Form FC-GPR Filing in case of Bonus Issue

Many professionals and Companies are of the view that that Form FCGPR is not required to be filed when bonus issue is being done to foreign individuals/entities since actual remittance of money from foreign land is not involved. However, this is not the case and hence, the Form FCGPR is mandatorily required to be filed within 30 days of bonus issue allotment as well.

In this article, we shall study about the basics of filing form FCGPR in case of allotment of equity shares via bonus issue:

DOCUMENTS/INFORMATION REQUIRED TO BE UPLOADED:

1. Letter to bank confirming compliance to Press Note No. 3(2020 Series) dated 17/04/2020 i.e. the investment is not received from anyone who is situated in or is a citizen of any such country (Pakistan, Bangladesh, Afghanistan, Nepal, Bhutan, Myanmar, and China wherein China includes Hong Kong and Macau).

2. Letter to bank for giving authority for deduction of debit charges towards FC-GPR Reporting.

3. Declaration by the authorized representative of the Indian Company.

4. Undertaking from the Indian Company that only FDI allowed activities will be carried on.

5. Validation note/ Cover Letter/ Clarification Letter from the Company giving details of the bonus issue allotment and the series of allotments made till date by the Company along with the proof of approvals and LSF paid, if any.

6. eForm PAS-3 and receipt filed along with the copy of attachments upload like list of allottees and certified copy of board resolution for allotment.

7. Certificate from Company Secretary detailing the facts of issue.

PROCESS OF FILING

1. Login into the SMF portal (https://firms.rbi.org.in/firms/faces/pages/login.xhtml)

2. Go to fresh filing of FCGPR tab and enter in all the details in different following tabs:

• Details of received FDI-Entry Route and Applicable Sectoral Cap
• Issue Details
• Foreign Investor Details
• Amount of Issue
• Particulars of Issue

3. Once you have entered all the details, attach the aforementioned documents and click on “Save and Submit” tab on top left.

4. On the submission, an acknowledgement mail shall be received on the registered email ID.

IMPORTANT POINTS TO NOTE:

1. Under Foreign Investor Details tab, in particulars of issue, “Issue Price per instrument” should be filed in zero (O).

2. Under Foreign Investor Details tab, in remittance details, nothing is to be filed except in mode of payment, you can select “Others” and write “Since bonus shares have been issued no consideration has been actually received”.

3. Since practically, FIRC and KYC is not actually received by the client, you can attach a declaration/covering letter that the FIRC and KYC is not required in case of bonus issue of shares since no remittance of funds is involved.

4. In case the client has not taken valuation report in case of bonus issue since as per Companies Act, 2013 valuation report is not necessary then, they can obtain valuation report of not more than 30 days before from the date of issue dated current but attaching valuation report is a must

5. Under particulars of issue tab, write fair value of the shares as Rs. 10/-.

6. In case of late filing of FC-GPR, the Reserve Bank of India even levies penalty in the form of Late Submission Fee (LSF).

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{The author i.e., Mrs. Kajal Goyal is a Company Secretary in Practice and can be reached at (M) +91-9999952595 and (E) cskajalgoyal@gmail.com}