WIRC Elections 2015 - CA Kasliwal Ambar Profile

I would like to take this opportunity to brief and introduce myself. I am Commerce Graduate from The University of Rajasthan and a Fellow Member of the Institute qualified in the year 2002. I have successfully completed the Certificate Course on Valuation and Certificate Course on International Taxation organized by Institute of Chartered Accountants of India. I have been fortunate enough to advise top names in the field of Media & Advertising, Venture Capital Funds, Courier Cargo & Logistics, Pharma and Diagnostic Centre’s as clients including industry leaders. Has expertise in setting up Venture Capital Funds and my main forte is Media & Entertainment Industry.

I have acted as coordinator for conducting the certificate course on International Taxation in Mumbai and other than submitting various representations to government departments on behalf of the CA fraternity, I have also been a regular contributor and speaker at various study circles and seminars.

I have also been actively involved in various trade and other organizations including the following -

• Sub group member of GMCS Coordination Committee for the Year 2015-2016

• An Active member of Kandivali Borivali East CPE Study Circle.

• Active member of Bombay Chartered Accountant Society (BCAS), Mumbai.

• Life member of The Chamber of Tax Consultants, Mumbai.

• Patron Life member of Jain International Trade Organization (JITO).

• Charter Member of Rotary Club of Mumbai Western Elite.

• An Active member of Bharat Vikas Parishad, New Delhi.

• Actively associated with various religious, educational and professional organizations.

• Core team member for building a Hostel for CA students in Malad, Mumbai.

Given the spectrum of my experience as practising chartered accountant, I am able to identify with the tribulations that a fresh chartered accountant both who are in practice or who chose to serve the industry. I am also aware of the challenges faced by my fellow members.

With my exposure of over a decade to varied environments and interaction with professional network and other social platforms that I have built over, will enable me to make constructive and valuable contribution to CA fraternity and WIRC.

Thank You!

Aadhar linked cellphone and IRIS are going to revolutionize India

PREPARE YOURSELF FOR A REVOLUTION

IN FINANCIAL MARKET

WHICH NEVER HAPPENED IN THE HISTORY OF MANKIND

Recently, Mr. Nandan Nilekani, a founder team member of Infosys and generator of the concept of Aadhar made one presentation of the impact this Aadhar linked cell phone will create and revolutionize the market in general and finance market in particular in India / world is a worth watching clip. I think the presentation of those 30 minutes will make you spell bound and speechless. How the technology is going to change the way we live in this world since the decades.... Major highlights of the presentation are as under.

1. There will be a massive disruption in financial services on back of technology revolution.

2. The telecom revolution has changed the desktop based environment to mobile interned based environment.

3. “WhatsApp movement” is the concept to understand this revolution because today 30 billion messages in a day are passed through WhatsApp in the world surpassing the SMS by large margin. This WhatsApp movement like revolution is going to take place in the world of finance making the concept of traditional banking and lending to go away.

4. We are moving from cash based society to cashless and digital society very very fast. Today India has more 900 million mobile users (More than 90 crores) which is a record in itself. The Aadhar when linked with the mobile set with IRIS authentication on will change the world we live in.

5. Today electronic clearing service NEFT-RTGS and IMPS have overtaken traditional payment system. With these 900 million mobile users, a mega trend is underway, which we are unable to apprehend. To put it in simple words, every mobile user will be an ATM.

6. When IRIS authentication (Biometric authentication linked with Aadhar server) will be on, the 900 million mobile users will be able to have online kyc, online authentication, online payment and online receipt on the basis of Unified Payment Interface (UPI). Smart phone will replace all type of debit and credit cards and Paytm like system will be fully operational. Physical cash to digital cash and digital cash to physical cash convertibility will be a game changer. Digital wallet and digital locker will revolutionize the security system. Enabling pear to pear payment system will do away many intermediaries and will be reimagining the infrastructure we have at present.

7. The whole process will lead to explosion of innovation, death of many businesses and birth of new ventures and business. India will become data scare to data rich country in five years in both, on consumer and business side. Credit process and credit appraisal will become obsolete and online loan payment will become possible. Think of 900 million people coming on one platform and remain connected!!! Almost all functions of the bank, government and taxation department will be done by Aadhar linked phones. This is even more important in the sense that IRIS authentication on cell phone is available only in India, no one has this system in the world!!!

8. Friends, this is not far away because the IRIS authentication on cell phone is practically started and will become a mass reality soon. So prepare yourself to live in the digitalized India with absolute transparency, no paper work, no bureaucratic intervention, no tax terrorism and much much more.

Watch "Disruption in Financial Services: Nandan Nilekani at TiE LeapFrog" on YouTube - https://youtu.be/aGM5TvAUF00

- CA Kasliwal Ambar

The Great Indian E-Commerce Liftoff

There's no better time for a bargain - India's three biggest online market places touted discounts of as much as 80% as they launched a festive season shopping campaign amid a blitz of advertising. But the enthusiasm of early birds was dampened somewhat -there were few eye-popping deals on the latest gadgets and fashion brands on the first day on Flipkart or Amazon India. But brands were relieved that their efforts to rein in price cuts had worked, confirming the trend of ecommerce firms moving away from extravagant discounts. Instead they are focussing on better financials. Still, deep discounts were available on online-only and ecommerce-focused products such as those made by Micromax, Onida, BPL and Motorola, and on older models of gadgets and smartphones, said industry executives. A similar trend has been seen in apparel and accessories.

This marked a sharp departure from last year, when the latest models of iPhone, Samsung Galaxy phones and Sony televisions were on sale. The ecommerce companies offered maximum discounts on their in-house apparel brands where margins are twice that of other clothing.“None of our fresh merchandise is on discount except old or last-season stock,“ said J Suresh, chief executive of Arvind Lifestyle Brands, which sells brands such as Gap, US Polo, Wrangler and Calvin Klein.

Conservative Approach

He said companies were more conservative this year, ordering about 1.2 times the normal stock for the discount period unlike last year when they were targeting to grow sales by five times. “The focus is surely on margins and profitability,“ Suresh said.

The chief of a leading shoe brand said deep discounting of 60-80%, which is usually offered during endof-season sales by the ecommerce firms, was missing on the first day.“The madness was not there and even I was expecting good deals on international brands for my person al purchase where discounts were hardly 4-10%,“ he said, requesting anonymity.

The absence of deep discounts on the hottest items is good news for brick and mortar retailers, who have been suffering on account of lower prices online.

Panasonic India managing director Manish Sharma, who is also president of the consumer electronics lobby group, said all big brands had advanced their Diwali promotional offers in the offline trade to boost consumer sentiment and offer a level playing field.

“The e-commerce marketplaces too are in a consolidation mode and have realised it may not be healthy to continue to burn money on discounts. This year's online Diwali sales is a healthy sign and will ensure both online and offline will coexist,“ Sharma said.

Haier India president Eric Braganza said the company had signed pricing agreements with ecommerce marketplaces such as Flipkart to ensures that there would be no sharp price cuts on its products.

Amazon and Flipkart started their festive season sales on Tuesday while Snapdeal kicked things off on Monday. Discounts were attractive on online-exclusive smartphone brands such as Motorola, Xiaomi, Yu Yuphoria and OnePlus 2. Price cuts were also offered on baby products, general merchandise, home décor and personal care products. The sale will carry on until the end of the week. Flipkart said there had been a surge in app downloads in anticipation of the sale.

“It's great to see 1.6 million app installs in the last two days, which is a great indicator that India has been preparing well for The Big Billion Days,“ said Mukesh Bansal, head of commerce platform at Flipkart.

The sale was off to a relatively glitch-free start. Flipkart, which was hit by glitches last year owing to heavy traffic, has staggered its apponly discounted sales over five days, across various categories such as fashion, home appliances, electronics and books.

The Big Etailing Rivalry

After Flipkart announced the October13-17 campaign, Amazon and Snapdeal announced similar exercises--a point that a company executive brought up.

“Random thought: Checked out TOI. Looks like we set the dates for when others do their festival sales :)! Go BBD!,“ Flipkart Chief Product Officer Punit Soni tweeted.

Rohit Bansal, Co-founder of Snapdeal, tweeted: “Looks like India has chosen @snapdeal as the app of their choice this festive season!“ Flipkart said it “saw 25 items sold per second.“ The company said 10 lakh products were sold in the first 10 hours with 6 million visits from across the country.

“This is pushing the limits, the volumes are much higher than last year,“ said Naman Sarawagi, Co-founder and CEO of FindYogi, a chat-based shopping assistance app. A clearer picture is likely to emerge when the sale concludes later this week.

Snapdeal said that it sold five mobile phones every second on Monday as it racked up total sales of $100 million. “Compared to last year, the infrastructure has greatly improved,“ said Sarawagi.

Amazon India claimed that the first day of the festive sales was the biggest day in its history, four times bigger than the peak of last Diwali.Traffic from mobile was over 70% and lakhs of new customers came from cities like Aurangabad, Malappuram, Dhanbad, Kannur, Tiruchirappalli, Jamshedpur and others.Small and medium sellers reported up to ten times more sales than their daily sales. Grocery & gourmet witnessed a three times growth in unit terms as compared to our previous biggest day and five times compared to the pre-sale period. “We have seen an enthusiastic and energetic response from our customers through the year and in all our promotions including the first day of our Great Indian Festive Sale today,“ an Amazon India spokesperson said.

Ambulance On Standby

Most visitors were from cities like Bengaluru, Delhi and Chennai. Ludhiana, Lucknow and Bhopal were among the top cities from non-metros, said Flipkart, where employees have been working round the clock to keep systems stable. Flipkart set up shuttle services for employees to be picked up and dropped and even put an ambulance and masseurs on standby.

"With over 20 million visits from across the country on the first day, the fashion sale has been a big hit amongst our customers. For electronics - it will be even bigger on 15th October as we have lined up a range of smartphone launches for our customers from brands like Google, Motorola, Huawei, Intex and Micromax. All these new launches will have aggressive launch and exchange offers along with exciting bank discounts," a Flipkart spokesperson said.

Nearly 1.5 million shoppers bought goods worth over $100 million from Flipkart during the sale in 2014 but the site stuttered as a large number of people sought to access the site. This year's Billion Days sale is expected to be five times in size, according to one Flipkart employee who requested anonymity.

Meanwhile, good discounts were available on older iPhones and iPads besides LED television models of LG and some apparel brands.

- CA Kasliwal Ambar

New Reward Scheme to catch Duty Evasion

The Government has framed a system of rewards for people who help in the detection of the tax evasion. The following are a few guidelines for the people who like to help detection of Central Excise Duty evasion/frauds:


Under the existing Reward Scheme, Government of India grants handsome rewards to informers who provide specific information leading to seizure of goods, currency, bullion or leads to detection of duty evasion including wrong declaration of quantity, description, value etc.

The information should contain details of modus operandi being adopted by the tax evader. Details like name & address of the firm, addresses of the key persons, place where records of clandestine clearances are secreted, details of flow of illegal funds are considered important piece of information.

Your name and identity will be kept absolutely confidential.

- CA Kasliwal Ambar

Do Last Minute Bookings help you save money?

The early birds may not get to fly cheaper any more. Airlines seem to be reducing fares closer to the travel date, an analysis of tickets on offer for travel on six key sectors showed. The fares quoted for travel on October 17 were more expensive when booked 30 days in advance than 10 days.

These select trunk routes have seen capacity addition by airlines in recent times.

"With the added capacity on the top metro routes, and lower load factors in the first half of October compared to last year, airlines have reduced fares closer in to get more people to fly," said Amit Taneja, chief revenue officer at online travel portal Cleartrip.

The lower fares benefit customers and airlines are also seeing higher overall revenue as the lower fuel prices enable them to operate profitably even at low fares, said Taneja.

About 63 flights operate from Delhi to Mumbai and vice versa. Other city pairs like Bengaluru-Mumbai and Mumbai-Hyderabad have 32 and 21 daily direct flights, respectively, and many more flights with stopovers. Pune and Chennai and Kolkata-Bengaluru have seven and 12 flights, respectively.

Airlines added about 18% seats this year, in sync with over 20% growth in passengers that the domestic market registered between January and August. In all, airlines offer about 300,000 seats on domestic sectors.
Another industry watcher said the airlines are reducing fares closer to the departure due to lower bookings. "The reason we are not seeing a lot of advance bookings is because people are spending less. Less expenditure by people is due to the economic situation, which is not in the best of health," said Ajay Prakash, former president of Travel Agents Federation of India and a travel agent.

Prakash said the demand for advance bookings is still not high despite airlines offering lower fares on the back of cheaper fuel. The airlines are also offering cheaper last-minute fares, as much as 47% lower than that last year over the recent long weekends.


When it comes to airfares, dynamic pricing seems to be an evolving concept. What's required is transparency, so that consumers know when to avail the best rates. A rule of thumb used to be to book six weeks ahead and avoid weekend schedules.

That may have run its course. One no-frills carrier wants passengers to purchase tickets three months in advance for the lowest fares. The way ahead is to better match vacant seats with demand for more attractive fares. It pays to repeatedly check and compare fares online.

-- CA Kasliwal Ambar

Avoiding complaints from your clients' may affect your firms reputation.

Dear Friends,

Research shows that as many as 66% of disgruntled clients' will most likely choose not to work with you again, for a faulty solution or experienced bad service. (Source : Google)

Here are seven ways to avoid losing clients — and save your reputation.

Tip #1 : Show that you care

Listen to what your client has to say to determine the problem and offer a quick resolution. It's important to stay professional and avoid getting emotional, but it's equally important to show your human side and demonstrate that the client is not just another number for you.

Just in case you need numbers to actually care: A 2014 study suggests that a completely satisfied client contributes 14 times as much revenue as a somewhat dissatisfied one (Source : Google)

Tip #2 : Throw away template answers

You should take a one-on-one approach for every aspect of your communication with your client. Generic copy-paste emails won’t do. Your voice and professional opinions need to be heard and, most importantly, you need to match them to your client's situation and to the solution you are providing.

Show your client a personalized approach and try to put yourself in your clients' shoes before you answer. Research suggests that more than 55% of your clients will be willing to pay more for better client service. And better means more individualized and personalized attention. (Source : Google)

Tip #3 : Avoid lengthy discussions

Try to focus on facts and don't get yourself dragged into disputes over who's right and what's right.

Proving your point will not get you any extra client love. Your clients – even those most upset – expect to be listened to, encouraged that their issue will be taken care of, and offered a resolution.

In a typical business, 42% of client service agents are unable to efficiently resolve customer issues due to disconnected systems, archaic user interfaces and age-old methods. (Source : Google)

Don’t close yourself off in a golden cage of old structures. Take the road less travelled.

Tip #4 : Offer a fast and effective solution
Unhappy clients will keep contacting you until you resolve their problem and make sure that help is coming. It's important for you to offer quick and reliable assistance. At the same time, you need to be realistic and not over-promise.

2012 research indicates that 33% of clients would recommend someone that provides a quick response, even if that response is ineffective. (Source : Google). This speaks about the need of time-efficient response to your client’s needs.

As long as you stick to the facts, you will gain clients' gratitude for responsibly handling their issues. You already have the skill set and experience to make the best possible short-term solution in a short amount of time. Be honest with your client about their options.

Tip #5 : Don't let the issue escalate

Finding a solution may take some consultations and follow-up, but remember that in the world we live in today, clients(especially those disgruntled ones) count on fast resolution. If they don't get it, they'll go on Facebook or Twitter to voice their frustration. Don't ignore any complaint; deliver what you promised and don't let the issue escalate to the point where it causes your firm, a loss of reputation.

Nowadays, your client is twice as likely to post a negative review about your client relationship as opposed to a positive one, and they are four times more likely to switch to the competition if they are dissatisfied with the service.

This is not to say you have to seal any issue that might have presented itself and never speak of it in public. When it comes to issue resolution, think fast and act faster. But don’t be afraid to give a creative apology if your client has been damaged by the issue.

Tip #6 : Train your staff so they can do their job right

This one is well-meant advice for those of you who employ more than just yourself in your client relationships. Your client service personnel are always out there on the battlefield, handling debates with unhappy clients and trying to put-out fires. Make sure they have all the support they need to assist and support others.

Share with them the company's values and guidelines so that they are never surprised by a question from a client; collect feedback from clients and try to improve your services as much as possible; show your staff what is doable and what is not doable when handling complaints; invest in brainstorming and training sessions so that they can provide top quality service. Don't be shy to include new market solutions that will save them time and effort.

Tip #7: Minimize negative reviews

Negative reviews can be very costly for your business. Show your clients you are ready to listen to their complaints before they go and rage about your service.

Resolve their problem fast and effectively by providing client service by phone, mail, skype etc. Your clients will reward you by staying with you — instead of choosing another professional.

-CA Kasliwal Ambar

Property prices will be hit by tax on unsold inventory held by developers and builders

According to tax authorities, real-estate companies should have to pay tax based on Annual Letting Value (ALV) on unsold flats as they are the owners of the flats and it does not matter whether the properties are rented out or not.

In a bid to arrest hoarding of residential flats by developers and increase supply across the country, the income-tax department has decided to tax realtors on estimated annual rentals.


The tax could be anywhere between 15% and 20%. The move is as per the central action plan for 2015-16, under which the I-T department can levy tax on any unsold flat by treating it as 'income from house property' under Section 43-CA of the I-T Act, 1961.
According to tax authorities, real-estate companies should have to pay tax based on Annual Letting Value (ALV) on unsold flats as they are the owners of the flats and it does not matter whether the properties are rented out or not.

This means inventory of builders will be taxed on the basis of notional ALV -- a value on which tax has to be paid on the annual value of house property or the rent actually earned, whichever is higher.

A senior IT official said, "The builders' lobby has been creating artificial scarcity through hoarding of flats, only to sell them at higher prices later".

It has been noticed that this practice has been in vogue for over a decade and such flats or stocks are shown 'unsold' in the books of accounts while the main aim was to rig the prices upwards, said a tax official on condition of anonymity.

Taxing unsold stocks will help in two ways, according to a senior I-T official. One, this brings significant revenue, and second, it will force real-estate players to either sell their unsold flats at market-determined price. "Paying tax will further affect their bottomlines," the official, who did not wish to be named, told dna.

According to a recent report on the real-estate market in India by an international property consultant, unsold flats in six major cities hit the highest at 6.88 lakh units in the January-March quarter.

According to the report, it will take 72 months for builders to clear the inventory in Delhi-NCR and 46 months in Mumbai.

So far, unsold projects of builders were exempted from income-tax under the 'stock-in-trade' category. The I-T department believes builders would release more flats into the market, if they have to pay tax on them.

"Real-estate companies show their finished apartments as stock-in-trade and income from these are shown as business income, as in most other businesses. In a rising market, several developers hold apartments to benefit from the price appreciation that will accrue a few years after the project is complete," said a real-estate consultant.

A few years ago, when there was an attempt to tax such unsold stock, builders had moved court. However, the court gave a judgment in favour of the department in 2012.

The court had validated the I-T department's argument that builders will have to pay tax based on the ALV method, irrespective of the fact that these flats were not rented out. The department has now decided to levy this tax uniformly across the country after the proposal was cleared by the finance ministry.

- CA Kasliwal Ambar

Betting turnover in Bihar elections is expected to cross Rs 10,000 crore

Bookies in the satta bazzar or the illegal betting market, who accurately predicted a single party majority for BJP in May 2014's national polls, are predicting that state's two political parties the RDJ and JDU may not win more than 50 seats and 80 seats respectively in the 243 seat state assembly. It is the best case scenario of both these political parties, bookies. Odds on Nitish Kumar led JDU winning 80 seats are pegged at 6:1 while Lalu Yadav's RJD winning 50 seats is pegged at 6:1.

"Anti-incumbency is strongly against JDU, while people of Bihar have still not forgotten the poor state of law during RJD's tenure," said a bookie. Betting turnover in Bihar elections is expected to cross Rs 10,000 crore.

The BJP appears to be galloping ahead in Bihar polls like the bulls. Bookies say in the worst case the BJP's seat count may not fall below 85 seats whereas there is no cap on seats on the upside. Bookies will offer only 85 paise on every rupee bet for BJP winning 85 seats. 

Lower the odds, higher are the chances of a win.

A couple of months ago most bets were on a close contest. The bookies gave BJP lead NDA and Nitish Kumar around 110 each. But, the punters now favour a clear majority for the NDA, giving it around 135 seats, JDU 40-42, RJD 33-35 and relegating Congress to single digits.

- CA Kasliwal Ambar

AUDITORS SHOULD NOT AFFIX THEIR DIGITAL SIGNATURE IN ROC RETURNS

Forms for annual filing have been released today. The two forms ie Form 23AC and ACA have been replaced by a single Form AOC-4.

Now every company needs to file its balance sheet in Form AOC-4

Form AOC -4 is required to be certified by any CA CS or ICWA in practice by subscribing to the declaration that the respective professional has been duly engaged for certification of the said form.

As per the provisions of section 144 of the Companies Act 2013 certain services can't be rendered as an auditor, which includes “management services”

Management services means services rendered on behalf of Management, which management itself is oblige to do.

E.g.

Preparation and filling of:
· Income Tax Return
· ROC Return
· Service Tax Return
· VAT Return
· TDS Return
· Excise Return

This can be planned to comply with the provision.

- CA Kasliwal Ambar

CASA Daily News Alert

>> TAR/ITR Extension Case:

Writ Petition filed against non extension of Due date of TAR/ITR filing for cases covered under Tax Audit Provisions in various High Courts (Gujarat, Delhi, Jodhpur, Karnataka, Orrisa, Mumbai and in Punjab & Haryana) - Cases adjourned for Hearing / Cases Listed for Final Hearing later. ICAI Meeting with FM: No Concrete Decision on TAR/ITR Date Extension.

>> CBDT has updated the tax audit utility today by updating utilities for form 3CA CD, form 3CB CD and form 10B. So please take care and in case you are using tax filling software ask your vendor to update software.

>> ICAI: Exposure Draft of Changes in Ind ASs as a consequence of deferment of Ind AS 115, Revenue from Contracts with Customers, for Public Comments issued

>> MCA Updates: New forms (AOC-4, MGT-7, ADT-2, SH-9) will be available from 25-09-2015. Versions of CRA-4 & CHG-4 are likely to be modified w.e.f. 25-09-2015.

>> SEBI has issued circular under Regulation 27(2) of the SEBI(Listing obligations and disclosure requirements) Regulations, 2015 read with regulation 101(2) (Clause 49 of the existing listing agreement), which provides for the format for compliance report on corporate governance to be submitted to the Stock exchanges by the listed entities.

>> Case Study: Bombay High Court held In the case of M/s Nagpur Engineering Co. Pvt. Ltd. vs. CIT. that in order to attract ceiling u/s 40(c), the payment must be a periodical payment. A Lumsum payment or one time payment is not covered under section 40(c) of Income Tax Act

- CA Kasliwal Ambar

Chartered Accountant: Latest Updates You Need To Know - 17th September 2015

1. President ICAI suggested Finance Minister to extend due date of filing of ITR & Tax Audit Report be extended from 30.9.2015 to atleast 31.10.2015 for genuine hardship to the assesses and members of the profession.

2. Individuals can now apply for PAN online with digital signature w.e.f 6.9.2015.

3. Salary and Interest to partner to be allowed as deduction while estimating the profits of the firm where books of accounts are rejected- Inter Continental Constructions (High Court of Andhra Pradesh and Telangana).

4. If the notice u/s 148 of I T Act was not served on the assessee in accordance with law, the re-assessment made is liable to be quashed.[ CIT vs. Chetan Gupta, High Court of Delhi]

5. Now a private company can accept unsecured loans also from a relative of director, with a declaration that such loan is not from borrowings. Notification dated 15.09.2015.

6. Union Cabinet has approved to promulgate the Negotiable Instruments (Amendment) Ordinance 2015 which redefined the jurisdiction clause in the Negotiable Instrument Act.

7. DGFT has notified modification in E-IEC’s as well as the IEC’s issued in physical format from 21st of September, 2015. www.dgft.nic.in.

- CA Kasliwal Ambar

‪MCA‬ Update on Deposit From Relative By ‪Private Limited Company‬

Deposits rules are quickly getting aligned with old 58A exempted rules to private limited company.

Without any upper limit of amount, now a private company can accept unsecured loans apart from director even from a relative (as per definition) of a director of the company with simple declaration saying the relative has not borrowed same from others. The relative need not be a shareholder of the company.

http://www.mca.gov.in/Minis…/…/Amendement_Rules_15092015.pdf

- CA Kasliwal Ambar

Guidance Note on Audit of Internal Financial Controls Over Financial Reporting

ICAI has issued "Guidance Note on Audit of Internal Financial Controls Over Financial Reporting"

Link for Text of Guidance Note: http://220.227.161.86/39249aasb28733.pdf

Link for Contents of accompanying CD: http://220.227.161.86/39250aasb28733cd.zip

- CA Kasliwal Ambar

GST Update

Companies with an annual turnover up to Rs 25 lakh might be exempted from the proposed national goods and services tax (GST). The Centre and states are likely to settle for this threshold as they finalise the GST laws.

According to finance ministry officials, the draft of these laws is expected to be ready by the end of this month. The Centre and states are working on a mechanism to avoid dual scrutiny of companies by them. "The thinking now is that all legal entities with an annual turnover of up to Rs 25 lakh will be completely exempt. This will be applicable to one TIN (Taxpayer Identification Number)," said a ministry official.

The government is looking to reconvene Parliament's monsoon session to get the Constitutional amendment Bill on GST passed in the Rajya Sabha. Three Bills - on the Centre's GST (CGST), states' GST and Integrated GST -would come up after the Constitutional Bill is cleared. Work on the drafts is on.

States wanted a threshold of Rs 10 lakh to protect their revenue, while the Centre has assured them full compensation for five years. Besides, firms with an annual turnover between Rs 25 lakh and Rs 75 lakh will have an option to pay a flat rate of one per cent or GST rate. If they decide to opt for one per cent rate, firms will not get input credits because of which many, particularly dealers, may choose the GST rate.

The exemption limit from value added tax and service tax across states - except the North-East - is close to Rs 10 lakh turnover. "There will be an impact on revenue but it will depend on how many under the Rs 25 lakh to Rs 75 lakh annual turnover bracket opt for the one per cent rate. If 60-70 per cent opt for it, there will be loss of revenue for states but they will also get compensated by the Centre," said Bipin Sapra, tax partner, EY. From the manufacturing point of view, it was important to keep the exemption limit higher, he added.

While these are likely to be part of the GST laws, a final decision on this is to be taken by the yet-unformed GST Council. This is to be constituted within two months of enacting the Constitution amendment. It would comprise the Union and state finance ministers and will be empowered to take key decisions on GST.

The idea is that entities with a turnover of up to Rs 75 lakh will not attract any checks or audits from either the state or the Centre. The Centre will give states a free run on compliance checks for companies with annual turnover above Rs 75 lakh and up to Rs 1.5 crore. "Here, the Centre will only do online scrutiny. And, if states detect non-compliance with respect to CGST, only the Centre will issue a notice. States cannot issue a notice on our behalf," said an official. However, in case of companies with annual turnover of more than Rs 1.5 crore, there will be concurrent audits by both the state government and the Centre.

"The government is still discussing a mechanism of a risk-based selection so that the checks by Centre and states do not overlap," said the official.

The government on Sunday made a renewed appeal to Opposition parties to help pass the Constitutional amendment through an extended monsoon session. It is vital that this be cleared at the earliest for the government to stick to the GST implementation timeline of April 1, 2016. The three draft legislations will lay down the fine print of the uniform indirect tax regime.

- CA Kasliwal Ambar

RBI – New Guidelines on Concurrent Auditing at Branches

The ‪Reserve Bank‬ on Thursday said the concurrent audit at bank branches shouldcover at least half of their advances and deposits.

The concurrent audit system is regarded as part of a bank's early warning system to ensure timely detection of irregularities and lapses.


"Concurrent audit at branches should cover at least 50 per cent of the advances and 50 per cent of deposits of a bank," RBI said in a notification.

It said branches rated as high risk or above in the last risk-based internal audit (RBIA) or serious deficiencies found in internal audit are subject to concurrent audit.

The audit will also be applicable on all specialized branches like large corporate, mid corporate, exceptionally large/very large branches, SMEs and all centralised processing units like loan processing units (LPUs).

Besides, it would include service branches, centralized account opening divisions, wealth and portfolio management services, card products divisions, data centres and treasury/ foreign exchange business, investment banking, among others.

The concurrent audit also helps in preventing fraudulent transactions at branches.

The main role of concurrent audit is to supplement the efforts of the bank in carrying out simultaneous internal check of the transactions and other verifications and compliance with the procedures laid down, the RBI said.

The scope of concurrent audit should be wide enough or focused to cover certain fraud-prone areas such as handling of cash, deposits, advances, foreign exchange business, off-balance sheet items, credit-card business, Internet banking, it added.

The regulator said appointment of an external audit firm for concurrent audit may be initially for one year and extended up to three years, after which an auditor could be shifted to another branch, subject to satisfactory performance.

Abolition of ISA Eligibility Test

The Committee decided to abolish the ISA Eligibility Test from the Post Qualification Course on Information Systems Audit and all the members who have not yet qualified the ISA Eligibility Test and completed the Professional Training classes will be allowed to appear directly in the forthcoming ISA Assessment Test scheduled to be held in December, 2015. All the participants who will complete their professional training classes by 20th November, 2015 will be allowed to appear directly in the ISA Assessment Test scheduled to be held in the month of December, 2015.

- CA Kasliwal Ambar

Regional Council Elections of WIRC of ICAI for 2016-18

Dear CA Friends,

We, as Chartered Accountants belong to an esteemed profession that is at the forefront of a rapidly developing economy. Our skill sets have been honed by one of the best educational systems in the country and we have been entrusted with the responsibility to lead, nurture and protect our great nation. It is, therefore, our responsibility to ensure that our skill sets are world class and we continue to be well equipped to take on the challenge.

Since qualifying as a Chartered Accountant in the year 2002, it has always been my endeavour to contribute to the pride, dignity and growth of our esteemed community. My senior members of ICAI have always been my inspiration, mentor and guide during my professional journey and they have always encouraged me to take on greater responsibility at the Institute. Coupled with the support and guidance of my father and other senior members, I am in a position where I understand and appreciate the concerns of our community which operates under highly regulated environment and work with Institute in developing an inclusive and supportive ecosystem to enable members to discharge their responsibilities objectively and independently. With the advantage of youth on my side, I am well aware of the issues that newly qualified members face with regard to professional opportunities and networking and operate effectively under globalization, liberalization and privatization arena. I am equally aware of the problems faced by members in the industry and the women chartered accountants.

I would like to pledge my experience, skills, resources and efforts to our noble profession to take our community to even greater heights. I hereby declare my candidature for the next term of the Regional Council Elections of WIRC of ICAI for 2016-18 for which elections are scheduled for 4th and 5th December 2015, and humbly seek your support as well as the support of your colleagues and friends in our fraternity.

TO HAVE A VOICE, MAKE A CHOICE.

Thanks & Regards,
CA Ambar Kasliwal
B.Com., F.C.A
________________________

Jain Kasliwal & Associates LLP
Chartered Accountants

F-10, Sej Plaza, 1st Floor,
Near Nutan Vidya Mandir,
Marve Rd, Malad (W)
Mumbai - 400 064

Landline : +91-22-2807 6279/91-22-2807 6877
Mobile : +91-98190-96877
www.cajainkasliwal.com

Central Excise Update

Cash Discount deductible from Transaction Value under new Section 4 also – Supreme Court in yesterday's judgement

The Supreme Court, on 25 August, 2015, has held that cash discount isdeductible from transaction value under new Section 4 of Central Excise Act, 1944 also as amended in the year 2000. [PurolatorIndiaLtd.vs.Commissionerof CentralExcise]

· According to the Supreme Court, for excisable goods, determination of price is only “at the time of removal” and this basic feature has not changed despite amendments in 1973 and 2000.

· The Supreme Court held that under Section 4, one needs to arrive at the assessable value based on transaction value as at the time of clearance of goods from the factory or depot. It held that basis for transaction value is the agreed contractual price and the term “whensold” does not indicate time at which goods are sold but goods are subject matter of an agreement of sale.

· The Apex Court held that cash discount is something known at or prior to clearance of goods as the same is contained in sale agreement and therefore, such cash discount must be deducted from sale price to arrive at value“at the time of removal”.

· The Supreme Court relied upon its own judgments in the cases of Union of India v. Bombay Tyre International and Government of India v. Madras Rubber Factory wherein the Supreme Court allowed deduction of trade discounts and year-end discounts & prompt payment discount respectively. The Court noted that ratio of these rulings will remain valid under amended Section 4 also.

· The Tribunal in its order had held if the buyer makes the prompt payment which entitles him to discount, the sale price will stand reduced by the amount of cash discount, whereas if payment is not made within the stipulated time, higher price recovered from the buyer will be considered as the assessable value. On this issue of cash discount, the Supreme Court set aside the order of the Tribunal.

· In this case, the Supreme Court was concerned with the period prior to as well as post 2000 i.e. both the normal price and the transaction value regimes. It distinguished the judgment rendered in the case of Commissioner of Central Excise v. Super Synotex wherein the Apex Court had dealt with amount of sales tax retained by the assessee on account of incentive scheme.

The conclusions emerging from this judgment are:

- Price at the time of removal is relevant under new Section 4 also.

- Cash discount is deductible from transaction value under new Section 4 also.

- Basis for transaction value is price as agreed or contracted as per sale agreement.

- Expression “actually paid or payable for the goods, when sold” in Section 4 means whatever is agreed to as the price whether such price has been paid or part paid or not paid at all.

- Price at the time of removal is not discounted or not determined is not fatal to deduction of cash discount

- CA Kasliwal Ambar

Service Tax on Home Delivery of Food not applicable

As per Govt norms, Service Tax is levied if the Food is served in an Air Conditioned Restaurant.

However, there has been a lot of confusion regarding levy of Service Tax on Home Delivery of Food as such food is not being eaten in a AC Restaurant.

A clarification in this regard was sought from the office of the Deputy Commissioner of Central Excise and Service Tax Division (Chandigarh) in this regard.

It has in a written communication replied that in the case of Transaction involving Pick-up/ Home Delivery of food sold by a Restaurant, the dominant nature of the transaction is that of Sale and not service as the Food is not served at the Restaurant.

Moreover, no element of service is being offered at the Restaurant, be it ambience, live entertainment, air conditioning, personal hospitality etc. The Service Tax can only be levied if there is an element of "Service" involved which would typically be the case where the food is served in a Restaurant.

Therefore, the above transaction is not chargeable to Service Tax, being sale in nature, only if, no amount is charged for such free delivery of food.

- CA Kasliwal Ambar

Useful Information for CA Beginners or a reminder to Seniors

This may be useful for beginners or a reminder to seniors

Appointment of Welfare Officer under Factories Act, 1948 is compulsory where 500 employees are employed.

Crèche is mandatory under the Factories Act where 30 womenworkers are employed

A canteen for use of workers providing subsidized food is statutory under the Factories Act where 250 workers are employed.

Under Factories Act, appointment of a Safety Officer is mandatory where the no. of employees exceeds 1000

Under Plantation Labour Act, 1951 a Welfare Officer is required to be appointed where the no. of workers is 300

Under Plantation Labour Act, crèche is to be set up where 50 women workers are employed or the no. of children of women workers exceeds 20

Under Plantation Labour Act, canteen is compulsory where 150workers are working

An adult worker under the Factories Act is eligible for leave with wages @ 1 day for every 20days worked during the preceding year

Under the Factories Act no worker is permitted to work for more than 9 hours in a day

Under the Factories Act, white washing of the factory building should be carried out in every 14months

Repainting or re varnishing under the Factories Act is required to be carried out in every 5 years

Certification of Standing Orders under the Industrial Employment (Standing Orders) Act, 1946 is mandatory where 100 workers are employed

In order to be eligible for maternity benefit under the Maternity Benefit Act, 1961, a woman worker should have worked for not less than 80 days in the 12 months immediately preceding the date of delivery

Under the Maternity Benefit Act, a woman worker is eligible for 12weeks leave with wages

In case of miscarriage, a woman worker shall be allowed 6 weeks leave with wages

Under the Payment of Wages Act, 1936 payment of wages of establishments employing not more than 1000 employees shall be paid within 7th day of the wage month

Under the Payment of Wages Act, payment of wages of establishments employing not less than 1000 employees shall be paid within 10th day of the wage month.

An employee is eligible to get bonus under the Payment of Bonus Act, 1965 if he had worked for not less than 30 days in the preceding year

An employee whose salary does not exceed Rs.10000 is eligible for Bonus under the Payment of Bonus Act.

The statutory minimum bonus is8.33%

Maximum bonus under the Payment of Bonus Act is 20%

In order to be eligible for Gratuity under the Payment of Gratuity Act, 1972, an employee should have a minimum continuous service of 5 years.

Under the Payment of Gratuity Act, the rate of gratuity is 15 Dayssalary for every completed year of service

A news paper employee is eligible for gratuity if he has 3 years continuous years of service

Employees who are drawing salary not more than 15000 are covered under the Employees State Insurance Act, 1948.

Employees’ share of contribution under the ESI Act is 1.75%

The employer’s share of contribution under the ESI Act is4.75%

Employees who are getting a daily average wages up to Rs.70/- are exempted from contributing employees’ share of ESI contribution.

Employees Provident Fund and Miscellaneous Provisions Act, 1952 is applied to establishments employing not less than 20 Employees

An employee whose salary at the time of joining does not exceed15000 shall become a member of the provident fund under the Act.

Employees’ share of provident fund contribution is 12%

Employer’s share of contribution to the provident fund is 3.67%

Employer’s contribution to Employees Pension Scheme is8.33%

Employer’s contribution to Employees’ Deposit Linked Insurance is 0.5%

Prior intimation to the appropriate Govt to lay off, retrench or close down an establishment is required under the Industrial Disputes Act, 1947 where there are 50 workers

Prior permission from the appropriate Govt to lay off, retrench or close down an establishment is required under the Industrial Disputes Act where there are 100 workers

Forming of a Works Committee under the Industrial Disputes Act, is mandatory where the no. employees is 100

Lay off compensation is to be paid @ 50% of average wages

The minimum no. of workers required to register a Trade Union under the Trade Unions Act, 1926 is 10% or 100 whichever is less

Continuous Service under major labour legislations means work of 240 days if work is above the ground and 190 days if work is below the ground Equal Remuneration Act, 1976prohibits discrimination in fixing salary to men and women engaged in the work of similar nature

Subsistence Allowance @ 75% shall be paid if suspension extends to a period beyond 90 days

The wages under the Minimum Wages Act, 1948 shall include a basic rate of wages and dearness allowance variable according to cost of living (

Employees State Insurance Actabsolves the employer’s liability under the Maternity Benefit Act and Workmen’s Compensation Act.

Any amount due froym an employer under settlement or award can be recovered following the procedures laid down in section 33 (C) of the Industrial Disputes Act.

The following amendments and latest provisions related under Labour Laws.

1.The Factories Act -1948 : Lot of changes to be comes under such as in Welfare Measures i.e.Canteen, Creche etc., Appointment of Safety Officers etc., Do not take any action against the employer by Police to FIR, If any accident takes place leads to death etc.

2. The ESI Act - 1948 : 1.Wage ceiling for coverage of employees is up to Rs.15,000/-per month.Conveyance Allowance is excluded under the part of wage.3. Maintenance of Previous Records for Inspection up to 5 years only.

3. The EPF Act - 1952 :1.Under EDLI - The Benifit has been extended from Rs.1,00,000/- to Rs.1,30,000/-

4. The Workmen Compensation Act - 1923 : Compensation under1. Death i.e.Minimum is 1,20,000, Maximum is Rs.4,25,000/- 2. Permanent Disablement - Minimum - Rs.1,40,000, Maximum is 5,40,000/- 2. Computation for calculation of compensation on wages has been extended from Rs.4,000/- to Rs.8,000/-.3. The Act can be amended as Employees Compensation Act. 4. Casual Labour are also covered under the act as per latest amendment.

5. The Payment of Wages Act - 1936 : Wages to be paid either through deposit in Bank or by cheque.

6. The Payment of Bonus Act - 1965 : Amendment has been proposed to extend wage ceiling from Rs.10,000/- to Rs.15,000/- and also for computation of Bonus from Rs.3,500/- to Rs.5,000/-.Minimum Bonus has also extended from 8.33% to 11%.

7. The Payment of Gratuity Act - 1972 : Maximum Payment under Gratuity has been extended from RS.3,50,000 to Rs.10,00,000/- 2. Compulsory Insurance coverage for employees under Gratuity Act.

8. The Industrial Dispute Act - 1947 : U/s 11a and impact of Sec2 a, any workmen will directly approaches to Labour Court and Tribunal Directly with out concilliation , if they are discharged, dismissed, terminated from service.

9. The Contract Labour Act - 1970 : Non Compliance under statutory provisions , contract labour to be deemed as employees of the priniciple employer.

- CA Kasliwal Ambar