Annual Return On Foreign Liabilities And Assets Under Foreign Exchange Management Act, 1999
The filing of annual return on foreign liabilities and assets (FLA return) has been introduced via A. P. (DIR Series) Circular No.45 dated March 15, 2011 issued by Reserve Bank of India (RBI). In order to capture the statistics relating to Foreign Direct Investment (FDI), both inward and outward in a more comprehensive manner as also to align it with international best practices, it had been decided to replace Part B of the Form FC-GPR by a separate ‘Annual Return on Foreign Liabilities and Assets’.
Only Indian companies were required to submit FLA returns to the RBI but as per the A. P. (DIR Series) Circular No. 22 Dated: October 21, 2015 , all Limited Liabilities Partnerships (LLPs) in India which have received FDI and/or made FDI abroad (i.e. overseas investment) in the previous year(s) as well as in the current year, shall also submit the FLA return to the RBI in the same manner.
It is pertinent to note the following information regarding FLA return:
Ø WHO SHOULD FILE FLA RETURN?Online GST Certification Course by TaxGuru & MSME- Click here to Join
All Indian companies and Limited Liabilities Partnerships (LLPs) which have received FDI and/or made FDI abroad in the previous year(s) including the current year
Ø WHAT IS THE DUE DATE OF SUBMISSION OF FLA RETURN
The due date is 15th of July every year.
Ø WHAT ARE THE CONSEQUENCES OF NON-FILING OF FLA RETURN
a) Non-filing of the return before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.
b) Black Money Act, 2015 shall also be applicable on the person who has not disclosed his foreign assets and shall be liable to pay income tax and penalty as prescribed.
Ø HOW TO FILE FLA RETURN
FLA return shall be submitted to the RBI using excel based form as provided on the RBI website.
Ø WHAT INFORMATION SHOULD BE REPORTED IN THE RETURN
If the company’s accounts are not audited before the due date of submission, i.e. July 15 then the FLA Return should be submitted based on unaudited (provisional) account. Once the accounts gets audited and there are revisions from the provisional information submitted by the company, they are supposed to submit the revised FLA return based on audited accounts by end of September of same year.
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