FINANCIAL YEAR-END COMPLIANCE CHECKS (BEFORE 31ST MARCH) UNDER THE COMPANIES ACT 2013 AND GST

FINANCIAL YEAR-END COMPLIANCE

 CHECKS (BEFORE 31ST MARCH) UND

ER THE COMPANIES ACT 2013 AND GST

FINANCIAL YEAR-END COMPLIANCE CHECKLIST

UNDER COMPANIES ACT, 2013:

1	Ensure minimum Board Meetings are held (Sec 173)
2	Director disclosures (MBP-1 & DIR-8)
3	Check related party transaction approvals required before start of next financial year (Sec 188)
4	Review loans & investments compliance (Sec 185/186)
5	Review CSR obligation & unspent amount (Sec 135), if applicable
6	Update statutory registers & minutes books
7	Reconcile share capital & verify pending ROC filings
8	Review charge filings, if any
9	Statutory Audit preparation- Books of accounts must be finalized for audit

Under Companies Act 2013, focus on board meetings, audits, and statutory filings.

UNDER GST

1	Reconcile GSTR-1, GSTR-3B with books
2	ITC reconciliation & vendor mismatch follow-up-- Match ITC with GSTR-2B and books
3	Payment of GST liabilities- Ensure no pending dues.
4	Filing of GSTR-9 (Annual Return)-- Mandatory for taxpayers > ₹2 crore turnover.
5	Filing of GSTR-9C (Reconciliation Statement)- Required if turnover > ₹5 crore.
6	Review of e-Invoices & e-Way Bills

Under GST, ensure reconciliation of returns, ITC, and timely filing of annual returns.

Completing these before 31st March avoids penalties and ensures smooth transition into the next financial year. 

COMPLIANCE CALENDAR (JAN–DEC)

Month	Companies Act 2013	GST
January – February	Conduct Board Meetings for review of accounts-Prepare draft financial statements--Update statutory registers	Reconcile GSTR-1 & GSTR-3B--Match ITC with GSTR-2B---Review e-Invoices & e-Way Bills
March (Before 31st March)	Finalize books of accounts-- Complete statutory audit preparation---Draft Director’s Report	Clear pending GST liabilities---Final ITC reconciliation---Ensure outward supplies match returns
April – June	Hold Board Meeting to approve audited accounts--Prepare AGM agenda & notices	Continue monthly GST filings---Review compliance for new FY
July – September	Conduct AGM (by 30th Sept)---File AOC-4 (within 30 days of AGM)--- File MGT-7 (within 60 days of AGM)	Continue monthly GST filings
October – December	Secretarial Audit (if applicable)-- Internal compliance review	File GSTR-9 (Annual Return) by 31st Dec--- File GSTR-9C (Reconciliation Statement) if turnover > ₹5 crore--- GST Audit (if applicable)

 

YOUR COMPLIANCE PARTNER – R V SECKAR FCS, LLB

79047 19295

KEY CORPORATE COMPLIANCE ISSUES IN JSW GROUP

KEY CORPORATE COMPLIANCE ISSUES IN

JSW GROUP

JSW GROUP

The JSW Group, a major Indian conglomerate with interests in steel, energy, and infrastructure, currently faces a multifaceted regulatory and compliance landscape.

As of early 2026, the primary issues center on environmental and human rights scrutiny, mining contract adherence, and cross-border supply chain hurdles.

HUMAN RIGHTS AND INTERNATIONAL SCRUTINY (ODISHA PROJECT)

The most significant reputational and compliance risk currently involves the JSW Utkal Steel Ltd (JUSL) project in Odisha.

UN WARNING (FEBRUARY 2026):	Eight UN officials issued a formal communication warning that the construction of the new steel plant may be violating the rights of indigenous peoples and forest-dwelling communities.
HUMAN RIGHTS DUE DILIGENCE:	The UN officials requested detailed information on JSW’s due diligence processes regarding the rights to food, water, and a clean environment. As of early 2026, reports indicate JSW has faced criticism for a lack of formal response to these specific inquiries.
FINANCING RISK:	International monitoring groups have alerted major global banks (including BNP Paribas and Standard Chartered) that continued financing could lead to non-compliance with the UN Guiding Principles on Business and Human Rights (UNGPs).

 

NON COMPLIANCE ISSUES IN MINING AND DETAILS OF PENALTIES

JSW Steel’s reliance on captive mining has led to recent legal friction with Karnataka state authorities:

PERFORMANCE SECURITY FORFEITURE (FEBRUARY 2026):	The Supreme Court declined to stay a Karnataka government order to forfeit ₹128 crore in performance securities.
Issue:	The forfeiture was triggered by the company's alleged failure to meet the Minimum Guaranteed Production (MGP) quotas at its iron ore mines in Chitradurga. This highlights a critical regulatory risk where operational shortfalls in mining lead to heavy financial penalties and potential "regulatory overhang" on future mining leases

 

₹128 CRORE FORFEITURE

The Supreme Court’s decision on February 18, 2026, to uphold the ₹128 crore forfeiture of JSW Steel’s performance security by the Karnataka government serves as a notable "one-off" financial hit.

While JSW Steel remains highly profitable, this penalty directly affects the bottom line of the current quarter (Q4 FY26). Here is a breakdown of the financial impact based on the latest performance data:

DIRECT EARNINGS IMPACT (BOTTOM LINE)	Net Profit Deduction: The ₹128 crore will likely be accounted for as an "Exceptional Item" or a direct expense in the Q4 FY26 financial results.
PROPORTION TO PROFIT:	In the previous quarter (Q3 FY26), JSW Steel reported a consolidated Net Profit of ₹2,410 crores. A ₹128 crore hit represents roughly 5.3% of a typical quarter’s net profit, indicating a measurable but non-crippling impact on earnings.
EPS DILUTION:	For a company with a massive share base, the impact on Earnings Per Share (EPS) is expected to be minimal (estimated at a few paisa per share), yet it contributes to the broader "regulatory overhang" that investors track.

COMPARISON WITH PAST PENALTIES

To put this in perspective, JSW Steel has navigated similar "regulatory leaks" before:

SEPTEMBER 2024:	Recognized a ₹342 crore provision for surrendering the Jajang mining lease.
SEPTEMBER 2023:	Recognized a ₹389 crore provision for a "Green Cess" in Goa.e

 

ENERGY SECTOR: CONTRACTUAL VS. REGULATORY CAPS

In the energy division, JSW has been navigating the balance between Central Electricity Regulatory Commission (CERC) rules and state agreements:

HYDRO POWER DISPUTE:	A 2025 Supreme Court ruling involving JSW Hydro Energy affirmed that while CERC caps the "free power" a company can pass into consumer tariffs (usually at 13%), the company must still honor higher contractual obligations (e.g., 18%) made to state governments.
FINANCIAL IMPACT:	These "excess" percentages must be borne by JSW and cannot be recovered from consumers, impacting the net profitability of specific power assets.

 

SUPPLY CHAIN AND CROSS-BORDER REGULATIONS

JSW’s foray into the electric vehicle (EV) market via JSW Motors is currently stalled by geopolitical and quality control regulations:

IMPORT LICENSES (2026):	The company has warned of delays in its first car launch due to pending licenses for importing critical components (like safety glass) from China.
QUALITY CONTROL ORDERS (QCO):	Strict Indian quality standards require overseas suppliers to be certified by local authorities. JSW’s heavy dependence on Chinese technology partners for its EV venture (including JSW MG Motor India) remains sensitive to New Delhi’s scrutiny of Chinese investments.

CORPORATE GOVERNANCE AND SEBI COMPLIANCE

Despite the operational challenges, the Group maintains high transparency in its statutory filings:

SEBI DISCLOSURES:	Both JSW Steel and JSW Energy remain compliant with Regulation 30 of the SEBI LODR Regulations, notably in the timely reporting of NCLT approvals for acquisitions (e.g., the Raigarh Champa Rail Infrastructure acquisition in January 2026).
ESG FRAMEWORKS:	The group has shifted toward "Double Materiality" in its 2025-2026 reporting, aligning with the Global Reporting Initiative (GRI) and the Business Responsibility and Sustainability Reporting (BRSR) mandated by SEBI.

 

The above lapses signify how compliance is important for a conglomerate business group like JSW.

R V SECKAR , FCS, LLB, 79047 19295

ED IMPOSED A ₹184 CRORE FEMA VIOLATIONS PENALTY ON NEWSCLICK WHICH IS THE LARGEST FEMA-RELATED FINES IMPOSED ON A MEDIA ORGANIZATION IN INDIA

 

ED IMPOSED A ₹184 CRORE FEMA VIOLATIONS PENALTY ON NEWSCLICK WHICH IS THE LARGEST FEMA-RELATED FINES IMPOSED ON A MEDIA ORGANIZATION IN INDIA

PPK NEWSCLICK STUDIO PVT. LTD

On 16 February 2026, the Enforcement Directorate imposed a Rs 184 crore penalty under the Foreign Exchange Management Act (FEMA) against PPK NewsClick Studio Pvt. Ltd. and its founder editor Prabir Purkayasthaz

DETAILS OF THE VIOLATIONS

1. The company misrepresented the nature of its business activity in statutory filings.

2. Foreign inward remittances declared as export of services but found to be in contravention of FEMA provisions.

3. Transactions were intentionally designed to defeat the objectives of the foreign exchange regulatory framework.

 

4.Misrepresentation of foreign direct investment (FDI) funds

 

5, Misdeclaration of services and exports

 

₹184 CRORE PENALTY

The Enforcement Directorate’s adjudicating authority has imposed a ₹184 crore penalty on NewsClick and its founder-editor Prabir Purkayastha for alleged violations of the Foreign Exchange Management Act (FEMA).

DETAILS OF THE PENALTY

- Rs 120 crore penalty levied on the company.

- Rs 64 crore penalty levied on Purkayastha personally, under Section 42 of FEMA, holding him liable for the company's conduct.

LEGAL GROUNDS:

Purkayastha was held liable under Section 42 of FEMA, which makes directors responsible for contraventions during their tenure.

INVESTIGATIONS:

NewsClick and its founder are also under scrutiny by other agencies including the CBI, Delhi Police, and Income Tax Department for alleged violations ranging from money laundering to breaches of the Foreign Contribution Regulation Act (FCRA).

HIGHEST PENALTY UNDER FEMA

This penalty is one of the largest FEMA-related fines imposed on a media organization in India.

R V SECKAR, FCS, LLB , 79047 19295

THE OPERATION OF FRAUDULENT INPUT TAX CREDIT (ITC) IN INDIA BY FRAUDUSTERS

 THE OPERATION OF FRAUDULENT INPUT

 TAX CREDIT (ITC) IN INDIA BY

 FRAUDUSTERS

Fraudulent ITC refers to the illegal practice of availing tax credits under the Goods and Services Tax (GST) framework without actual supply of goods or services. This undermines revenue collection and creates unfair competition.

 

COMMON METHODS OF ITC FRAUD

Bogus Invoices:	Claiming ITC on fake or inflated invoices without actual movement of goods.
Non-existent Suppliers:	Using shell companies or firms with cancelled GST registrations to generate invoices.
Circular Trading:	Creating artificial transactions among related parties to inflate turnover and claim ITC.
No Receipt of Goods:	Availing ITC without physically receiving goods or services, only on paper transactions.

 

RECENT CASES

₹2,150 crore scam:	DGGI busted a massive fake ITC-export refund fraud, arresting masterminds across India. A separate ₹17 crore fraud was unearthed in Andaman & Nicobar
₹6.53 crore fraud:	A company director was arrested in Delhi for availing ITC on bogus invoices worth ₹36.28 crore, with suppliers found to be fake or non-functional .
Nationwide crackdown:	Between August–October 2024, authorities identified 17,818 fake firms involved in ITC frauds worth ₹35,132 crore, saving ₹6,484 crore through ITC blocking and recoveries
FY26 surge:	GST officers detected fraudulent ITC claims of ₹15,851 crore in April–June 2025, showing a sharp rise despite fewer fake firms .

 

LEGAL FRAMEWORK & ENFORCEMENT

•     Fraudulent ITC claims violate the CGST Act, 2017.

•     Offenders can face:

•     Arrest under Section 69 of the CGST Act.

•     Cancellation of GST registration.

•     Attachment of properties for recovery.

•     Prosecution with imprisonment and fines.

•     Courts have clarified that genuine ITC cannot be denied if transactions are bona fide, even if suppliers fail to pay GST .

KEY TAKEAWAYS

 Vendor due diligence, GST registration status checks, and actual goods movement documentation are now critical — not optional.

Because in GST law, “Documentation without substance = Litigation (and possibly prosecution).”

 

R V SECKAR , FCS, LLB 79047 19295

KEY MCA PENALTY AREAS (2025-2026 TRENDS):

  KEY MCA PENALTY AREAS (2025-2026 TRENDS):

MCA IMPOSING SIGNIFICANT PENALTIES FOR NON COMPLIANCES UNDER COMPANIES ACT,2013

The Ministry of Corporate Affairs (MCA) imposes significant penalties—ranging from ₹1 lakh to over ₹7 lakh—on companies and their directors for compliance lapses under the Companies Act, 2013. Frequent penalties stem from failures in filing annual returns (MGT-7/AOC-4), maintaining registered offices (INC-22), or appointing key personnel.

KEY MCA PENALTY AREAS (2025-2026 TRENDS):

 

STATISTICS ON NON-COMPLIANCE

·      1250 Cases have been filed for non-compliance during 25-26 and fines collected around Rs 75 Crores.

·      TOP VIOLATIONS

·      Reporting Issues – 45%

·      Audit Lapses         -30%

·      Regulatory non-compliances -25%

FINANCIALS MISTATEMENTS

·      Fraud Losses Rs 120 Crores

DIRECTOR DISQUALIFICATIONS

·      Disqualifications   320

·      Banned Directors    95

REASONS FOR DISQUALIFICATIONS

·      Fraud                            40%

·      Negligence                   30%

·      Conflict of Interest     25%

 

CONSEQUENCES OF NON-COMPLIANCE:

PERSONAL LIABILITY:

Penalties are often imposed on both the company and every officer in default (directors).

INCREASED SCRUTINY:

Repeated failure to respond to notices leads to ex-parte orders and higher penalties. 

 Failure to file forms can restrict a company's ability to borrow money, raise funds, or operate legally.

APPEAL TO REGIONAL DIRECTOR

Companies have 90 days to pay penalties or can file appeals to the Regional Director (RD) within 60 days of receiving an order.

RISKS & CONSEQUENCES

•     Monetary fines can strain finances.

•     Directors may face personal liability.

•     Persistent non-compliance can lead to prosecution or disqualification of directors.

•     Reputation damage and restrictions on future operations.

PREVENTIVE ACTION:

Timely filing of annual returns, financial statements, and board reports is critical to avoid penalties.

R V SECKAR FCS,LLB 79047 19295