Society News

11th Jal Erach Dastur CA Students’ Annual Day – ‘Tarang 2k18’ held on 9th June 2018

BCAS Students’ Forum under the auspices of HDTI Committee organized 11th Jal Erach Dastur CA Students’ Annual Day on 9th June, 2018 at K. C. College, Churchgate under the banner Tarang 2K18. In this mission, the Students’ Team embarked upon the journey with an apt theme ‘New India’ for Tarang 2k18. The Forum comprised of a fleet of 36 dedicated and enthusiastic students. The event was truly an event ‘OF CA students, FOR CA students and BY CA students’. It completely changed the personality perception regarding CA students while witnessing them as event managers, anchors, talented dancers and also photographers!

The theme of ‘New India’, as envisaged by our Hon. Prime Minister, focuses on innovation and improvisation. This year ‘Tarang’ reinvented its decade old elocution competition (sponsored by Smt. Chandanben Maganlal Bhatt Elocution fund) into Talk Hawk on the lines of the famous TEDx program. Also, this edition saw the reintroduction of Antakshari competition which had formed a part of the 1st edition of this event in 2008. The year set a new benchmark for ‘Tarang’ with the participation reaching a new high with 294 entries comprising seven different competitions.

The event commenced with a dance performance with lezim beats invoking the blessings of Lord Ganesha. It was followed by Ganesh Arti performed by CA. Narayan Pasari, President, BCAS who also paid tribute to Shri Jal E. Dastur along with the members of the Managing Committee & HDTI Committee.

The three finalist teams of the reinvigorated ‘Antakshari Competition’ named as ‘Deewane’, ‘Parwane’ and ‘Mastane’ were the first to occupy the stage. The Antakshari had fun-filled and innovative rounds to test quick thinking of the participants. Everyone were astonished to witness the talent of CA students even in the arena of Bollywood songs and trivia. The event was hosted by CA. Vijay Bhatt accompanied by CA. Meena Shah and Tej Bhatt.

The next event was ‘Talk Hawk’ (sponsored by Smt. Chandanben Maganlal Bhatt Elocution fund) wherein the three finalists had to give a 6 minute TED Talk on any topic of their choice. This enabled a level playing field for all participants who gave their impressive performances on their respective topics. During the Talk Hawk, the auditorium was graced by the presence of Senior Advocate, Shri Sohrab. E. Dastur who is a constant source of inspiration to this event.

Post Talk Hawk, the winning film of Short-film making competition – ‘The Screenmasters’ was played. The message of winning film – ‘Smile’ did moist eyes of the audience. This was the second year of the Short-film making competition and it truly scaled a new height. All the entries of short films had a beautiful message for the theme of ‘New India’ and were very precisely shot.

Next, the best photographs from the Photography Competition ‘Khinch Le’ were displayed. This event, too, was reinvented with a concept of ‘Public Choice award’ wherein photographs short listed by judges were put to vote on the Facebook Page and the photograph with maximum votes would be the winner. Participants were given themes on which they had to click creative photographs and post it on the Facebook Page with an innovative tagline based on the theme selected. This competition saw record participation of 75 entries and kept the Facebook Page thundering.

Thereafter, the stage witnessed a surprise entry of the Chief Guest of the evening – the witty Cyrus Broacha, a well-known TV personality and satirist, most popularly known for his show ‘MTV Bakra’ and ‘The Week That Wasn’t’. He used his gifted humorist skills to tickle the funny bone of the audience. He was felicitated by our President CA. Narayan Pasari and the event coordinator Parth Patani proposed a vote of thanks for Mr. Cyrus Broacha.

Then the time had ripened for the most awaited event of the evening – CA’s Got Talent. The singers had assembled, guitars and keyboards were in place, dancers were on their feet and actors began polishing their lines before they could thrill the audience with their mesmerising performances. To give a spirited kick start to this most awaited event, the students’ team presented a 4 minute flash mob which was choreographed by CA. Rishikesh Joshi.

And rightly then, the 12 performances in singing, dancing and other performing arts category enthralled the audience. The judges were fascinated, rather bewitched, by the talent of young CA students. They indeed had a mountainous task of choosing the winner.

With the clock-ticking, the participants began crossing their fingers as the ice was about to be broken. The winners of the competition representing their firms were finally announced. The list goes as follows:

Essay Writing Competition ‘Awaken the Writer Within’

Talk Hawk – ‘Aspire to Inspire’

Talent Show ‘CA’s Got Talent’

Antakshari Competition – ‘Suro ke Sartaaj’

Sketch & Slogan Competition ‘Leave your Mark’

Photography Competition ‘Khinch Le’

Short Film Making Competition ‘The Screenmasters’

Hearty Congratulations to all the winners and their firms.

Judges for the Various Competitions were as follows:

The entire evening was marvellously anchored by Mr. Kedar Pandey, Ms. Gauri Kakraniya and Mr. Nilay Gokhale with their sheer display of energy coupled with mind blowing performances. The anchors were also supported by Ms. Devyani Choksi and Ms. Preksha Shah in hosting the show.
Mr. Sahil Tanna proposed the well-deserved vote of thanks to Mr. Sohrab Erach Dastur for sponsoring the annual day in the fond memory of his brother late Jal Erach Dastur, the family of Smt. Chandanben Maganlal Bhatt for sponsoring the Elocution Competition, the members of the Managing Committee and HDTI Committee, the Coordinators of the Annual Day, the Event Moderators, Judges of various competitions, BCAS Staff and the vibrant team of student volunteers and all the students for participating in big numbers.

A scrumptious dinner was arranged after the event for all those who marked their presence at the annual day. Finally with a sense of satisfaction, joy of success, lasting motivation and with some unforgettable memories, it was called a day.

“Power Up Summit” held on 16th June, 2018 at Orchid Hotel, Mumbai

The Human Development and Technology Initiative Committee organised a one day programme “The Power Up Summit: Reimagining Professional Practice”, on June 16, 2018, at the Orchid Hotel, Mumbai. This Summit was in continuation of a series of Power Summits organised annually since 2011.

The Power Up Summit, conducted by a team of 3 faculty members, CA. Nandita Parekh, CA Ameet Patel and CA. Vaibhav Manek was attended by 73 members. The entire programme was conducted and well-coordinated by the faculty members in a seamless manner. The presentations were creative, colourful and intertwined with short videos that drove the points home in an entertaining manner.

The Summit raised important issues dealing with succession planning and sustainability of professional practices, the merger mathematics and valuation of professional practices, the challenges and opportunities arising due to technological advances and the need to get ready to “thrive” in these disruptive times, and not just survive.
The interest of the participants was evident in terms of the involved discussions and the incessant questions raised after each session. The Summit succeeded in generating a lot of interest among the participants in learning the art and science of practice management.

INDIRECT TAX STUDY CIRCLE

Indirect Tax Study Circle Meeting held on 16th June, 2018 at BCAS Conference Hall

Indirect Taxation Committee organised a Study Circle Meeting on 16th June 2018 at BCAS Conference Hall, to discuss the important definitions under the GST Law. The discussion was led by CA. Yash Parmar and the group was guided by CA. Naresh Sheth and CA. Rajat Talati. The Group discussed definition of “goods”, “services”, “aggregate turnover”, “taxable supply”, “exempt supply”, “non-taxable supply”, “composite supply”, “mixed supply”, “job work” and “works contract”. The importance of expression “unless the context otherwise requires ” used in the definition clause was also discussed. Related judicial pronouncements and Advance Authority Rulings were mentioned in the discussion.

The meeting was quite interactive and participants benefitted a lot from the session.

Celebration of International Yoga Day on 21st June, 2018 at BCAS Conference Hall

HDTI Committee, jointly with Indian Spiritual Healing (ISH) Foundation, organised a Yoga Session on 21st June 2018 at BCAS Conference Hall to mark the celebration of “International Yoga Day” which falls on the same day.
Mr. Pradeep Thakkar, a Professional Yoga teacher and also an active member of ISH Foundation guided the participants to perform different Asanas with ease, comfort for healthy body and mind relaxation. He also demonstrated some powerful Asanas to improve memory, maintain mental fitness and also to keep the body flexible and tone the muscles of the body.

Participants had good learning of Yoga Asanas for healthy body and peaceful mind.

Report on 12th Residential Study Course (RSC) on GST held at Kochi from 21st to 24th June, 2018

The 12th RSC of Indirect Taxation – GST was planned and organised by the Indirect Taxation Committee at Hotel Marriott, Kochi from 21st to 24th June, 2018. The Timing was perfect as GST law was nearing its first completed year after implementation. Looking at the complexity and frequent changes in the law, the RSC was attended by many delegates from various parts of the country. RSC was attended by 218 members.

The RSC for the first time was extended by a day to a 3 nights & 4 days course. The Course comprised of three group discussions on case papers prepared by eminent speakers and discussed by members in five different groups headed by group leaders. The Speakers also presented their views on the cases discussed by the members. The Group discussion and presentation of views of speakers was followed by presentation of two important topics by eminent speakers. The Highlight of the course was the Talk Show arranged by the Indirect Taxation Committee.
On the first day of RSC, post registration, there was a session of Group Discussion on Paper I by Adv. Rohit Jain on “Case Studies in Levy, concept of Supply with related schedules, Scope of ‘Business’ under GST (Including Mixed and composite supplies)”. The case study exhaustively covered the topic within the groups.

Subsequently, there was an inaugural session which commenced with the inaugural address by the President of BCAS, CA. Narayan Pasari. He briefly addressed the gathering and also gave a brief about the activities of BCAS and benefits to its members. Later, chairman of the Indirect Taxation committee, Deepak Shah gave introductory remarks on the design and structure of the course and the purpose of selection of the topics for group discussion as well as presentation. Thereafter, the keynote address was given by Mr. D.P. Nagendra Kumar D.G. (South) (GST), Chennai & Mr. Pullela N. Rao, Chief Commissioner, Kochi. Both the speakers got well connected to the participants and gave an insight into the provisions of the law and also responded to all the queries posed to them.

Second day started with Presentation of Paper I by Adv. Rohit Jain. All the questions were diligently covered by the speaker who well explained the concept of Mixed Supply, Composite Supply and Works Contract. Post that, the group got together for discussion on Paper II by CA. Divyesh Lapsiwala on “Place of Supply, Cross-Border transaction (including between states) under GST (including mixed and composite supplies)”. All the cases given by the presenter were well discussed and the points highlighted by the presenter were on day to day issues faced by the practitioners.

Post lunch, Presentation paper on “GST Audit and state of preparedness” by CA. Naresh Sheth was well articulated and reference material was given to all the members present, to work on GST Audit. He gave a framework for the professionals to conduct the audit and gave an exhaustive list of reconciliations for consideration.

A Talk show on GST related practice was also organised which was anchored by Vice President, BCAS, CA. Sunil Gabhawalla & Senior member CA. A.R. Krishnan and panel comprised of CA. Naresh Sheth, CA. Rajiv Luthia, CA. Divyesh Lapsiwala & CA. Jatin Harjai. All the four panellists were requested to share their preparedness for GST during the initial days of act coming into existence, the Working culture and best practices they followed. It was followed by a presentation paper on “Procedure under GST, Payment, Returns etc. – issues” by CA. Rajiv Luthia. The Speaker made a presentation on the issues related to the procedural aspects of payments & returns which covered a variety of problems faced with possible solutions. Day ended with entertainment program and authentic Kerala dinner called Sadhya.

Day Three started with group discussion on Paper III by Adv. G. Shivadass “Classification issues under GST, Works Contract and Job Work” pointing out various issues under classification, works contract and job work. After that, presentation of Paper II was made by CA. Divyesh Lapsiwala and his colleague. The speaker gave all his views on the topic and covered all the questions given in the paper book. It was followed by lunch and sightseeing for the participants with boat ride arranged by BCAS for all the participants. Last day started with presentation of Paper III by Adv. G. Shivadass who very well presented his thoughts and covered all the questions in the designated time.

The Concluding session was presided over by Chairman CA. Deepak Shah and he acknowledged contribution of the faculty and group leaders, as well as active participation of all participants and support from BCAS staff for the success of the RSC. Some of the participants gave their views on the course and conveyed their satisfaction at the format, topics covered and structure of the course. Participants were also quite happy and satisfied with the arrangements made by BCAS at the venue and learnt a lot from RSC sessions.

Lecture Meeting on “Transforming Mumbai – Challenges and Opportunities” held on 26th June, 2018

Bombay Chartered Accountants’ Society organised a lecture meeting on ‘Transforming Mumbai – Challenges and Opportunities’ on 26th June 2018 at Indian Merchants’ Chamber which was addressed by the guest speaker Mr Ajoy Mehta, Hon. Municipal Commissioner of Mumbai.

President, CA. Narayan Pasari, introduced the Speaker and gave the opening remarks while explaining the vision and various activities of BCAS including our 50th year Journal, Annual Referencer, Representations and social activities such as RTI, Charitable Trust and Accounting & Auditing Clinic etc. He also touched upon the subject with particular reference to challenges of transforming Mumbai and the role of MCGM and its good governance.

Mr. Ajoy Mehta, Hon. Municipal Commissioner of Mumbai took forward the discussion and explained the challenges and the opportunities to overcome those challenges of Mumbai. He started with the introduction of Mumbai and mentioned that Mumbai is having 476 Sq. Km. of area with population of 1.24 crore. If we leave aside the mangroves, roads and coastal regulatory zones etc., we are left with very little area for use of the public at large. So, he enumerated the following key factor attributed to Mumbai:

Area: He explained that going by the demographic history, the population growth has considerably reduced from 38 % increase in 1990-91 to 3.7 % in 2001-2011. Till 2021, we are going to see growth in population. As per 2034 vision, we feel that after 2021, population growth of Mumbai will drop because of the satellite cities like Thane, Vashi etc. developing fast. We just need to push infrastructure, transportation etc.

He also discussed how to deal with the issues which the local body (Corporation) faces while implementing the policies. There are two instruments namely. (i) Budget and (ii) Land Use to overcome the obstacles. He told that the Corporation has made the development plan for the next 20 years.

Further, the Speaker enumerated the key challenges being faced by Mumbai which need to be dealt with by MCGM aggressively viz. (i) Services (ii) Long Term Infrastructure (iii) Regulatory Roles ((iv) Employment Generation (v) Affordable Housing (vi) Social Equity Issues (vii) Water (viii) Waste Disposal (ix) Health Care etc.

The Hon. Speaker explained that the Corporation has made most of the services IT enabled like online payment, building permit etc. On the environment front, every tree in the city has been mapped and we are going to develop a very strong IT equipped engine to cover more services under its umbrella and thereby give better services.

Mr. Ajoy also explained about the ongoing projects like the Coastal Roadway and Urban Transport amongst others and the widening role of MCGM to cope up with the challenges ahead in meeting the infrastructure requirements of the Mumbai Metro City. He also emphasized the need for a futuristic outlook and vision, to prepare a draft plan to execute efficiently with the passage of time without any bottlenecks.

The meeting was followed up by Q&A session where the Speaker thoroughly responded to all the queries raised by the participants.

The participants were hugely enlightened with the insights provided by the Speaker.

Lecture meeting on “Filing of Income Tax Return for A.Y. 2018-19” held on 2nd July, 2018

A lecture meeting on topic “Filing of Income Tax Return for A.Y. 2018-19” was held on 2nd July, 2018 at K. C. College auditorium. CA. Devendra Jain dealt with legal aspects of Return Filing and CA. Divya Jokhakar dealt with procedural aspects of Tax Return Filing.

During his presentation CA. Devendra Jain discussed and explained various amendments of Finance Act 2017 relating to Rates of taxes, exemptions etc. He touched upon legal aspects of Income from House Property, Capital Gains, Business Income, changes in Depreciation, Other Sources etc.

CA. Divya Jokhakar in her presentation explained procedural aspects of Income Tax Return such as Applicable forms for various types of assessees, Mode of submission etc. She also updated the participants on the
latest changes in Income Tax Return.

Both the speakers replied to the questions raised by the participants.

The lecture meeting provided a hands-on guidance to the participants, many of whom were young members.

70th Foundation Day Lecture Meeting on “India – 2019 & Beyond” held on 6th July, 2018 at Garware Club House, Churchgate, Mumbai

A lecture meeting on “India – 2019 & Beyond” was held on 6th July, 2018 on the occasion of 70th Foundation Day of the Society which was addressed by CA. Nilesh Shah, MD, Kotak Mahindra AMC Ltd. President CA. Narayan Pasari briefly touched upon the perspective of India’s economic growth and shared the profile of Mr. Nilesh while welcoming the Chief Guest and then requested him to address the august audience.

At this occasion, BCAS publications: Thought Mailers – A Compendium Volume 1 & 2, Presumptive Taxation under sections 44AD, 44ADA and 44AE and BCA Journal – July 2018 were released by the hands of the Speaker CA. Nilesh Shah.

On the topic of the Lecture Meeting “India – 2019 & Beyond”, the Speaker explained the challenges to overcome to achieve the growth story of India beyond 2019. He lucidly drove the inherent challenges which India has to face on account of following: (i) India being equivalent to a continent, (ii) savings allocation being poor, (iii) Poor tax compliance (iv) Poor job creation (v) Global liquidity crisis (vi) Deteriorating macro outlook viz. crude oil, current account deficit, fiscal deficit etc. (vii) Credit squeeze.

He also discussed about basic market forces which are leading to the growth of economy and enumerated some of them as follows:(i) Increased Urban consumption, (ii) Overall increase in auto sales, (iii) Aviation sector doing well, (iv) Tourism growing fast, (v) MFI recovery in rural sector is good, (vi) Railways is on fast track, (vii) GST buoyancy, (vii) NPAs getting solved and (viii) PE Ratio being above average.

The Speaker further talked about the reforms of Modi Government which will contribute to faster development of the economy from 2019 onwards namely Lower inflation, Minimum Government-Maximum Governance, Free markets, Improving quality of public spending, Fiscal Prudence, Attracting FDI amongst others.

At the end, there was Q&A session where the Speaker responded in a pragmatic manner to the queries of the audience.

The audience got mesmerised with presentation skills of CA. Nilesh Shah and gained a lot from the insights from his spectacular speech.

SUBURBAN STUDY CIRCLE

Suburban Study Circle Meeting on “Provisions of ICDS Revelant to SME’s” held on 7th July, 2018

The Suburban Study Circle organised a meeting on “Provisions of ICDS Revelant to SME’s on 7th July, 2018 at Bathiya & Associates LLP, Andheri (E) which was addressed by CA. Namrata Dedhia.

The speaker CA. Namrata Dedhia made a detailed presentation on the provisions of ICDS which are specifically applicable to SMEs. The major points discussed were (a) Applicability of the ICDS and the background (List of ICDS notified) of ICDS which had its basis and comments from the Delhi HC ruling. (b) Major changes and recent developments (c) Other provisions of ICDS. The speaker also discussed what confusions are still around, the best available stand we should take to avoid penalties and non-compliance. The speaker shared practical examples on her experience with the clients and tax authorities.

The participants learned a lot from the presentation shared by the speaker.

BEPS STUDY CIRCLE

Meeting on “Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures under BEPS measures” held on 7th July, 2018 at BCAS Conference Hall

International Taxation Committee organized a Study Circle Meeting on “Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures under BEPS measures” on 7th July 2018 at BCAS Conference Hall which was led by Group Leader CA. Shweta Ajmera.

The group leader explained about BEPS Action Plan 12 (i.e. Mandatory Disclosure Rules) and OECD Model Disclosure rules to address Common Reporting Standard (CRS) Avoidance Arrangements and Opaque Offshore Structures which was released on 8th March 2018. So far, the exchange of information is done between Governments. The new guideline would require intermediary of an arrangement to disclose factual disclosure of the arrangement including service providers and to identify the jurisdiction in which the Arrangement is available to implement. It also includes intermediaries providing services for such an arrangement if they are in a position to know that such arrangements avoid reporting. The model rules would require intermediary to make the disclosure 30 days after the intermediary makes the arrangement available to implement or after the intermediary provides what are “Relevant Services”.

The Speaker also explained that now the game is over for CRS avoidance. The objective of Mandatory disclosure rule is to provide tax administrators with information on CRS Avoidance Arrangements and Opaque structures. This information is used by the jurisdiction for compliance purpose as well as to decide future policy tax design. Intermediary or user of a CRS avoidance arrangement or Opaque Offshore structure has to disclose certain information to its tax administration. If the user is resident of another jurisdiction, then information will be shared with that jurisdiction.
By rules, the tax administrators will get information about various schemes- their suppliers, users for use in compliance activities, exchange with treaty partners to tax policy design. Five key elements of rules are:

• Description of arrangements that are required to be disclosed (i.e. Hallmark of Disclosable scheme)
• Who will disclose – Description of persons required to disclose such arrangements (i.e. intermediaries that are subject to reporting obligations under the rules)
• What to disclose: A trigger for the imposition of a disclosure obligation (i.e. when an obligation to disclose crystallises under the rules and any exception from reporting)
• A description of what information is required to be reported
• Appropriate penalties or other mechanisms to address non-compliance.

Considering the above rules the members also deliberated as to how will it affect the advice rendered by Chartered Accountants and other tax advisors.

The speaker further shared her knowledge and experience on various related issues which was a valuable takeaway for the participants.

Lecture Meeting on “Taxation of Transactions in Securities” held on 11th July, 2018

Taxation Committee of BCAS organised a lecture meeting on Taxation of Transactions in Securities on 11th July, 2018 at Indian Merchant Chambers, Mumbai which was addressed by CA. Yogesh Thar.

CA. Sunil Gabhawalla, President, BCAS introduced the Speaker and gave opening remarks while explaining about BCAS activities and also touched upon the subject in brief. At this occasion, BCAS publication “Interest Limitation Provisions under Section 94B” was also released by the hands of the guest Speaker.

CA. Yogesh Thar broadly covered the following key elements of Taxation of Transactions in Securities in detail:

1. Business Income vs. Capital Gains: Under this. he talked about relevant judicial pronouncements and legislations covering past assessment records, methods of valuation, nature and quantities of purchase and sales, ratio between purchase and sale and period of holding, frequency, continuity and regularity of transactions, source of acquisition, transfer of control and management along with shares, bonus stripping, amendments to Sec. 145 A etc.

2. Impact of Taxation of Transactions in Securities other than shares: He discussed about investment in units of equity mutual funds, purpose of MAT, one time settlement agreement, Accounting Policies and Changes, Demergers and Debentures etc.

3. Re-introduction of Long Term Capital Gains Tax: Under this topic, he explained about provisions prior to introduction of section 112A, its applicability from AY 2019-20 and analysis. He also talked about determination of cost of acquisition under section 55 (2)(ac) etc.

4. Section 50CA & section 56(2) & Valuation Rules: Under this segment, the Speaker explained about interplay between section 50 CA and 56 (2)(x). Section 50CA presupposes consideration, Rights and Bonus Issue, Convertible Instruments under section 56 (2)(x) etc. He also touched upon multi-layer shareholdings and the rules and issues on rules and other issues etc.

5. Taxability of ESOPS: Under this aspect, CA. Yogesh Thar deliberated upon the grant, vesting and exercise of options, sale of shares, recent development in taxability of stock option rights (SARS), issues under DTAA, Deductibility of ESOP Expenses and IndAS MAT implications amongst others.

6. GAAR Applicability to Transactions in Securities in particular for FPIs: The Speaker also talked about the circular no 7 of 27.01.2017 by CBDT, Draft Guidelines for GAAR implementation under Direct Tax Code Bill 2010 and analysis thereof.

7. Penny Stocks: He further shared his thoughts on taxability under section 115BBE, Safeguards against Transactions being treated as fictitious, documents required to prove genuineness and judicial analysis etc.

8. Transfer Pricing: Under this subject, the Speaker explained inbound and Outbound Investments and whether transfer pricing provisions would apply for buy back taxable under section 115 –QA.

Apart from the above, Mr. Thar also briefly touched upon Implications of long term capital gains tax on securities, Source of acquisition, Investment Portfolio, Listed and unlisted securities and transfer of unlisted shares, Debentures, Investment in Mutual Fund Units, Units of MF held as stock in trade, Valuation of cost to market value, Value of inventory as per RBI Guidelines and measurement of financial assets etc.

The Speaker also briefed about the case laws and circulars issued relevant to transactions in securities. He further spoke on introduction and purpose of MAT and unrealised and notional gains.

The lecture was followed by Q&A session and the Speaker replied to all the queries of the participants in a very
lucid manner.

ITF STUDY CIRCLE

ITF Study Circle Meeting on “Discussion on MasterCard AAR Ruling / Recent rulings on Permanent Establishment (‘PE’)” held on 12th July 2018 at BCAS Conference Hall

International Taxation Committee conducted a meeting on “Discussion on MasterCard AAR Ruling / Recent Rulings on Permanent Establishment” on 12th July, 2018 at BCAS Conference Hall. Meeting started with deliberation on facts of the case along with modus-operandi of the payment solution provider “MasterCard” by the Group Member and presenter CA. Nilesh Lilani.

After the brief explanation of the facts, the floor was opened for the members to discuss peculiar aspects from the perspective of different forms of Permanent Establishment (‘PE’). Revenue’s acknowledged the significant activities of the MasterCard in eccentric way which bring solace for the participants to discuss all the sweeping remarks made by AAR in relation to PE, Royalty and Fee for Technical Service and withholding obligations.

During the meeting, participants exuberantly discussed the significance of MasterCard Interface Processor (‘MIP’), MasterCard Network, Indian Subsidiary in determining the fixed place PE, rendering of services by employees in determining service PE and agency activities by Indian Subsidiary in determining dependent agent PE.

Further discussion took place amid consideration of implication with respect to restructuring in MasterCard India, Transfer Pricing Report of Indian Subsidiary, reply under section 133(6) of the Income Tax Act, 1961 by Banks in India, mark-up charged on technology upgradation services of MIP, taxation of MasterCard in other jurisdiction such as Australia, preparatory and auxiliary nature of services and other related considerations.

Indeed, it was bolstering and interactive meeting and the participants got enormously benefitted from the discussion and insights provided during the meeting.

Meeting on “Making Internal Audit Count: Raising to the Expectations – A Curtain Raiser” held on 13th July at BCAS Conference Hall

Internal Audit has long been acknowledged as one of the four pillars of Corporate Governance. Is the pillar of Internal Audit strong enough to support Corporate Governance? To discuss the issue at length, the newly formed GRC Subgroup of the Accounting and Auditing Committee hosted an interesting “curtain-raiser” event titled “Making Internal Audit Count – Rising to the Expectations” at the BCAS Conference Hall on 13th July, 2018. This event marked the beginning of the year long series of events and initiatives planned by this subgroup to create a platform for GRC professionals to interact and ideate, teach and learn. The Annual Calendar of events planned was also released at this event.

The speakers for the evening, CA. T. N. Manoharan and CA. Mario Nazareth, enthralled the audience with their intellect, humour and wisdom – a rare combination indeed. Their years of experience in senior management and leadership positions translated into deep insights. The carefully curated presentations added colour and charm to the evening; their emphasis on professional responsibility, ethics and integrity, and the need to make a positive contribution raised the bar for the audience by several notches. The large turnout at the event, from industry and profession resulted into a packed hall and an overflow in the foyer where there was live display on the screen.

With the success of this launch event, the GRC subgroup of the Accounting & Auditing Committee is confident of moving forward with the series of initiatives planned for the year with focus on Internal Audit.

The sessions were very interactive and enlightening for the participants who benefitted a lot from the rich experience of the learned speakers.

“Panel Discussion on “Analysis of PE Constitution- “Recent Judicial Pronouncements including MasterCard, Nokia Networks and Formula One.” held on 14th July, 2018 at BCAS Conference Hall

The international taxation committee held a half-day panel discussion on 14th July 2018 at BCAS Conference Hall, on the contentious topic of Permanent Establishment with special reference to the recent Advance Ruling in the case of MasterCard, the Supreme Court decision in Formula One case and Tribunal’s Special Bench ruling with regard to Nokia Networks OY.

The Panel consisted of three eminent personalities in the field of international taxation namely Mr. Kamlesh Varshney, Commissioner of Income-tax; Mr. Uday Ved, Partner, KNAV and Mr. Rishi Kapadia, partner, Dhruva Advisors. The panel was moderated by Mr. Akshay Kenkre, Founder, TransPrice Tax Advisors LLP.

The decision of Advance Ruling Authorities (AAR) for the MasterCard Singapore was the highlight of the day. Mr. Kamlesh Varshney gave a detailed understanding of the fact pattern of the decision. It was deliberated that the essential element to hold MasterCard Singapore as having a Permanent Establishment in India was the location of the MasterCard Interface Processor (MIP) that connects the MasterCard’s network and processing centres.

Although the Indian subsidiary owned the MIP, the control over the asset exercised by MasterCard Singapore and it is not the ownership but the control over the risk and the asset that are essential elements for the creation of a Permanent Establishment. Here the test of disposal was one of the debated topics amidst the panel.

Further, the importance of Functional, Asset and Risk (FAR) Analysis was brought out during the discussion. The importance of FAR in the transfer pricing study is well known, however, it was brought to attention that such a FAR shows the true substance of a transaction and therefore, could also be relied upon by the international tax authorities to arrive at a conclusion to address a question on the permanent establishment.

The next in line was the Formula One decision by the Supreme Court. The decision gives an interpretation of the test of permanence for determination of Permanent Establishment. The panel considered the pros and cons of the determination of duration test of as short as 3 days to be considered as a Permanent Establishment. If the economic activity is conducted over the entire period of the tournament, then the test of duration is considered to be met. Also, the intention to conduct such activities on a year on year basis is an important proof to hold such transaction to lead to a Permanent Establishment.
The last discussion was on Nokia Networks OY, where it was held that Nokia Networks OY does not create a Permanent Establishment in India. This was a contradictory decision to the earlier two decisions discussed and thus was deliberated on factual grounds.

It was discussed that the activities of the Indian subsidiary cannot be reckoned to constitute a fixed place Permanent Establishment as it did not fulfil any of the triple tests of a fixed place, permanency and disposal, which are prerequisites to constitute an entity as a Permanent Establishment.

The panel gave an all-around perspective in all the three judgements and provided insights taking various live cases and examples to substantiate the explanation which was a huge takeaway for the participants.

INDIRECT TAX STUDY CIRCLE

Meeting on “Supply and Definition of Business under GST” held on 24th July, 2018 at BCAS Conference Hall

Indirect Taxation Committee organised a study circle on ‘Supply and Definition of Business under GST’ on 24th July, 2018 at BCAS Conference Hall which was addressed by the Group Leader CA. Rahul Thakar under the mentorship of CA. Vikram Mehta and CA. Jayraj Sheth. The Speaker made an in depth analysis of both the definitions and cited various past case laws relevant to the terms used in the definitions. Both the mentors guided well not only the leader but also ensured that the overall discussion and coverage completed well in time. Meeting was very interactive and participants immensely benefitted from the session.