Foreign Liabilities and Assets Return (FLA)

Reserve Bank of India (RBI) vide its circular No. RBI/2010-11/427
A.P. (DIR Series) Circular No. 45 dated March 15, 2011 introduced Annual return on Foreign Liabilities and Assets reporting by Indian Companies and discontinuation of the Part B of form FC-GPR.

This return is required to be submitted on or before July 15 every year on the basis of fulfilment of certain conditions to be discussed further.

Applicability to submit FLA Return:

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.

If the company is not receipt of  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

Cases in which FLA return is not required to be filed:

• If the Indian company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, the company need not submit the FLA Return.
• If a company has received 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, then that company is not required to fill up FLA return.
• 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 end-March of reporting year, then the company need not submit the FLA Return.
• 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.

• Information to be filed if balance sheet of the company is not audited before the due date of submission:

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 get 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 – September.

Details required to be submitted on FLAIR Portal of RBI for filling FLA Return are as under:

I. COMPANY INFORMATION 

II. FINANCIAL DETAILS 

Details of Nature of Business (As per National Industrial Classification (NIC) 2008 Code) can be found at:

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Penalty: There are no specific penalties for FLA however, asper. (A.P. (DIR Series) Circular No. 29, dated February 02, 2017), Non-filing of FLA return before the due date will be treated as a violation of FEMA and penalty will be levied on defaulters which shall be– If, the amount against which offense is quantifiable, then the penalty will be “THRICE” the sum involved in the contravention. Where the amount cannot be quantified the penalty may be imposed up to two lakh rupees. If, the contravention is continuing every day, then Five Thousand for every day after the first day during which the contravention continues.

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