The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who holds foreign Assets or Liabilities in their Balance Sheets.
In FLA return, the company shall be reports its foreign investment or foreign remittance which is received by the company itself.
Applicable provisions: Foreign Exchange Management Act, 1999
Applicability of FLA Return:
3. Others [including SEBI registered AIFs, Partnership Firms, Public Private Partnerships (PPP), etc.].
If the Partnership firms, Branches or Trustees have any outward FDI outstanding as on end-March of the reporting year, then they are required to send a request mail to get a dummy CIN number which will enable them to file the FLA Return. If any entity has already got the dummy CIN number from the previous survey, they should use the same CIN number in the current survey also.
It is also informed that these dummy CIN numbers are provided by RBI for filling based FLA return only and not for any other purpose.
Non Applicability of FLA Return:
1. If a company did not receive FDI or made overseas investment in any of the previous year(s) including the current year
2. If a company has only share application money and does not have any foreign direct investment or overseas direct investment outstanding as on end-March of the reporting year.
3. If non-resident shareholders of a company has transferred their shares to the residents during the reporting period, therefore, companies which have issued the shares to non-resident only on Non-Repatriable basis, is not required to submit the FLA Return.
However, If the company has not ‘received any fresh FDI and/or ODI (overseas direct investment)’ in the latest year but the company has outstanding FDI and/or ODI, then that company is required to submit the FLA Return every year by July 15.
Due Date: 15th July of every year.
However, if the accounts are not audited before the due date of submission, then the FLA Return shall be submitted based on unaudited/ provisional accounts and once the accounts are audited, revised FLA Return shall be submitted by 30th September of the same year.
In case where Account Closing Period of the company is different from reference period (end-March), can we report the information as per Account Closing Period?
No. Information should be reported for all the reference period, i.e. Previous March and Latest March. If Account Closing Period of the company is different from the reference period, then information should be given for the reference period on internal assessment.
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.
The penalties for violating the law or filing false information under the FEMA Act is 300 percent of the amount involved in the violation or Rs. 2 Lakh if the offence is non-quantifiabe:
If the violation continues every day, the penalty is Rs. 5000 for each day after the first day during which violation continues; and the power to compound the violation has been delegated to Regional officer of RBI.
Note: This Return is filed Online on RBI Portal. The portal on which you can file the return is https://flair.rbi.org.in/fla/
DISCLAIMER:- The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws.