Ease of Doing Business: Commerce Ministry seeks cut in compliant burden on firms

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New Delhi | Published: May 13, 2019 5:51:49 AM

Sources said that commerce ministry earlier this week approached the MCA requesting it to explore options regarding bringing down the number of compliances companies have to follow to reduce their regulatory burden.

Another issue flagged by the commerce ministry was over the number of returns filed by companies, sources said.

In an attempt to bring down the compliance burden on companies, especially the small and medium enterprises (SMEs), the commerce ministry has urged the ministry of corporate affairs (MCA) to explore avenues where firms can opt for self-certifying their returns as well as clubbing all the returns to be filed in a year into a single annual return.

Besides, it also wants that forms such as those related to certifying a company’s registered office and for becoming director in a company too should be clubbed with the annual return.

Sources said that commerce ministry earlier this week approached the MCA requesting it to explore options regarding bringing down the number of compliances companies have to follow to reduce their regulatory burden.

“They urged MCA to do away with the requirement of verification by a chartered accountant or a company secretary in filing returns under Companies Act, 2013 and introducing the practice of self-certification or self-verification,” a senior official said.

Another issue flagged by the commerce ministry was over the number of returns filed by companies, sources said, adding that “ministry is in favour of exploring whether there can be scope for merging all the returns into a single annual return to reduce compliance burden”.

Confirming the development, a commerce ministry official said that the government is committed towards creating a conducive business environment by streamlining such regulatory structures.

“We have also requested MCA to look into filing for forms for validating a company’s address (Form INC-22A) and for applications regarding becoming director in a company (Form DIR-3). We have inquired whether the late date of filing form INC-22A and DIR-3 can be deferred and the same can be merged with the annual return, which is filed by November 30 every year”.

The industry largely had a mixed response to the development with AMRG & Associates, a chartered accounting firm saying that merging numerous forms in a single annual return is a good move towards ease of doing business and would help reduce the burden of compliances on corporate sector.

Gaurav Mohan, the CEO of AMRG & Associates, however, had a word of caution. “Moving away from profession certifications to self-certification would greatly increase the risk of fraud, wilful misstatement, and suppression of facts leading to corporate mismanagement,” he said. “Moving away from professional responsibility and accountability may initiate an era of non-governance burning investor confidence in Indian markets.”

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