Lira India Pvt. Ltd. is a subsidiary of Lira Inc. USA. During the financial year 2018-19, the holding company on behalf of its subsidiary i.e. Lira India Pvt Ltd. had paid directly to the Income tax department through on

Under the provisions of FEMA, 1999, the said financial assistance by Lira Inc. USA would be viewed as External Commercial Borrowings (ECB) by Lira India Private Ltd. The said financial assistance would be considered as debt and it should have confirmed to the ECB policy of RBI. Accordingly, all norms applicable for ECB viz. Eligible borrowers, recognition of lenders, amount and maturity, end use stipulations etc. shall apply in this case. Lira India should have complied with Directions regarding ECB issued by RBI under FEMA, 1999. As the same has not been done, it should file compounding applications voluntarily for the non-compliance of provisions of ECB guidelines as stipulated by RBI.