Understanding an FLA return (Foreign Liabilities & Assets Return)

FLA (Foreign Liabilities & Assets) return is an annual return which provides information about a company's foreign liabilities and assets. This return is required to be submitted with RBI by

- all the India-resident companies,

- LLPs,

- Others [(include SEBI registered Alternative Investment Funds (AIFs), Partnership Firms, Public Private Partnerships (PPP)]

which have received Foreign Direct Investment (“FDI”) or made overseas investment in any of the previous year, including the current year i.e., who holds foreign assets or liabilities in their balance sheets. If an entity does not have any outstanding investments related to inward and outward FDI as of the end of March in the reporting year, they are not required to submit the FLA Return.

?Due Date

The due date for filing the FLA Return is 15th July of every year. If the accounts are not audited before the due date of submission, the FLA Return must be submitted based on unaudited or provisional accounts. Once the accounts are audited, a revised FLA Return should be submitted by 30th September of the same year.

Delay in reporting

?Non-filing of the return on or before due date (July 15 of every year) will be treated as a violation of Foreign Exchange Management Act, 1999 (FEMA) and penalties may be imposed accordingly. ?

The entity responsible for filing the return will be liable to pay the late submission fee if the return is not filed by the due date. According to A.P. (DIR Series) Circular No.16 dated September 30, 2022, late submission fee for reporting delays under FEMA due to late filing or non-filing of the FLA return is INR 7,500 per return.

?Entities can fill the FLA return even after due date, after taking approval from RBI. But in that case, penalty clause may be invoked on the entity for late submission.

Disclaimer: The contents of this write up is based on the relevant provisions and as per the information existing at the time of preparation. In no event I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the above information.