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January 2012

A.P. (DIR Series) Circular No. 55, dated 9-12-2011 — Foreign Direct Investment (FDI) in India — Issue of equity shares under the FDI scheme allowed under the Government route.

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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Presently, companies are permitted to issue equity shares/preference shares under the Approval Route by conversion of import of capital goods/ machineries/ equipment (including second-hand machineries) and pre-operative/pre-incorporation expenses (including payments of rent, etc.), subject to terms and conditions.

This Circular has modified two of the conditions as follows:

 

 

 

A.P.
(DIR Series)

Earlier
condition

Revised
condition

Circular
No. 74,

 

 

 

 

 

dated
30-6-2011

 

 

 

 

 

 

 

 

Para 3(I)(d)

All
such conversions of import payables for

Applications
complete in all respects, for

 

capital
goods into FDI should be completed

conversion
of import payables for capital

 

within
180 days from the date of shipment of

goods
into FDI being made within 180 days

 

goods.

from
the date of shipment of goods.

 

 

 

Para 3(II)(d)

The
capitalisation should be completed within

The
applications complete in all respects,

 

the
stipulated period of 180 days permitted for

for
capitalisation being made within the

 

retention
of advance against equity under the

period
of 180 days from the date of in-

 

extant
FDI policy.

corporation
of the company.

 

 

 

 

 

 

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