The CFSS scheme – the ‘Companies Fresh Start Scheme 2020’ brought hope to defaulting companies all over India.
But now, they desperately want the Government to extend the scheme by a few weeks or months.
What is the CFSS scheme?
Every company operating in India needs to follow norms laid out by the Government – from annual return filing, filling financial statements, books of accounts and other documents.
If the company fails to upload these documents, they are fined a penalty fee and categorized as ‘defaulting companies’. To help businesses cope with COVID-19, the ‘Companies Fresh Start Scheme’ was launched by the Ministry of Corporate Affairs to relieve compoanies of heavy compliance duties till 31st December 2020.
The CFSS scheme allows businesses to make good any filing-related defaults, irrespective of date, duration of default – and make a fresh start as a completely compliant entity.
Who benefits with the CFSS scheme?
Any company that defaulted on documentation and compliance are permitted to file the belated documents on the Ministry of Corporate Affairs website.
Forms to file under the CFSS scheme?
All companies availing this scheme should file forms –
- E-form CFSS 2020
- FormAOC 4 – Financial statements
- MGT 7 – Annual Returns
Why are companies requesting an extension of the scheme?
Several companies went to the Ministry of Corporate Affairs website to file their documents on the last date, but the website crashed. Many business owners took to social media to address their grievance since the delay caused huge penalty fees.
MCA portal is crashed and not responding at all. Challan not generating. Instead of extension to CFSS scheme & settlement Scheme, govt has imposed a 40k fine. @nsitharaman @nsitharamanoffc#EaseOfDoingBusiness
— Abhishek Singhvi (@DrAMSinghvi) January 2, 2021
However, the scheme expired on 31st December 2020, prompting several MSMEs and companies to take to social media to implore the Government to extend the scheme. Also, the penalties deter new companies and LLPs from registering.
This Twitter thread elucidates why companies want the CFSS scheme extended desperately.
What is exactly #Extend_CFSS and why it is trending?
Basically it is a request to extend an Amnesty Scheme introduced by #MCA (Ministry of Corporate Affairs). There are multiple reasons for it.. (1/n)
— CS Jigar Shah (@FCSJigarShah) January 3, 2021
What else can the Government do to ease MSME burden?
Clear outstanding dues
The Ministry of MSMEs on Sunday congregated to discuss a new set of schemes and measures to help MSMEs with outstanding dues arising from working capital requirements. Nitin Gadkari addressed the receivables issue by asking all government bodies to clear any dues to MSMEs in 45 days of supplies.
Increased focus to boost the rural economy
The Government also plans to raise the rural economy from 80,000 crores to 5 lakh crore for employment generation in agriculture, rural and tribal sector.
Increased digital credit
Fintech players are on the rise to provide collateral-free loans to companies at low-interest rates. Increased ‘pay-per-use’ models from payment gateways will enable more Khirana stores to go digital with online payments.
Secure transactions
The RBI has issued a set of guidelines for MSMEs to be wary of hackers and lending fraudsters. Just last week, the government arrested over 11 instant loan app scammers who cheated small business owners off a lot of money. Here’s how you can protect your online payments from any scam and protect your business.
RBI Cautions against unauthorised Digital Lending Platforms/Mobile Appshttps://t.co/BnarH8zbw6 #BeAware #BeSecure#rbikehtahai #StaySafe https://t.co/mKPAIp5rA3 pic.twitter.com/be0oSgrILS
— RBI Says (@RBIsays) December 24, 2020
Do not get behind on legal compliance
Whether the Government extends the scheme or not awaits to be seen. However, it is best for MSMEs to be aware and educated about different compliance and documentation processes. It is not easy to run a business and also ensure compliance of all documents for your business.
LegalWiz.in is an Instamojo merchant offering compliance services to let your business run smoothly without any legal issues. The company has also curated a LegalWiz free online course for anyone interested in learning about compliance and business registration.
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