Annual return on Foreign Liabilities and Assets (FLA) has been notified under FEMA which is required to be submitted by all the Indian Companies which have received Foreign Direct Investment (FDI) or companies who invest in foreign companies in the previous years including the current year i.e. who carry foreign Assets or Liabilities in their Balance Sheets. FLA annual return need to cover all the foreign investments made by the company and investment made to the company and it must be directly submitted by the company to the Reserve Bank of India (RBI).
Companies Who are Required to File FLA Return are Mentioned Below:
As per the regulation under FEMA, 1999 :-
- A Company who falls in the meaning of the Companies Act, 2013- section 1(4).
- A Limited Liability Partnership (LLP) firm who registered under the Limited Liability Partnership Act, 2008
- This return also to be filed by entities holding foreign assets or liabilities like by SEBI registered Alternative Investment Funds (AIFs), Partnership Firms, Public Private Partnerships (PPP), etc.
Companies Who Are Exempted from Filing FLA Return are mentioned Below:
- Companies that have only issued shares on a non-repatriable basis to the non-residents of India are exempt from filing Foreign Liabilities and Assets Annual Return.
- Firms that do not have any outstanding balance of Foreign Direct Investment by the end of the financial year (FY) are exempt from filing Foreign Liabilities and Assets Annual Return.
- Entities who received only share application money & have not got any Foreign Direct Investment or not made any ODI, are exempt from the filling of FLA return.
What are the Penalties if no FLA Return Filed are Mentioned Below?
There are no specific penalties for FLA, according to the Circular No. 29- dated 02 February 2017, But If anyone not able to filing of the FLA return before the due date then it will be counted as the violation of FEMA and penalty will be applicable on defaulters which must be–
- If an amount against which offence is quantifiable, then the amount of penalty will be thrice the sum involved in the contravention.
- Where an amount cannot be quantified, the penalty may be imposed up to 2 lakh rupees.
- If any contravention is continuing every day, then INR 5000 for every day after a first day during which the violation of rule continues.
What is the Procedure for Filing FLA Return?
- Submit the Foreign Liabilities and Assets Annual return to the Reserve Bank of India (RBI) using the excel-based FLA Return form.
- After completing form, send an email to the RBI from an official email address of any authorized person like CFO, Director, CS (Company Secretary) etc.
- After submitting the FLA return, an acknowledgement email came to the email address of the authorized person.
The Reserve Bank of India (RBI) on 29 July 2020 has decided to extend the date for the submission of annual return on FLA through the web-based FLAIR. The entities which are filing Foreign Liabilities and Assets Annual Return for the first time with revised UIN i.e. Unique identification number are needed to register for creating login id and password after that they can file FLA return.
However, the companies who have already registered earlier may submit FLA-2020 using their login id and password. The last date for filing of FLA return on FLA -2020 has been extended from 31 July 2020 to 14 August 2020.