• By ADMIN
• Posted 12 Jul, 2019
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FLA Return of FDI/ODI under FEMA

Scope & Applicability

An Indian company which has received FDI or an LLP which has received investment by way of capital contribution in the previous year(s) including the current year, should submit form FLA to the Reserve Bank on or before the 15th day of July of each year. Year for this purpose shall be reckoned as April to March. [Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 as amended from time to time]

In the case where a company/LLP does not have any foreign assets or liabilities for the current year but has outstanding FDI or ODI from the previous years, it must file the FLA annual return indicating their outstanding assets or liabilities.

Due Date

It has to be filed on or before 15^th July every year

New mechanism introduced w.e.f 28^th June, 2019

Change in Filing Mechanism with effect from 28^th June, 2019 as notified by RBI vide their Circular No. RBI/2018-19/226 A.P. (DIR Series) Circular No. 37 Dated June 28, 2019

Till before 28^th June , 2019, it was offline i.e. Every company required to submit FLA return (Excel Sheet) through E-mail to the official e-mail of RBI i.e.fla@rbi.org.in. but w.e.f 28^th Jun, 2019, it is to be filed online using https://flair.rbi.org.in. In the old method, no acknowledgement was given but in the new method it is being given.

FLA Return can be filed using unaudited financial statements.

Special features in the new online system of filing FLA

Web-portal for reporting entities (https://flair.rbi.org.in)

The existing mechanism of email based submission of FLA forms is discontinued.

The new mechanism is applicable for reporting of information for the year 2018-19 onwards.

As usual the FLA Return is required to be filed by 15th of July every year.

Non-Compliances

Non-filing of the return by the Indian entities before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA under Section 13 of Foreign Exchange Management Act, 1999. The relevant provisions for the penalty is reproduced as follows:-

“If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues.”