MCA relaxes time for Filing of creation or modification of charge forms

Relaxation of time for filing forms related to creation or modification of charges under Companies Act,2013:

♦ APPLICABILITY:

This relaxation is provided inrespect of following forms whether filed by a company (Section 77) or a Chargeholder (Section 78):

1. Form CHG-1- Application for registration of creation, modification of charge (other than those related to debentures)

2. Form CHG-9- Application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for debentures.

♦ BEFORE RELAXATION:

1. Time line for filing of such form: 120 days from the creation or modification of charge i.e.,

• • Within 30days with payment of normal fees;
  • Next 30 days with payment of additional fees;
  • Next 60 days with payment of advalorem fees.

♦ CIRCULAR SHALL BE APPLICABLE IN THE FOLLOWING MANNER:

CASE I: Date of creation or modification of charge is before 01.04.2021

AND

Timeline for filing of such form is not expired as on 01.04.2021

1. On 01.04.2021, time period of 120 days has not been expired: It implies charge created/ modified on and after 02.12.2020 is eligible under this scheme. In other words, charge created on or before 01.12.2020 shall not be eligible for any benefit under this scheme.

2. The period from 01.04.2021 till 31.05.2021 shall not be calculated for the purpose of counting the number of days for filing of form by the company or chargeholder. In other words, Period beginning from 01.04.2021 to 31.05.2021 shall be excluded from the time line of filing of form.

3. In case the form is not filed upto 31.05.2021, the first day after 31.03.2021 shall be 01.06.2021 for the purpose of calculating the number of days within which the form is required to be filed.

• For example: If 31.03.2021 was 26^th day from creation/modification of charge, then 01.06.2021 shall be 27^th In this case, only normal fees shall be levied.
• If 31.03.2021 was 56^th day from creation/modification of charge, then 01.06.2021 shall be 57^th In this case both normal and additional fees shall be levied.

4. Payment of fees:

• Form is filed on or before 31.05.2021: fees payable as on 31.03.2021 shall be charged.
• Form is filed after 31.05.2021: Fees payable under fees rules from the date of creation/modification till 31.03.2021 plus from 01.06.2021 till the date of filing of such form.

CASE II: Date of creation or modification of charge falls on any day between 01.04.2021 to 31.05.2021 (Both dates inclusive)

1. Charges created or modified on or after 01.04.2021 upto 31.05.2021 shall be eligible under this scheme.

2. The period beginning from 01.04.2021 to 31.05.2021 shall not be reckoned for the purpose of counting the number of days under section 77 or section 78.

3. Incase the form is not filed within such period (upto 31.05.2021) then 01.06.2021 shall be the first day to count 120 days under section 77.

4. For example: Charge is created/modified on 04.04.2021, the period of 30 days for filing of form with normal fees shall be calculated from 01.06.2021.

5. Payment of fees:

If the form is filed on or before 31.05.2021: normal fees shall be payable under fees rules.

If the form is filed after 30.05.202: the first day after creation/modification shall be 01.06.2021 and the number of days till the date of filing of form shall be calculated accordingly for the purpose of payment of fees under fees rules.

♦ NON – APPLICABILITY:

1. Where a company has already filed Form CHG-1 or Form CHG-9 with additional or advalorem fees, such company shall not be eligible for any benefit of refund of the fees already paid.

2. This circular shall not be applicable in respect of form whose timeline has been expired as on 01.04.2021.

3. Filing of Form CHG-4 i.e., satisfaction of charge.

Source: https://taxguru.in/company-law/time-relaxed-form-creation-modification-charges.html

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Author – CS Shaenny Chhabra and can be contacted at [email protected].

Disclaimer: The entire contents of this document have been prepared based on the relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.