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Reporting foreign income, Assets to RBI by Dec 24

Co Act 2013 56 views 1 replies

Jayanta Bandyopadhyay

382 Points Joined June 2021

We ,an unlisted public limited company, are having WOS in Mauritis, who in turns controls step down subsidiary. There was certain mis-clarification in equity& redeemable preference share and project profile amendment is under process thru AD. Since there are changes in step down subsidiary, pending amendment, AD advises us not to submit APR, FLA.

However beyond December, RBI will impose penalty .

How to address this dilemma

Kindly guide1

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

8756 Points Joined December 2011

Given the situation: - Your unlisted public limited company has a Wholly

Owned Subsidiary (WOS) in Mauritius. - The WOS controls a step-down subsidiary. - There are pending amendments to the project profile and equity/redeemable preference share due to mis-clarification. -

The Authorized Dealer (AD) advises against submitting the Annual Performance Report (APR) and the FLA (Financial Commitment) return until the amendments are approved. -

RBI may impose penalties if the APR and FLA returns are not submitted by December.

To address this dilemma:

1. *Seek AD's clarification in writing*: Request the AD to provide a written clarification on their advice to delay submitting the APR and FLA returns. This will help you document their guidance.

2. *Submit APR and FLA returns with a disclaimer*: You can submit the APR and FLA returns with a disclaimer stating that the reports are based on the current information available and that the company is in the process of amending the project profile and equity/redeemable preference share.

3. *Attach supporting documents*: Attach supporting documents, such as the application for amendment, to the APR and FLA returns. This will provide context to the RBI and demonstrate your company's efforts to comply.

4. *Request RBI's clarification*: If possible, seek clarification from the RBI on their expectations regarding the submission of APR and FLA returns in cases where amendments are pending.

5. *Be prepared to explain the delay*: Be prepared to explain the delay in submitting the APR and FLA returns to the RBI, citing the reasons for the amendment and the AD's advice.

To avoid penalties:

1. *Submit the returns by December*: Submit the APR and FLA returns by December to avoid penalties, even if it means submitting them with a disclaimer.

2. *Follow up with the AD and RBI*: Follow up with the AD and RBI to ensure that the amendments are processed, and the returns are accepted.

Consult with your AD, a tax professional, or a chartered accountant to ensure compliance with RBI regulations and to address any specific concerns or questions you may have.

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