Saturday, February 24, 2024

Supreme Court asks Central government, RBI for response on plea seeking FEMA exemption for resident OCIs

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The Supreme Court has asked the Central Government and the Reserve Bank of India for responding to to a plea which seeks to exempt resident Overseas Citizens of India (OCIs) from the purview of the Foreign Exchange Management Act (FEMA).

A bench consisting  Justice KM Joseph and Justice BV Nagarathna  has issued notice to the Centre and the RBI after finding and noting that prayers pertaining to the parity of OCIs with Indian citizens and Non-Resident Indians (NRIs) was already decided by Justice AS Bopanna recently.

The petition was filed by the Association of Resident Overseas Citizens of India and Families along with one Dr Narayan Hulse, who stated that subjecting OCIs to FEMA norms when they have resided in the country for long and pay tax on their global income in India, is arbitrary and violative of the right to equality. 

As per the plea,exemption was sought under Regulation 2(d) of the 2018 Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, for resident OCIs who are permanently domiciled in the country. 

The above mentioned provision mandates that Regulations would be applicable to OCIs.

Under section 7(A) of 1955 citizenship act,the OCIs have been defined as a person residing outside India, but is registered as citizen in India and has not given the citizenship.

As per the petitioners, the provision by making FEMA applicable to resident OCIs, keeps them away from enjoying the guarantees on the basis of which they took up domicile in India. 

The petition stated that the impugned notification deprives Resident OCIs from enjoying those guarantees on the basis of which such Resident OCIs had adopted permanent domicile of India, thereby directly and substantially affecting the Resident OCIs’ financial and educational opportunities in this country.

It also mentions that the notification has the inevitable effect of depriving the Resident OCIs of their livelihood, their legitimate business and occupation.

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