The Ministry of Corporate Affairs (MCA) vide its General Circular No. 23/2020 dated 17th June, 2020 has introduced a scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 for the purpose of condoning the delay in filing certain forms related to creation/ modification of charges.
The companies are required to file forms related to creation or modification of charges within the timelines provided in section 77 of the Companies Act, 2013, i.e. a total of 120 days of the creation or modification of charge.
Earlier, the MCA has introduced Companies Fresh Start Scheme, 2020 (CFSS, 2020) vide its circular dated 30th March, 2020 for giving an opportunity to defaulting Companies to file their belated documents or forms from 01st April, 2020 to 30th September, 2020 without any additional fees in the MCA-21 registry. Under CFSS, 2020, the benefit of waiver of additional fees was not extended to the charge related documents.
After, various representations seeking relaxations in charge related documents received by the ministry, the MCA introduced the above mentioned scheme.
1. EFFECTIVE DATE OF SCHEME
The scheme shall come into effect from the date of issue of the Circular mentioned above i.e. 17th June, 2020.
2. APPLICABILITY
- The scheme shall be applicable in respect of filing of e-form No. CHG-l and e-form No. CHG-9 (collectively as “Forms”).
- Where the date of creation/ modification of charge falls on any date between 01.03.2020 to 30.09.2020 (both dates inclusive).
- Where the timeline (i.e. 120 days) for filing of Forms falls on any date between 01.03.2020 to 30.09.2020 (both dates inclusive).
For example: The date of creation of charge is 1st January, 2020 and 120th day falls on any date between 01.03.2020 to 30.09.2020 then we can take the benefit of this scheme.
This scheme is applicable on Forms whose creation or modification date is on or after 3rd November, 2019.
3. RELAXATION OF TIME (NON-INCLUSION OF TIME IN 120 DAYS)
| Case | Exclusion period | Example |
| If date of creation or modification of charge is before 01.03.2020. | The period beginning from 01.03.2020 and ending on
30.09.2020 shall not be reckoned for the purpose of counting 120 days. |
If date of creation or modification of charge is 01.01.2020 then period from 01.03.2020 to 30.09.2020 shall not be reckoned and the first day after 29.02.2020 shall be reckoned as 01.10.2020 for the purpose of counting 120 days.
In this case, Company can file the Form on or before 29th November, 2020 with such additional fees or ad-valorem as the case may be. |
| If date of creation or modification of charge falls on any date between 01.03.2020 to 30.09.2020. | The period beginning from the date of creation or modification of charge to 30.09.2020 shall not be reckoned for the purpose of counting 120 days. | If date of creation or modification of charge is 01.07.2020 then period from 01.07.2020 to 30.09.2020 shall not be reckoned and the first day after 01.07.2020 shall be reckoned as 01.10.2020 for the purpose of counting 120 days.
In this case, Company can file the Form on or before 28th January, 2021 with such additional or ad-valorem as the case may be. |
4. APPLICABLE FEES (NORMAL OR ADDITIONAL OR AD VALOREM)
| Case | Forms Filing Date | Fees |
| If date of creation or modification of charge is before 01.03.2020.
|
If the form is filed on or before 30.09.2020. | The fees payable as on 29.02.2020 under the Fees Rules for the said form shall be charged.
It can be normal or additional or ad valorem, depending on the case. |
| If the form is filed after 30.09.2020. | The applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01.10.2020 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29.02.2020.
It can be normal or additional or ad valorem, depending on the case. |
|
| If date of creation or modification of charge falls on any date between 01.03.2020 to 30.09.2020. | If the form is filed before 30.09.2020. | Normal fees |
| If the form is filed after 30.09.2020. | The applicable fees shall be charged as per the number of days.
It can be normal or additional or ad valorem, depending on the case. |
5. NON-APPLICABLITY
The Scheme shall not apply, in case:
- The forms i.e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular i. e. Forms filed before 17th June, 2020.
- The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to 01.03.2020 i.e. 120 days expired on 01.03.2020.
- The timeline for filing the form expires at a future date, despite exclusion of the time provided in point no. 3 above.
If 120 days expired on any date after 30.09.2020 (after considering exclusion period starting from date of creation or 1st March, 2020 as the case may be) then this scheme shall not be applicable.
- Filing of Form CHG-4 for satisfaction of charges.
FAQs:
Q 1. If any Company filed Forms before 17th June, 2020 with additional fees, whether such Company is eligible for refund from MCA?
Ans. This scheme specifically mentioned if forms is filed before 17th June, 2020 then scheme is not applicable. Therefore, question of refund does not arise.
Q 2. If date of creation is on or after 3rd November, 2019 and Company not filed the forms. Whether the scheme is applicable on such Companies?
Ans. Yes, If date of creation is on or after 3rd November, 2019 then period of 120 days is not expired on 01.03.2020 and the scheme is applicable on such Companies.
Q 3. Whether Company have to take immunity certificate under this Scheme?
Ans. No, there is nothing mentioned in the scheme with respect to immunity certificate like mentioned in CFSS, 2020. This scheme is completely separate scheme.
Q 4. Is Form CHG-4 (satisfaction of charge) covered in this scheme?
Ans. No, this scheme shall not applicable to Form CHG-4.
Q 5. What is additional or ad valorem fees for Form CHG-1 if filed after 30 days (after considering the exclusion period as per this scheme)?
Ans. The additional or ad valorem fees shall be as follows:-
| Period of delay | Small Companies and One Person Company | Other than Small Companies and One Person Company |
| Up to 30 days | 3 times of normal fees | 6 times of normal fees |
| More than 30 days and up to 90 days | 3 times of normal fees plus an ad valorem fee of 0.025 per cent. of the amount secured by the charge, subject to the maximum of one lakh rupees. | 6 times of normal fees, plus an ad valorem fee of 0.05 per cent. of the amount secured by the charge, subject to the maximum of five lakh rupees”. |
Source: https://taxguru.in/company-law/mca-relaxes-time-file-forms-creation-modification-charges.html
(Written by CS Brajesh Kumar and edited by CS Rahul Das can be contacted at kumarbraj7@gmail.com and rahuldas151292@gmail.com for any kind of query and Corporate laws services)
DISCLAIMER: The information given in this document has been made on the basis of the provisions of the Companies Act, 2013 and Rules made thereunder. It is based on the analysis and interpretation of applicable laws as on date. The information in this document is for general informational purposes only and is not a legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this document. Under no circumstances whatsoever, we are not responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document.
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