SECOND BCAS LONG-DURATION COURSE ON GST
The second BCAS Long-Duration Course
on GST was conducted at the BCAS Hall from 4th to 19th
October, 2019. It was held over three consecutive Fridays and Saturdays with
six sessions per day and a total of 36 technical sessions on important areas
under GST. Each technical session was conducted by experienced faculty having
vast experience and knowledge in the area of indirect taxation. The course was
aimed at imparting basic and middle-level knowledge on conceptual aspects of
GST law and procedures which were explained in interactive sessions along with
talks, practical examples and case studies. The last two sessions were combined
and designed as a ‘Brain Trust’ session, moderated by BCAS Immediate
Past President and present Co-Chairman of the IDT Committee, Sunil
Gabhawalla, along with renowned faculties S.S. Gupta and Parind
Mehta as ‘brain trustees’ who answered innumerable questions put to them by
the participants and highlighted various issues in GST.
The course
received very good response. A total of 71 participants enrolled for it; they
came from 12 different cities. The participants were all praise for the course.
Those who
attended at least 75% of the course were presented with participation
certificates by the Society. The overall verdict from the feedback forms
received was encouraging, as almost all participants appreciated the design,
structure, timing, faculties and so on.
HUMAN RESOURCES DEVELOPMENT COMMITTEE
‘Non-violence
is the greatest force at the disposal of mankind. It is mightier than the
mightiest weapon of destruction’, said Mahatma Gandhi.
The HRD Study
Circle organised a talk on ‘Non-Violent Communication’ (NVC) by Ms Leonie
D’Mello at the BCAS Hall on 10th October, 2019. (Earlier, in
memory of the Mahatma, BCAS organised a special programme ‘Bapu@150’ on
2nd October, 2019 in its Conference Hall.)
The speaker
made several key points while delivering her talk. Among them were the
following:
‘Non-Violent Communication is a simple
tool to defuse arguments and create compassionate communication with family,
friends, etc. It is an amazingly effective language for saying what is on your
mind and in your heart. It is simple on the surface, challenging to use in the
heat of the moment and powerful in its results.
Non-Violent
Communication is a way of getting things done in the right way with both sides
willing to dialogue and resolve conflicts.
It involves expressing honestly and
receiving emphatically. When we learn to connect our needs with our feelings,
we empathise with ourselves and others. We learn to be compassionate with
ourselves and with others.
NVC shows us
to focus on what we truly want, rather than on what is wrong with others or
ourselves. It gives the tools and understanding to create a more peaceful state
of mind.
NVC is a very interesting way to
communicate effectively.’
Those who attended the talk expressed a
desire to learn even more about non-violent communication – so that they could
communicate with others successfully and more effectively.
LECTURE
MEETING ON ‘RECENT DEVELOPMENTS IN GST’
A lecture meeting on ’Recent Developments in
GST’ was held on 11th October, 2019 at Bhatia Wadi, near Savarkar
Garden, Borivali (West), on 11th October, 2019.
Well over a hundred professionals and others
attended this first-of-its-kind meeting. BCAS President Manish Sampat,
in his opening remarks, underlined the objective of this particular lecture. He
said this was the first initiative to reach out to the suburbs for the benefit
of scores of members and others living and / or working in Borivali and nearby
areas.
Immediate Past President Sunil Gabhawalla
explained the various important developments which had taken place due to the
change in the law and also through various notifications and circulars after
its enactment. In a sense, the members were taken on a ‘GST journey’ starting
from inception to execution, the hurdles and hindrances along the way and so
on. The speakers answered all the queries raised from the floor of the house.
The interactive meeting ended with
announcements about future BCAS events and a vote of thanks proposed by Dushyant
Bhatt.
FEMA STUDY CIRCLE MEETING
FEMA Study Circle Conveners Kirit P.
Dedhia, Niki Shah and Parag Kotak joined hands to organise a
very interesting discussion on ‘ODI Contraventions: Reporting and Regulations’
at the BCAS Conference Hall on 15th October, 2019.
The choice of Ms Aarti Karwande as
Group Leader proved to be a good decision. For, in the course of her
presentation she covered various case laws pertaining to ODI contraventions.
This paved the way for a lively and thought-provoking discussion on the
applicable FEMA regulations. The topic of discussion being so interesting, the
room was packed with professionals with a sprinkling of students.
Ms Karwande pointed out that Overseas Direct
Investment had rapidly evolved over the years. Therefore, it was important to
understand the regulations and the reporting pertaining to the subject –
because any contravention could have several adverse ramifications.
The Study Circle meeting served to clarify
matters and set the professionals on the right track to tackle this key subject
(Overseas Direct Investment).
‘ESTATE
DUTY – A TRIGGER FOR SUCCESSION PLANNING’
The BCAS organised a lecture meeting
addressed by Mr. Ketan Dalal on ‘Estate Duty – a Trigger for Succession
Planning’ on 16th October, 2019 in the BCAS Conference Hall.
Introducing the subject, President Manish
Sampat pointed out the importance of estate / succession planning all over
the world and in India, too. He stated that in recent times, the focus on
succession planning had increased amongst high net-worth Indian business
families so as to minimise the loss in value while transferring assets /
businesses from one generation to another.
In the last few years, especially during the
time of the presentation of the Union Budget, there had been a great deal of hype
about the re-introduction of estate duty (which had been abolished in 1985).
That had triggered the need for succession planning. People had started looking
beyond wills and probates and were approaching lawyers, chartered accountants
and attorneys for succession planning, the President pointed out.
Mr. Ketan Dalal started the session with a brief history of estate planning all
over the world, especially in countries like the USA where estate duty laws
have been in force for many years. He then explained the earlier estate duty
law in India and its main features, the challenges it faced and the reasons why it was abolished. He gave an overview
of succession planning and how it was a much wider concept than mere mitigation
of estate duty issues.
He stated that succession planning was very
important in India even without any estate duty law being in place. Various
structures were used by people for succession planning; they faced several
issues in doing so and were being made aware of the timelines involved in the
whole succession planning process.
Mr. Dalal
described the integrated approach to be adopted for structuring such planning
and shared his experience on the issues that arose, on the basis of the
innumerable cases handled by him.
He also explained some of the key issues
that one could come up against under various laws in India dealing with trusts,
family settlements and restructuring. He then answered a plethora of questions
from the eager participants on gifts, nominations, wills, probate, etc.
The meeting was
well appreciated as the speaker articulated several aspects of succession
planning very well.
President Manish introduced the
speaker, Vice-President Suhas Paranjpe presented a memento to him and
Convener Hardik Mehta proposed the vote of thanks.
SUBURBAN STUDY CIRCLE
The Suburban Study Circle organised a
meeting on ‘Amendments to Income-tax Act, 1961’ vide an ordinance, the Taxation
Laws (Amendment) Ordinance, 2019, on 18th October, 2019 which was
addressed by Mr. Milin Bakhai.
The speaker made a detailed presentation on
the amendments and explained each change clause by clause. The group had a
detailed discussion on the possible outcomes of selecting the option u/s
115BAA.
He walked the participants through a
comparison of companies under different tax rates and the various pros and cons
for selection of the new tax rates. He also examined section 115BAB in detail
and the various references which were drawn from different judicial precedents
to explain the same. He gave examples to describe which arrangements would be
considered as reconstruction and / or splitting.
The participants lauded the speaker for his
erudition and his easy-to-understand presentation.
INTERNATIONAL
ECONOMICS STUDY GROUP
The International Economics Study Group held
its meeting on 5th November, 2019 to discuss ‘Issues &
Implications of Banking & Financial Crisis in India’. CA Harshad Shah
and CA Paresh Budhdev led the discussions and presented their thoughts
on the subject.
They pointed out that Indian banks (mostly
PSUs and some private banks) had been facing serious NPA crises for the last
five years. Besides, many well-known promoters had been facing huge liquidity
challenges and a few of them had filed for bankruptcy themselves or their
lenders had done so. This got further aggravated and spread to NBFCs and
private banks with problems at some well-known ones. Many more lenders were
likely to be added to the list due to stress in the real estate, automobiles,
MSME sectors and the rural and agricultural economy. At the same time, there
were governance issues in small savings funds, EPF and LIC, too.
As per RBI data, the aggregate gross
advances of PSU banks increased from Rs. 11.33 lakh crores as on 31st
March, 2008 to Rs. 34.03 lakh crores as on 31st March, 2014 (a
three-fold increase in six years). The primary reasons for the spurt in
stressed assets had been aggressive lending practices, including phone banking,
directed lendings, wilful default / loan frauds / corruption in some cases and
overall economic slowdown.
India’s banks were grappling with roughly $150
billion in stressed assets (Rs. 10 lakh crores); about 85% of these NPAs
were from the loans and advances of PSU banks. In the last decade, the gross
NPAs of banks had increased from 2.3% of total loans (2008) to 9.5% (in 2019),
indicating that an increasing proportion of a bank’s assets had ceased to
generate income for the banks, lowering their profitability and ability to
grant further credit. Bank NPAs were expected to shrink 350 bps over two years
to 8% by March, 2020, compared with the peak of 11.5% in March, 2018.
The International Economics Study Group also
discussed the NBFC crisis and its domino effect on the Indian economy. There
were 11,400+ shadow banking companies (NBFCs) with a combined balance sheet
worth around Rs. 22.1 trillion ($304 billion) and their loan portfolios had
grown at nearly twice the pace of banks. According to RBI data, gross NPAs
(non-performing assets) or bad loans of NBFCs stood at 6.6% at the end of
March, 2019 against 5.3% a year ago. On the other hand, bank lending to NBFCs
had also seen a substantial rise. NBFCs owed an outstanding amount of Rs. 6.4
lakh crores at the end of March, 2019. This was a 22% increase compared with
the previous year when the debt was Rs. 4.9 lakh crores. NBFCs and HFCs had a
balance sheet of Rs. 36 lakh crores as of March, 2019. If the extent of
under-reporting was around 5% of advances, there could be Rs. 1.8 lakh crores
of more bad news yet to be recognised.
The risks of contagion were rising in the
Indian financial sector and any failure of a large shadow lender could lead to
a ‘solvency shock’ to banks. India’s shadow lenders got a substantial part of
their funding from banks – the weaker ones had seen a sharp rise in their
borrowing costs, and a big drop in their equity values. High business risk is
inherent in NBFC business models that rely on short-term market borrowings for
long-term loans. The resulting risk aversion by lenders had landed NBFCs and
HFCs with high asset-liability mismatches in hot water.
The way forward suggested was: (1) Regulators and investors need to recognise that both the ALM
(asset liability mismatch) and liquidity crises are restricted to a handful of
NBFCs / HFCs which require closer regulatory supervision, along with the firms
accessing public deposits or retail NCDs requiring close scrutiny. (2) With
default and the string of credit rating downgrades, which undermined market
confidence in credit ratings and the accounting practices of NBFCs, regulator/s
need to undertake special audits. This is essential to shore up market
confidence in the sector. (3) NBFCs / HFCs with retail participation and good
quality books may need a liquidity lifeline to ward off solvency issues. (4) It
is not the absence of regulations but ineffectual supervision by the regulators
that has left the doors open for the NBFC crises to play out. Hence, instead of
adding to their voluminous regulations, regulators need to deploy additional
manpower and acquire forensic capabilities to more closely monitor the frequent
statutory filings of these firms.
