News Alert: Notification issued by Ministry of Corporate Affairs (MCA) and Reserve Bank of India (RBI)
News from the desk of Ministry of Corporate Affairs (MCA)
Every cost auditor appointed under the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, is required to prepare and issue a cost audit report in e-form CRA-3 to the board of directors of a company on which a cost audit is applicable, within a period of 180 days from the end of the relevant financial year, i.e., on or before the 30th day of September of the relevant year.
Further, every company on which a cost audit is applicable needs to file a cost audit report in e-form CRA-4 with the central government within a period of 30 days of receipt of the cost audit report from a cost auditor.
Due to the outbreak of the Covid-19 pandemic, the stipulated date of the 30th day of September for the financial year 2019-20 was extended to the 30th day of November, 2020, vide MCA’s General Circular No. 29/2020 dated 10th September, 2020. Upon receipt of several representations from various stakeholders seeking further extension of the last date of filing of e-form CRA-4 (attaching the cost audit report). MCA had further extended the last date of submission of the cost audit report by the cost auditor to the Board of Directors of a company from the 30th day of November, 2020, to the 31st day of December, 2020.
Accordingly, the stipulated period of 30 days for the filing of e-form CRA-4 by the company with the central government shall be reckoned from the 31st day of December, 2020. actual date of issuance of the cost audit report, whichever is earlier. The complete text of the notification may be viewed at the below link: http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.38_01122020.pdf
News from the desk of Reserve Bank of India (RBI)
The Reserve Bank of India had, with a view to bringing clarity, issued advisory instructions to the authorised dealer banks to not issue any fresh permissions and/or renewals to any foreign law firm for the opening of a liaison office in India till the policy is reviewed based on, among others, the final disposal of the matter by the Hon’ble Supreme Court of India.
The Hon’ble Supreme Court of India has, while disposing of the case, held that advocates enrolled under the Advocates Act, 1961 alone are entitled to practise law in India and that foreign law firms/companies or foreign lawyers cannot practise the profession of law in India. As such, foreign law firms/companies or foreign lawyers or any other person resident outside India are not permitted to establish any branch office, project office, liaison office or other place of business in India for the purpose of practising the legal profession.
Accordingly, AD Category-I banks are directed not to grant any approval to any branch office, project office, liaison office or other place of business in India under FEMA for the purpose of practising the legal profession in India. Further, they shall bring to the notice of the Reserve Bank in case any such violation of the provisions of the Advocates Act comes to their notice. The Master Direction Establishment of Branch Office (BO)/Liaison Office (LO)/Project Office (PO) or any other place of business in India by foreign entities is being updated to incorporate the contents of the said circular.
The said circular RBI/2020-21/69 A.P. (DIR Series) circular No. 07 was notified on November 23, 2020.
The complete text of the notification may be viewed at the below link: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/APDIR0798DFFED77933459F8FEDF0E4754D20B2.PDF
Article contributed by: Luv Malhotra, Senior Manager, MBG Corporate Services
Additional Resources:
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- MCA Mandates RBI Approval for Foreign Holding Companies Merging with Indian Subsidiaries
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