‪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

Learn CARO, 2015 in just a minute.

Lets Begin!!

We have to learn one line to learn each point of CARO , 2015.

Line is:

"FIL ID Code - SAD GUN"

1. F : Fixed assets

2. I : Inventories

3. L : Loans u/s 189

4. I : internal control system

5. D : Deposited

6. Code : Cost records

7. S : Statutory dues

8. A : Accumulated Losses

9. D : Default of repayment

10. G : Guarantee for Loan

11. U : Usage of Term Loan

12. N : Noticed any fraud and its reporting ?

- 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

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