No statutory dues certificate

Get CA certified No Statutory Dues Certificate with UDIN which is mandatory for Loans, RERA, Closing a company, M&A, Tenders, Startups raising funds, etc. Call us or Whatsapp us !!

When dealing with business takeovers, mergers or even loan approvals, one document that authorities or financial institutions often ask for is a No Statutory Dues Certificate. This certificate confirms that an entity has cleared all its statutory dues such as provident fund, ESI, GST, income tax or other government-related liabilities up to a specific date. It serves as a clean chit from the concerned department or statutory authority, providing assurance that there are no pending payments.

For businesses, especially those undergoing restructuring or seeking clearances from regulatory bodies, this certificate helps in establishing credibility and financial discipline. In this guide, we explain what a No Statutory Dues Certificate is, when it is required, how to apply for it and which authorities issue it.

What Are Statutory Dues?

Direct Tax Dues

Income Tax
TDS (Tax Deducted at Source)
Dividend Distribution Tax (for earlier years)

Indirect Tax Dues

Goods and Services Tax (GST)
Customs Duty
Excise Duty (for specific industries still under excise)

Labour Law Related Dues

Employees Provident Fund (EPF) contributions
Employees State Insurance (ESI) contributions
Labour Welfare Fund
Professional Tax
Bonus under Payment of Bonus Act
Gratuity dues (if applicable)

State-specific Dues

Stamp Duty and Registration Charges
Local Body Tax (LBT) or Municipal Cess

Other Statutory Dues

MCA Filing Fees (for companies)
ROC Penalties or Compliance Fees
Environment Cess (for applicable industries)
Import Export Dues (DGFT-related obligations)

list of Statutory Dues

Statutory dues are payments that a business or individual is legally required to make to the government under various laws. These include taxes, contributions, and levies mandated by central or state laws. Common examples of statutory dues are income tax, GST, professional tax, customs duty, employee provident fund (EPF), employees state insurance (ESI), TDS (Tax Deducted at Source), and labour welfare contributions. These dues are not optional, they are compulsory and must be paid within prescribed timelines.

What is a No Statutory Dues Certificate?

A No Statutory Dues Certificate is an official declaration or certification that confirms that an individual or entity has no outstanding statutory liabilities as of a particular date. This certificate is often required to demonstrate financial compliance and good standing with government departments.

Where is No Statutory Dues Certificate Required?

This certificate is commonly required in the following situations:

1. Loan Applications (Especially from Public Sector Banks)

When applying for a business or personal loan, especially from public sector banks and cooperative banks, the borrower is often required to submit a No Statutory Dues Certificate. This document helps the bank evaluate the applicant’s compliance with statutory laws such as GST, Income Tax, PF and ESI.

It acts as a risk mitigation tool for the bank, ensuring that the applicant doesn’t have hidden financial liabilities that could affect loan repayment. Many banks include this certificate as part of their standard documentation checklist during credit appraisal.

2. Business Sale, Merger, or Acquisition

During a merger, acquisition or sale of a business, the buyer conducts a thorough due diligence process to assess the financial and legal standing of the entity being acquired. A No Statutory Dues Certificate from a CA certifies that the target company has no pending dues to government authorities.

This ensures a clean transfer of ownership without the risk of inheriting past liabilities, which could lead to penalties or litigations post-transaction.

3. Voluntary Company Closure or Strike Off

When a business entity opts for voluntary winding up or files for strike-off under the Companies Act, 2013, the Registrar of Companies (ROC) often requires a No Statutory Dues Certificate as part of the closure process.

This certificate confirms that the company has fulfilled all its financial obligations toward statutory authorities and ensures that no dues are left unpaid before shutting down operations. It protects directors and promoters from future legal complications.

4. Due Diligence Process

Whether it’s for raising investment, onboarding new partners or undergoing regulatory inspection, a compliance due diligence is often conducted. A No Statutory Dues Certificate provides critical assurance to investors, legal advisors and auditors that the company is compliant with all applicable tax and regulatory norms.

5. Tenders or Government Contracts

While applying for government tenders or contracts, companies are typically required to submit various declarations and certificates, including a No Statutory Dues Certificate. This proves the bidder’s compliance record and financial integrity.

Government bodies prioritize working with vendors who have no pending statutory dues, as it reflects their credibility and reduces legal risk for the contracting authority.

6. Startup Fundraising or Investment

Investors such as venture capitalists, angel investors and private equity firms often demand a No Statutory Dues Certificate during the fundraising process. It assures them that the startup is not facing any legal or financial troubles related to tax compliance or statutory dues.

This document can significantly improve a startup’s chances of securing funding, as it adds transparency and builds investor confidence.