FDI reporting compliances involve coordination with the authorised dealer bank and the remitter bank; and it also involves compliances under other Regulations, like Companies Act. Many Companies could not, therefore, make timely reporting under FEMA. These are only procedural lapses and the law only provided for adjudication process, or the company could have gone for compounding.
Now, the RBI vide notification dated 7th November 2017, has laid down a simple procedure for payment of late fees to regularise the instances of delay in reporting. These sanctions such as late submission fees (LSF) will provide an incentive for the prompt filing of returns and is in the interests of good and efficient administration.
Master Direction on Reporting under Foreign Exchange Management Act, 1999 has laid down the amount of Late Submission Fees (LSF) that shall be laid down on the reporting delays that have taken place post 7th November 2017. The important points with respect to delayed submission and levy of late fees are as follows:
|Amount involved in reporting (in INR)
|Late Submission Fees (LSF) as % of the amount involved*
|Maximum amount of LSF applicable
|Up to INR 1,00,00,000
|More than INR 1,00,00,000
Amount involved X time rounded off to the next higher month ÷ 12X 0.05 % or 0.15 % as the case may be
In the case of ARF, the amount involved shall be the amount of inward remittance. And in the case of FC-GPR, the amount involved shall be the amount allotted to the non-resident person.
It is to be noted that the Regional office of RBI has the discretion to levy LSF ranging from Minimum LSF as calculated by the aid of formula to the criteria mentioned for Maximum LSF (as detailed in the table above).
The reader can also look through other blogs based on New FEMA Regulations as notified on 7th November 2017, by clicking the following links: