Global Economy

Tax professionals seek extension for CFSS and LLP Settlement Scheme till March

Mumbai: After the deadline for filing tax returns by businesses has been extended till February 15, the company secretaries and chartered accountants are seeking extension of the Company Fresh Start Scheme (CFSS) 2020 and LLP Settlement Scheme (LSS) 2020 till March 31st, 2021.

Right from representations from professional bodies’ to a protest march to social media petitioning to filing a public interest litigation – the compliance and tax professionals have been actively seeking the extension by the Ministry of Corporate Affairs (MCA).

A public interest litigation has been filed in the Rajasthan High Court by the Centre for Social Work and Research Management Foundation citing Covid-related hindrances in filing documents by the offices of company secretaries, chartered accountants and tax practitioners as the reason for seeking extension.

The CFSS and LSS were introduced on April 1, 2020 for a period of six months offering a one-time opportunity to the defaulting companies and LLPs respectively to file the pending documents delayed with MCA without charging any additional fees. The schemes were extended till December 31st, 2020. “However, since the lockdown was lifted in October, the scheme effectively got implemented for the two months of November and December”, a Pune-based practising company secretary told ET. “While other regulatory bodies such as Sebi, Income Tax department and RBI extended the due dates for their filings, the MCA instead of extending the due dates for filing of documents amid lockdown, only introduced these schemes”, he informed.

“Many SMEs and LLPs could not complete their accounts and audits due to Covid. The filing of RoC returns can be completed only after receipt of audited financials” said Dhrumil Shah, a Mumbai-based practising company secretary. “In case of struck off companies, NCLT has to be approached to make them active and then fresh appointment of directors has to be done – the entire process takes a lot of time due to Covid”, he said.

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Besides, the MCA portal crashed on December 31st on back of increased load on the last date of filing under CFSS and LSS. “MCA portal issues are repetitive as the capacity of the system is not adequate to take the load”, said a Mumbai-based company secretary.

#Extend_CFSS trended on Twitter on Monday as compliance professionals as well as professional bodies sought the extension of the schemes. Protest marches were held by practising company secretaries to represent the regional RoC offices simultaneously in Delhi, Mumbai, Ahmedabad and Jaipur on Monday. Citing difficulties and hardships faced by stakeholders, the Institute of Company Secretaries of India has made a representation to the secretary of MCA on December 24th seeking extension of the schemes till March 31st.

There was no comment received from the Registrar of Companies officials in Mumbai in this regard.


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