M.P.Tony's Blog

New FVU for efiling of TDS returns released

2012-01-04T17:10:00.000-08:00

File validation Utility (FVU) version 3.3 for FY 2010-11 onwards and version 2.131 for upto FY 2009-10 released

DSC- Important message

2012-01-04T17:03:00.000-08:00

If in case you are using Digital Certificate issued post 1st January 2012 (SHA2 Certificate ),please ensure that you have Windows XP ( SP3 )/ Windows Vista/Windows 7 installed.

Yet another problem is going to be started. We have windows XP SP2 in all our systems. Now we have to arrange for a new system with windows XP SP3 for newer DSC and SP2 for older DSCs and also keep these DSC saperate i.e. you keep on remembering that which is issued before 1st January 2012 and which is issued after 1st January.

Greetings

2011-12-24T22:11:00.000-08:00

Wish you and your family

Merry X'mas

and Happy New Year

Tony & Family

GDP grows 6.9% in second quarter of 2011

2011-11-30T06:46:00.000-08:00

Due date of filing balance sheet in XBRL extended from 30th Nov to Dec, 2011

2011-11-30T05:55:00.000-08:00

New PAN Application form

2011-10-29T16:41:00.000-07:00

The new PAN application form, which is effective from 01.11.2011, is available on the link below:-

http://www.taxindiaonline.com/RC2/pdfdocs/forms/itforms/itr_2011-12/New_PAN_Form.pdf

How to know the address in PAN Data base

2011-10-12T01:00:00.000-07:00

To know the address of tax payer in PAN data base, just follow the steps given below:-

Log in to 26AS.

In 26AS, just before the PAN, we can see a + (plus sign), just click on this + sign

Your PAN Data base address will be displayed.

Service Tax on Rent

2011-10-09T08:31:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Dear Friends

1. Please let me know what is the current status, whether we have to pay service tax or wait for further.

2. One of My Client was paying service tax and his receipt was more than 10 Lacs in 2009-10. In 2010-11 his receipt was 7.50 Lacs . Current year that is 2011-12 his expected receipt will be 7.80 Lacs. Whether in current year he is liable to pay tax.

Interesting service tax issues - 6

2011-10-09T08:29:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Dear Colleagues;

A hotel is receiving advance on booking of rooms. Rooms will be
occupied and thus service will be rendered at a later date.

My query is whether service tax is payable at the time of receiveing
of advance or when actual service is rendered.

If service tax is payable on advance then what happens if booking is
cancelled and

a) advance is refunded in full.
b) advance is refunded after cancellation of certain charges.

Kindly advise.

regards,

Interesting service tax issues - 5

2011-10-09T08:28:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Query:

A company has paid Service Tax on Transpotation(GTA) @ 2.575 %.

The company is also liable to pay Service Tax on Business auxillary Services.

Both activities, i.e. transpotation & output services provided are directly related.

Can the company take setoff of Service Tax Paid under GTA aginst the Service Tax Payable on Business Auxillary Services.

Kindly Advice.

Interesting service tax issues - 4

2011-10-09T08:22:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Dear members

i would like to be clarifed understated issue on ser.tax.

The scope has now been expanded to cover:

q1. Services provided by business entities to any person;

q2. Representational services before any Court, Tribunal or an authority, to be provided by any person to a business entity;

q3. services provided by arbitrators to business entities.

Whether service provided by an lawyer in his individual capacity through a solicitor for a business entity is laible to service tax.or otherwise when a lawyer raises a bill on soilicitor' should he charge ser.tax.

Regds

Interesting service tax issues - 3

2011-10-09T08:19:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Dear All,
Guidance is sought for the following query:

A limited company providing whole Operating & maintainces Service to his subsidary company. For this service the company raise monthly bill inclusive ST.Besides the subsidary company also bear other cost directly like external employee training, travelling, rent of accomodation, maintainces etc etc of Holding companies staff . Will there be any service tax liability arising on other cost??

regards,

XXXX

Interesting service tax issues - 2

2011-10-09T08:14:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Dear Sirs

Please help me with respect to the below query:-

Can a Concern simultaneously choose both the option under Rule 6(2) and 6(3) of Cenvat Credit Rules for availing Cenvat Credit in the following manner.

1. Maintian separate accounts for those Input Services which are exclusively used for providing Taxable services and take credit as per Rule 6(2).

2.maintain a composite accounts for those input services which are used for both Taxable and Exempted services and than take credit as per Rule 6(3) option (ii) by reversing the amount as attributable to exempted output services.

Your quick reply in this matter will be highly helpful.

Regards

XXXXXX

Interesting service tax issues - 1

2011-10-09T07:39:00.000-07:00

Here is an interesting service tax issue from a friend.

Mail me your views on it to mail id: ableindiaemail@yahoo.com

Dear Members,

Need clarification: -

1. Whether there is service tax on Lease Premium paid on leasehold rights on land. If yes then can anyone provide me the provisions on the same. and if no then is there any case reference or provision on the same.

2. Whether we can claim depreciation, by capitalizing the lease premium , during the period of leasehold rights.

As per my view

1. There should not be any service tax on lease premium.

2. Further we can claim depreciation on lease premium during the continuity of leasehold rights.

Your view on the above matter is highly solicited as It's a bit urgent..

Thanking You

With Regards

XXXXXX

service tax efiling, efile at the earliest

2011-10-09T07:34:00.000-07:00

As we all know, the efiling of service tax return is now made mandatory for all wef. 1.10.2011.

However, e-payment is mandatory only if the tax payment exceeds Rs. 10 lakhs in a financial year.

Unlike Income tax and VAT, the possibility of an extension of due date for filing service tax return is not there.

Moreover, the penalty (late fee) for non filing of service tax returns is also very high these days.

GST panel going to meet again

2011-10-09T07:27:00.000-07:00

After a long gap, the GST panel headed by Bihar Finance Minister Mr. Sushil Modi is going to meet again on 14 th October to sort out the issued in connection with rolling out GST in India.

Let us wait for the outcome of this meeting. As understood from the medias and the speed with which we are going ahead, the possibility of introduction of GSt from 1st of april, 2011 is next to impossible.

Tax refund letters to reach IT firms soon

2011-10-05T00:57:00.000-07:00

NEW DELHI: The finance ministry is firming up a plan to expedite payment of thousands of crores of rupees it owes the software and BPO industry in tax refunds. The move promises to bring some joy to the $50 billion information technology sector haunted by the deepening economic woes of the western world.

"A plan is being finalised to ensure refunds are issued expeditiously," a finance ministry official told ET on condition of anonymity. Chairman of the Central Board of Excise and Customs S D Mazumdar said the plan will be taken up by the board this week.

Software makers in India are facing a huge pressure on their margins as fears of a recession in the US and debt crisis in Europe cripple their main export markets. Industry watchers say a settlement of pending refund claims during such a distress will help shore up the dwindling bottom lines of these companies.

The IT and BPO industry, which employs over two million workers, has been consistently raising the issue of refunds with the government. Infosys Chairman Emeritus N R Narayana Murthy had even voiced the concern at a recent meeting of industry leaders with Finance Minister Pranab Mukherjee.

Experts say the problem arises because of a linkage between input services consumed by the industry and output services that are exported.

Since no taxes can be levied on exports, taxes on inputs used in the process of carrying out the exports are neutralised through refunds.

In the IT sector, however, there has been an issue over taxes paid on input services consumed in the process of providing a service overseas. Although some inputs have been specified by the CBEC, confusion persists. This leads to delays in refunds or denials altogether.

The government has made several attempts in the past to ensure speedier refunds through simplification of procedures, but this has failed to satisfy the industry.

"The process (of refunds) is very cumbersome and tedious," said Som Mittal, president of IT industry body Nasscom. "Requirement of documentation has led to unnecessary delay in issue of refunds."

In its last attempt to simplify procedures, CBEC had issued a circular clearing the ambiguity over definition of services used as "inputs" by technology and BPO companies.

Service tax paid on inputs, such as transportation of staff, telecom facilities, software maintenance and up-grades, hiring of recruitment agencies and other related services were made eligible for refunds.

But the industry says the conditions specified in the circular, such as proof of consumption of services, made the refund process cumbersome.

"If there is a single query involving just Rs 1lakh, a refund of Rs 10 crore may be put on hold," Mittal said, pointing out that refund claims worth Rs 3,000 crore made in 2010-11 remain locked up.

The finance ministry official quoted earlier said the proposal for speeding up the refunds will go to the finance minister for approval after it is cleared by the CBEC.

"The guidelines will be issued by next week," the official said, adding that they will cover both dues of current fiscal as well as those of the previous financial years.

Experts, however, say that easing of the process on its own will not help.

"Liberalizing procedures for grant of refund of service tax is welcome, but they should be implemented in actual letter and spirit by the field formations," said Bipin Sapra, partner with audit firm Ernst & Young.

The ministry is also working on a drawback scheme to refund service tax for goods exporters. This is expected to become operational soon.

MCA- Company Law Settlement Scheme, 2011 extended upto 15th December 2011

2011-10-05T00:53:00.000-07:00

General Circular No. 65/2011; GOI; MCA; Dt 4thOct, 2011

All Regional Director, All Registrars of Companies.

Subject: Company Law Settlement Scheme, 2011

In continuation of the Ministry’s General Circulars No. 59/2011 dated 05.08.2011 and No. 60/2011dated 10.08.2011 on the subject cited above, it is stated that the said scheme has been extended upto 15th December, 2011.

2. All the terms and conditions of the General Circulars No. 59/2011 dated 05.08.2011 and No. 60/2011 dated 10.08.2011 will remain the same.

Yours faithfully,

Monika Gupta

Assistant Director

MCA extents the filing of DIN4 upto 15th December 2011

2011-10-05T00:52:00.000-07:00

General Circular No. 66/2011; GOI; MCA; Dt 4thOct, 2011

All Regional Directors; All Registrar of Companies.

Sub: Allotment of Director’s Identification Number (DIN) under Companies Act, 1956

In continuation of General Circular No. 32/2011dated 31.05.2011 on the subject cited matter, I am directed to say that the time for filing DIN-4 by DIN holders for furnishing the PAN and to update PAN details has been extended till 15.12.2011.

source: http://corporatelawreporter.com

Govts, PSUs favour CA firms with MNC link: ICAI

2011-10-03T02:54:00.000-07:00

Accounting regulator ICAI has accused state and central governments, and PSUs, of deliberately favouring chartered accountant companies having affiliations with multinational audit firms.
"In certain cases, public sector undertakings, the government departments, central and state governments advertise for various professional services, wherein the basic eligibility requirement tends to favour multinational network accounting firms or other corporate entities," ICAI said.

These observations are part of the ICAI's 'Report on Operation of Multinational Network Accounting Firms (MAF) in India, which was submitted to the Ministry of Corporate Affairs.
The big four audit firms which operate in India through associates include, PricewaterhouseCoopers, KPMG, Ernst&Young, and Deloitte.
It further said, "It has also been observed that auditors have been replaced by Indian CA firms networked with MAFs apparently for no professional reasons".
In certain cases, ICAI said, joint venture agreements, MoUs, foreign collaborations agreements, shareholders agreements, private equity participations and side letters are exchanged between parties mandating appointment of auditors as prescribed by international parent.In the same report, the Institute of Chartered Accountants of India (ICAI) has also accused the multinational accounting companies of violating the CA Act and asked for joint action by agencies, including the Reserve Bank India and the Corporate Affairs Ministry, to enforce compliance."The [ICAI] Council shall request the Ministry of Corporate Affairs, Reserve Bank of India and other relevant Ministries/Departments of Government of India to take appropriate action [to enforce compliance of law]," ICAI said in its report.The ICAI report, however, did not name multinational audit firms operating in India.The report is significant in the wake of involvement of PwC affiliates in auditing the books of Satyam Computer Services (now Mahindra Satyam), which was embroiled in a Rs 14,000-crore accounting fraud.The ICAI report observed that some of the Indian audit companies have licence agreements to use international brand names, under which the affiliates have to align their policies with the network, which in turn influences decisions and functioning of the domestic firm.The ICAI also noted that many CA firms have not furnished complete information or have "masked certain portions" about their arrangements with multinational accounting firms and action would be taken against them for the same.

Teleconference at ICAI Branches

2011-10-02T23:45:00.000-07:00

CPE Teleconferencing on Service Tax Point of Taxation Rules & other significant amendments at ICAI branches at 11 am to 1 pm on 04-10-2011.

import of services taxable under service tax only wef 18.4.2006 - CBEC finally agrees !!

2011-10-02T09:20:00.001-07:00

The long standing dispute between Service Tax Department and tax payers regarding the

date from which the import of services were taxable is now finally settled.

Now CBEC has finally clarified that services provided by non- residents or persons located outside India to a recipient in India is taxable only with effect from 18.04.2006.It is thus, settled now that in such cases, service tax liability would arise w.e.f. 18.4.2006, ,i.e, date of enactment of section 66A of Finance Act, 1994.

CBEC took such a step because the appeals filed by Union of India got dismissed by SC

Service tax on renting - SC stays Delhi HC decision

2011-10-02T09:09:00.000-07:00

Supreme Court has stayed the Bombay High Court decision that upheld levy of Service Tax on renting of immovable properly service.

Bombay High Court had upheld the retrospective levy of Service Tax on commercial rentals w.e.f. 1.6.2007.

Thus, uncertainty continues.....................who is going to win?

Landlords and tenants are waiting on their wings !

e-filing of service tax return even mandatory for old returns as well

2011-10-02T08:51:00.001-07:00

The finance ministry has made it mandatory for taxpayers to file their central excise and service tax returns electronically from October 1.

E-filing will be a must not only for returns due after October 1, but also for returns of past periods which have not been filed yet or are to be revised.

mandatory efiling of service tax return with effect from 1-10-2011- trade notice

2011-10-02T08:44:00.000-07:00

OFFICE OF THE COMMISSIONER OF SERVICE TAX-I : MUMBAI

5^th Floor, Central Excise Building, 115, M. K. Road, Churchgate Mumbai – 400 020.

----------------------------------------------------------

Tel No.:022 2206 0619 Email : servicetax_mumbai@yahoo.co.in Fax No.: 022 2206 0618

------------------------------------------------------------

TRADE NOTICE NO 03 /2011-SERVICE TAX-I, MUMBAI Dated 15-09-2011

Subject:- Mandatory E filing of ST3/ST3A Return by Every Assessee- reg.

1. As per Section 70 of Chapter V of the Finance Act, 1994 read with Rule 7 of Service Tax Rules, 1994 every assessee has to submit the half yearly return in form ST-3 or ST-3A by the 25^thof the month following the particular half year.

2. In this regard attention of the Trade is invited to the Notification No. 43/2011-Service Tax dated 25^th August 2011 under which the said Rule 7 has been amended.

3. As per the amended Rule 7, with effect from 1^st October 2011, every service tax assessee is required to file half yearly return only electronically.

4. A service tax assessee can file return electronically by accessing ACES Web Portal www.aces.gov.in. The said website has hosted LMS (Learning Management System) on the home page. The broad features are given below:-

(i) For login into ACES system, user name and password is required for every assessee. From 15^th February 2010 onward, all Service Tax Registrations are issued in the ACES System itself. For all registrations obtained after 15-02-2010, the 11^th and 12^th digit of their registration number is ‘SD’. The said assesses are already mapped into the ACES system, have their user name and password with them and can file their returns electronically. However, the assesses who have obtained their service tax registration numbers before 15^th February 2010 under erstwhile SAPS system, would be having their 11^th and 12^th digit of registration number as ‘ST’ and they do not have login password and user name for accessing the ACES System in the website. These assesses (who obtained service tax registration prior to 15-02-2010 and whose 11^th and 12^th digit of registration number is ‘ST’) should make an application (format enclosed) to the jurisdictional Deputy/Assistant Commissioner who will issue TPIN number i.e. login id password through mail. User name has to be created by clicking hyper link provided in the email. Only after obtaining the TPIN i.e. login password & user name as created by assessee himself after receipt of e-mail from the Service Tax department, these assesses may be in a position to access ACES System and file return electronically.

It is highlighted that service tax return for half year ending 30^th September 2011 is required to be filed electronically. Therefore, all assesses who have not obtained login id password and user name for accessing ACES System should immediately apply for the same in the enclosed format.

5. For facilitation of trade, Help Centers are formed at all three Divisions & Headquarter office. Details are given as under

Sr.No. Division Telephone No.

1 I 24988040

2 II 22630449

3 III 22611603

4 Hqrs. 22090038

(Computers Section)

6. All the Service Tax Assesses and their Associations are requested to give wide publicity to the Trade Notice amongst their constituent members.

Sd/- 15-09-2011

(SUSHIL SOLANKI)

COMMISSIONER

SERVICE TAX-I, MUMBAI

F.No.I/ST/HQ/ACES/Comp/Implementation/09

Mumbai, the September 2011

To,

The Trade Association (as per mailing list),

Mumbai

Copy to:-

1. Chief Commissioner, Central Excise, Zone-I, Mumbai

2. ADG, Directorate General of Systems, New Delhi.

3. ADG, Directorate General of Systems, Chennai.

4. Commissioner, Service Tax-II, Mumbai.

5. Additional/Joint Commissioner, Service Tax-I, Mumbai

6. Dy./Astt. Commissioner, Division-I,II&III

7. Notice Board

8. Copy for Master File

FORMAT OF OBTAINING TPIN

To, Date:

The Deputy / Assistant Commissioner

Division - ____, Service Tax –I, Mumbai

Sir,

Sub: Issue of ‘TPIN’ for transaction into ACES for Service Tax

Please refer to the Trade Notice No 03 dated 15-09-2011 issued by Commissioner of Service Tax-I, Mumbai on the above subject. Since I do not have the user id and password for accessing the ACES application for filing of Service Tax Return, Refund Application etc., it is requested to issue TPIN. For this purpose I am submitting the following information:

(i) E-mail ID : _________________________________________

(ii) Repeat Email Id in Capital Letter : ________________________

2. The existing information about my Registration is given below

(a) PAN based Service Tax Registration No.(15 digit).:______________________

(b) Name and Address of the assessee:____________________________________

3. It is requested to issue ‘TPIN’ number immediately on my e- mail as given above

Yours faithfully,

(Signature of the authorized signatory)

Designation:

Name:

Contact Tel. No:

Note: The above Text may either be printed on a plain paper with your office address stamp on it or on a letter head of the firm

Online Learning Module for service tax

2011-10-02T03:18:00.000-07:00

Follow the link below to view online leaning module to know how to efile service tax returns. It is very useful.

http://www.aces.gov.in/Documents/LMS/ST_REG/intro.swf

Digital Signature for e-filing service tax returns

2011-10-02T00:55:00.001-07:00

At present, service tax returns are e-filied, without Digital signatures (DSC).

It is likely that DSC may be made compulsory in future.

The CBEC has clarified as follows:-

"The ACES application is designed to accept digitally signed documents. However, in

the beginning this functionality is not going to be activated. Pending its activation the

electronic returns will be filed into ACES without digital signatures"

No need to give hard copy of service tax returns, if efiled

2011-10-02T00:25:00.001-07:00

Dear all,

As we are all aware that e-filing of service tax return is made mandatory with effect from 01-10-2011 for all service tax payers.

It may please be noted that if the ST3 returns are e-filed, there is no need to give hard copy of the same return with service tax department.

It has been clarified by CBEC as follows:-

"Hence, wherever the returns are submitted through ACES there will not be any requirement to submit signed hard copy separately."

XBRL update – MCA validation tool to be released soon

2011-10-01T00:52:00.000-07:00

The XBRL Taxonomy recently released by MCA for the First Phase of Financials for FY ended 31st March, 2011 is final and no further changes are expected for Phase I.

The MCA Validation Tool for validating XBRL instance documents as per the final taxonomy is ready to be released.

If you wish to test and validate a duly prepared XBRL instance document by MCA Validation Tool, you may send the same by e-mail to xbrl.technical@mca.gov.in.

This instance document should be based on actual financial data that would be used for MCA filing. Further it should be complete in all respects like valid CIN, correct director details, etc as the instance document would be tested for pre-scrutiny from MCA database related validations. Please note that this exercise is purely to test your XBRL preparation tool, will not be construed to be actual MCA filing of financial statements.

CA firms empanelment at IIM, Ranchi

2011-09-30T23:12:00.000-07:00

Dear all,

Indian Institute of Mangement, Ranchi, invites expression of Interest from C&AG empanelled firms of Chartered Accountants for maintenance of books of accounts of IIM, Ranchi.

Interested firms may apply before 20-10-2011.

Visit: www.iimranchi.ac.in

MCA – Registration of Certified Filing Centres (CFC)

2011-09-30T04:58:00.000-07:00

Registration of Certified Filing Centres (CFC)

Requests including from Professional Institutes have been received seeking re-opening the registration process of CFCs and allow enrolment of more CFCs so that the involvement of professionals in XBRL and peak filing can be expanded to a large extent.

The Ministry has considered the requests and decided to re-open the registration process for a period of 2 months from October 1, 2011.

Professionals are requested to avail this opportunity.

happy onam

2011-09-08T19:11:00.000-07:00

Wish you all a happy onam.

Tony and Family

verify MEF declaration status as on 23-08-2011

2011-09-08T19:09:00.001-07:00

MEF declaration received status as on 23-08-2011 can be verified from the link below:-

http://www.meficai.org/declarations_recieved.jsp

ICAI's moderation criteria

2011-09-05T05:06:00.001-07:00

In a dispute under the Right to Information Act, the Supreme Court last week ruled that the Institute of Chartered Accountants of India must disclose, if asked by a candidate in its examination, the standard criteria relating to moderation employed by it for the purpose of making revision. The court also rejected the argument of the institute that it had copyright over question papers and therefore they could not be disclosed even after the tests. It also rejected the argument of the institute on the burden cast on it by supplying information to failed candidates. Out of nearly 4 lakh candidates, only 16 per cent pass. If all of the failed candidates seek information on their answer sheets, the work of the institute will be stalled, it had argued. The court said that "Additional workload is not a defence. If there are practical insurmountable difficulties, it is open to the examining bodies to bring them to the notice of the government for consideration so that any changes to the Act can be deliberated upon. Examining bodies like ICAI should change their old mindsets and tune them to the new regime of disclosure of maximum information. Public authorities should realize that in an era of transparency, previous practices of unwarranted secrecy have no longer a place.

an Engineering student and a CA student

2011-09-04T23:00:00.000-07:00

An Engineering student and a CA student go on a camping trip, set up their tent ,and fell asleep.Some hours later, the CA wakes his Enginer friend and says "Look up at the sky and tell me what you see."The Enginer replies, "I see millions of stars."The CA asks, "What does that tell you?"The Enginer ponders for a minute."Astronomically speaking, it tells me that there are millions of galaxiesand potentially billions of planets.Astrologically, it tells me that Saturn is in Leo.Time wise, it appears to be approximately a quarter past three.Theologically, it's evident the Lord is all-powerful andwe are small and insignificant.Meteorologically, it seems we will have a beautiful day tomorrow.What does it tell you?"The CA is silent for a moment, then speaks."Practically...Someone has stolen our tent"."Chartered Accountancy = 100% COMMON SENSE"

nice thoughts

2011-08-31T01:09:00.000-07:00

Friendship is sweeter than honey and greater than money; smoother than silk and whiter than milk;

higher than any tower and stronger than any power.

nice thoughts

2011-08-31T01:08:00.001-07:00

Instead of Thinking about what you are MISSING.
Sometimes it is GOOD to THINK About what you have that many are MISSING.

Revenue Deppt. finding 9 lakh assesses who have stopped filing Service Tax Returns

2011-08-30T19:24:00.000-07:00

he Revenue Department is trying to locate 9 lakh business entities which have stopped filing service tax returns, with a view to improving collections, meeting Rs 82,000-crore target in 2011-12 and to ascertain whether there is any tax evasion. There are 15 lakh registered service tax payers in the country. According to the Central Board of Excise and Customs (CBEC) Chairman SD Majumdar, only six lakh service tax payers are filing returns.
“So, nine lakh have stopped filing returns. We are trying to locate them and find out whether they have really stopped providing service or there is (tax) evasion,” Majumdar told PTI.

He said the Revenue Department was taking a number of steps to increase the indirect tax collection.
“We have taken a number of steps towards the recovery, so that there is no evasion of service tax,” he said, adding that service tax collection has been good in the first four months of the fiscal.

In the April-July period, the growth in service tax collection is estimated at 35.5 per cent, Majumdar said.
In 2010-11, the service tax collection was Rs 70,200 crore, which exceeded the revised estimates of Rs 69,400 crore. In the previous year, the tax mop-up was Rs 58,422 crore.

The tax, at a rate of 10%, is imposed on a limited number of services, like banking, hotel and telephony.
However, with the implementation of Goods and Services Tax (GST) the scope of service tax would be widened.
The Finance Ministry is working on a ‘negative list’ of service tax, meaning all those services which are not in the list would be taxed.

CBI arrests Everonn MD on Rs 116-cr tax evasion charge

2011-08-30T19:20:00.000-07:00

Chennai, Aug.30:
The Central Bureau of Investigation (CBI) on Tuesday arrested Mr P. Kishore, Managing Director of the Chennai-based Everonn Education Ltd, for tax evasion of Rs 116 crore.
An Additional Commissioner of Income Tax (Mr Andasu Ravindar) and a middleman (Mr Uttam Chand Bohra) were also arrested for accepting a bribe of Rs 50 lakh, according to a CBI press release.
According to the release, Mr Kishore had concealed taxable income of Rs 116 crore and requested an I-T officer to conceal around Rs 60 crore of taxable income.
The three were called for questioning at the I-T office this morning and were later arrested.
It was alleged that Mr Ravindar organised a search and survey proceeding at Everonn, a V-Sat education network company.
The search revealed that Mr Kishore had concealed taxable income of Rs 116 crore. Mr Kishore allegedly contacted Mr Ravindar through a chartered accountant to reduce the income-tax liability.
After holding negotiations, he requested Mr Ravindar to suppress Rs 60 crore of taxable income out of Rs 116 crore.
Finally, it was agreed that Mr Kishore would pay Rs 50 lakh as bribe to Mr Ravindar to conceal the taxable income and reduce his tax liability, the CBI release said.
Mr Kishore brought the bribe amount of Rs.50 lakh in a cardboard box and handed it over to Mr Ravindar at his house.
However, Mr Ravindar wanted to transport the amount to an unknown place through Mr Bohra.
At this point of time, on a tip-off, the CBI apprehended Mr Ravindar and Mr Bohra when they were trying to remove the Rs 50 lakh. The money was seized, and Mr Kishore was also arrested.
(This article was published in the Business Line print edition dated August 31, 2011)

I-T commissioner held for graft

2011-08-30T18:57:00.000-07:00

TIMES NEWS NETWORK

Mumbai:The CBI officials on Monday arrested income-tax commissioner Daya Shankar while he was allegedly accepting Rs 2 lakh from a businessman to reduce his Rs 1.5-crore tax liability.
The CBI allegedly found Rs 8.5 lakh at Shankars Hyderabad Estate residence in south Mumbai,said Rishi Raj Singh,joint director,CBI.
Shankar,an Indian Revenue Service officer from the 1983 batch,is posted as I-T commissioner at its Bandra-Kurla Complex office,and hears appeals against tax demands on assessees.For financial year 2008-09,the income-tax officer (ITO) had raised a Rs 1.5-crore tax demand on the copper wire manufacturer. The businessman appealed against it before Shankar who allegedly demanded Rs 25 lakh.After negotiations, the bribe amount was allegedly reduced to Rs 2 lakh.The CBI officials said Shankar owns properties in Delhi,Gaziabad and Lucknow and that they are currently collecting details about these.
A CBI official said that even the ITO had asked for an approximately Rs 5 lakh bribe.He did not pay the sum and decided to appeal against the order before Shankar, a CBI official said.Shankar allegedly threatened to attach the businessmans immovable properties if he did not pay up.Shankar had already frozen the businessmans bank accounts.
The CBI said the businessmans chartered accountant (CA) is a witness in the case now.He was present when the money was paid. The official said it would not be proper to comment now on whether the CA was no more acting as the agent of the I-T commissioner. CBI has investigated several cases where the CA acted as an agent of officials in accepting bribes.In this case,the official directly demanded the sum.
Singh said his office gets at least one corruption complaint a day.In July,the CBI had arrested another I-T commissioner in charge of appeals,Ram Phool Meena,for demanding Rs 2.2 lakh from a businessman to reduce his tax liability.The CBI had also arrested his CA U P Pai for acting as the middleman.The CBI has asked the public to contact them on 8108224455 in case any Central government officer demands money of them.

Case Details

Daya Shankar,an officer from the 1983 IRS batch,is posted as I-T commissioner at the Bandra-Kurla Complex office
For financial year 2008-09,the income-tax department had imposed 1.5-crore tax demand on a copper wire manufacturer The businessman appealed against it before Shankar,who allegedly demanded 25 lakh as bribe After negotiations, the bribe amount was allegedly reduced to 2 lakh

nice thoughts

2011-08-30T18:56:00.000-07:00

Give so much time to the improvement of yourself that you have no time to criticize others.

nice thoughts

2011-08-30T18:55:00.000-07:00

River cuts the rock not because of its power but because of its consistency.

So never loose your hope and keep walking towards target.

Electronic filing of service tax return made mandatory

2011-08-26T02:12:00.000-07:00

Electronic filing of service tax return made mandatory for all assessees with effect from 01-10-2011.

The relevant notification given below:-

NOTIFICATION NO

43/2011 – ST., Dated: August 25, 2011

G.S.R. 642 (E).- In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely :-

1. (1) These rules may be called the Service Tax (Fourth Amendment) Rules, 2011.

(2) They shall come into force on the 1st day of October, 2011.

2. In the Service Tax Rules, 1994, in rule 7, -
(a) in sub-rule (2), the proviso shall be omitted;
(b) after sub-rule (2) as so amended, the following sub-rule shall be inserted, namely:-

“(3) Every assessee shall submit the half-yearly return electronically”.

F. No. 137/99/2011 – Service Tax

(Deepankar Aron)
Director (Service Tax)

Note.- The principal rules were notified vide notification No. 2/1994 – Service Tax dated the 28th June 1994, published in the Gazette of India, Extraordinary, Part II, section 3, Sub-section (i), vide number G.S.R. 546(E), dated the 28th June, 1994 and were last amended by notification No. 35/2011 - Service Tax, dated the 25th April, 2011, vide number G.S.R. 343 (E), dated the 25th April, 2011.

nice thoughts

2011-08-24T08:46:00.000-07:00

We can hope for change

we can spark it.

Share your issues in accounting and auditing practice

2011-08-23T05:52:00.000-07:00

There are several issues we come across in our day to day accounting and auditing practice.
Some of the issues we can solve our own; while some of the issues haunt us for long.

I come accross many issues in my practice that finding answers to all of them,my own, is really impossible. So I was thinking of how I can seek help from my CA brothers and sisters from thier knowledge and experience.

One thing is clear that i cannot seek for advise every time i need it. I should also serve others so that they will help me in my issues. We can also try to find better answers to many common issues that we face.

If you are interested, then mail me your comments and view about this proposal.

If we have experts in fields like, income tax, company law, VAT law, international taxation, Technology,service tax, auditing, IFRS, XBRL,Excise, Customs etc..... with us, this will be a remedy for many of the problems.

mail me your comments at: trcmptony@gmail.com

Tax Relief: Depreciation Can Not Be Disallowed u/s 40(a)(ia) ?

2011-08-23T05:01:00.000-07:00

Non deduction of tax is very costly to business assessees on account of provision u/s 40(a )(ia) of the I T Act under which no business expenses are allowed to be deducted while computing income chargeable to tax for failure to deduct tax or not depositing tax after deduction before due date of filing return of income.

So, it happens that while scrutinizing the case , A.O finds that there are capital expenditures on which tax was deductible and the assessee has not deducted any tax . The issue then arises whether the A.O is empowered u/s 40(a) ia) of the I T Act to disallow the portion of depreciation attributable to the capital expenditure on which tax was deductible , but not deducted.

In SMS Demag (P) Ltd. vs DCIT ITAT, New Delhi , Tribunal held that disallowance of depreciation for non deduction on capital expenditure is not correct.

The facts of the case :-

The assessee M/s SMS Demag Pvt. Ltd. is a subsidiary of M/s SMA, Demag AG Germany.
M/s SMS Demag India Pvt.Ltd. is engaged in the business of courtsupply as assemblies/subassemblies of metallurgical equipment, profession of consultation and technical service in design and engineering to ferrous and non-ferrous sectors. During the course of assessment proceedings, the Assessing Officer noted that assessee company had made SAP maintenance expenses of Rs.1,82,48,673/- to the parent company M/s SMA Demag AG Germany without deducting tax in India during the financial year 1999-2000 . The Assessing Officer issued show cause notice as to why the payment of Rs.1,82,48,673/- should not be disallowed u/s 40(a)(i). It was submitted by the assessee that the amount of Rs.1,82,48,673/- was not charged to profit and loss account relevant to Assessment Year. The amount represented the charges payable to SAP installation charges which were capitalized in the books of account under the head “computer” in the relevant Assessment Year. Since the amount was not charged to profit and loss account, the provisions of sec. 40(a)(i) have no applicability. However, this contention of the assessee was rejected by the Assessing Officer relying on provisions of sec. 40(a)(i) under which deduction will not be allowable unless tax is deducted at source.

CIT( A) confirmed the disallowance of depreciation by A.O on the capitalized payments.
Decision of Tribunal:-

The tribunal , however , decided in favour of assessee and held as under
8. As regards the claim of assessee for depreciation on assets capitalized, depreciation cannot be disallowed on the ground that at the time of remittance no tax was deducted at source. Provisions of section 40(a)(i) are not applicable for claim for deduction u/s 32 of the Act. Accordingly, in our considered opinion, the assessing officer was not justified in disallowing 50% of depreciation on the ground that provisions of section 40(a)(i) were applicable. However, the assessing officer will verify the fact whether the assets in respect of which expenditure has been capitalized have been used in business for period more than 180 days. If the assets have been used for more than 180 days, the assessing officer will allow full depreciation, as claimed by the assessee. The assessing officer is directed accordingly

Welcome Changes in CESTAT - Only for Delhi and Mumbai?

2011-08-22T07:10:00.000-07:00

YESTERDAY, reporting on the above subject, DDT had commented, “It is not clear whether short matters will be listed every day in Ahmedabad, Bangalore, Chennai and Kolkata.”

Advocates and consultants in these Benches of the CESTAT are worried that, as per the Circular, Stay matters will be heard only on one day in a week in Benches other than Delhi and Mumbai. A senior advocate to wrote in, “Contrary to the view expressed in DDT , this circular will benefit only Mumbai and Delhi litigants. It will adversely affect other Benches by reducing the number of days for stay hearing from 2 days a week to 1 day a week”.

It is learnt that the Indirect Practitioners Association of Bangalore CESTAT has sent a representation to the CESTAT Vice-President, to extend the beneficial changes brought about in Mumbai and New Delhi to Bangalore also – that is, order that both stay matters and regular matters be listed on all days from Monday through Thursday. The Association submits that this would be in keeping with the objective of the Office Order to clear the heavy pendency and also in keeping with the principle of uniform practice throughout the country without any disparity between the Benches.

Let us hope the Vice-President will give a clarification soon.

source: www.taxindiaonline.com

Appeal to CESTAT and Higher Courts -CBEC enhances Monetary limits by Five Times

2011-08-22T07:07:00.000-07:00

BY instructions in F.No.390/Misc./163/2010-JC: dated October 20, 2010, the CBEC had fixed monetary limits of Rs. 1 lakh and Rs. 2 Lakhs, for appeals to CESTAT and High Court respectively. DDT 1472 (22.10.2010), had commented, “But isn't the threshold limits too low? They should be at least Rs 5 lakhs and Rs. 10 Lakhs respectively”.

DDT is proud, happy and grateful to the Board for accepting this suggestion. The monetary limits have been enhanced.

Sl.No.	Appellate Forum	Monetary limit	Previous limits as per Instructions dated 20.10.2010
1.	CESTAT	Rs.5,00,000/-	Rs. 1,00,000
2.	HIGH COURTS	Rs.10,00,000/-	Rs. 2,00,000
3.	SUPREME COURT	Rs.25,00,000/-	Rs. 5,00,000

Board has further clarified that:-

++ In a case where a part of the duty demanded is not disputed and is paid and the outstanding duty under dispute is less than the monetary limit prescribed by the Board, no appeal shall be filed. In other words, monetary limit shall apply on the disputed duty and not on the total duty demanded in a case.
++ The monetary limits being prescribed by the Board would apply to cases of refund as well.
++ The limit specified herein will not be applicable to application filed before the Joint Secretary (Revision Application).
++ In all cases of audit objections accepted by the Department, while protective demands may continue to be issued but the same would be subjected to the monetary limits for filing appeal in the Tribunal, High Courts and the Supreme Court.

The revised monetary limits will come into force with effect from 01.09.2011.

Board deserves all praise for this magnanimous and assessee-friendly decision. This will, to a large extent, reduce frivolous appeals and the higher courts can concentrate better on really important issues.

source: www.taxindiaonline.com

formation of an informal discussion group of Chartered Accountants

2011-08-21T08:12:00.001-07:00

Dear sir / friends,

I have pleasure to share with you some thoughts on formation of an informal discussion group of Chartered Accountants.

Frequent changes in laws, judicial decisions and technological developments affects our profession to a great extent. To cope up with the law and technology, we had to spent lot of time and energy.

In such a scenario, formation of an informal discussion group makes much sense. We can come together at one place and share our thoughts onanything and everything that affects our profession whether positively or otherwise.

To start with, the informal discussion group can take up the following points for discussion/debate in the first meeting:-

1. How to comply with section Section 44AD? Discuss the implications.

2. Formation of LLP. Points to ponder.

3. Taxation of GTA service. How to remain safe. An analysis.

4. Is there corruption in tax departments? who is responsible?

5. Presentation and analysis of landmark decisions in tax laws ( five cases).

6. Chit service and renting service - present status of service tax.

7. Are we getting articled assistants? which way forward.

8. Significant changes in Kerala Budget, 2011.

Each topic we can debate for the maximum time of 15 to 20 minutes.

The venue,time and date can be fixed at our convenience. The frequency may be twice in a month. First meeting can be fixed at THRISSUR tentatively on 30th or 31st August at 6 pm to 8 pm.

Please share your thoughts on the formation of this informal discussion group and other points that we can take up for discussion at the meeting.

I invite you to participate and take part in the debate. If you are interested to lead any of the topics above, you are most welcome.

Issues that we face in our day to day practice can be taken up at this meeting and try to find solutions.

Your encouragement and support most important.

Let's make a new start.

MEF Declaration Received upto 8th August, 2011

2011-08-20T20:25:00.000-07:00

MEF Application declaration received status can be verified from the link below:-

http://www.meficai.org/declarations_recieved.jsp

Service tax evaders to lose assets: Finance ministry

2011-08-18T09:43:00.001-07:00

Alarmed by a possible large-scale evasion of service tax, the finance ministry has decided to use the toughest measure in its bouquet of options - seizing property of assesses not filing returns -to ensure compliance with the law. Out of 15 lakh registered service tax assesses only about six lakh are filing returns, suggesting a large-scale evasion of service tax. In fact, data from the Directorate General of Central Excise Intelligence, the intelligence wing of the indirect taxes body, shows that evasion in service tax has grown by as much as 70%.

Service tax evaders to lose assets: Finance ministry

2011-08-18T09:43:00.000-07:00

Now, govt eyes TDS in service tax

2011-08-18T09:38:00.001-07:00

The Central Board of Excise and Customs (CBEC) has proposed to introduce a Tax Deducted at Source (TDS) mechanism in collecting service tax.

TDS has been successfully used for direct taxes like the income tax. Although the proposal is at initial stage, the board has set up a study group to examine its feasibility and how to implement it.

It is learnt this may be introduced in a phased manner in the current year itself. The Union finance ministry has set a target of collecting Rs 82,000 crore this year from service tax. A TDS on service tax would substantially help.

The opinion of industry organisations has been sought. The study group is considering whether certain services to the common citizen such as electricity and telecom could be kept outside the TDS method, as could small service providers and receivers.

They could continue to pay service tax as at present. It is most likely the new mechanism would be made applicable in a phased manner. From the point of view of service receivers, the new method would increase the burden of administration.

However, the CBEC feels many of them may be doing the same work on paying income tax, where the TDS method has been successful in guaranteeing more revenue.

Shailesh Sheth, advocate and member, Indian Merchants Chamber’s indirect tax committee, said: “A TDS on service tax may turn out to be Terror at your Door Step for service recipients, as it will result in several complications and administrative burden for them.”

He said as the payment of service tax had moved from a receipt to an accrual basis from April, there was no justification for introducing TDS in service tax. He contended the Cenvat credit mechanism prevailing under service tax would mean great turmoil if a TDS system for collection was introduced.

Sheth’s suggested alternative: “Rather than introducing TDS in service tax, the government may expand the list of services where a reverse charge mechanism is applicable.”

At present, reverse charge applies in case of import of services, goods transport service and a very few selected others where payment of service tax is required to be made by the recipient or the designated person but not by the service provider.

Now, govt eyes TDS in service tax

2011-08-18T09:38:00.000-07:00

The Central Board of Excise and Customs (CBEC) has proposed to introduce a Tax Deducted at Source (TDS) mechanism in collecting service tax.

TDS has been successfully used for direct taxes like the income tax. Although the proposal is at initial stage, the board has set up a study group to examine its feasibility and how to implement it.

However, the CBEC feels many of them may be doing the same work on paying income tax, where the TDS method has been successful in guaranteeing more revenue.

Sheth’s suggested alternative: “Rather than introducing TDS in service tax, the government may expand the list of services where a reverse charge mechanism is applicable.”

everything positive...............

2011-08-05T06:39:00.000-07:00

Every bad situation will have something positive.
Even a stopped Clock is correct twice a day.

Multi Purpose Empanelment ( MEF 2011-12) now ready

2011-07-29T08:42:00.000-07:00

MEF 2011-12 hosted on www.meficai.org

Last date for submission of online application is 27th Aug, 2011

Empanelment for Concurrent audit with Uco Bank

2011-07-15T04:46:00.000-07:00

UCO Bank invites application for empanelment of Chartered Accountants
for concurrent audit.

Follow the link below for details:-

http://www.ucobank.com/notices_default.htm--

XBRL webcast

2011-07-11T03:56:00.000-07:00

The ICSI is organizing MCA-ICSI WEB SEMINAR ON XBRL at ICSI Head Quarters, New Delhi on Monday, July 11, 2011 from 2.00 pm to 4.00 pm.

The programme would be live webcast at the following URL from 2.00 pm onwards on Monday, July 11, 2011.

Follow the link below:-

http://www.streamonweb.com/ICSI

ICAI WebTV launched

2011-07-09T21:47:00.000-07:00

ICAI Web TV is really wonderful. The vedios added are of best quality, Clarity and best sound quality.

It will be a pathbreaking initiative from ICAI for the benefit of Chartered Accountants.

Visit: http://www.icaitv.com/

how nice it is ...........

2011-07-06T03:22:00.001-07:00

Trust one, Who Can See These three Things in you :

a) Sorrow Behind your Smile,
b) Love Behind your Anger,
c) Reason Behind Your Silence!...

Nice thoughts

2011-07-05T21:26:00.000-07:00

If you are right then there is no need to get angry, And if you are wrong then you don't have any right to get angry.

Patience with family is love,
Patience with others is respect,
Patience with self is confidence and
Patience with GOD is faith.

Never Think Hard about PAST, It brings Tears...
Don't Think more about FUTURE, It brings Fears...
Live this Moment with a Smile, It brings Cheers.!!!!

Every test in our life makes us bitter or better,
Every problem comes to make us or break us,
Choice is our whether we become victim or victorious !!!

Search a beautiful heart not a beautiful face.
Beautiful things are not always good but
good things are always beautiful.

Remember me like pressed flower in your Notebook. It may not be having any fragrance but will remind you of my existence forever in your life.

Do you know, why God created gaps between fingers? So that someone who is special to you, comes and fills those gaps by holding your hands forever.

Concurrent audit guidelines

2011-07-03T23:15:00.000-07:00

CIRCULAR NO. DBS. CO.FrMC.BC. NO. 11/23.04.001/2010-11, DATED 30-6-2011
1. A study of large value frauds, including frauds under housing loan segment, reported by banks to Reserve Bank of India was undertaken to understand the gaps in the control mechanism which contributed to perpetration of those frauds particularly when the branches were also under concurrent audit. It was observed that large number of frauds were perpetrated on account of submission of forged documents by the borrowers which had been certified by professionals' i.e. valuers/advocates/chartered accountants.
2. The reason for failure on the part of concurrent auditors may be attributed to the new/innovative/complex nature of financial products or transactions. Further, banks have assigned audit responsibility to their own staff without ensuring that they are suitably trained to undertake the audit responsibility.
3. In order to contain the frauds, the banks may put in place a system wherein the concurrent audit would look into the following and report on the following aspects:
(i) Wherever documents of title are submitted as security for loans, there should be a system where documents of title are subject to verification regarding their genuineness, especially for large value loans. In case of loan against the security of land, the banks may also seek reports from the local revenue authorities regarding the title deeds before sanction of loan.
(ii) Wherever a Chartered Accountant certificate, property valuation certificate, legal certificate, guarantee/line of credit or any other third party certification is submitted by the borrower, the bank should independently verify the authenticity of such certification by directly communicating with the concerned authority issuing the certificate; indirect confirmation may also be resorted to, i.e. indicating to the issuer that in case there is no response by a certain deadline, it would be assumed that the certificate is genuine.
(iii) Aspects such as internal discipline, staff rotation, checks and balances, etc. should be ensured by the bank.
(iv) In cases where it is established that the certification given by a chartered accountant, lawyer, registered property valuer or such third party is wrong, IBA should put in place a process to issue a ‘Caution List’ regarding the certifier to all banks. In this connection, banks may ensure compliance to our circular DBS.CO.FrMC.BC.3 /23.04.001/2008-09, dated March 16, 2009 in the matter.
4. Please acknowledge receipt .
nn

Happy CA Day

2011-06-30T22:27:00.000-07:00

On Foundation Day of CA Profession, I wish you the very best.

Happy CA Day !!

Your professional Brother, Tony m p

Statutory auditors may have to certify correctness of financial reporting under XBRL

2011-06-30T22:17:00.000-07:00

New Delhi, June 30:
The Centre plans to ask statutory auditors of companies to certify the correctness of accounts when they are converted into XBRL mode and filed with the corporate affairs ministry. India Inc is however not in favour of any such move as it would add to their compliance costs.

By a circular issued in early June, the Corporate Affairs Ministry has made it mandatory for companies to file financial statements for the year 2010-11 and onwards using XBRL (eXtensible Business Reporting Language).

XBRL is a ‘digital’ language that has been developed to provide a common, electronic format for business and financial reporting.

"Accounts are audited by chartered accountants. We have taken a stand that statutory auditors will certify the correctness of accounts when it is converted into XBRL mode. The Managing Director will always say I am not a technical man and that I have appointed a chartered accountant to be the statutory auditor, who will be responsible for it", Mr E Selvaraj, Director of inspections and investigations at the Corporate Affairs ministry said at a CII event on XBRL here.

All listed companies in India and their Indian subsidiaries; all companies having paid-up capital of Rs 5 crore and above and all companies having turnover of Rs 100 crore and above are required to file XBRL formation information for the year 2010-11 by September 30 this year. Exceptions have been made for banking, insurance and power companies, and NBFCs

service tax on accrual basis

2011-06-29T18:46:00.000-07:00

all the assesses, except professionals, will have to pay service tax on billing basis from July 1, 2011

sms channel

2011-06-29T17:55:00.001-07:00

Dear all,

I have pleasure to invite you to join the sms channel of CA Club to share valuable informations related to CA practice.

To join this channel, Just type"ON caclub-channel" from your mobile and send to: 9870807070

President's Message (July , 2011)

2011-06-29T09:39:00.000-07:00

Dear Friends,

It is my proud privilege to address my accounting fraternity on the eve of 1st July, a day remembered as the Foundation Day of the accountancy profession in India and celebrated as Chartered Accountants’ Day (CA Day).

It would be arguably justifying and appropriate to remember Shri G. P. Kapadia, the first and founder President of our institution, on this occasion, who, being a great visionary, gave a very distinct shape to the scope of our profession. Let us accept that it would have been quite difficult for us to imagine the status of profession, had he not done what he had for the foundation and development of the profession.

On 11th August, 1951, Shri Kapadia had said at the second Annual Meeting of the ICAI Council: ...the Institute is a new one and it will take time to build up its traditions and I am sure that in course of time the Institute will have the best of traditions of which the profession and the country will be proud of. The assistance of the members of the profession as also the Government and public is necessary in building up the Institute and I am sure that this be had in the fullest measure. His idea and vision to touch heights is still alive in our hearts and we have been striving tough to realise his dreams. Though we have moved forward quite a lot since then, still I would never say that, as this will stop the scope to grow further.

A man of unflagging conscience, Shri Kapadia gave a definitive direction to the accounting professionals through his vision and conviction. He let the membership understand where they should go and what was favourable for them in future. He inspired them and raised their aspirations to achieve the best in profession. He believed in the beauty of perseverance which helped us attain our destiny. And then, future with a host of bright possibilities would belong to us. The beauty of Shri Kapadia’s leadership was that he strongly articulated his vision on numerous occasions before the accounting fraternity. We know that when vision is combined with venture, it becomes substantive. In the absence of execution, vision is merely hallucination, Thomas Edison opines. Shri Kapadia and Mr. Edison appear to be in agreement here.

Before I talk about the important developments of the past month, it will be a matter of joy for me to inform all of you that we have planned to launch the following services on the occasion of the CA Day (1st July):

Web TV Portal: This Portal will contain video streaming of seminars, lectures and so on. The members and students will be able to login to the website register easily and then view the videos online. The main purpose of creating this online portal is to share with our members and students the experience of being virtually present in the seminar/programme/lectures. The portal will comprise both Static Web Module containing committee information, contact details, terms & conditions, privacy policy, and other static information, and General Public Module containing latest videos, images and event details about members and students. The portal will also have a discussion board and a forum.
CPT Online Registrations: The students can register themselves 24*7 to CPT course using this online form which is also having the facility to pay course fee online using credit/debit cards/net banking of various banks. This will bring our students closer to the doorsteps of the ICAI, and other such forms will also be available online in due course. I request all of you to encourage students to use this online facility.
CA Firms Portal: On this portal, Small and Medium Practitioners may create their portals as per the norms laid down by the Council. Thus, all the CA Firms shall be able to upload the details of their firms on the proposed website from their end and it shall also provide them an opportunity to reach out to the international practitioners.
Project Parivartan: ‘Beta’ version of the new ICAI website will be released. The main objective of this Beta release is to share the new perspective on how we perceive to capture your thoughts and transform the ICAI Web Portal into a truly members and students friendly one. We look forward to your valuable feedback on the same.
ICAI-Tax Suite Software: The software will assist the members in the areas of Income tax, TDS, Audit Reports, Project Report/CMA, Form Manager, Annual Information Return (AIR), Service Tax and Document Manager.
ICAI-MDA Software: The Software will assist in compliance with MCA filings.

I am sure that the entire membership including the members in industry and our students will find the above-mentioned services efficient, productive and helpful in their professional development, networking, practice management and statutory compliance.

Now, let us have a look at the important developments and changes in profession that we have brought about nationally as well as internationally:

Interaction with the Government

Meeting with the President of India:
I had the proud privilege of meeting the Hon’ble President of India, Smt. Pratibha Devisingh Patil, along with the ICAI Vice- President CA. Jaydeep N. Shah. Her Excellency was updated about the recent progress and changes in the profession and the Institute and was also handed over documents related to the Institute. The head of the Nation has wished our profession and the Institute a great future and growth.

Recommendations Submitted to Election Commission:
It is quite gratifying to inform you that we have submitted the report on Uniform Accounting & Auditing Framework for Political Parties to the Election Commission of India (ECI) during a meeting with Dr. S.Y. Quraishi, Chief Election Commissioner of India and officials of ECI recently. I participated in this meeting with the ICAI Vice-President CA. Jaydeep N. Shah and my Council colleague CA. Shivji B. Zaware among others. CA. Zaware also made a presentation on the principal recommendations from the report, which were extensively discussed and appreciated by the officials of the Commission. The implementation of these recommendations would go a long way in bringing about accountability of political parties, the ECI officials felt. We were informed that the recommendations might be implemented with appropriate amendment vis-à-vis relevant laws and regulations. To support the recommendations, the ECI has further sought from us inputs on international accounting practices being followed by political parties, which we would submit to them shortly.

Suggestions Submitted to the Ministry of Corporate Affairs:
We have submitted our views/suggestions to the Ministry of Corporate Affairs on (i) Circular issued by MCA which states that the auditor of the company will not be allowed to sign and certify the filing with MCA-21 system if such a company has not filed its statutory annual reports with the ROC, and on the (ii) Companies (Cost Accounting Records) Rules, 2011 and the Companies (Cost Audit Report) Rules, 2011. We are also in the process of preparing a document on the revised Schedule VI to the Companies Act, 1956 for guidance of members and have identified several critical issues in the revised Schedule VI. We have made representations to the various regulators along with issues and solutions in order to bring about harmonisation of laws so that implementation of revised Schedule VI can be facilitated smoothly.

MCA Nominates Council Members and ASB Secretary:
A Committee has been formed by the Ministry of Corporate Affairs to identify the tax issues arising out of convergence between the Companies Act, 1956, IFRS, DTC and GST, and matters related thereto. Apart from other members, my Central Council colleagues CA. Sanjay Agarwal and CA. Jayant Gokhale, and the ICAI Accounting Standards Board (ASB) Secretary Dr. Avinash Chander have been nominated by the Ministry as representatives from the ICAI. A meeting of that Committee was also held recently.

International Initiatives and Strengthening Ties

Broadening Horizon of UK Accounting Ties:
I had the opportunity to meet the leaders of the accounting bodies of Ireland and Scotland apart from constituents of UK accounting profession. As the members are aware, we have a qualification recognition arrangement with ICAEW, this visit intended to broaden the elements of bilateral cooperation with ICAEW on commonality of areas including technical resource sharing and taking a joint lead voice on issues which need attention at a global level. ICAI and ICAEW leadership that included ICAEW Deputy President Mr. Mark Spofforth and CEO Mr. Michael Izza, shared their flagship programmes and the way forward to promote member-to-member and firm to firm networking to widen their professional horizon at either end.

Our interaction with the ICA Scotland CEO Mr. Anton Colella and the leadership (the Vice President Mr. Brendan Lenihan and the CEO) of ICA Ireland further explored the need and the processes for augmenting qualification recognition arrangements with these two bodies. We also met the leadership of the Chartered Institute of Public Finance and Accountancy, and the Association of International Accountants. I had an interaction with the UK members of the Indo-UK Accountancy taskforce that included its Chair Ian Gomes. I also interacted with the Financial Reporting Council of UK to understand the issues of quality assurance and professional oversight, and the elements of full reciprocity including licensing in the UK while explaining our regulatory position.

Extending Help to Mongolian Accountancy:
My Central Council colleagues CA. Mahesh P. Sarda and CA. Nilesh Vikamsey along with the ICAI Addl. Secretary Shri Rakesh Sehgal visited the Mongolia Institute of Certified Public Accountants (MONICPA) recently, where they met its President and its CEO as well as the heads/secretaries of its various committees. The visit to MONICPA was intended to provide a technical support on its application on Statement of Membership Obligation for becoming a full member of the IFAC. We have given them suggestions for improving upon their IFAC application based on the functioning of MONICPA.

Extending Professional Help to Saudi Accountancy:
It is quite satisfying to acknowledge before our membership that the Saudi Organisation of Certified Public Accountants (SOCPA) has requested us for a support in capacity building for IFRS Convergence at institutional level. It has requested us to send an ICAI team to the SOCPA to carry out this capacitybuilding programme on an urgent basis. In addition SOCPA has also requested us technical support to improve upon its Quality Review Program in the light of international best practices. In this regard they have requested ICAI’s support in developing and updating SOCPA quality review manuals and guidelines and conducting training programmes for SOCPA reviewers to improve upon its Quality Review Program. Since we have a sizeable presence in the Middle East and related regions, support programmes like this will create an additional brand value for our Institute as well as for our members.

Furthering Bilateral Cooperation with South African Accountancy:
We have also initiated dialogue with the South African Institute of Chartered Accountants (SAICA), which has asked us to come back soon on the matter with regard to further action on the bilateral cooperation.

Edinburgh Group and IFAC Board Meeting:
I had the opportunity to attend the Edinburgh Group and IFAC Board meeting and along with the ICAI past-President CA. Ved Jain. The Edinburgh Group approved its mission statement and also discussed the criteria for the membership of the Group. The Group was of the view that the membership should be based on some minimum criteria and the member body should have commitment to the cause of the Edinburgh Group.

In the IFAC Board meeting several key initiatives on the Action Plan of IFAC and on the Strategy Plan for 2012 were discussed. We used this opportunity to emphasise that the IFAC should play a key role in standard-setting process, keeping in view the economy of developing nations. The issue of increase in fees was also discussed in the meeting. IFAC has also signed an MoU with the World Bank, which shall help in extending funds for the professional bodies in the developing nations.

Meeting with World Bank and IMF Representatives:
I wish to inform that I along with my Central Council colleague CA. Manoj Fadnis, Chairman, Accounting Standard Board and two ICAI Officials, recently met the representatives of the World Bank and the International Monetary Fund at the Securities and Exchange Board of India in Mumbai who were in India under the Financial Sector Assessment Program (FSAP). The objective of their visit was to assess the degree of compliance with accounting and auditing standards as well as the mechanism in place in India for the oversight of the auditing profession, particularly, for ensuring the quality of audit and auditor’s independence. This exercise is a part of IOSCO’s assessment of the effectiveness of the regulatory and supervisory framework existing in India for its capital market vis-a-vis the principles promulgated by the IOSCO.

MoU with College of Banking and Financial Services of Oman:
It is a matter of satisfaction that we have renewed our MoU with the College of Banking and Financial Services (CBFS) of Oman. Under the MoU, CBFS shall sponsor and facilitate the working of the Chapter of the ICAI at Muscat to undertake professional developmental activities and training programmes for the benefit of accountants of all nationalities domiciled or residing in the Sultanate of Oman, and in that process assist the CBFS. The ICAI shall provide assistance and support to CBFS in capacity building of Omani Nationals in Finance, Accounts, Auditing, IT, Corporate Governance and allied areas under the MoU.

XBRL Conference in Belgium:
This is to inform the membership that our Central Council colleague CA. Atul C. Bheda along with other officers of the Institute attended the 22nd XBRL Conference in Belgium. The Conference was very significant, as it focused on the new developments and initiatives being taken by the XBRL International and the key initiatives being taken by our Institute through XBRL India to keep pace with the global developments.

Interaction with Functionaries of Various Embassies

In order to develop ways and means to foster and promote bilateral co-operation, business, understanding the regulatory architecture, promoting the mandate of providing “One Stop” information on the socio-economic legal and regulatory environment; and to explore areas where ICAI can collaborate with similar placed organisations/institutions for positioning brand Indian Chartered Accountants globally, the ICAI is organising an ‘Interaction with the Senior Functionaries of various Embassies in India’ on 11th July, 2011 at New Delhi. The program would be inaugurated by Shri S.M. Krishna, External Affairs Minister, Government of India.

Indo-Japan Forum 2011

India and Japan had established a joint working group on the issues relating to application of/or convergence with the IFRS. In order to discuss the issues involved, a delegation from India visited Japan last year in July 2010 to gain from each others experience and learning cycle already undergone in the process of implementation of IFRS at either end. During the visit, a memorandum of understanding (MoU) between The Core Group on IFRS constituted by the Ministry of Corporate Affairs, Government of India, and The IFRS Council, Japan, had been signed to exchange views on legal and regulatory issues arising out of application of or convergence with the IFRSs, and to explore the possibilities of mutual cooperation in this regard. Towards the furtherance of this cooperation, a Japanese delegation will be visiting India on 3rd to 4th August, 2011 for the 2nd Indo-Japan Forum meeting to be organised in Bangalore and to be hosted by us.

Important Clarifications

LLP will not be treated as Body Corporate for Limited Purpose of Appointment as Statutory Auditors:
Limited Liability Partnership (LLP) has now become a new form of statutory organisation which is gaining its importance and opening up new opportunities for the practising Chartered Accountants. The practising Chartered Accountants can now take the advantage in forming/realigning their firms as Limited Liability Partnership. As per Section 3 (1) of the Limited Liability Partnership Act, 2008, since a limited liability partnership is a body corporate, it is precluded from appointment as Statutory Auditors of the company under Section 226 (3) (a) of the Companies Act, 1956 which provides by way of disqualification for appointment of auditor of a company that a body corporate cannot be appointed as an Auditor. To remove this lacuna, on a representation made by us, the Ministry of Corporate Affairs has clarified vide its Circular No 30/2011 dated 26-05-2011 that Limited Liability Partnership of Chartered Accountants will not be treated as body corporate and has taken LLP out of the purview of the definition of Body Corporate under Section 2 (7) (c) of the Companies Act, 1956 and therefore, LLP can be appointed as Statutory Auditors of the company.

Clarification on Member-in-Charge of Office of CA/ Firm of CA:
This is to inform our membership that we had recently discussed the question whether ‘member’ in-charge of an office of a Chartered Accountant or a firm of such chartered accountant in terms of provision of Section 27(1) was necessarily required to be associated with a chartered accountant/firm concerned as a partner or paid assistant, or, whether a member associated with the chartered accountant/ firm as a retainer could also be designated as member in-charge. Noting the related directions contained in the Code of Ethics, it was concluded that an office of a chartered accountant/firm could be placed under a charge of a member associated with him/firm as a partner or paid assistant, and that if such a member is paid assistant, he is required to be in full time employment.

Initiatives for Members

Getting Close to Members in Industry-Outreach Programme:
As I have informed earlier, the Outreach programme has been conceived with the idea of bringing the members in Industry closer to ICAI by highlighting our activities for them, to interact on matters of professional interest, to encourage new members to apply for membership, to solicit views from members in industry about what they expect from the ICAI, and to encourage their participation in research projects of the ICAI. It is a pleasure to inform that second such CMII Outreach Programme was organised at the Power Finance Corporation of India Ltd. in New Delhi. I, along with the Vice-President CA. Jaydeep N. Shah and my Central Council colleagues CA. K. Raghu, CA. Pankaj Tyagee, CA. S. B. Zaware and CA. Rajkumar S. Adukia among others, had the opportunity of interacting with our members on various issues concerning the profession. We also interacted with the Director (Finance) of the Corporation, Shri R. Nagarajan, about our various initiatives in this regard. More than 40 CAs attended the programme.

Differentiating Ind ASs from IFRSs and Existing ASs:
We have considered and finalised the differences between Ind ASs and IFRSs, and Ind ASs and the existing ASs, which may be issued in form of our pronouncement, as it would remove the ambiguity amongst various stakeholders and public regarding the carve outs and differences in Ind ASs from corresponding IASs/IFRSs.

Compendium of Technical Guides on Internal Audit:
Internal auditors today must possess an alwaysexpanding toolkit of technical skills and competence to perform a job that seems to constantly change in scope and function. Our Institute is committed to facilitate the auditors in acquiring the required skills and competence, and, therefore, we have issued Compendium of Technical Guides on Internal Audit having Industry Specific Technical Guides as well as Generic Guides, so that our members can access all these Guides at one place. Volume I of the Compendium all Technical Guides and Volume II all background materials and various studies relating to internal audit issued till date.

CABF-Meeting Demands of Crises:
I would like to inform you with a lot of satisfaction that a large number of members and families of deceased members have been benefited through the CABF (Chartered Accountants Benevolent Fund). A sum of Rs. 2,16,16,500 has been released during the period, from 1st April, 2010, to 31st March, 2011. Keeping in mind of the nature of help this Fund is capable of extending, I have made an appeal to the Chairman of Regional Councils and Branches to collect donations for the Fund and to contribute to it at their end. I would like to appeal to all members of the Institute to contribute generously for the Fund.

New Groups Constituted:

To Address the Issue of Money Laundering: A Group comprising the ICAI Vice-President CA. Jaydeep N. Shah and our Central Council colleagues CA. Jayant Gokhale, CA. Mahesh P. Sarda, CA. S. B. Zaware, CA. Dhinal Ashvinbhai Shah, CA. S. Santhanakrishnan, CA. Sumantra Guha and CA. Sanjay Kumar Agarwal has been constituted under my convenorship to provide necessary inputs/ suggestions on effectively addressing the menace of money laundering, and related issues in view of public interest attached. After due consideration, the inputs given by the Group will be submitted to the Government.
To consider setting up a cyber cell: A group comprising my Central Council colleagues CA.Nilesh S. Vikamsey, CA. P. Rajendra Kumar, CA. Ravindra Holani and CA. Sanjay Kumar Agarwal has been constituted under the convenorship of CA. S.B. Zaware to consider setting up of a Cyber Cell in our Institute, including the study of issues involved and the steps required to be taken in that regard.

XBRL Workshops:
As communicated in my earlier messages, we, through our CPEC and CMII, have started organising one and a half day workshops on XBRL, providing hands-on trainings for creation of XBRL documents for filing with the Ministry of Corporate Affairs. These workshops are in addition to the awareness seminars and conferences being organised at various locations. The batches for providing hands-on trainings on XBRL are going on at Mumbai and Hyderabad. Indore, Pune, Hyderabad and Coimbatore have already had one round of training workshop each.

The Ministry of Corporate Affairs (MCA) has also had a meeting with various consultancy firms and the software vendors. It proposes to host the list of software vendors on XBRL on their website shortly for the convenience of all. As per the FAQs issued by MCA, professionals are also required to certify the XBRL documents filed with MCA. The Institute is also considering to provide separate guidance to the members in this regard.

Bhoomi Pujan at Gwalior Branch: This is a matter of satisfaction for me to report to my accounting fraternity that Bhoomi Pujan for branch building of the Gwalior Branch of CIRC of ICAI was organised by the Branch recently, which I attended as the Chief Guest along with the ICAI Vice-President CA. Jaydeep N. Shah. The function was also attended by my Central Council colleague CA. Ravindra Holani and CIRC Chairman CA. Vivek Khanna among others. This function was well attended by the members, students and other dignitaries.

Initiatives for Students

Entry Requirement for CA Course:
Our members must be aware that, pursuant to a Council decision, a group under the convenership of my Central Council colleague CA. Abhijit Bandyopadhyay was constituted to review entry requirements for Chartered Accountancy course. I am happy to inform you that the Group placed its recommendations at the Council meeting recently for its consideration. The ICAI Council has decided that Commerce and non- Commerce graduates with 55 and 60 per cent marks respectively in aggregate should be exempted from Common Proficiency Test (CPT) and such students would be allowed direct entry to articleship training. It was also decided that candidates who have passed the intermediate level examination of ICWAI/ICSI are exempted from CPT and they will be allowed to join articleship training only after passing first group (Group I) of IPCC examination. Students who wish to pursue Accounting Technician Course of the Institute would also be exempted to appear in the CPT. The matter has been placed before the government for consideration and issuance of necessary notification in this regard.

Extension in IPCC Registration Deadline:
As the members are aware, the results of the CPT examination held on 19th June 2011, would be declared in July 2011. In terms of Regulation 28E, no candidate is admitted to the IPC Examination, inter alia, unless she/he undergoes a study course for a period of not less than nine months. Accordingly, candidates who achieve success in the CPT examination in June 2011 will be required to register themselves for the IPCC by 1st August, 2011. Thus, only a period of about 15 days would be available to the concerned persons provided the results of CPT in June are declared on 15th July without delay under any circumstances. Considering recent experiences in the past and provision of adequate time for registration, deadline for IPCC registration has been extended to 16th August, 2011.

Join CA Educational Loan Scheme:
This is to inform our student community that we have sent request to chief managing directors (CMDs) of public-sector banks for sanctioning a loan of Rs 2 lakh to CA students as educational loan under the Join CA Educational Loan scheme, when they approach any of such banks towards financial help for the completion of their CA education/training. In this regard, I am happy to acknowledge that the Bank of Maharashtra has informed us that education loan assistance is already available for CA course under priority sector lending at their branches and a similar response has been received from the Oriental Bank of Commerce also. Further, the IDBI bank has come out with an Education Loan Scheme specifically structured for the students pursuing CA Course.

Convocations in 2011:
Taking the new tradition forward to bring new members of the Institute under the umbrella of the accounting fraternity and foster a feeling of belonging-ness to the Institute, we are organising Convocation 2011 in Delhi, Chandigarh, Mumbai, Ahmedabad, Chennai, Bangalore, Hyderabad, Kolkata, Kanpur and Jaipur this year. Around 5,731 members enrolled up to March 2011 will be awarded membership certificates besides merit certificates. I am happy to note that a large number of new members have shown keen interest in attending their convocation. I am sure the moments of the conferment of membership will be cherished by the participating members for life.

It is true that if we want to understand the existing condition of our profession, we should better look for reasons in its yesterday. Behind all colourful present, there could be a hard past. Therefore, it is essential for all of us to know our past, our history to understand our own story, to understand who we were before and why we are so at present. History, therefore, not only presents the mistakes of our past but gives us an ability to understand our present and builds a perspective for us to understand our mistakes in advance that we may make. Although given a chance, many of us would avoid going to history. But we are what our history has been. We can not ignore history. Had we not had a history of thousands of years behind us, we would have been living dangerously millions of years before the current civilisation.

History is important. Thucydides, an early Greek historian, says: History is philosophy teaching by examples. Bulgarian novelist Elias Canetti, a Nobel Laureate in literature, says: History is on the side of what happened. It is, therefore, my personal appeal to my accounting fraternity to know their glorious past and tradition, which would give us a perspective to think about vision for the profession and would add value to our understanding of the profession. In fact, this will give us an idea about how we should grow, what we have to achieve and what we could expect from our future. It would be wonderful if you could share your viewpoint with me in this regard. Write to me. It would be a privilege to know what our think about the profession and what their expectations are.

History is valuable. Let us preserve its glory. Tradition has to be celebrated progressively and correctively. Let us take care of our present, as tomorrow this will be history too.

Best wishes and a very joyous and eventful CA Day!

XBRL - how much it costs ??

2011-06-28T06:00:00.000-07:00

Dear all,

We are all very eagerly waiting for the XBRL filing.

But the preliminary study of it, reveal that to convert the financialstatement of a small and uncomplicated company would cost a minimum ofRs. 60,000.

This cost will go up for large companies..

Many members say that it is a wonderful oppurtunity.

To my understanding the software companies are going to make the moneyfrom XBRL, not the CAs.

CAs may have to depend on the software and consulting Companies.

Share your views so that we can have a considered view of it. sent your mail to : tonyfca@rediffmail.com

Corporates and banks mandated to issue Form 16A downloaded from TIN central system - CBDT Reminds

2011-06-28T05:44:00.000-07:00

CBDT has issued a Circular No. 03/2011 dated May 13, 2011 as per which TDS Certificates in Form No. 16A will be generated from Tax Information Network (TIN) . It is mandatory for Companies and Banks to issue Form 16A from TIN to their deductees for deductions made from April 1, 2011 (F.Y. 2011-12 onwards). Taxpayers are advised to insist on Form 16A (quarterly TDS certificate) that has been downloaded by the deductors from TIN Central System only.
CBDT reiterates and advises:
It is mandatory for corporates and banks to issue TDS certificate in Form 16A as generated from Tax Information Network of Income Tax Deptt. Please Insist on Form 16A (quarterly TDS certificate) that has been downloaded from TIN Central System only.
++ Verify that the Form 16A, is in PDF form and has a “unique six alpha character (e.g. AQTYUR) TDS Certificate number”.
++ To verify genuineness of certificate click on “Verification of TDS certificate (Form 16A) by Tax payer
(https://onlineservices.tin.nsdl.com/TIN/JSP/form16A/LinkToUnauthorizedView.jsp)“ in the “TDS” link at www.incometaxindia.gov.in.
++ Option to view Form 16A is also available, while viewing 26AS statement online.
CBDT adds that the Income Tax Department (ITD) is not responsible for any mismatch in the TDS certificate and the actual transaction of the taxpayer with the deductor. In case of mismatch please contact your deductor for necessary action

source: www.taxindiaonline.com

service tax on receipt basis- Consulting enginners are also included

2011-06-28T05:34:00.000-07:00

As per Point of taxation Rules 2011 service tax liability wef 1.7.2011 will be on accrual basis however the following services are eligible for payment of tax on receipt basis:-
(g) : Consulting Engineer.
(p) : Architect
(q) : Interior Decorator
(s) : Chartered Accountant
(t) : Cost Accountant
(u) : Company secretary
(za) : Scientific or Technical consultancy
(zzzzm) : Law

Notification to include consulting engineers are issued which is given below:-

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 27th June, 2011

Notification No. 41/2011 – Service Tax

G.S.R. (E).- In exercise of the powers conferred by clause (a) and clause (hhh) of sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following rules further to amend the Point of Taxation Rules, 2011, namely:-

1. (1) These rules may be called the Point of Taxation (Second Amendment) Rules, 2011.
(2) They shall come into force on the 1st day of July, 2011.

2. In the Point of Taxation Rules, 2011, in Rule 7, in sub-rule (c),-
before the bracket and letter “(p)”, the bracket and letter “(g)” shall be inserted,

[F. No. 334/3/2011-TRU]

(Samar Nanda)
Under Secretary to the Government of India

Note.- The principal rules were notified vide notification no. 18/2011-Service Tax, dated the 1st March, 2011, published in the Gazette of India, Extraordinary vide Number G.S.R. 175(E), dated the 1stMarch, 2011 and last amended vide notification No.25/2011-Service Tax, dated the 31st March, 2011, published on the Gazette of India vide Number G.S.R. 283(E), dated the 31st March, 2011.

nice thoughts !!

2011-06-27T21:40:00.000-07:00

1. Heavy rains remind us of challenges in life. Never ask for a lighter rain.
Just pray for a better umbrella.

2. When flood comes, fish eat ants & when flood recedes, ants eat fish. Only time matters. Just hold on, theres opportunity for everyone!

3. Some people always throw stones in your path. It depends on you what you> make with them, Wall or Bridge? Remember you are the architect of your life.

4. Every problem has (n+1 ) solutions, where n is the number of solutions that you have tried and 1 is that you have not tried. That is life.

5. It is not important to hold all the good cards in life. But it is important how well you play with the cards which you hold.

6. Often when we lose all hope & think this is the end, God smiles from above and says, `Relax dear, it is just a bend. Not the end. Have Faith and have a successful life.

7. One of the basic differences between God and human is, God gives, gives and forgives. But human gets, gets, gets and forgets. Be thankful in life!

Indirect tax Ombudsman Guidelines, 2011

2011-06-26T00:15:00.000-07:00

follow the link below for the full text:-

http://www.cbec.gov.in/it-ombud/it-ombudsman-guidelines.pdf

Circular No 33/2011 applicable only to those defaulting companies who have not filed Balance Sheet or Annual Return for any of F.Ys 2006-07 to 2009-10

2011-06-23T08:16:00.001-07:00

Clarification on circular No 33/2011 dated 01.06.2011 with regard to Compliance of provisions of the Companies Act,1956 and Rules made there under

Circular No. 38 / 2011

F. No. 17/ 146/ 2011-CL-V

Government of India

Ministry of Corporate Affairs

5th Floor, A Wing , Shastri Bhavan

Dr. R.P. Road , New De lhi-110001

Date d 20.06.2011

All the Regional l Directors,

All the Registrar of Companies / Official Liquidators

The Stake holder

Sub: Clarification on Circular No. 33/ 2011 dated 01.06.2011 with regard to compliance of provisions of the Companies Act, 1956 and Rules made there under

Sir,

The Ministry has issued General Circulars No. 33/ 2011 dated 01.06.2011 wherein it was informed that in order to ensure corporate governance and proper compliances of provisions of Companies Act, 1956, no request, whether oral, in writing or through e-forms, for recording any event based information / changes shall be accepted by the Registrar of Companies from such defaulting companies, unless they file their up dated Balance Sheet and Profit & Loss Accounts and Annual Return with the Registrar of Companies.

In order to have better understanding of the circular, it is further clarified that the above circular shall be applicable to those defaulting companies and their Directors which have not filed Balance Sheet or Annual Return for any o f the financial year’s 2006-07, 2007-08, 2008-09 and 2009-10 with the Registrar of Companies as required under sections 220 and / or 159 of the Companies Act, 1956.

It is again reiterated that the above circular shall be effective from 3rd July, 2011.

Yours faithfully,

-SD/ -

(Monika Gupta )

Assistant Director

8% net profit must for business, if no tax audit done

2011-06-23T07:02:00.000-07:00

As per section 44AD of Income tax Act, all business entities with turnover less than 60 Lakhs, other than companies, are required to offer 8% of Turnover as taxable Income. Otherwise, Tax audit to be done.

Earlier it covered only retail trade. Now it covers all business.

Seems professions are not covered by 44AD.

Cost inflation index for FY 2011-12: 785

2011-06-23T06:46:00.000-07:00

COST INFLATION INDEX FOR FINANCIAL YEAR 2011-12

NOTIFICATION NO. 35/2011 [F. NO. 142/5/2011-TPL], DATED 23-6-2011

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O. 709(E), dated the 20th August, 1998, namely :—

In the said notification in the Table, after serial number 30 and the entries relating thereto, the following serial number and entries shall be inserted, namely :—

"31

2011-12

785"

FOUR THINGS YOU PROBABLY NEVER KNEW YOUR MOBILE PHONE COULD DO!

2011-06-21T20:01:00.000-07:00

There are a few things that can be done in times of grave
emergencies. Your mobile phone can actually
be a life saver or an emergency tool for survival.
Check out the things that you can do with it:

FIRST
Emergency

The
Emergency Number worldwide for all Mobile Phones
is 112. If you find yourself out of the coverage area of your
mobile network and there is an emergency, dial 112
and your mobile will search any existing network in your area to establish the emergency
number for you, and interestingly this number 112 can be dialled even
if the keypad is locked. This works on all phones worldwide and is free. It is the equivalent of 000.

SECOND
Have you locked your keys in the car?

Does your car have remote keyless entry? This may come in handy someday. Good
reason to own a cell phone:
If you lock your keys in the car and the spare keys are at home, call
someone at home on their mobile phone from your cell phone.

Hold your cell phone about a foot from
your car door and have the person at your home press the unlock
button, holding it near the mobile phone on their end.
Your car will unlock. Saves someone from having to drive
your keys to you. Distance is no object. You could be thousands of miles away,
and if you can reach someone who has the other 'remote' for your car, you can
unlock the doors (or the trunk).

Editor's Note: I didn’t believe this when I heard about it! I rang my daughter in Sydney from Perth when we went on holiday. She had the spare car key. We tried it out and it unlocked our car over a mobile phone!'

THIRD
Hidden
Battery
Power

To activate, press the keys *3370# (remember the asterisk). Do this when the phone is almost dead.
Your mobile will restart in a special way with this new reserve and the instrument will show a 50%
increase in battery life. This reserve will get re charged when you charge your mobile next time.
This secret is in the fine print in most phone manuals. Most people however skip this information without realising.

FOURTH
How to disable a STOLEN mobile phone?

To check your Mobile phone's serial
number, key in the following digits on your phone: * # 0 6 #

Ensure you put an asterisk BEFORE the #06# sequence.

A 15 digit code will appear on the screen. This number is unique to
your handset. Write it down and keep it somewhere safe. If your
phone ever get stolen, you can phone your service provider and give them
this code. They will then be able to block your handset so even if
the thief changes the SIM card, your phone will be totally useless.
You probably won't get your phone back,
but at least you know that whoever stole it can't use/sell it either. If
everybody done this, there would be no point in people
stealing mobile phones..
This secret is also in the fine print of most mobile phone manuals. It was created for the very purpose of trying to prevent phones from being stolen.

Also -ATM PIN Number Reversal - Good to Know !!

If you should ever be forced by a robber to withdraw money from an ATM
machine, you can notify the police by entering your PIN # in
reverse. For example, if your pin number is 1234, then you would put
in 4321. The ATM system recognizes that your PIN number is backwards
from the ATM card you placed in the machine. The machine will still
give you the money you requested, but unknown to the robber, the
police will be immediately dispatched to the location.
All ATM’s carry this emergency sequencer by law.

This information was recently broadcast on by Crime Stoppers
however it is seldom used because people just don't know about it.

Please pass this along to everyone.

CONVERSATION BETWEEN HUSBAND & WIFE

2011-06-19T21:54:00.000-07:00

Husband throwing darts at his wife’s photo and not even a single onehitting the target..........

From another room wife called the husband : “honey what are you doing...

Husband: “MISSING YOU”.......

Kerala High Court grants stay for service tax on bar attached hotel ( airconditioned restaurents).

2011-06-17T03:08:00.001-07:00

It is understood from reliable sources that Kerala High Court has granted stay for two months on service tax on Bar attahced hotels.

Service tax on Air conditioned Restaurent (Bar attached hotel) service was made taxable from 1.5.2011

The order is awaited. will share the copy of the order at the earliest.

This is for your information

Concurrent audit empanelment in Punjab national Bank

2011-06-13T01:29:00.000-07:00

Empanelment in Punjab National bank.

Follow the link below:-

https://www.pnbindia.in/En/ui/Public-notice.aspx

Practical guide to getting work done without paying bribe

2011-06-08T04:49:00.000-07:00

A useful mail from one of my CA Friends is given below, which is really worth reading.

Have a read !

Corrupt officials use various tactics to extract bribes.
You may take the following action to counter those tactics.
(1) Indefinite Delay: They delay your work until you offer a bribe. Solution: Don't visit government offices. Follow up your pending work through letters. You may send letters by courier, registered post or speed post. [Local speed post costs only Rs 12/-. Local couriers are available at Rs 5/-]. You may also use RTI Act to know status of your work. In which case you need to spend another Rs 10/-.
.
(2) Demanding unnecessary papers: Sometimes they demand unnecessary documentation, and hint that work can be done without those very papers if you pay a bribe. Solution: If they can offer to do your work without additional papers [with bribe], it means that those papers were definitely unnecessary. (i) Ask officials to demand those papers in writing, and record the conversation. (ii) Write a letter stating that you demanded these papers. Are they really mandatory as per law? You can also use the RTI Act here. (iii) Use the RTI Act to find out whether s/he demanded those papers from other applicants. (iv) Whatever paper s/he demands, send it by post. Never deliver anything without receipt. [Remember no officer will complete your work without the mandatory papers].
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(3) They advise you to pay bribe so that you pay less tax / penalties. Many times they demand higher amount for penalties than prescribed under laws. Solution: (1) Check laws if you can (2) Record the conversation and tell them that you are going to report it to the Anti-Corruption Bureau. (3) Use the RTI Act to find out how much was paid by others under similar circumstances.
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(4) When the official is not available in his/her office. Solution: Write a letter that you visited his/her office on say, 1st August at 11 AM but s/he wasn't available. His/her assistant Mr. Rama Rao said to come again on 5th August. This letter will make him/her take special care of your work.
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(5) If nothing works, try this: When you don't have any option, record the conversation, pay money and get your work done. After your work is completed, meet that official and demand your money back. Tell him/her that you are going to complain, if s/he does not return your money. Tell him/her about Jago Party. Take a Jago pamphlet or advertisement copy with you. This will most likely make him/her return your money.
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(6) Develop the habit of complaining. Whenever you see crime and corruption, send written complaints to head of that department, ACB / CBI, local newspapers and the Jago Party.
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(7) Don't be submissive. Call officials by their names. Don't call them `Sir' or `Madam'. Be polite but don't show unnecessary respect. Be firm and confident. Talk about the RTI Act and the Jago Party. Corrupt officials are generally afraid of knowledgeable people.

New Easy Exit Scheme announced by MCA

2011-06-07T06:52:00.000-07:00

Ministry of Corporate Affairs announced new Easy Exit Scheme for companies.

(Circular dated 07-06-2011)

Highlights:--

wef 03-07-2011

filing fees Rs. 5000

Nil assets and NIL Liabilities and No business since incorporation orin last one year.

The eform to be certified by CA/CS/CWA

IT’S TIME TO CHANGE…..

2011-06-06T08:02:00.000-07:00

find given below, a mail from a Chartered Accountant friend.

This mail is worth reading.............. Go ahead!

All of us should NORMALLY be overwhelmed to see the REVISED MINIMUM FEESrecommended by ICAI, thanks to our Hon. President and his team. Finally after advising and helping the bankers, business houses, government to control inflation, we have thought for helping ourselves for fighting the devil (INFLATION) which have created major holes not only our practice and our pockets, but even profession. It would not be exaggeration of matter if I say that now-a-days it has become difficult to retain the good talents in our office, as we are not good pay-masters. But does revising the minimum fees level a sufficient step to give impetus to practicing CA and attract fresh CA’s to practice that are more inclined towards industry, or shall we REVISIT the basis of charging of fees.

The real problem is implementation of these Minimum Fees basis by all the professionals. ICAI, as a regulator have recommended minimum fees but it does not have any feasible mechanism to vouch for its implementation. It makes even more difficult for members to implement these fees structure when they are competing with Tax Practitioners, more so in non-metros and smaller towns. Further the work estimation can not be judged and ICAI provides only the recommended minimum fees structure with no upper cap, meaning thereby that one can charge as per the cost involved, expertise required, geographic demographics, etc. However this leads to wide range of disparities resulting in competition and un-controlled under-cutting in fees, the direct beneficiaries being our service recipient. There are no comparables and our clientele take undue advantage of this at times. In all its whole a Chartered Accountant is losing to another losing Chartered Accountant - apparently this may sound weird, but one who accepts assignment at lower amount is also a loser to some extent.

All these factors call for better option for charging of fees by a professional Chartered Accountant. We feel time has come asking for paradigm shift in basis for charging by CAs. In order to reduce disparities we should switch over to charging of the fees onPERCENTAGE BASIS. Today almost all professionals like Architects, Interior Designers, Engineers, Valuers, even carpenters do charge their fees on Percentage Basis. If one charges fee for instant on basis of percentage of Balance Sheet totals, or Turnover, or working capital as is done in case of Co-operative Banks in Maharashtra, there would equality in the fees charged by members.

We very well understand that immediate argument to this would be with reference to clause 10 of Part I of The First Schedule to The Chartered Accountants Act, 1949. The clause reads as – A CA in practice shall be deemed to be guilty of professional misconduct, if he charges or offers to charge, accepts or offers to accept in respect of any professional employment, fees which are based on a percentage of profits or which are contingent upon the findings, or results of such employment, except as permitted under any regulation made under this Act.

However one may find / suggest ways and means to charge percentage like on Balance Sheet totals, Turnover etc. Or we leave it to all expert professional friends to suggest ways or means for this and if require go for amendment in the Act which is creating undue competition amongst its professional members and hampering the growth of the members. Few of the suggestive methods can –

Percentage of Turnover, Balance Sheet totals, or working capital basis
Percentage of Capital generated or capital build up
Percentage fees with Minimum Fixed Fees and there-after staggered slab wise percentage
Percentage or minimum fixed fees can differ for businessmen and professional
For representation or consulting matter where percentage mechanism is not possible alternate method can be worked out.

We appeal to members to provide thoughts on working this proposal of charging of professional fees on Percentage Basis. We do respect each and every member being CA but in this discussion we would request you NOT to reply on any other basis of charging of fees or how percentage basis is wrong, but restrict your contributions on ways and means of giving effect to the concept “Professional Fees on Percentage Basis” only. This change can bring a revolutionary change in the profession and our personal life, if we DARE to think and think for a change.

Thanking you & looking forward to positive inputs for taking the matter ahead and lead this noble profession to new regime where it can sustain itself as Noble Professionrather than degrading itself and its members by undercutting.

Client threshing of tobacco and client processing of raw cashew to recover kerenels thereof not liable to service tax

2011-06-06T07:29:00.001-07:00

Notification No. 14/2004-ST dated 10.09.2004 inter-alia exempts business auxiliary service in relation to processing of goods for, or on behalf of the clients when provided ‘in relation to agriculture’. It has been clarified that the following are covered within the expression ‘in relation to agriculture’ and thus are eligible for exemption provided in Notification No. 14/2004-ST dated 10.09.2004:

(i) process of threshing and drying of tobacco leaves and thereafter packing the same; and

(ii) processing of raw cashew involving roasting/drying, shelling and peeling of raw cashew to recover kernel

The Board has clarified that tobacco or raw cashew, which are subject to client processing retain their essential characteristics at the output stage and therefore the processes undertaken on behalf of client should be considered as covered by the expression ‘in relation to agriculture’.

Further, it has been clarified that where the commission agents stationed abroad provide business auxiliary service to promote the export of rice, said business auxiliary service is covered byNotification 13/2003-ST (as amended) because, the word ‘rice’ is mentioned under the explanation to the term ‘agricultural produce’, in the inclusive portion along with other items like cereals, pulses, etc.

[Circular No. 143/12/ 2011 – ST dated 26.05.2011]

concurrent audit in Vijaya Bank

2011-06-06T00:09:00.001-07:00

follow the link below:-

http://vijayabank.com/vijaya/vijaya/internet-en/menus/announcements/Notice_Empanelment_of_Concurrent_Auditors.html

Registration of companies in 24 hours from first week of July

2011-06-06T00:05:00.001-07:00

COMPANIES CAN REGISTER IN 24 HRS
BS REPORTER New Delhi, 4 June
Come July, you can register a company in India in 24 hours! The Union ministry of corporate affairs has set the first week of July as the target date for launching a completely digitised service that will allow anyone with all relevant documents and approvals to complete the process of registering a company in one day.
A senior ministry official toldBusiness Standard that all the offices of the Registrar of Companies (ROC) were busy putting in place the new system and an announcement of the launch of the new service was likely by the end of June. The offices of ROC, appointed under Section 609 of the Companies Act, have the primary responsibility of registering companies floated in different states and Union territories and ensuring that they comply with statutory requirement under the Act.
At present, the process of registering a new company takes anywhere between 10 days and a month. One of the reasons for India faring poorly in global competitiveness indices is the inordinately long time the government takes in granting permission to set up anew company. The latest World Competitiveness Report of the World Economic Forum ranks India at 51, while China is much higher at 27.
Registration of a new company within 24 hours is only one of the many new initiatives the ministry of corporate affairs has planned for the next few months. It has decided to streamline the functioning of its oversight mechanism. At present, there are over 75,000 cases languishing in different courts that the ministry has to deal with. Most of these cases pertain to non-compliance of procedures by companies that have ceased to operate. The ministry has decided that it would wind up such insignificant cases through close monitoring and follow-up action in the next few months.
The target is to bring down the number of cases pertaining to violation of provisions under the Companies Act to amore manageable figure of 5,000. Ministry officials said it would be possible to close all the frivolous and inconsequential cases that wasted the government’s time, money and energy and focus only on the substantive cases where serious violation of the Companies Act had taken place. The objective was not to spread the ministry’s resources thin, but concentrate on the few cases that needed greater monitoring.
Already, the ministry has taken a firm stance on companies that continue filing various returns and documents even without filing the annual reports, including the balance sheet. Companies that have not filed the last year’s annual report, including the balance sheet, would now be unable to file any other reports electronically. Several companies delay filing their annual reports in violation of the procedures under the Act. This move would ensure greater compliance in akey area of corporate governance, the officials said.
Ever since its launch a few years ago, MCA-21, a website service run by the ministry, has been offering a slew of services to companies for electronic filing of returns or registration of digital signature. Researchers also find MCA-21 hugely useful for the information on companies that are now accessible on payment of fees. The new moves, initiated by the ministry, will make compliance of corporate laws more transparent and easy, the officials said.

PAN mandatory for DIN

2011-06-04T08:07:00.000-07:00

Now PAN mandatory for DIN.

those who have not furnished PAN earlier while applying for DIN, need to file DIN-4 by 30.09.2011

XBRL

2011-06-04T08:06:00.000-07:00

Based on the comments received on the Exposure Draft on taxonomy, the
Ministry of Corporate Affairs (MCA) has finalised the Taxonomy and Business
Rules for Commercial and Industrial (C&I) entities for filing their Balance
Sheet and Profit and Loss Account in XBRL.

CBDT Plans To Use Third Parties To Recover Tax DuesThe Central Board of Direct T

2011-06-04T08:03:00.000-07:00

The Central Board of Direct Taxes (CBDT) is considering use of third parties to recover tax dues. This is part of a plan to control mounting tax arrears. The plan has been envisaged because insufficient information on assets of taxpayers is hampering CBDT's recovery efforts. The income tax arrear demand made by CBDT stood at Rs. 2,29,032 crore on March 31, 2010. Out of this, Rs. 9,476 crore is difficult to recover because the assessees are not traceable. Cases where the board has found no or insufficient assets for recovery — called `no-asset cases' — account for Rs. 92,360 crore. A worried CBDT has felt the need to take outside help to find these assets. CBDT is also planning to reward those who give information on assets of defaulters. The names of defaulters who are not traceable or whose assets are not identifiable may be given in newspapers. Anyone giving information in response will be
rewarded. At present, those who give tip-offs at the time of investigation, that is, before the tax demand is raised, are rewarded. The board is also increasing the limits for taking irrecoverable demands off its books by four-five times. For example, it proposes to raise the limit for write-offs at the level of income tax officers from Rs. 5,000 to Rs. 25,000. Similarly, at the highest level (CCIT, or chief commissioner of income tax, full board, finance ministry), the limit is proposed to be increased from Rs. 50 lakh to Rs. 2crore. Tax arrears may be declared irrecoverable if the assessee has become insolvent, is not traceable or has left India. In case of companies, the write-off can happen if the company has gone into liquidation and its business has been discontinued. The demand can be considered irrecoverable if the assessee has no attachable assets. Writing off of irrecoverable demands is an administrative act and does not lead to waiver of the
government's claim. It only helps such amounts to be written off the income tax department's books. These may be recovered for the next 30 years. – www.business-standard.com

Taxman May Soon Keep 24x7 Watch on Crorepatis

2011-06-04T08:02:00.000-07:00

CBDT panel proposes dedicated cell to monitor earnings and spending of rich taxpayers

High net worth individuals, or HNIs, may soon be subject to intense year-round scrutiny by income-tax officials. A panel constituted by the Central Board of Direct Taxes, or CBDT, has proposed setting up a dedicated cell to monitor those earning over 1 crore per annum or spending more than 10 crore a year, or having assets in excess of 100 crore. The panel has also suggested that the Income-Tax Department share information on these individuals with its overseas units to keep a close tab on their spending abroad. Robust and dedicated data centers have been recommended for creation of 360-degree profiles of such HNIs to ensure proper monitoring and payment of taxes, said an income-tax official privy to the report. Such dedicated monitoring of HNIs would enable the tax department to map expenditure to income. The panel believes this would help in tracing black money in cases where spending exceeds known sources of income. Countries such the US, UK and Australia already have such dedicated tax divisions for HNIs. The CBDT panel has also recommended tougher wealth disclosure norms for the rich. It has saidwealth tax return forms should include both productive and unproductive assets, including those held abroad. At present, only unproductive assets such as houses, farm houses, urban land, jewellery, bullion, cars, planes, boats and yachts have to be declared in the returns. If the panels recommendations are accepted, HNIs may have to disclose assets such as shares, bank deposits, fixed deposits, bonds and debentures in their wealth tax returns. The data that the department will receive through the returns and other intelligence will help it keep a close watch on any tax evasion, the official said. In order to ensure that there is no suppression of income or wealth, the panel has also suggested that IT returns of HNIs be scrutinized every year. At present, the tax department scans up to 2% of the total number of returns filed, on a random basis. The proposal to intensify scrutiny on HNIs comes amid growing pressure on the government to act tough on corruption and bring back black money stashed abroad. It recently set up a committee of senior tax officials to examine measures to curb generation of black money and its illegal transfer abroad.

Economic Times, New Delhi, 03-06-2011

President's Message - June 2011 (please specially note the green and orange colour highlighted paras)

2011-05-31T07:21:00.000-07:00

Dear friends,

Let the faith of people of the world be restored in democracy for good, where the supreme power lies with the citizens who themselves elect people to represent them; democracy needs to be celebrated and kept alive by all possible means. Father of our Nation Mahatma Gandhi agrees to its value and suggests that actions inspired by tolerance, nonviolence and love could lay stronger foundations of democracy, and a change of heart can possibly be a better device to change the spirit of democracy, if required and desired. Violence is never a weapon of strong and brave people; it can only represent our moral and intellectual bankruptcy, Mahatma opines. The spirit of democracy has to come from within.

Bharat Ratna Dr. B. R. Ambedkar, a strong activist of democracy in the most fundamental sense, said: Fraternity means a sense of common brotherhood of all Indians, all Indians being one people. It is a principle that gives solidarity to social life. It is difficult thing to achieve. It seems to me that there lies a heavy duty to see that democracy does not vanish from the earth as a governing principle of human relationship. If we believe in it, we must both be true and loyal to it. Father of our Constitution, and the first Law Minister of independent India, Dr. Ambedkar believed that social democracy was the need of the hour, and, therefore, he created a socially relevant constitution for the country. He went on to warn us: We must not only be staunch in our faith in democracy but we must resolve to see that whatever we do, we do not help the enemies of democracy to uproot the principles of liberty, equality and fraternity. While presenting the final draft Constitution in the Constituent Assembly in November 1948, he had said: I feel that the Constitution is workable; it is flexible and it is strong enough to hold the country together both in peace time and in war time. Indeed, if I may say so, if things go wrong under the new Constitution, the reason will not be that we had a bad Constitution. What we will have to say is that Man was vile.

Foundation Day: July 1

We, through our institution of accountancy, too, run on the same fundamental principles of democracy in spirit, where our membership elects its representatives who commit themselves to the cause of the profession including its members, students and academia. Presence of ethos of ethics in our profession has always been its distinctive feature. 1st July is approaching and so we are ready with our preparations on celebrations of the CA Foundation Day. This year, as obvious from the cover of previous issues of the Journal, we have been remembering and celebrating thinkers and their words of wisdom and we will be celebrating our CA Day too as theFestival of Thoughts. This will be our humble tribute to guides and philosophers of our times, and this is the least we can do to honour them. It is my special request to all our members-in-industry to organise Foundation Day celebrations on 1st July in their respective organisation by inviting their colleagues and, possibly, the head of their orgainsations. I would like to appeal to all our members to celebrate the Day in a befitting manner.

Let us have a look at some of the significant developments in the Institute towards the growth our profession:

IFRS Regional Policy Forum in Bali

Recently, I had an opportunity to attend the IFRS Regional Policy Forum organised by the Indonesian Institute of Accountants along with the past-President CA. Amarjit Chopra and Smt. Usha Narayanan, Executive Director SEBI and Govt. Nominee on our Central Council. I addressed the Forum on the very first day on The Opportunities and Challenges of IFRS adoption/convergence and the imperative role of Accounting Standards Setters covering the Indian Standard Setter perspective on the convergence process of Indian Accounting Standards with the International Financial Reporting Standards. Other prominent speakers on the occasion were Sir David Tweedie, Chairman, IASB, Ms. Rosita Uli Sinaga, Chairperson, the Indonesian Accounting Standards Board, Mr. Ikuo Nishikawa, Chairman, Accounting Standards Board of Japan, Dr. Suk-Sig Lin, Chairman, Korea Accounting Standards Board.

On the second day, the Forum was first addressed by Smt. Narayanan on the topic Role of Market Regulators regarding the Opportunities and Challenges of IFRS adoption/convergence and later by CA. Chopra on The Opportunities and Challenges of IFRS adoption/ convergence – Issues of mobility of auditors and also preparation on Audit Standards to audit IFRS-based Companies.

Advancing Our International Ties

I happened to attend the meeting of Professional Accountancy Organisation Development Committee of IFAC held recently in Austria along with the past- President CA. Amarjit Chopra, wherein significant issues on development of accountancy profession in developing economies were discussed. I also attended the CAPA events held in Korea along with the ICAI Vice-President CA. Jaydeep N. Shah, where I have made presentation on an expression of interest for hosting the CAPA Conference in India in 2015. I am sure that we were able to convince the CAPA about the resources available within India for hosting the event. On the sidelines of the CAPA Board meeting, the matter relating to International Public Accounting Standards Conference and the involvement of the donor agencies for taking up projects was also discussed. CA. Jaydeep N. Shah also had detailed interaction with the officials of the Korean Institute of Certified Public Accountants to promote bilateral cooperation between the two Institutes.

Further, continuing to promote its efforts in extending technical support to developing Nations, we have submitted Expression of Interest for strengthening of the Liberia Institute of Certified Public Accountants (LICPA) through a twinning arrangement. The arrangement calls for technical support to promote and maintain world class professional standards among LICPA members and assist the Institute to develop professional accounting qualification programme to university graduates in Liberia.

Our Central Council colleagues CA. Vinod Jain and CA. Naveen N. D. Gupta attended the International Education Standards meeting in Toronto recently, wherein significant issues on the development of new education standards were discussed. Yet another Central Council colleague CA. Manoj Fadnis had discussions with the Asian-Oceanian Standards Setters Group office bearers in Indonesia recently to discuss the progress of convergence within Asia Oceanic region.

Global Commerce Education Summit in July

I wish to inform here that we will be organising a one-day Global Commerce Education Summit in July 2011 in New Delhi with the Vice-Chancellors/Head of Commerce and/or Management department of various universities and eminent national and international academicians as participants, providing a platform to them to debate new paradigms for commerce and accountancy education in India. The Summit will also focus on the emergence of single regulator to ensure quality across the Institution mechanism. Hon’ble Minister of Human Resource Development Shri Kapil Sibal has given his consent to inaugurate the Summit. The summit intends to solicit inputs from renowned Commerce academicians aiming at a universal understanding on the imperatives of the theme of the conclave.

Accounting Standards Advisory Group

It has been decided to constitute an Accounting Standards Advisory Group at the national level and various Accounting Standards Advisory Groups in different regions to advise the Accounting Standards Board of the ICAI on various issues related to formulation and revision of Accounting Standards. The National Accounting Standards Advisory Group and Regional Accounting Standards Advisory Groups would ensure involvement of greater number of our members and other stakeholders in providing inputs to the Accounting Standards Board at various stages of the formulation of Accounting Standards. This step would enhance greater credibility of the standardssetting process in the country by providing timely feedback to the Board.

Taxation of Services Rendered by Chartered Accountants

I wish to inform that I along with the ICAI Vice-President CA. Jaydeep N. Shah and my Central Council colleague CA. Bhavna Doshi met Central Board of Excise and Customs Chairman Shri Sunil Dutt Majumder recently at the Ministry of Finance in New Delhi with an objective to apprise him of the disparity in respect of taxation of services rendered by chartered accountants visà- vis legal professionals. I also brought to his notice that though services rendered by individual lawyers to individuals are out of tax net, that exclusion is not available to our members, which is a distortion for the two, otherwise similarly-placed, professionals. I also pointed out that exemption available to our members in respect of representation services was withdrawn in view of bringing in such services provided by legal professionals in the service tax net. The taxation of such services in case of legal professionals has been stayed by the Delhi High Court and there is also stay on withdrawal of the exemption by the Delhi High Court. Let us understand that similar petitions would be filed by legal professionals across the country and if the matter is decided in favour of them, it would place our members at a disadvantage. It was suggested that a similar exemption to our membership be restored till the issue is finally decided. A representation on the same agenda was handed over to Shri Majumder during the meeting.

Initiatives for Social Responsibility

Investor Awareness Programme: I wish to inform all stakeholders of the profession that the Ministry of Corporate Affairs (MCA), under the aegis of Investor Education and Protection Fund (IEPF) of the Government of India, has entrusted us with the task to educate the present and prospective investors of our nation about the intricacies of capital market. The objective of the initiative is to create better awareness among common people for investment in corporate sector towards creating a strong India Inc. Apart from the related programmes to be conducted by our Regional Councils and Branches, the MCA desires us to conduct programmes through selective resource persons in the smaller towns under the overall control of our Branches, associating with CII, FICCI, ASSOCHAM, etc., wherever applicable and possible. As conscious keeper of the financial system of the country, it’s imperative for our member fraternity to be a part of this noble initiative of the MCA as a resource person. It would, in fact, from part of our Social Responsibility towards this country. I am sure we will naturally give it our best effort to reach a wider spectrum of the society through such programmes and create a thorough financial awareness.

Training Programmes for Government Officials: I am happy to acknowledge that we recently organised a two-day training programme on Cash to Accrual Basis of Accounting for the officials of Finance and Accounts Department of Lakshadweep. We also organised an orientation programme for graduates of the island on the prospects of the CA course on the sidelines of this training programme. Dr. N. Vasantha Kumar, Secretarycum- Commissioner of the Department of Finance & Accounts, inaugurated the training programme and appreciated our efforts for imparting training on the pivotal issue of cash to accrual basis of accounting. Our Central Council colleague CA. Anuj Goyal was also present during the programme.

It is again satisfying to acknowledge that another two-day training programme on various topics of relevance in finance and accounting was recently organised for the Finance Department of Tamil Nadu in Chennai. Joint Secretary Thiru R. Kirlosh Kumar inaugurated the programme and appreciated our noble efforts for giving this fruitful training. Deputy Secretary Dr. Vijay Pingale was also present during the inauguration. Our Central Council colleagues CA. P. Rajendra Kumar, CA. V. Murali, CA. M. Devaraja Reddy were also present along with the SIRC Chairman CA. K. Shanmukha Sundaram.

Workshop of the Quality Review Board jointly with ICAI: I am pleased to inform you that a workshop of the Quality Review Board was recently organised in New Delhi jointly by us for the Auditors of the listed companies. Shri R. Bandyopadhyay, Chairman, Quality Review Board, CA. Amarjit Chopra, immediate Past President, ICAI, CA. Yogesh Sharma, New Delhi, and the undersigned, addressed the participants in the workshop. Shri Bandyopadhyay shared his views on the activities of the Quality Review Board. There were two technical sessions addressed by CA. Chopra on “Quality Review - Role and Responsibility of Audit Firms” and by CA. Sharma on “Audit Quality Review – International Perspective”.

ICAI Representation on Government Committees

It is quite satisfying to me to inform our accounting fraternity that we have recently got representation in two very important committees formed by the Ministry of Corporate Affairs. The committees were formed in the areas which are very important not only for the entire corporate world but also for the Indian economy and for our profession. Our Council colleagues CA. Vinod Jain and CA. Naveen N.D. Gupta were nominated on ‘Committee to advise the Government on the proposed Takeover Code’ and ‘Committee to advise the Government on the Bimal Jalan Committee Report on Ownership and Governance of Market Infrastructure Institutions (MIIs)’ respectively. In a meeting of the Committee on Takeover Code held recently, CA. Vinod Jain presented the views of the Institute on the Size of Open Offer, Trigger Point, Creeping Acquisition and Offer Price besides other important aspects of the Code. Meeting of the other Committee related to Ownership and Governance of the MIIs was also attended by a representative of the Institute.

Meeting with Minister of State for Corporate Affairs
ICAI President CA. G. Ramaswamy with the Minister of State for Corporate Affairs Shri R. P. N. Singh during a meeting in New Delhi

Celebrating Accounting Foundations

Diamond Jubilee Celebrations of SIRC: Just couple of years back it was very special moment for all of us when we celebrated Diamond Jubilee year of the Institute with great enthusiasm. We have similar occasions to celebrate this year as well in which all of our Regional Councils are entering their Diamond Jubilee year. More reasons of happiness will come as many Branches are also entering/completing their Golden or Silver Jubilee. It’s really time for celebrations, and personally it’s very satisfying to be part of these moments of joy and happiness as President of this esteemed Institute.

It was quite heartening for me to participate in the inaugural function of the Diamond Jubilee Celebrations of the Southern India Regional Council in Chennai along with the ICAI Vice-President CA. Jaydeep N. Shah. CA Final Examinations Gold Medallist CA. S. Viji, Chairman, Sundaram Finance Limited and Managing Director, Brakes India Limited, was the Chief Guest, and Shri Nalli Kuppuswami Chetti, Managing Partner, M/s. Nalli Chinnasamy Chetty also graced the occasion. The occasion grew all the more important with the presence of past-Presidents and past members of the Central Council of the Institute, past-Chairmen of SIRC, past members of the Regional Council of SIRC, present members of our Central Council and the Regional Council of SIRC. It was heartening to note that senior most members had come to receive the honours with enthusiasm, which is a sign of our neverending involvement and dedication for profession. I would like to fondly recall here that the SIRC had celebrated its Golden Jubilee in 1999 during my term as SIRC Chairman. It was a proud privilege for me to be one of the recipients of the award being the past- Chairman of SIRC. I also had the honour of unveiling the Diamond Jubilee logo of SIRC and releasing a four-page supplement booklet on the occasion.

Fifth Anniversary of Kuwait Chapter of ICAI: I am happy to share with you that our Kuwait Chapter celebrated its fifth anniversary and I was more than happy to attend the function with ICAI Vice-President CA. Jaydeep N. Shah. The patron of the Chapter and Ambassador of India His Excellency Shri Ajai Malhotra was present on the occasion. Chairman of the Chapter CA. M. S. Mathew, founder Chairman CA. Jagdeesh Joshi and other members along with their family participated in the celebrations. The ambassador expressed his pleasure on the Chapter getting the due recognition with the presence of ICAI leadership, and said that many large businesses in Kuwait relied on and respected the professional standards of our members of the Chapter. I acknowledged his compliments with gratitude and said that our members had earned this reputation through their professional integrity following the high ethical standards, and informed the gathering of our professional agreement with other international professional accounting bodies.

Initiatives for Members

ICAI Connect - Membership Revival Campaign: It is quite satisfying to acknowledge that a membership revival campaign, ICAI Connect, has been launched among the chartered accountants in industry. It has been observed that many members working in industry do not renew their membership, which prevents them from getting latest updates on development in the profession. We will make a special effort to reach out to those members through ICAI-Connect programmes to be held at various corporations. I would request the membership to help us in this noble and benevolent initiative, ICAI Connect, and make this revival campaign a grand success.

Capacity Building Measures: Tax Suite/ROC software: I am pleased to inform you that the Executive Committee of the Institute has decided to procure the tax compliance software called Tax Suite which combines facility for income tax, TDS, audit reports, project report/CMA, Form Manager, Annual Information Return, Service Tax and document management, to empower our members for their general and specific practices. The Committee has also decided to procure the ROC software pertaining to manage all secretarial requirements and generating all forms as per the MCA-21 requirements, which will provide our members a facility to prepare auto filling of e-forms, shares records/certificates, meetings and minutes, resolutions/drafting, annual return forms, and maintain their registers and reports. The content of these software will be made available shortly on the ICAI website, so that the software setup may be downloaded and installed conveniently, free of cost.

Chain of Workshops on XBRL: In my last communication, I had informed that the Ministry of Corporate Affairs had mandated certain class of companies to file their financial statements in XBRL format for the year ended 31st March, 2011. In order to educate our members on XBRL and providing handson training on the process, XBRL India has planned a chain of workshops to be organised at various locations across the country. During the first phase, workshops will be organised to provide training on XBRL filings in selective big cities using the resources of the Information Technology Training Centres of the Institute. Three leading companies having expertise in XBRL filings will be the knowledge partners for this initiative. I sincerely hope that this training will help our members to understand XBRL, which is emerging as the most popular reporting language across the world. In view of the importance and need, we have also focused on XBRL in this issue of the Journal and five articles on the subject have been published. More articles and case studies will also be published on regular basis in the coming months to educate the members.

Group on LLP Conversion Formed: In my last communication, I had also informed that the Council had decided to allow all CA firms to convert themselves into LLPs which would enable CA firms to grow bigger and increase their capacity. Pursuant to this decision of the Council, rules for conversion and format for preferring an application for conversion into LLP are required to be formulated. Accordingly, a group has been constituted for this purpose with my Central Council colleague CA. S. Santhanakrishnan as its Convenor and Central Council colleagues CA. Abhijit Bandhyopadhyay, CA. Manoj Fadnis, CA. Jayant P. Gokhale, CA. Charanjot Singh Nanda and CA. Dhinal Ashvinbhai Shah as its other members, for making suitable recommendations for the consideration of the Council.

ICAI-BU Coordination Committee Meeting: Recently, a meeting of the ICAI-BU Coordination Committee was held in New Delhi, represented by the Vice-Chancellor Dr. C. Swaminathan and other senior officials from the Bharathiar University (BU) and myself, ICAI Vice-President CA. Jaydeep N. Shah, ICAI Secretary Shri T. Karthikeyan, Director Board of Studies Shri Vijay Kapur from the ICAI. I am happy to share with you that the Coordination Committee has decided to increase the number of admissions to the various courses under the joint programme. The Committee also decided to hold a joint seminar in the month of June/July 2011 and to hold the Examination from 2nd June, 2011, to 7th June, 2011, in six centres, viz. Delhi, Kolkata, Coimbatore, Mumbai, Chennai and Ernakulam. I sincerely hope that the students would do well in the coming examinations.

Special Campus Placements Programmes

Special campus placement programme was organised to appoint Education/Executive Officers in the Institute. Hundred candidates have been shortlisted for the final round of interviews out of more than 1000 registrations for this placement. The recruitments of our young members would be for our technical and non-technical Committees with a view to provide better services to the growing membership. Campus placement for small- and medium-sized enterprises and CA firms was also organised at eight centres in Ahmedabad, Bangalore, Chennai, Kolkata, Mumbai, Nagpur, New Delhi and Pune quite successfully. I am sure such special placements will eventually empower our small and medium firms in building their capacities.

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Summer has finally arrived at our doors equipped with abnormally soaring temperatures. Despite a timely start, there have been a lot of irregularities in our climate in the recent past and this appears to be alarming. Somewhere our irresponsible and noncommittal attitude towards our existence as well as our atmosphere, towards our heritage as well as our future, and towards our sense of righteousness as well as the forbidden is responsible for all such critical existences. If we continue with such attitude, we may invite larger environmental crises in our lifetime.

I know one thing: our training as chartered accountant has taught us to be ethical and responsible. Now let this training transcend its spirit on to our way of living. And I am sure, we will be able to build a better and secure time for our generation next.

Let our professional ethics and integrity take over the reign of our life. Amen!

Clarification Regarding Body Corporate for the Purpose of Section 226 (3) (A) of the Companies Act, 1956

2011-05-28T23:32:00.001-07:00

The Ministry of Corporate Affairs has clarified that Limited Liability Partnership of Chartered Accountants will not be treated as body corporate for the limited purpose of section226 (3) (a) under the Companies Act, 1956. Accordingly, a notification has been sent for publication by the Ministry.

This clarification follows a number of representations received in the Ministry from Institute of Chartered accountants of India wherein they have stated that under Section 226 (3) (a) of the Companies Act, 1956 a Body Corporate is disqualified from the appointment as auditor by a company. Since LLP is a body corporate as per Section 3 (1) of the Limited Liability Partnership Act, 2008, LLP among Chartered Accountants will not be qualified for appointment as auditor under section 226 (3) (a) under the Companies Act, 1956.

service tax - processing in relation to agriculture - clarification

2011-05-28T23:22:00.000-07:00

Circular No. 143/12/ 2011 – ST

F.No.332/37/2010-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

North Block, New Delhi

26^th May, 2011

Chief Commissioners of Central Excise and Service Tax (All),

Director General (Service Tax),

Director General (Central Excise Intelligence),

Director General (Audit),

Commissioners of Service Tax (All),

Commissioners of Central Excise and Service Tax (All).

Madam/Sir,

Subject: - processing for or on behalf of client, in relation to agriculture – causing sale or purchase of agricultural produce -- reg.

Representations have been received that client processing of tobacco involving threshing and drying of tobacco leaves and client processing of raw cashew involving roasting/drying, shelling and peeling of raw cashew to recover kernel, are considered by the field formations as not falling within the meaning of the expression “in relation to agriculture” appearing in notification 14/2004-ST (as amended) dated 10^th September, 2004, resulting in avoidable disputes and litigation.

2. These representations have been examined. In the cases represented, the agricultural produce namely tobacco or raw cashew, which are subject to client processing retains their essential characteristics at the output stage and therefore the processes undertaken on or behalf of client should be considered as covered by the expression ‘in relation to agriculture’. Client processing which falls under business auxiliary service undertaken on the primary agricultural produce namely tobacco or raw cashew, does not result in any change in their essential character of tobacco or cashew. In the light of the above principle (i) process of threshing and drying of tobacco leaves and thereafter packing the same and (ii) processing of raw cashew and recovering kernel, undertaken for, or on behalf of, the clients by processing units are covered by the expression “... processing of goods for, or on behalf of, the client.....and provided in relation to agriculture,...” appearing in the said notification.

3. Also where the commission agents stationed abroad provide business auxiliary service to promote the export of rice, said business auxiliary service is covered by notification 13/2003-ST(as amended) because, the word ‘rice’ is mentioned under the explanation to the term ‘agricultural produce’, in the inclusive portion along with other items like cereals, pulses, etc.

4. Trade Notice/Public Notice may be issued to the field formations accordingly.

5. Please acknowledge the receipt of this circular. Hindi version to follow.

Samar Nanda)

Under Secretary, TRU

Tel: 011-23092037