(i) Foreign airline companies operating in or through India are required to submit to Reserve Bank through their bankers monthly statement (in duplicate) of their passage and freight collections and disbursements made therefrom in form SPM 1 duly signed by the Chief Executive in India of the airline in terms of paragraph 22 of the Guidelines (Annexure III). Applications for remittance of surplus passage fare and freight collections to the non-resident owners and operators of the foreign airline companies, as and when desired, should be made by their offices or agents in India to their bankers on form A2 along with the statement in form SPM 1 indicating, inter alia, the amount to be remitted. The concerned authorised dealer may allow the remittance of surplus funds provided the company has produced the necessary undertaking/certificate regarding payment of income-tax (cf. paragraph 3B.10). Before allowing the remittance, the bank should verify that the concerned airline has obtained the necessary permission from Reserve Bank under Section 29 of FERA 1973 for carrying on their commercial activity in India and also advise the concerned airline company that discrepant amounts noticed during the scrutiny of the statements by Reserve Bank or the amount remitted in excess of its entitlement should be brought to India immediately by the airline company concerned by inward remittance and no adjustment from other surplus funds held/future accretions, etc. would be permitted. Reserve Bank has, however, granted general permission vide its Notification No.F.E.R.A.202/99-RB dated 15th April 1999 to airline companies which are not incorporated in India and which do not have a branch, office or other place of business in India to carry on normal commercial activities in India through their local agents. Authorised dealers should, therefore, not insist on permission under Section 29 of FERA in such cases, but should obtain a certificate from the airline company or their agent in India concerned that DGCAs approval for on-line operations has been obtained.
(ii) Likewise, foreign off-line carriers i.e. those airline companies which are not operating their services in or through India but are issuing their tickets and/or airway bills in India are required to submit to Reserve Bank through their bankers monthly statements (in duplicate) of their passage fare and freight collections and disbursements made therefrom in form SPM 1 duly signed by the Chief Executive in India of the airline or their General Sale Agents in India in terms of paragraph 22 of the Guidelines (Annexure III). Applications for remittance of surplus passage fare and freight collections should be made by their Offices or their Agents in India to their bankers on form A 2 alongwith the statement in form SPM 1, indicating, inter alia, the amount to be remitted. The authorised dealer may allow the remittance of passage fare/freight collections subject to the terms and conditions/documents prescribed in sub-paragraph (i) and after obtaining the following additional documents:
(a) A certificate from the airline company or their agent in India that there exists a bilateral service agreement between the Government of India and Government of the country of incorporation of the foreign airline company concerned.
(b) Undertaking/certificate regarding payment of income-tax (cf. paragraph 3B.10).
(iii) Authorised dealers may, on request, allow remittance upto 75% of remittable surplus (subject to availability of balance in the account) on ad-hoc basis as per quick estimates made by the foreign airline company/its agent, pending submission of statement SPM1 any time after the 20th of the month to which it relates. The balance amount of net remittable surplus may be allowed after scrutiny of the SPM1 statement. No further remittance should be allowed on ad-hoc basis till the relative SPM1 statement is submitted
(iv) One copy of the statement in form SPM 1 should be forwarded by the authorised dealer to Reserve Bank after completing the certificate mentioned therein immediately after making the remittance alongwith the undertaking/certificate regarding payment of income-tax (cf.paragraph 3B.10). The statement should be submitted irrespective of whether remittance of surplus funds out of India is intended to be applied for or not. Authorised dealer should also specifically confirm on form A2 that the remittance has been made on the basis of airlines statement in form SPM1 for the relevant month.
(v) Authorised dealers should watch the regular receipt of the monthly statements from the airlines concerned who are maintaining rupee accounts with them and bring to the notice of Reserve Bank cases where the statements are not received by them for any particular month.
(vi) Authorised dealers may ensure that foreign airline companies or their agents do not keep the surplus collections of passage fare and freight in term deposits.