Forex Remittance Of Lottery Earnings Banned

The finance ministry has banned foreign exchange remittances of lottery earnings, income from racing and other sweepstakes.

This also includes payment of commission on exports made towards equity investment in joint ventures and wholly-owned subsidiaries of Indian companies.

Other remittances that have been prohibited include dividend by any company to which the requirement of dividend balancing is applicable, payment of commission on exports under the rupee state credit route, payments related to "call back services" of telephones and remittances of interest income on funds held in non-resident special rupee scheme accounts.

The ministry said forex remittances in these areas have been prohibited under Section 46 of the Foreign Exchange Management Act, 1999, and in consultation with the Reserve Bank.

 

However, a transaction with a person resident in Nepal or Bhutan may be exempted by the RBI subject to conditions it may stipulate by a special or general order.

The ministry has also stipulated that prior approval of the government would be required for remittances for cultural tours, advertisements abroad by any public sector undertakings (PSU) or state and Central government department, remittances of freight of vessel charted by a PSU, payment of import by a government department or a PSU on cost, insurance freight basis and multi-modal transport operators making remittances to their agents abroad.

Prior approval would also be required for remittances for the following_-hiring charges of transponders, container detention charges exceeding the rate prescribed by the Director General of Shipping, technical collaboration agreements where payment of royalty exceeds 5 per cent on local sales and 8 per cent on exports and lump-sum payment exceeds $2 million.

Government approval

would be required for remittance of prize money, sponsorship of sports activity abroad by a person other than international, national and state level sports bodies, if the amount involved exceeds $ 100,000 and payment for securing

insurance for health from a company abroad.

However, prior approval would not be required if the payment is made out of funds held in the resident foreign currency account or exchange earners foreign currency account of the remitter.

The ministry has also stipulated a separate set of items that

would require prior approval of the RBI, unless the payment is made out of resident foreign currency account or exchange earner's foreign currency account of the remitter.