To,
Company
Sub:- filing of FLA with RBI by the company.
Who Needs to File Foreign Liabilities and Assets Return?
1.1 Company
As per the regulations of FEMA, the companies who have either received FDI or made ODI (“Overseas Direct Investment”) have to file FLA return. These companies must report the FLA of the current taxation year along with assets and liabilities of the previous year.
If a company doesn’t have any kind of foreign assets or liabilities in the ongoing taxation year but left with an outstanding ODI or FDI from previous years, the organization has to file FLA return mentioning the outstanding assets or liabilities.
Therefore, If the Indian company does not have any outstanding investment with respect to inward and outward FDI as on year-end then the company does not require to submit the FLA Return.
FLA Return Filing
Businesses need to file FLA prior to 15th July of the following financial year. It must include all the data of ODI and FDI the company has made or received in the previous years and current year up to 15th July.
The form must comprise financial details along with other required details according to the company’s audited or unaudited accounts. If the company doesn’t have any audited account before 15th July, they need to file FLA annual return with the unaudited accounts details. After filing the details one can audit the accounts thereafter.
After completing the audit if it requires any changes the company will have to file another form in regard to the updated details within the last day of the month of September for the same taxation year. Just after filing the FLA annual return, the authorised member of the company will receive an acknowledgement mail from the RBI.
Key Points to Remember while Filing FLA Annual Return
If a company fails to file the FLA annual return within the stipulated time they will have to pay heavy penalties. In the case of non-filing, the company has to pay an amount of thrice the sum as penalty which involves the contravention.
If it’s not quantifiable, the company will have to pay a penalty of Rs. 2,00,000. In case the violation of rules continues, the company has to pay Rs. 5,000 per day as penalty.
Due date of filing FLA return is on the 15th of July of the following financial year. If the FLA return filing has been done on the basis of unaudited accounts, the company needs to submit a revised form by the last day of September of the same taxation year.
The RBI regional offices have the potential to compound the contraventions. But regional offices of Kochi and Panaji don’t have the power in this case.
Regards
MM & CO.
