DPT-3: Reporting of Exempted Deposits to MCA By CS Dhaval Gusani


MCA vide its notification dated 22nd January, 2019, notified Companies (Acceptance of Deposits), Amendment Rules, 2019 in which Sub-rule 3 in Rule 16A was added which provides as follows:
 
“Every company other than Government company, shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to the date of publication of this notification in the Official Gazette (22nd January, 2019), as specified in Form DPT-3 within 90 days from the date of said publication of this notification along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.”.
 
In the said notification, MCA has also added an explanation in Rule 16: It is hereby clarified that Form DPT-3 shall be used for filing return of deposit or particulars of transactions not considering deposit or both by every company other than government company.  
 
MCA vide its general circular 05/2019 dated 12th April, 2019, clarified that now Companies are required to file data with regard to exempted deposits upto 31st March, 2019 (as opposed to the publication of earlier notification date i.e 22nd January, 2019). Now, Companies are required to file data of exempted deposits for the period of 01st April, 2014 to 31st March, 2019, within 30 days from the deployment of a new version of DPT-3.

Now it is 90 days from March 31, 2019

What is meant for Deposit?

The definition of Deposit in inclusive and not exhaustive. Rule 2(1)(C) of Acceptance of Deposit Rules, 2014 exempts certain transactions from the ambit of Sec 73 to 76. Any transactions outside the said rule will be deemed as Deposit and all the provisions of Sec 73 to 76 will apply.
 
“Deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company but does not include such categories of the amount [Provided in Rule 2(1)C] as may be prescribed in consultation with the RBI.
 
Broadly, Deposits will include-
 
  • Deposit in substance;
  • Amount received from any Body Corporate except from the Company;
  • Installment schemes which promise returns, in cash or in kind, at the end of the specified period;
What are the exempted deposits from Sec. 73 to 76?
 
The definition of deposit excludes certain transactions from its purview which are given in the Rule 2(1)(C) of the Companies (Acceptance of Deposit Rules), 2014. So, We need to look at Rule 2(1)(C) to see what are the exempted deposits for which this one time DPT-3 is required.
 
Rule 2(1)(C) of the Companies (Acceptance of Deposit Rules), 2014
 
"Deposit" includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include –
 
i. Any amount received from the C.G, S.G, Local Authority or Statutory Authority constituted under an Act of Parliament or a State Legislature;
 
ii. Any amount received from Foreign Governments, Foreign Banks, Multilateral financial institutions, Foreign Governments owned development financial institutions, Foreign export credit agencies, Foreign collaborators, Foreign bodies corporate and Foreign citizens, Foreign authorities or Persons resident outside India subject to the provisions of FEMA Act and Rules;
 
iii. Any amount received as a loan or facility from any banking company or banking institution;
 
iv. Any amount received as a loan or financial assistance from public financial institutions or any regional financial institutions or insurance companies or scheduled banks;
 
v. Any amount received against the issue of commercial paper or any other instruments issued in accordance with the guidelines or notification issued by the Reserve Bank of India;
 
vi. Any amount received by a company from any other company;
 
vii. Any amount received and held towards subscription money, share application money or advance towards allotment of securities pending allotment.
 
Explanation - For the purposes of this sub-clause, it is hereby clarified that -
 
If the securities, for which application money was received, can’t be allotted within 60 days from the date of receipt of the application money, such application money is to be refunded to the subscribers within 15 days from the date of completion of 60 days. If not refunded, such amount shall be treated as a deposit under these rules.
 
viii. Any amount received from a director of the company or a relative of the director of the Private company:
 
Provided that the director of the company or relative of the director of the private company furnishes to the company at the time of giving the money, a declaration in writing that the amount is not borrowed money.
 
ix. Any amount raised by the Issue of Bonds OR Secured Debentures OR bonds OR debentures compulsorily convertible into shares of the company within 10 years:
 
ixa Any amount raised by issue of Unsecured, Listed, Non-Convertible Debentures;
 
x. Any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest bearing security deposit;
 
xi. Any non-interest bearing amount received and held in trust;
 
xii. Any amount received in the course of, or for the purposes of, the business of the company;
 
(a) As an advance for the supply of goods or provision of services provided that such advance is appropriated against supply of goods or provision of services within a period of 365 days from the date of acceptance of such advance.
 
(b) As an advance received in connection with consideration for an immovable property under an agreement or arrangement. Provided that such advance is adjusted against such property in accordance with the terms of agreement or arrangement;
 
(c) As a security deposit for the performance of the contract for supply of goods or provision of services;
 
(d) As an advance received under long term projects for supply of capital goods except those covered under item (b) above:
 
(e) As an advance towards consideration for providing future services in the form of a warranty or maintenance contract as per written agreement or arrangement;
 
(f) As an advance received and as allowed by any sectoral regulator or in accordance with directions of Central or State Government;
 
(g) As an advance for subscription towards publication, whether in print or in electronic to be adjusted against receipt of such publications;
 
xiii. Any amount brought in by the promoters of the company by way of unsecured loan in pursuance of the stipulation of any lending financial institution or a bank subject to fulfillment of the following conditions, namely:-
 
(a) The loan is brought in pursuance of the stipulation imposed by the lending institutions on the promoters to contribute such finance;

(b) The loan is provided by the promoters themselves or by their relatives or by both; and

(c) The exemption under this sub-clause shall be available only till the loans of financial institution or bank are repaid and not thereafter;
 
xiv. Any amount accepted by a Nidhi company in accordance with the rules made under Section 406 of the Act.
 
xv. Any amount received by way of subscription in respect of a chit under the Chit Fund Act;
 
xvi. Any amount received by the company under any collective investment scheme;
 
xvii. An amount of Rs. 25 lakh or more received by a start-up company, by way of a convertible note (convertible into equity shares or repayable within a period not exceeding five years from the date of issue) in a single tranche, from a person.
 
xviii. Any amount received by a company from Alternate Investment Funds, Domestic Venture Capital Funds, Infrastructure Investment Trusts, Real Estate Investment Trusts and Mutual Funds registered with the Securities and Exchange Board of India in accordance with regulations made by it.”

Which Companies need to file One Time DPT-3?
 
All the Companies (Except Govt. Company) which have accepted deposits or loans which are exempted from the provisions of Section 73 to 76 of the Companies Act, 2013 and such deposits and loans are still outstanding as on the date of 31st March, 2019 are required to file this one time return DPT-3 within 30 days from the deployment of new version of form DPT-3.
 
Which Companies are exempted from reporting requirements?

Government Companies, Banking Companies and NBFCs.

What if Company has accepted exempted deposit after 01st April, 2014 and repaid before 22nd January, 2019?

The amendments require reporting of the details of outstanding sums of receipt of money not considered as deposit as per the definition for the period starting from 1st April, 2014 to the 31st March, 2019. Therefore, if the company had accepted money from a company as a loan in the year 2014 which has already been repaid in 2017 shall not require filing of DPT-3.

Which period data is required to be filled in one time DPT-3?
 
The details of outstanding exempted deposits accepted between 01st April, 2014 to 31st March, 2019, are required to be filled in one time DPT-3.

What if Company has exempted deposits as on 22nd January, 2019 but repaid by 31st March, 2019?

The original date of notification is 22nd January, 2019 but MCA circular dated 12th April, 2019 requires to file outstanding loans as on 31st March, 2019. So, I think such companies need not required to file DPT-3 because it does not have outstanding loans as on 31st March, 2019.

What if Company has both deposits and exempted deposits as on 31st March, 2019?

Such Companies are required to file Two DPT-3, First, for one time return for exempted deposits within 30 days of deployment of new version of DPT-3 and Second, by 30th June for deposits covered under Sec 73 to 76 of the Companies Act, 2013.

What if Company doesn’t have any deposits or exempted deposits as on 22nd January, 2019?

Such Companies are not required to file any return even NIL return is not required.

Return filing will be one time or every year?
 
As per our view, DPT-3 is one-time return only for companies which have accepted exempted deposits. However, Companies which has deposits under Sec 73 to 76 are required to file DPT-3 annually by 30th June.
 
What will be the consequences for non- reporting?
 
Section 76A and Rule 21 provides punishment for non-compliance with any provisions of the rules.
 
On the company: A fine of minimum Rs. 1 Crore or twice the amount of deposit so accepted, whichever is lower, which may extend to Rs. 10 Crore; and
 
On the officers of the Company who is in default: imprisonment upto 7 years and with a fine of not less than Rs. 25 lakh which may extend to Rs. 2 Crore.
 
Conclusion
 
The exemption list of deposits covers common items like Bank Loans, Directors’ Loans, Promoters Loans, Unsecured Loans from Members, Advance from Customers among others which are very common for each type of entities irrespective of its size, status etc. Now, the Companies will have to disclose details of all these transactions even though the same are not deposits.

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