As mentioned in our previous article, Received Foreign Funding? Comply with FC-GPR filing in 30 days, we are witnessing a massive amount of foreign funds coming into India especially through investments into Start-ups. The government is also encouraging foreign investment through different incentives like liberalizing FDI limits in various sectors. But, due to lack of awareness, often start-ups fail to follow FEMA and RBI regulations for Foreign investments and as a result, they end up paying late fees and penalties for delayed filing and contraventions. We have covered the Form FC-GPR (Foreign Currency- Gross Provisional Return) filing with RBI and SFT (Specified Financial Transactions) filing in our previous articles. In this article, we will explain the process of filing FLA, timelines to be adhered to and consequences of late filing.
♦ When is FLA required to be filed and its due date?
The due date for filing FLA return is 15th July of every year.
♦ Filing process of FLA return:
- First time users need to register on https://flair.rbi.org.in.
- Log into FLAIR, navigate to Online FLA Form tab and Choose FLA Form.
- Fill the required details and submit the form.
♦ Registration Process and Documents required:
- Go to https://flair.rbi.org.in.
- Click on “Registration (New Entity Users)”.
- Fill in the required details in the web-based form related to entity and Authorised Person.
- Upload Authority Letter and Verification Letter on the portal and proceed with “Submit”. (Format of the same is available https://flair.rbi.org.in/fla/faces/pages/login.xhtml)
♦ Entities exempted from filing FLA return:
- Companies who do not have any outstanding investment in respect of inward and outward Foreign Investment as on 31st March.
- If a Company has received only share application money and does not have any FDI or ODI outstanding as on 31st March.
- If all non-resident shareholders of a Company have transferred their shares to the residents during the reporting period and the Company does not have any outstanding investment in respect of inward and outward FDI as on 31st March.
♦ Consequences of filing delayed FLA Return:
♦ Points to remember:
- If the accounts are not audited before the due date of submission, then the FLA Return shall be submitted based on unaudited/ provisional accounts. Once the accounts are audited, revised FLA Return shall be submitted by 30th September of the same year.
- A Company can file the previous year FLA form (through online FLA portal only) by taking approval from RBI. For taking approval, they need to send mail to [email protected]
- A Company can delete/modify the FLA return after taking the approval from RBI (RBI will provide due date on the FLA portal).
CA Shreyans Dedhia | Partner | Email: [email protected]
Sutishna Dhanuki | Associate Consultant | Email: [email protected]