Aditya Shah

DIPP has vide their Press Release Note 4 Of 2014 Series[1] has switched from the old NIC 1987 version to new NIC 2008 for the purpose of classification for Industrial Licenses and Industrial Entrepreneur’s Memorandum (IEM) proposal that have been submitted to DIPP. In light of those changes and to ensure that the reporting to RBI remains fine tuned with that of DIPP, RBI has vide RBI/2014-15/133 A.P. (DIR Series) Circular No. 6 dated 18th July 2013[2] (Present Circular) has changed the classification code that is used for reporting requirement.

 The National Industrial Classification standard is an important business and industrial standard for industrial classification system. In India, NIC 1987 version for industrial classification system was prevalent. However, for the purpose of Companies Registration with Registrar of Companies the NIC Code which will be required for the classification will be NIC 2004 version. The switch from NIC 1987 version to the new classification under NIC 2008 version[3] is to ensure a contemporary classification system, in light of various structural and economic changes over the period of time. This is considered to be more internationally- attuned.

Changes made by Present Circular

Indian companies currently are required to report the details of issue of shares, convertible debentures, partly paid shares and warrants to non-resident in form FC-GPR to the Regional Office of RBI within 30 days of issue of relevant securities. Further transfer of shares, convertible debentures, partly paid shares and warrants by way of sale from a person resident in India to a person resident outside India or vice versa, are required to be reported by the transferor/transferee resident in India to the AD Bank in form FC-TRS, within 60 days from the date of receipt or payment of the amount of consideration.

Indian companies are required to report the NIC Codes in the form FC-GPR and form FC-TRS. Formerly the NIC code classification was based on NIC 1987 version, however pursuant to Present Circular NIC Codes shall be based on the NIC 2008 version. Companies will have to also ensure reporting the same in Annual Return on Foreign Liabilities and Assets Reporting. The revised format specified by RBI vide RBI/2013-14/646 A .P.(DIR Series) Circular No. 145 dated June 18, 2014[4] requires companies to give details of NIC as per NIC 2008.

Further, uniform state and district code list for reporting of details of FDI by Indian Companies has also been introduced.[5]

[1] http://dipp.nic.in/English/acts_rules/Press_Notes/pn4_2014.pdf

[2] http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=9111&Mode=0

[3] http://pib.nic.in/newsite/PrintRelease.aspx?relid=105918

[4] http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8945&Mode=0

[5] (www.rbi.org.in → FEMA – State and District Code List).

(Author is working with Vinod Kothari & Company and can be contacted at trainee@vinodkothari.com)

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