Executive Summary:
This circular from the Reserve Bank of India (RBI) introduces a uniform matrix for Late Submission Fees (LSF) for reporting delays under the Foreign Exchange Management Act (FEMA), 1999. It standardizes LSF calculations for Foreign Investment (FI), External Commercial Borrowings (ECBs), and Overseas Investment-related transactions. These provisions are effective immediately for delayed filings made on or after September 30, 2022.
Key Points / Main Content:
* **LSF Structure:**
* A uniform matrix is implemented for calculating LSF for reporting delays.
* The LSF amount depends on the type of reporting delay and the amount involved.
* **LSF Calculation:**
* **Fixed Fee:** INR 7500 for delays in Form ODI Part-II APR, FCGPR B, FLA Returns, Form OPI, evidence of investment or any other return which does not capture flows or any other periodical reporting.
* **Variable Fee:** Calculated as (0.025% \* A \* n) for returns capturing flows or non-fund transactions, including FCGPR, FCTRS, Form ESOP, Form LLPI, Form LLPII, Form CN, Form DI, Form InVi, Form ODI Part I, Form ODI Part III, Form FC, Form ECB, Form ECB2, Revised Form ECB.
* `n` = Number of years of delay, rounded upwards to the nearest month (up to 2 decimal places).
* `A` = Amount involved in the delayed reporting.
* **LSF Conditions:**
* LSF is per return.
* For ECB2 returns, delayed submission for each Loan Registration Number (LRN) is treated as one instance. A is the gross inflow or outflow (including interest and charges), whichever is more.
* Maximum LSF is capped at 100% of amount A, rounded upwards to the nearest hundred.
* LSF advice is void if not paid within 30 days; late payments are not accepted. The date of the subsequent application is the reference for calculating ‘n’.
* LSF option available up to three years from the reporting due date, including for delayed submissions under FEMA 120/2004-RB and earlier regulations, up to three years from the date of notification of Foreign Exchange Management Overseas Investment Regulations, 2022.
* **Penal Action:**
* Failure to submit/file within the specified time or with LSF may result in penal action under FEMA, 1999.
* **Other Provisions:**
* Existing FEMA reporting provisions remain unchanged.
* Master Directions for reporting under FEMA and ECBs are being updated.
Impact Analysis:
* **Category-I Authorised Dealer (AD) Banks:**
* Impact: Responsible for implementing the revised LSF framework and informing their constituents and customers about the changes.
* Action Required: Update internal processes to reflect the new LSF calculation and ensure compliance. Inform customers about the revised fee structure for delayed reporting.
* **Entities Reporting under FEMA (e.g., Companies, Individuals):**
* Impact: Subject to the revised LSF framework for delayed reporting of foreign exchange transactions.
* Action Required: Familiarize themselves with the new LSF structure and ensure timely reporting to avoid penalties. Pay applicable LSF for past delays within the stipulated timeframe.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the Indian financial system.
Foreign Exchange Management Act, 1999: An act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Late Submission Fee (LSF): A fee introduced for reporting delays in Foreign Investment (FI), External Commercial Borrowings (ECBs) and Overseas Investment related transactions.
Foreign Investment (FI): Investment made by non-residents in India.
External Commercial Borrowings (ECBs): Commercial loans raised by eligible resident entities from recognized non-resident entities.
Form ODI PartII APR: Form related to Overseas Direct Investment reporting.
Form ECB2: Form for reporting details of External Commercial Borrowings.
Foreign Exchange Management Overseas Investment Regulations, 2022: Regulations pertaining to overseas investments under FEMA.
भारतीय �रज़व� ब�क
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2022-23/122 September 30, 2022
A.P. (DIR Series) Circular No.16
To
All Category-I Authorised Dealer Banks
Madam / Sir
Late Submission Fee for reporting delays under Foreign Exchange Management Act,
1999 (FEMA)
The Late Submission Fee (LSF) was introduced for reporting delays in Foreign Investment (FI),
External Commercial Borrowings (ECBs) and Overseas Investment related transactions with
effect from November 07, 2017, January 16, 2019 and August 22, 2022 respectively. It has now
been decided to bring uniformity in imposition of LSF across functions. The following matrix shall
be used henceforth for calculation of LSF, wherever applicable:
Sr. LSF Amount
Type of Reporting delays
No. (INR)
1 Form ODI Part-II/ APR, FCGPR (B), FLA Returns, Form OPI,
evidence of investment or any other return which does not capture 7500
flows or any other periodical reporting
2 FC-GPR, FCTRS, Form ESOP, Form LLP(I), Form LLP(II), Form
CN, Form DI, Form InVi, Form ODI-Part I, Form ODI-Part III, Form [7500 +
FC, Form ECB, Form ECB-2, Revised Form ECB or any other (0.025% × A ×
return which captures flows or returns which capture reporting of n)]
non-fund transactions or any other transactional reporting
Notes:
a) “n” is the number of years of delay in submission rounded-upwards to the nearest month and expressed up to
2 decimal points.
b) “A” is the amount involved in the delayed reporting.
c) LSF amount is per return. However, for any number of Form ECB-2 returns, delayed submission for each LRN
will be treated as one instance for the fixed component. Further, ‘A’ for any ECB-2 return will be the gross
inflow or outflow (including interest and other charges), whichever is more.
d) Maximum LSF amount will be limited to 100 per cent of ‘A’ and will be rounded upwards to the nearest hundred.
e) Where an advice has been issued for payment of LSF and such LSF is not paid within 30 days, such advice
shall be considered as null and void and any LSF received beyond this period shall not be accepted. If theapplicant subsequently approaches for payment of LSF for the same delayed reporting, the date of receipt of
such application shall be treated as the reference date for the purpose of calculation of “n”.
f) The facility for opting for LSF shall be available up to three years from the due date of reporting/ submission.
The option of LSF shall also be available for delayed reporting/submissions under the Notification No. FEMA
120/2004-RB and earlier corresponding regulations, up to three years from the date of notification of Foreign
Exchange Management (Overseas Investment) Regulations, 2022.
g) In case a person responsible for any submission or filing under the provisions of FEMA, neither makes such
submission/filing within the specified time nor makes such submission/filing along with LSF, such person shall
be liable for penal action under the provisions of FEMA, 1999.
2. The above provisions shall come into effect immediately for the delayed filings made on or after
the date of this circular.
3. All other provisions of reporting under FEMA remain unchanged. AD Category - I banks should
bring the contents of this circular to the notice of their constituents and customers.
4. The ‘Master Direction – Reporting under Foreign Exchange Management Act, 1999’ and
‘Master Direction - External Commercial Borrowings, Trade Credits and Structured Obligations’
are being updated to reflect the changes.
5. The directions contained in this circular have been issued under section 10(4) and 11(1) of the
Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions/approvals, if any, required under any other law.
Yours faithfully
Ajay Kumar Misra
Chief General Manager-in-Charge
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