Foreign Liabilities and Assets (FLA return) is mandatorily required to be submitted by all the companies / LLPs / AIFs / Partnership Firms / Public Private Partnerships which have received foreign direct investment (FDI) and/or made overseas investments in any of the previous year(s), including the current year.Foreign Liabilities and Assets (FLA return) is mandatorily required to be submitted by all the companies / LLPs / AIFs / Partnership Firms / Public Private Partnerships which have received foreign direct investment (FDI) and/or made overseas investments in any of the previous year(s), including the current year.

Filing of FLA return:

The submission of FLA should be based on audited or unaudited accounts of the entity, and it must be completed by July 15 every year. If audited balance sheets are not available, entities may fill the return using provisional or unaudited numbers. Once the audited numbers are ready, they can request a revision of the previously filed return to the RBI. Upon approval by the RBI, the entity can revise the return with audited numbers and resubmit it

Procedure for submission of the FLA return:

• The FLA return can be submitted through the web-based portal called Foreign Liabilities and Assets Information Reporting (FLAIR) system. The portal’s URL is https://flair.rbi.org.in/fla/faces/pages/login.xhtml .

• The entity has to register on the portal by clicking Registration for New Entity Users.

• The entity has to fill the details in the FLA user registration form, upload the documents mentioned (Verification Letter and Authority Letter) and click submit to complete the registration.

• After successful registration, user id and default password will be sent to the authorized person’s mail id. Using this user id and password, entities can login to the FLAIR portal and file the FLA Return.

• Each section needs to be validated, without validation next section will not operative. After filing mandatory fields, SAVE AS DRAFT. Amounts should be in lakhs.

Upon final submission, the system will generate an acknowledgement of the FLA data. No separate email will be sent for this acknowledgment.

It is important to note that the previous excel-based and email-based reporting systems have been replaced by the web-based format for submitting the annual FLA return since June 2019.

Companies exempted from filing FLA return:

• Companies that have only issued shares on a non-repatriable basis to the non-residents of India.

• Companies who do not have any outstanding balance of FDI or ODI by the end of the financial year.

• Companies that have only received share application money and have not received any FDI or not made any ODI.

Penal Provision:

In case the company does not file the FLA return within the given time, the company will be liable to pay a penalty of thrice the sum involved in the contravention.

In case it is not quantifiable, then a penalty of INR 2,00,000 will have to be paid by the company. If the contravention is continuing, a penalty of INR 5,000 per day will have to be paid by the company.

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