FLA Return, Abbreviated Form of Foreign Liabilities and Assets Return 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 including LLP which has received investments in the way of Capital Contribution in the previous year including the Current year SHALL Submit FORM FLA to the Reserve Bank of India on or before 15th day of July every year as per Foreign Exchange Management (Transfer of issue of Securities by person Resident outside India) regulation 2017 issued vide Notification No. FEMA 20(R)/2017-RB dated November 7, 2017.
FAQ ON Reporting
Q1. Is it required to submit Annual Performance Report for ODI, if we have submitted FLA Return?
Ans: FLA Return and Annual Performance Report (APR) for ODI are two different returns and monitored by two different departments of RBI. So you are required to submit both the returns if these are applicable for your company.
Q2. If non-resident shareholders of a company has transferred their shares to the residents during the reporting period, then whether that company is required to submit the FLA Return?
Ans.: If all non-resident shareholders of a company has 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 end-March of reporting year, then the company need not submit the FLA Return.
Q3. If company issued the shares to non-resident on Non-Repatriable basis, whether that company is required to submit the FLA Return?
Ans.: Shares issued by reporting company to non-resident on Non-Repatriable basis should not be considered as foreign investment; therefore, companies which have issued the shares to non-resident only on Non-Repatriable basis, is not required to submit the FLA Return.
Standard Operating Procedure {SOP}
FLA can be reported in the format as being shared on the RBI website;
Link: http://rbi.org.in/scripts/BS_ViewFemaForms.aspx
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- Company can download the updated FLA return every year by end of May and should use the updated FLA return only and submit till 15th day of July every year.
- Filled-in excel based FLA return should be sent by mail to official Mail id fla@rbi.org.in with no other attached document except the FLA return. Further, Queries can also be raised at surveyfla@rbi.org.in if found any discrepancy related to reporting or any technical issue.
- After the filing of the FLA return, an acknowledgement mail will be sent by the RBI to the email ID of the authorised person like CFO, Director, Company Secretary etc.
- In case the FLA return filed is based on unaudited accounts, a revised form has to be filed based on audited accounts before the end of September of the same year.
Penal & Prosecution
In case the company does not file the FLA return within the given time, the company will be liable to pay a penalty of thrice the sum involved in the contravention. In case it is not quantifiable, then a penalty of Rs 2,00,000 will have to be paid by the company. If the contravention is continuing, a penalty of Rs 5,000 per day will have to be paid by the company.
However the regional Offices of RBI have the power to compound Contraventions without any Limits not applicable to kochi and panaji.
EXEMPTED COMPANIES
The Following Companies are being exempted from the filling of the Necessary returns mentioned Under the act
- the company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year
- If a company has received only share application money as on end-March of the reporting year.
- the company issuing Shares to non-resident only on Non-Repatriable basis
FAQ
Q1. If non-resident shareholders of a company has transferred their shares to the residents during the reporting period, then whether that company is required to submit the FLA Return?
Ans.: If all non-resident shareholders of a company has 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 end-March of reporting year, then the company need not submit the FLA Return.
Q2. Is it required to submit Annual Performance Report for ODI, if we have submitted FLA Return?
Ans.: FLA Return and Annual Performance Report (APR) for ODI are two different returns and monitored by two different departments. So Need to submit both the returns if these are applicable for respective company.
Note: Submission of Annual return on FLA through the web-based FLAIR Portal for the Financial year 2019-20 has been started. Entities which are filing FLA return for the first time/ with revised UIN (Unique Identification Number) are required to register themselves first for generating Login credentials and they can file FLA returns. However existing registered entities may submit FLA Return 2020 using their credentials before the last date being extended to 14/08/2020.
Source: Rbi.org.in (https://flair.rbi.org.in/)
