Govt not to waive fees on late filing of company documents

“With the economy having stabilized and the country out of the pandemic, there is no case for a waiver of additional fee for delayed filings,” said a person familiar with the matter.

The due date for payment without fee will vary across companies depending on the date on which they hold their annual general meetings (AGMs). For instance, a company that doesn’t file its financial statement within 30 days from holding its AGM and doesn’t submit annual returns within 60 days from the AGM would be liable for additional fee.

Companies have six months to hold AGMs after the end of a financial year, which means the last date this year to hold an AGM was 30 September. The additional fee will be levied on a daily basis till the documents are submitted.

“This year, a large number of companies have already filed their statutory documents, including many with additional fee,” said the person cited above.

The person said there seems to be some misconception about the liability to pay additional fees, even among professionals. “It isn’t possible for all the 1.5 million active companies to hold their AGMs on 30 September. Many would have held it earlier and their last date of filing documents without the additional fee would start earlier and it is not correct to assume the ‘due date’ for filing financial statements as 29 October. That is the “last possible” due date for financial statements without additional fee,” the person said.

Email queries to the corporate affairs ministry on Friday remained unanswered till press time.

Professionals are of the view that a fee waiver may do good. Noorul Hassan, partner with Lakshmikumaran & Sridharan Attorneys said during covid, the government had extended the relaxation from paying additional fee but it has not been extended this year. “Paying the additional fee for delay in filing financial statements and annual returns may take care of the breaches in compliance. We usually do not file for condonation of delay. One consequence of not being compliant with the filing of annual returns or financial statements for three consecutive financial years is that it results in disqualification of directors,” said Hassan. He also said that there may be a case for a waiver of additional fee at least for small companies as it increases their compliance burden.

Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm, said considering the normalization of the economy, the Registrar of Companies has not given any extension to hold the AGM for the financial year 2021-22 and has also not given any waiver of the per-day additional fees to be paid by companies. Consequently, companies which were not able to file their annual accounts and annual returns within the due date are now filing with an additional fee, said Maheshwari. “We believe that some extension should have been given considering several teething issues encountered on the website of the ministry of corporate affairs during the last two days of the deadline,” he said.

Companies who default on filing annual returns and financial statements also stand the risk of attracting a penalty subject to an adjudication mechanism that is meant to protect those who have filed with additional fees. A company that doesn’t file annual returns for two consecutive years and doesn’t acquire dormant status could expose it to the risk of getting removed from the official register.