Dear Members,
It’s amazing! It’s versatile! And
it’s also scary! At the recently concluded Google developer conference, CEO
Sundar Pichai prowled around a giant stage revealing the awesome capabilities
of its latest offering – Google LENS. Essentially a piece of software, LENS
leverages Google’s expertise in computer vision and artificial intelligence to
make your smartphone…much, much smarter!
LENS helps your smartphone to read
and understand text and images, so as to enable you to take action. Click a
strange insect or a rare car and your phone will pull out complete background
information. Check out restaurants and cuisine with a snap…Or get translations
on the go! Working in tandem with Google Assistant you could book tickets to a
movie with just a snap. What’s more, Google’s algorithms can help you edit and
enhance your snaps effortlessly. Are you ready for more and more; by doing less
and less? In a lighter vein, I am sure some members are wondering can LENS read
the mind of their spouse by pointing the smartphone towards them or if only the
students can get all their answers to the question paper….
Performance
Appraisal
Three years in office and the Modi
Government has impressed people across India, and the world…he has also managed
to silence the opposition and critics. Prime Minister Modi follows a punishing
schedule and expertly juggles numerous meetings, global trips, and visits to
far-flung parts of India with effortless charm.
Riding to power on the promise of
development, he certainly has very impressive credentials – Inflation has been
curtailed at 3.89%; the fiscal deficit to GDP has been prudently trimmed to a
manageable 3.50%; while GDP growth has spiraled to 7.10% and forex reserves
have inched up to $370 billion. The stock exchanges have been reflecting the
confidence of a healthy economy, soaring and setting new benchmarks. However,
the jewel in the crown is that India has retained its title as the world’s
numero uno FDI recipient for the second year, attracting $62.3 billion in 2016.
What’s significant about this FDI Report put together by Financial Times is
that India has surged ahead of long term favourites – China and the US.
Numerous well-branded initiatives
by the Modi Government have been hailed across the world. Jan-Dhan Yojana, Make in India, Swachh Bharat Abhiyan, Digital India, Startup
India, Stand-Up India… have all made an impact and the momentum continues.
Among the boldest decisions were the demonetisation to tackle the deep-rooted
problem of black money and the surgical strikes across the LoC that sent a
strong message to Pakistan and the world.
But tempering the thunder made by
the government is the stubborn reluctance of the international rating agencies.
The report card from the rating agencies and World Bank tell a different story
and spell a difficult reality. As per World Bank, India is a lowly 130th
in ease of doing business, 155th at starting a business, 185th
in dealing with construction permits, 138th in registering property,
166th in enforcing contracts and 108th in trading across
the border. India’s economy is currently rated at BBB- which is just a notch
above junk level by both Fitch and Standard & Poor. Moody’s too have
assigned a ‘Baa3’ rating which reflects India’s poor fiscal and institutional
strength.
For the professional also these
last three years have been very eventful. With a deluge of new laws and
compliances, there have been tremendous new professional opportunities getting
generated. It is very evident that the Government is putting faith in the CA
fraternity for aiding compliance of the new law in letter and spirit.
FIPB –
Shutters down
Set up in the nineties, FIPB has
been the single window for allowing foreign direct investment. The ‘single
window’ description did not live up to its expectations – investments proposals
languished instead of being expedited. File movement and decision-making took
eons frustrating the enthusiasm of the investors.
FDI into India continues to
escalate, clocking an impressive growth of 9% in 2016-17. In a determined
effort to slash red tape and enhance ‘ease of doing business,’ FIPB is now
abolished. Now all proposals will be vetted and cleared by the relevant
departments. Timelines are being imposed to ensure no endless waiting for
clearances. Rejections will be more difficult requiring a clear-cut
explanation.
To further open the floodgates to
FDI, more sectors are expected to be put under the automatic route. It is
interesting to note that in the last three years, almost 95% of FDI came in
through the automatic route – only 11 sectors still require government
approval.
Global
Tax Treaty
The well-known and widely
practiced tax planning strategy of shifting profits to low or no-tax locations
is set to be plugged. Multinationals have for decades exhibited astute
opportunism by channeling profits to low-tax countries, resulting in a very low
level of corporate tax payment.
A multilateral Convention has been
painstakingly drafted to implement tax treaty-related measures to prevent Base
Erosion and Profit Shifting (BEPS). This Multilateral Convention will address
BEPS concerns in a very comprehensive way, modifying and replacing over 3,000
bilateral tax treaties which would otherwise have to be changed in a cumbersome
and time-consuming manner.
This Multilateral Convention is
open for signing, and the ceremony is slated for June 2017. This prudent step
will effectively block any multinational organisation from engaging in any tax
avoidance initiatives. Now with GAAR and this Multilateral Instrument, it is
going to make it almost impossible for any entity to engage in adventurous tax
planning. As CAs it becomes our duty to educate our clients and encourage them
to desist from any tax structuring since
now the thin line between tax planning and tax avoidance no longer exists, and
everything may be treated as tax avoidance leading to severe consequences.
Gateway
to Operation Clean Money
As one more step of the Government
to eradicate Black Money, the government has launched a new portal – Operation
Clean Money. The portal has been designed to ensure transparency and
facilitates the two-way flow of information. Comprehensive and user-friendly,
it provides a single source for step by step guides, FAQs, reference guides and
training toolkits. The portal will also act as a bridge to citizens enabling
them to get tax compliant and to share their experiences and feedback. With the
sharing of status reports, including explanations of verification cases and
thematic analysis reports, tax administration will become more transparent.
The Income Tax Department now has
two data analytics agencies and a business process agency to sift through large
volumes of data and zero in on cases where tax compliance is suspect. This new
initiative is yet another nudge from the department to come clean and be an
honest taxpayer.
BCAS –
GST Training:
As vast swathes of the country are
reeling under scorching heat and with average and minimum temperatures above
normal, all eyes are on the skies eagerly awaiting the godly rains. Another
area where tremendous heat is being generated is GST. GST is to be a real game
changer and the biggest reform of Independent India on the taxation front. It
is the responsibility of the intelligentsia of India to garner their combined
resources and spread the knowledge for smooth implementation of the greatest
initiatives of our times to achieve its desired results and to launch India
into the next orbit of Developed Nation from Developing Nation.
BCAS being one of the torch
bearers of CA profession has been identified as one of the responsible and
capable organisations which can contribute through its collective professional
wisdom for the successful implementation of GST regime. With the deadline (in
fact the start line) nearing 1st July, BCAS has launched a slew of
training programs for its members, trade, industry and stakeholders. Request
you all to make the most of this opportunity.
The way I see it, if you want the
rainbow, you got to put up with the rain…
Warm Regards,
Chetan Shah
