Late submission fee (LSF) – For reporting delays under Foreign Exchange Management Act, 1999

By / / FEMA

Notification no: RBI/2022-23/122, dated 30/09/2022

The following matrix shall be used henceforth for the calculation of Late submission fee, wherever applicable,

S. NoType of Reporting delaysLSF (Amount)
1
  • 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
Rs. 7500
2
  • FC-GPR
  • FC-TRS
  • Form ESOP
  • Form LLP(I)
  • Form LLP(II)
  • Form CN
  • Form DI
  • Form InVi
  • Form ODI-Part I
  • Form ODI-Part III
  • Form FC
  • Form ECB
  • Form ECB – 2
  • Revised Form ECB (or)
  • Any other return which captures flows or returns which captures flows or returns which capture reporting of non-fund transactions or any other transactional reporting.
 [Rs. 7500 + (0.025% * A * n)]   Where,
A = Amount involved in the delayed reporting  
n = number of days delay in submission rounded upwards to the nearest month and expressed up to 2 decimal points

Note: The late submission fee will be levied on a “per return” basis.

1. What is the maximum amount of LSF that can be levied?

  • Maximum LSF amount will be limited to 100 % of “A” (the amount involved in delayed reporting).
  • The maximum LSF shall be rounded upwards to the nearest hundred.

2. What is the consequence of non-payment of LSF within the stipulated time period?

  • Where an advice has been issued for payment of LSF, and such LSF has not been paid within 30 days. Such advice will be considered null and void.
  • That is, the applicant cannot pay any late fee against that advice beyond the expiry of the time limit.
  • The applicant should submit an application again for the payment of LSF and the authority shall determine a new “n” (number of days’ delay in submission). The date of receipt of the new application will be treated as the end date for the calculation of “n”.

3. What is the time limit for opting to pay LSF?

  • The facility for opting to pay LSF shall be available up to 3 years from the due date of reporting/ submission.
  • The option of LSF shall also be available for delayed reporting/submissions under 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.
  • For Any delay beyond 3 years, the applicant has to approach RBI for compounding of offence.

4. Special provisions with regard to LSF in respect of ECB 2 returns?

  • The “A” for any ECB – 2 return will be the
    1. gross inflow or
    2. outflow (including interest and charges), whichever is more.
  • Form ECB-2 is a monthly return and the LSF amount shall be levied on a “per return” basis. However, for any number of Form ECB-2 returns, delayed submission for each LRN (Loan reference number) will be treated as one instance for the fixed component. That is,
  • The LSF formula for the delay in reporting of Form ECB 2 is [Rs. 7500 + (0.025% * A * n)]
    1. Here, Rs. 7500 is the fixed component of the formula and
    2. (0.025% * A * n) is the variable component of the formula
    3. In respect of LSF for the delay in reporting of ECB-2, notwithstanding the number of months for which ECB-2 is not filed, the fixed component will remain as Rs. 7,500 and the variable component will be calculated for each month of default separately.

Research Team – Pioneer One Consulting

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