter sent by a customer to a supplier to inform the supplier that their invoice has been paid for. If the customer is paying by cheque, the remittance advice often accompanies the cheque.
Advance Remittance Form for Investment in Company
Advance remittance form is used in transactions for foreign investment that comes into India in various forms. Any foreign investment into India in a company must be reported to the RBI under FEMA guidelines. For example, an Indian company which has received amount of consideration for issue of shares and where such issue is reckoned as Foreign Direct Investment for the purpose of these regulations, should report such receipt (including each upfront/ call payment) in the Advance Remittance Form to the Regional Office concerned of the Reserve Bank, not later than 30 days from the date of receipt.
Advance Foreign Inward Remittance Reporting should be done within 30 days of receipt of funds from the foreign entity. In case there is a scenario where the remittance received by Indian company has to be refunded to the foreign investor, the Indian Company can also request for this refund approval through this service.
After an applicant receives the UIN and acknowledgement letter, the applicant can choose to close the workflow (if there is no refund approval required) or initiate a refund approval request by submitting request letter.
If the shares are not issued within sixty days from the date of receipt of the consideration the money received should be refunded to the person concerned by outward remittance through banking channels or by credit to his NRE/ FCNR(B) accounts, as the case may be within fifteen days from the date of completion of sixty days. Prior approval of the Reserve Bank would be required for payment of interest, if any, as laid down in the Companies Act, 2013, for delay in refund of the amount so received.
In effect, the remittance can be refunded within 75 days from the date of remittance without any approval from RBI. Any refund, post 75 days would invite payment of interest, as per the Companies Act, and would require prior approval of RBI.
Advance Remittance Form Sample
A sample Advance Remittance Form is reproduced below for reference. Click here to download Advance Remittance Form.Advance Remittance Form