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Reduction of burden of compliances during pandemic of COVID-19-

We all are aware (or may be some of us are already fed up) with the news of CoVID-19 which is pandemic and led to thousands death tolls around world with Italy the most affected country. To combat this worse condition Indian Government has announced 21 days lockdown for the whole country. 

This epidemic disease affected every aspect of life in every corner of world. the Indian Government through various departments taking tons of actions to serve the citizens of India and help combat this life-threatening situation for safety of every citizen of India.

Due to lockdown in India working of every sector has taken halt, each of departments, in order to help the owners/ companies/ LLPs and other body corporates to cop such circumstances easefully notifying extensions, relaxations, etc. under Ministry of Corporate Affairs, Income Tax, Goods and Service Tax (GST) and others from mandatory compliances and other regulatory disclosure. 

Major relaxations notified up to 25th March,2020 by Ministry of Corporate Affairs-

  1. General Circular No. 11 /2020 Dated 24th March, 2020 In order to  support and enable Companies and Limited Liability Partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the following measures have been implemented by the Ministry of Corporate Affairs to reduce their compliance burden and other risks-  

    1. No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing noncompliant companies/ LLPs to make a ‘fresh start’. The Circulars specifying detailed requirements in this regard are being issued separately.
    1. The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA13) (120 days) stands extended by a period of 60 days till next two quarters i.e., till 30th September. Accordingly, as a one-time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters, instead of 120 days as required in the CA-13.
    1. The Companies (Auditor’s Report) Order,2020 shall be made applicable from the financial year 2O2O-2O21 instead of being applicable from the financial year 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the financial year 2019-20. A separate notification has been issued for this purpose.
    1. As per Para Vll (1) of Schedule lV to the CA-13, independent Directors (lDs) are required to hold at least one meeting without the attendance of Non-independent directors and members of management. For the financial year 2019-20, if the lDs of a company have not been able to hold such a meeting, the same shall not be viewed as a violation. The lDs, however, may share their views amongst themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary.
    1. Requirement under section 73(2)(c) of CA-13 to create the deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020.
    1. Requirement under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 to invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be complied with till 30th June 2020.
    1. Newly incorporated companies are required to file a declaration for Commencement of Business within ‘180 days of incorporation under section 10A of the CA-13. An additional period of 180 more days is allowed for this compliance.
    1. Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-1 3 shall not be treated as a non-compliance for the financial year 2019-20.

     

  2. General Circular No. 10/2020 Dated 23rd March, 2020 for clarification on spending of CSR funds for COVID-19 states that: –

    1.   Spending of Corporate Social Responsibility Funds (CSR) for COVID-19 id eligible for CSR Activity.
    1.   Funds may be spent for various activities related to COVID-19 under the items Nos. (i) and (xii) of schedule VII relating to promotion of health care, including preventive health care and sanitation, and disaster management.
Sonal

Sonal

Sonal is a content writter by profession.

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