Annual Return on Foreign Liabilities and Assets

Annual Return on Foreign Liabilities and Assets

A.     Reference of law

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=10083&Mode=0

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7287&Mode=0

B.     When to be filed i.e. Due date

15^th July every year

C.     Which entities required to file (LLP/ Company)

ELIGIBLE COMPANIES TO SUBMIT THE FLA RETURN

-          by all the Indian companies and;

-          LLPs ;

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.

It is important to note that if the company which 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 also required to submit the FLA Return every year by July 15.

That means even of the company has nil return, it needs to intimate RBI on the outstanding FDI/ ODI in their company account.

For the first time, all the eligible entities are required to send a request mail to RBI to get a dummy CIN. But this CIN is valid for filing annual return on foreign assets and liabilities and not for any other purpose. 

Companies which are not eligible are;

-In case Indian company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, the company is not required to submit the FLA Return.

-There are cases wherein the company has received only share application money and not full allotment 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 also not required to file FLA return.

-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.

-If Shares are issued by reporting company to non-resident on Non-Repatriable basis, then it should not be considered as foreign investment; therefore, companies which have issued the shares to non-resident only on Non-Repatriable basis, are not required to submit the FLA Return.

How to file

There is excel in set prescribed format in which we needs to file FLA return by 15^th July every year.

At which website

www.rbi.org.in

What if not filed on time?

Penalty clause for violation of FEMA could be invoked for non filing of FLA by the due date.

It is important to note that even if the company’s accounts are not audited before the due date of submission, i.e. July 15, then also the FLA Return should be submitted based on unaudited (provisional) account.

Once the accounts gets 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.

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