ICAI Warns CAs Against Extremely Low Fee Quotes in Tenders; Matter May Be Referred for Disciplinary Action
The Professional Development Committee of the Institute of Chartered Accountants of India (ICAI) has issued an important announcement dated 2 July 2026 regarding the quoting of professional fees by Chartered Accountants and CA firms in tenders.
The announcement communicates a decision taken by the Council of ICAI concerning cases where members or firms quote fees that are extremely low compared with the scope and requirements of the assignment.
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ICAI Council’s Decision on Extremely Low Fees
According to the announcement, wherever the fee quoted by a member or firm is extremely low and is not commensurate with the size, value, volume, manpower requirement and nature of work, the matter can be referred to the Director (Discipline) for appropriate action.
The Council’s decision indicates that fee quotations in tenders may be examined not merely on the basis of the amount quoted but also in relation to the actual scale and requirements of the professional assignment.
The relevant factors specifically mentioned in the announcement are:
- Size of the work
- Value of the work
- Volume of the work
- Manpower requirement
- Nature of the work
Accordingly, where the quoted professional fee is extremely low when assessed against these factors, the matter may attract scrutiny and can be referred to the disciplinary mechanism of ICAI.
Decision Applies Beyond Services Exclusively Reserved for CAs
A significant aspect of the Council’s decision is its broad application.
The announcement expressly states that the decision will apply whether or not the tender is issued in an area of service exclusively reserved for Chartered Accountants.
This means that the applicability of the decision is not confined only to tenders involving services that can exclusively be performed by Chartered Accountants. Even where a tender relates to an area of service that is not exclusively reserved for CAs, an extremely low and disproportionate fee quote may still be referred to the Director (Discipline).
No Fixed Minimum Fee Prescribed in Announcement
The announcement does not prescribe any specific minimum fee, percentage, benchmark or numerical threshold for determining when a quotation becomes “extremely low.”
Instead, the Council’s decision links the adequacy of the quoted fee with the circumstances and requirements of the particular work, including its:
- size,
- value,
- volume,
- manpower requirement, and
- nature.
Therefore, the announcement focuses on whether the fee is commensurate with the assignment, rather than prescribing a uniform minimum fee applicable to all tenders.
Implications for Chartered Accountants and CA Firms
The decision is important for members and firms participating in tender-based professional assignments. Before submitting a financial bid, they may need to carefully evaluate whether the proposed fee reasonably corresponds with the actual work involved.
For example, the quoted fee should be considered in light of the expected volume of work, personnel required, complexity and nature of the engagement, and overall size and value of the assignment.
Where a quotation is extremely low despite substantial work or manpower requirements, the matter may potentially be referred to the Director (Discipline) for appropriate action.
Key Takeaway
The ICAI Council has made it clear that extremely low professional fee quotations in tenders may have disciplinary implications where the quoted amount is not commensurate with the size, value, volume, manpower requirement and nature of the work.
Importantly, this principle applies irrespective of whether the tender concerns an area of service exclusively reserved for Chartered Accountants.
The announcement dated 2 July 2026 therefore serves as an important caution for CAs and CA firms participating in tenders to ensure that professional fee quotations appropriately reflect the scope and requirements of the assignment.
Extract of ICAI Press release is as follows:
Professional Development Committee
The Institute of Chartered Accountants of India
2nd July, 2026
ANNOUNCEMENT
Decision taken by the Council regarding tenders
The Council of ICAI has decided that wherever the fee quoted by the member or the firm is extremely low and is not commensurate with the size, value, volume, manpower requirement and nature of work, the matter can be referred to Director (Discipline) for appropriate action. This decision shall stand whether or not the tender is issued in the area of service exclusively reserved for chartered accountants.
