FLA (Foreign Liabilities and Asset) Return under FEMA (Foreign Exchange and Management Act, 1999) is Annual Return required to be submitted by all the India resident companies, Partnership firms, SEBI registered Alternative Investment Funds (AIFs), Public Private Partnerships (PPP), Branches or Trustees which have received FDI and/ or made overseas investment in any of the previous year(s), including current year.
Due Date:- FLA is required to be submitted by July 15 every year. In case FLA filed on the basis of provisional accounts. In case there is variation in provisional and audited financials, a revised FLA is to be filed based on audited accounts before September end.
Non Compliance:- 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 penalty as prescribed under the FEMA is “THRICE” the sum involved in contravention or Rs. 2 lakh if the offence is non-quantifiable and if the contravention is continuing every day, then Rs. Five Thousand for every day after the first day during which the contravention continues.
Compounding for delay in filing:- The powers to compound the contraventions have been delegated to all Regional Offices of RBI (except Kochi and Panaji) without any limit on the amount of contravention.
Where Indian 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 and does not have any foreign direct investment or overseas direct investment outstanding as on end-March of the reporting year
Companies which have issued the shares to non-resident only on Non-repatriable basis are not required to submit the FLA Return.
With the objective to enhance the security-level in data submission and further improve the data quality, the previous email-based reporting system for submission of the FLA return is replaced with the online reporting portal (web-based system). Foreign Liabilities and Assets Information Reporting (FLAIR)system has been introduced by RBI via recent notification dated June 28, 2019
Main features of the revised Foreign Liabilities and Assets Information Reporting (FLAIR) system:
Such change in reporting system would be applicable from reporting of information for the year 2018-19. Entities can submit FLA information for earlier year/s after receiving RBI confirmation on their request via email.
Reporting entities are required to register itself on web-portal and generate RBI-provided login credentials for filing FLA.
The form will seek investor-wise direct investment and other financial details on fiscal year basis as hitherto, where all reporting entities are required to provide information on FATS related variables (foreign affiliate trade statistics, which was mandatory only for subsidiary companies earlier).
In addition, the revised form seeks information on first year of receipt of FDI/ODI and disinvestment.
The reporting company need to take approval from RBI in case of revision of submitted FLA form after set due date.
Reporting entities can amend/alter data entered in FLAIR and view/download the information submitted.