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Category: From The President

From the President

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Dear members,

As per a recent report published in The Wall Street Journal, India has the third largest number of billionaires in the world, with a combined fortune of $ 266 billion, up from fifth rank just a year ago. This news underscores the growing abundance of wealth post the economic liberalisation in India.

While many Indians have prospered enormously postliberalisation, the benefits of the growth have been grossly uneven, and a large part of India continues to cope up with dire poverty. Given its fiscal and budgetary limitations, the Government of India is unable to fund the needs of the masses, and its spending on various programmes achieve less than desired impact on development outcomes for the poor. The introduction of Corporate Social Responsibility is the Government’s endorsement of the need to rely on the critical role played by private philanthropy.

Given the enormous need, it is encouraging to find philanthropy gaining new momentum. The postliberalisation wealth-creators such as Azim Premji, Narayan Murthy and Shiv Nadar have committed substantial amounts, running into several billion dollars towards charity on the lines of Giving Pledge by Warren Buffet and Bill Gates. Their contributions have spurred on an eco-system of new-age charitable organisations maximising impact through strategic collaboration with the donors.

At the same time, there are thousands of small charitable institutions carrying out phenomenal work. As per the recently published India Philanthropy Report 2015 by Bain & Company, the country has added more than 10 crore donors since 2009 and had about 25 crore donors in 2013. India also improved its rank to 69 in 2014 from 134 in 2010 in the World Giving Index (WGI) published by the Charities Aid Foundation.

A question that arises is whether the tax and other policies of the Government are conducive to critically required private philanthropy. It appears that the attitude of the authority is that of distrust influenced by few bad examples. The difficulties are compounded by indifferent, and often corrupt, administration.

The CAG in its Report No. 20 of 2013 states, “Trusts are earning huge profit consistently, after spending meagre expenditure as compared to their total income, and accumulate it as surplus. These surpluses are used for creating fixed assets for earning more profit or are transferred to other trusts rather than for charitable purposes to avoid tax.”

Almost every year, the provisions pertaining to the charitable entities in the Income-tax Act have been amended, which bears testimony to the general mistrust the bureaucracy has towards this sector.

The Tax Administration Reforms Commission (TAR C) in its report submitted last year has commented, “The perceived misuse of voluntary organisations for tax evasion has led the finance ministry to curtail huge tax incentives.”

Unfortunately, this approach of reactionary amendments without a radical overhaul of the system, causes an adverse impact mainly on good charitable organisations. These changes do not take into account massive administrative burden which small charitable institutions are simply not equipped to cope up. At the same time, the bad ones continue to manage/manipulate the system often with the help from pliable administration.

It appears that the magnitude of perceived misuse of voluntary organisations is miniscule in comparison to their contribution to the Nation. Part of the Union Budget 2015 documents, the Statement of Revenue Impact of Tax Incentives under the Central Tax System (Annexure 12) reveals very interesting statistics about charitable entities:

total number of electronically filed returns of charitable entities till 30th November 2014, during FY 2014-15 is 99,076, as compared to 1,06,443 in the previous year

total amount applied by such entities for charitable and religious purposes in India aggregated to Rs. 2,25,472 crore during FY 2013-14, as compared to Rs. 2,00,274 crore in the previous year

total revenue impact arising from deductions u/s. 80G, 80GGA and 35AC is Rs. 1,112.60 crore for the financial year 2013-14, as compared to Rs. 862.60 crore in the previous year.

The total amount applied towards the charitable purpose during FY 2013-14 of Rs. 2,25,472 crore, amounting to approx. 2% of the GDP, nearly matches the Government’s receipts from income-tax revenue. It far exceeds the Government’s revenue expenditure on social services such as education and health at Rs. 25,572 crore. In comparison, the tax concessions to the Charitable Entities result in miniscule revenue loss in comparison.

There is no denying that, the laws and administration applicable to this sector are in need of a complete overhaul. The Financial Action Task Force, an independent intergovernmental body, has flagged risk of criminal and terrorist abuse in non-profit organisations. The Nagpur Bench of the Bombay High Court, while dealing with a PIL case involving a Charitable Trust set up by a newspaper accused of siphoning funds collected for relief for victims of the Kargil conflict, has observed that a legislation is necessary to regulate the contributions collected and monitor their utilisation.

The Second Administrative Reforms Commission mooted a suggestion to have a uniform law for charities and trusts which the Law Ministry is reportedly working on. The TAR C too, has recommended a national database of the non-profit sector to be made available to the public indicating their activities.

The above suggestion can bring about radical changes in the regulation of charitable organisations. The online availability of the financial reports and registration related details of the charitable institutions, on the lines of the MCA portal, will help the following:

Donors will be able to check the status of their 80G registration along with their PAN , the registration under the Foreign Contribution (Regulation) Act, etc.

Greater transparency of their financials will put pressure on the non-functioning charitable organisations and provide an opportunity to take action against such institutions.

The implementation of the Corporate Social Responsibility (CSR) regulations under the Companies Act, 2013 is expected to give further momentum to the philanthropic activities. Let us hope it will also accelerate the process of online national database and bring about greater accountability and transparency about the charitable organisations.

Philanthropy is not a new concept in India. It has been an integral part of our culture and tradition for ages, with a diverse range of community-specific traditions such as Daan, Sewa, Tithes and Zakat. The Government needs to acknowledge the due credit and ensure it acts as a facilitator in channelising collective efforts of the charitable organisations.

The BCAS along with the BCAS Foundation too have been engaged in various philanthropic activities which include relief in times of calamities and campaigning for the right to information which is critical to good governance. I take this opportunity to thank our stalwart leaders who have encouraged, pushed and lead the BCAS to channelise our collective energy towards making positive changes this World.

With warm regards,
Nitin Shingala

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FROM THE PRESIDENT

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Dear members,

By the time you read this page, we would have welcomed the New Year with lots of hopes as well as resolutions. My colleagues at the BCAS join me in wishing all of you a very Happy New Year. Let us hope that 2015 will bring a lot more cheer, good health and peace to everyone, and all of us indeed succeed in our resolutions.

The year end is also the season for the experts in various fields to analyse the past trends and come up with forecasts for the new year eventhough an increasingly uncertain world makes this virtually impossible. Recent developments such as falling oil prices, tumbling currencies in emerging markets,the financial crisis in Russia and the looming possibilities of black swan events underscore this challenge.

Climate change is an important field where the world needs to analyse the trend and ensure that the forecast is not bleak. The UN Framework Convention on Climate Change proclaims that the climate change is disrupting national economies, costing us dearly today and even more tomorrow. The record for the warmest monthly global sea surface temperature has been broken three times this year. The five warmest months of sea surface temperature ever recorded have all taken place in 2014. Author Naomi Klein says, “A destabilised climate is the cost of deregulated, global capitalism: it’s unintended, yet unavoidable consequence.” Led by the UN, the world strives to stymie the impact of the climate change. The recently concluded 20th Annual Climate Conference proclaimed “Lima Call for Climate Action”, that is a step forward in the right direction even though it is perceived somewhat as a compromise.

Can accountants solve global problems like climate change and save the planet? Author Jane Glesson-White raises this very interesting question in her recent book “Six Capital”. She advocates that the seemingly endless growth that capital offers us is, in fact, limited by the earth’s resources and comes at a huge price to the planet and our wellbeing. Jane emphasises the need for the second revolution in accounting to transform corporate accounting and natural capital accounting for nations and the global economy since double-entry bookkeeping emerged in medieval Italy.

Jane insists that the familiar categories of industrial and financial capital bequeathed by the mercantile and industrial ages be broadened to include four new categories of wealth: intellectual, human, social and natural. She further argues that incorporating these new categories of capital into our financial statements and GDP figures would be the only way to address many crises that we face today. Indeed, this is a very interesting perspective that the accounting profession will need to appreciate sooner than later.

Recently, the Ministry of Finance (MoF) released the 2014-15 mid-year economic analysis report. It expresses grave concerns about India being afflicted by the “balance sheet syndrome with Indian characteristics”. Overexuberant investment in the last few years, especially in the infrastructure and in the form of Public-Private Partnerships (PPPs), has triggered this challenge. The report pegs the total of the stalled projects at Rs. 18 lakh crore hampering corporate profitability and leading to over-indebtedness in the corporate sector. As a result, the banking sector is displaying risk aversion and is increasingly unable and unwilling to lend to the corporate sector.

This MoF report also acknowledges that the above problem is further compoundedby relatively weak institutions. It states that the work on effective legal processes (the Corporate Debt Restructuring Systemand the SARFAE SI Act) that can allocate the pain of past decisions between investors, creditors, consumers, and taxpayers are in progress.

The suggested remedy of pursuing a series of reforms to de-bottleneck existing projects, reviving public investment, FDI in insurance, ushering the GST and direct transfers in place of subsidies appear to be ambitious. Let us hope that the Indian Government will be able to put behind the election fever of 2014 to bring in required reforms and move forward on the much-needed governance front.

On 19th December 2014, the Comptroller & Auditor General (CAG) tabled its report no. 32 of 2014 in the Parliament. In its audit findings, the CAG has listed 367 cases of non-adherence to various provisions of the Income-tax Act by Chartered Accountants in tax audit reports and other certificates during the financial years 2010-11 to 2012-13. The CAG has alleged this nonadherence has led to deny dues of Rs. 2,813.11 crore to the Government and has recommended putting in place a mechanism to initiate actions against erring Chartered Accountants under relevant provisions of the law.

The report lists cases such as furnishing incorrect information in respect of depreciation and amortisation, brought forward loss/depreciation, personal/capital expenditure and excess allowance of exemptions among others. The report also listed cases with names of the Chartered Accountants where the number of tax audit assignments exceeds the limit of 45 prescribed by the Institute of Chartered Accountants of India (ICAI) and has stressed on the need to strengthen the monitoring mechanism and enforce this limit.

Prima facie, the audit findings seem to be largely based on differences arising from a comparison between information in the tax audit reports and the assessment orders. Given the track record of aggressive practices adopted by the assessing officers, a detailed examination is required to evaluate the validity of the above differences and whether the Assessees have preferred any appeal. Similarly, there appears to be some incongruity in the data on the number of tax audit assignments. The numbers provided seem to include not just tax audit assignments but other certifications as well.

There cannot be two opinions about the need to take action in cases where there are lapses. However, pending detailed examination of the matter, the disclosure of confidential information containing the names of the assessees and the Chartered Accountants appears to be premature. I am sure the ICAI will take up this matter with the CAG and the MoF at the earliest, to address these issues and take corrective action.

Is there a difference between Success and Excellence? On 17th December 2014, the Society organised a talk by Shri Swami Swatmananda on “Pursuing Excellence in Profession – a Holistic Approach”. In this talk organised under the auspices of Shri Dilip Dalal Oration Fund, revered Swamiji shared the secrets of how to practice excellence in our daily life and achieve success, happiness and fulfilment. Don’t miss to go through the video recording of this lecture meeting at www.bcasonline.tv and benefit from the same, in case you could not attend the lecture meeting.

The present team of the Office Bearers at the BCAS completes six months in office on 6th January 2015. Various initiatives have been taken during this period to continue improvements in the administration of the Society. Conscious efforts are being made to make our response time shorter through the on-going staff coaching and training. Technology initiatives are being pursued to improve our reach and services. Efforts are also being made to bring about innovation in terms of the subjects and speakers at our programmes. Younger members are being proactively encouraged and groomed. I invite your feedback, comments, suggestions and contributions to ensure that we continue to take our Society to greater heights.

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FROM THE PRESIDENT

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India has witnessed an excellent equity market performance in 2014, with the combined market capitalisation of India’s publicly listed companies on BSE touching the Rs.100 lakh crore(One followed by fourteen zeros) mark during November. India now ranks 9th on the league table of market capitalisation with an increase of 39 % so far this year. By far, this is the highest growth in this year compared to the other nine countries in the top 10 list.

Even as the Indian stock market has achieved this remarkable feat, the primary market, considered as a benchmark for new capex in the economy, continues to languish. The capital raised through public and rights issues in 2013-14 by the private sector amounted to Rs.11,681 crore of which capital raised through IPO’s consisted only of Rs.1,236 crore. The comparable data for the half year ended September 2014 at Rs.4,335 crore and Rs.1,031 crore respectively, shows no significant improvement. In stark contrast, the capital raised by the private sector 20 years ago during 1994-95 was much higher at Rs. 26,417 crore even as India’s GDP has increased by nearly ten times over these 20 years.

Another worrisome factor is the very low investment inequities by retail investors. While India reports very high household savings rate of over 20 %, less than 1 % of India’s population invests in equities. The proportion of these total household savings that make it to capital market is less than 2 %.

The below par performance of the primary market remains a concern and is also a symptom of structural bottlenecks faced while doing business in India. The jobless growth witnessed under UPA-I Government reaffirms the need for structural reforms and qualitative improvement in governance to usher in sustainable growth.

A vast majority of today’s youth graduating through rote learning prefer to be job-seekers rather than becoming job-givers and compound this challenge. Even Chartered Accountants are not an exception to this. In the last ten years ending 31st March 2014, the total membership of the ICAI increased by 1,13,055, out of which 80,363, i.e., 71 % of the members opted not to obtain a certificate of practice.

Indeed, it is time for the Modi Government to accelerate the much-promised reforms. The ‘Make in India’ campaign needs to go beyond the rhetoric and ensure de-bottlenecking of procedural and bureaucratic hurdles. The Finance Minister has promised that a whole set of second-generation reforms will be unveiled in the next Union Budget.

Every year, the Taxation and Indirect Tax Committees invite suggestions from the members for inclusion in the prebudget memorandum. The response, however, has been not so encouraging. The dedicated team of committed volunteers at the BCAS burns the mid-night oil to prepare a thoughtful pre-budget memorandum and submits the same to the Government authorities. Let us hope that the new Government will give due consideration to all the suggestions received and implement the deserving ones.

It appears that most Citizens are happy to complain but do not come forth to contribute and respond to government initiatives. This is partly due to inertia and partly due to cynicism. It remains to be seen how the new initiative by Prime Minister Modi through www.MyGov.in is able to bring about a change in this attitude.

The recent enactment of mandatory voting by persons in local body elections by the Government of Gujarat has erupted into a controversy with liberals, calling it totalitarian and some lawyers calling it unconstitutional. The Fundamental Duties of the Citizen in Article 51A of part IV of our Constitution were enacted by the 42nd Constitutional Amendment Act, 1976. Experts are of the view that the constitution does not make any provision to enforce the performance of these duties. Perhaps, we need to take a revisit to this issue and strike an equitable balance between the rights and the duties of the Citizen.

At the recently concluded G20 Brisbane Summit in Australia, a major concern remained around the uneven global recovery not delivering the jobs needed. The leaders agreed to a detailed action plan, aimed at raising the global growth, to deliver better living standards and quality jobs for people across the world. They have set up an ambitious goal of lifting G20’s GDP by at least an additional 2 % by 2018.

The G20 Summit also acknowledged that corruption continues to represent a significant threat to global growth and financial stability. It destroys public trust, undermines the rule of law, skews competition, impedes cross-border investment and trade, and distorts resource allocation. The summit reaffirmed its commitment to building a global culture of intolerance towards corruption. The action plan outlined includes ensuring transparency of beneficial ownership, combating bribery through effective criminal and civil laws and enforcement, private and public sector transparency and integrity and international cooperation. The Summit also identified high-risk sectors such as extractives sector, customs, fisheries and primary forestry, and construction sectors and resolved to identify and develop international best practices to address the risk of corruption. The elaborate agenda of the G20 Summit has resulted in a compilation of a long wish list. The critics have termed the 800-plus policy proposals as a catalogue of measures that are old, vague or unlikely to be implemented and that G20 has failed to deliver on its 2010 commitments. It remains to be seen how G20 Summits travel beyond the annual sojourn and photo opportunities.

The residential programmes pioneered by the BCAS have gained immense popularity over the years. For the past several years, the residential programmes dedicated to specialised subjects such as International Tax, IFRS and Service Tax, are being organised for the targeted group of participants. Last year, the BCAS team pioneered innovation once again. Two residential programmes dedicated to specific age groups were organised-Senior Chartered Accountants’ Meet for seniors above the age of 60 years and Youth RRC for young chartered accountants below 35 years. Both these programmes received encouraging response and are being repeated in 2015 as well.

The conclusion of the annual tax filing season for AY 2014-15 brings a much needed relief to the members. It is time to enjoy the winter chill and ring in the New Year. At this time of the year, we eagerly look forward to the much coveted Annual Residential Refresher Course for learning and bonding in a relaxed atmosphere.This time the 48th RRC will be held from 8th to 11th January 2015 at the scenic Udaipur, and we look forward to seeing some of you there.

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From the President

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Dear members,

Over the last few decades, we have witnessed tremendous technological developments that have drastically improved life for mankind. The next few decades are likely to be a period of profound scientific change. The inventions once confined to the realm of science fiction are coming into common usage. A German Sociologist and Media Researcher Volker Grassmuck says, “The ultimate promise of technology is to make us masters of a world that we command by the push of a button.”

With the rise of computing and digital technology, the automation process started crossing boundaries with automation of even mental work. Authors Erik Brynjolfsson and Andrew McAfee in their book “The Second Machine Age” make a case that humanity has reached an “inflection point” for the digital age. The computers and other digital advances are doing for mental power, what the steam engine and its descendants did for muscle power. The Artificial Intelligence (AI) and machine learning technology have enabled computers to make decisions, recognise speech and visualise in 3D. The Internet of Things (IoT) that connects devices, systems, and services and goes beyond machine-to-machine communications is spreading quickly and is expected to connect nearly 26 billion devices by 2020.

A case in point is the self-driving car being developed by several companies. You could get in the car, go to sleep and wake up at your destination. With Google, Tesla, Uber and now even Apple joining the race, autonomous vehicles are predicted to be commercially available by 2020.

Such technological developments result in unintended consequences. Brynjolfsson and McAfee argue that while automation of the physical work still requires humans to be the control system, it is less clear what the role of humans would remain with automation of the control system itself. Such developments could lead to technological unemployment as there may not be another big sector of the economy to absorb all these workers.

Stephen Hawking, a well-known scientist, has warned that AI could one day spell the end for mankind and that humanity faces an uncertain future as technology learns to think for itself and adapt to its environment.

In his book “The Rise of the Robots”, the Silicon Valley-based futurist Martin Ford forecasts significant unemployment and rising inequality unless radical changes are made. In the past, technology created as many jobs as it destroyed and made people better off by making goods and services cheaper. However, this premise is no longer valid. Martin argues that increasingly the humans are becoming less and less useful compared to machines. As an example, he cites New York-based start-up Work Fusion, which sells software to businesses to automate big projects that would previously have been done by office workers. The software divides the job into micro-tasks, automates the repetitive bit then recruits freelance workers through crowdfunding platforms for tasks that require thinking. The software not only manages these freelance workers, it monitors what they are doing, but also learns from them. Over time, the software can automate more and more. As freelance workers do their jobs, they are, in effect, training the software to replace them.

A survey of nearly 2,000 experts carried out by the Pew Research Centre, reveals over half of them believe the technology will have displaced more jobs than it creates by 2025. In a recent study conducted in the UK, Michael Osborne and Carl Frey from Oxford University conclude that 35% of UK jobs were at high risk of disappearing in 10 to 20 years because of automation.

The experts foresee the job categories most at risk include cab drivers as well as neurosurgeons as driverless cars would cause lesser accidents. It will also include professionals such as taxation experts and accountants where the job involves manipulating a formulaic information. Disruptive innovation does not take kindly to entrenched competitors, and autonomous car could severely impact not only the major automakers but also ancillary and allied industries.

Is it that we are extrapolating too far based on examples such as self-driving cars? Is mankind capable of adapting to the big shifts in employment? Probably the risk to some of the professions is exaggerated as the importance of human interactions and discretion cannot be underestimated.

Many believe that greater automation would continue to raise average productivity, new sectors opening up leading to more exciting, more cognitively challenging, better paid and fewer dangerous jobs. Some experts believe that there will still be plenty of room for humans, with common sense and judgment, to complement the work of machines. The advancements such as autonomous cars have the potential to reverse the trend of global warming and drastically reduce our dependence on fossil fuels.

Individuals will need to cultivate skills such as idea generation or performing arts where humans currently have the comparative advantage. The recommendations for policymakers could include boosting entrepreneurs to enable them to invent the new industries and jobs necessary to replace the old ones and refocusing education to emphasise creativity and interpersonal skills. Thus, while the debate over philosophical and ethical aspects will continue, mankind will need to exercise intellectual discernment to contain negative fallouts of technology developments.

On a separate note, the much awaited IndAS has finally seen the light of the day. The Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Rules 2015 which come into force on 1st April, 2015. The announcement came while the 5th Residential Study Course on IFRS/Ind AS organised by the BCAS was in progress. Thus, your Society became the first organisation in India to hold a program on the notified Ind AS.

By the time you read this message, we would be busy dissecting provisions of the Finance Bill, 2015 and the Union Budget for 2015-16. The recent election results in Delhi suggest that Aam Aadmi is getting restless. It tells that no ruling dispensation can take the public for granted and let’s hope that the Government has learnt useful lessons. We look forward to the first full-fledged budget of the NDA to be a step towards fulfilling all the promises made and meeting raised expectations that puts India back on a high and all-encompassing growth trajectory.

With warm regards,

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From the President

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Dear members,

As said by Martin Luther King, Jr., “Intelligence plus character – that is the goal of true education.” This goal seems to be one of the most important challenges faced by today’s education system.

The recent arrest of now ex-Minister of Law of Delhi for allegedly obtaining fake degrees aptly highlights some of the ills plaguing India’s education. This incident also bring to fore the massive challenge of improving the education system in India. The lauded goal of “Sabka Saath, Sabka Vikas” will remain a dream otherwise.

The UNESCO in its Education Strategy 2014-2021 document states: “We live in a rapidly changing and increasingly interdependent world where knowledge and innovation are major drivers of development. This means good quality education and learning are becoming even more important determinants of the well-being of individuals, the progress of countries and the quality of humanity’s common future.”

As stated on the website of the Department of Higher Education, Ministry of Human Resource Development of India (MHRD), the number of Universities increased 34 times from 20 in 1950 to 677 in 2014. The number of colleges also registered a manifold increase of 74 times with just 500 in 1950 growing to 37,204, as on 31st March 2013. The public expenditure on education as a percentage of GDP too has increased from 0.64% in 1951-52 to 4.29% in 2012-13.

This massive increase in the number of Universities and Colleges has helped improve the Gross Enrolment Ratio (GER) in higher education to 21.1% in 2013. However, it still falls short of the global benchmarks required to join the league of developed nations. The worldwide average GER is 30% with China at 27%, Germany and the UK at 62% and the US at 94%.

Even as India has managed to achieve this significant quantitative expansion, the quality of education has been deteriorating. The Committee to Advise on Renovation and Rejuvenation of Higher Education chaired by eminent academician Prof. Yash Pal deliberated on these issues. Its report submitted in June 2009 acknowledges that mushrooming engineering and management colleges having largely become mere business entities, dispensing very poor quality education.

Various quality issues faced by India’s education sector are well-known and include:

Outdated and theoretical curriculum disconnected devoid of practical experiences, lack of vocational training
Poor quality of teachers and their continuing education
Archaic examination system that does not test required skills to be successful
Inadequate infrastructure and learning resources
Lack of student support and progression
Poor governance, management and leadership of educational institutions

The poor quality of education is aptly reflected in the Unemployment Rate of 28% for the persons aged 18-29 years and holding a degree in graduation and above as per the Report on Fourth Annual Employment & Unemployment Survey 2013-14 released in January 2015. This alarming rate of unemployment amongst the graduates is compounded further by unreported under-employment. It is reported that a large group of educated young people are becoming alienated, unable to become part of the growing middle class and frustrated by unfulfilled aspirations.

The increasing demand for quality education with supply not matching up is also triggering a rapid rise in outbound student mobility from India and resulting in the brain drain. As per “Indian Students Mobility Report 2015: Latest Trends from India and globally”, India has overtaken China in terms of growth rate in the number of students studying in foreign countries.

Ironically, it appears that no significant steps have been taken to implement the roadmap worked out by Prof. Yash Pal Committee to achieve renovation and rejuvenation of higher education. Various other initiatives such as the National Knowledge Commission set up in 2005 seems to have mostly come a cropper. It is disheartening but not surprising to note that our country, once known for world’s finest educational institutions such as Nalanda and Takshashila, does not have a single educational institution in top 200 rankings in the 11th annual Times Higher Education World University Ranking 2014.

The MHRD proclaims the following as some of the major initiatives to improve the education in India:

Right to Education (RTE)
Sarva Shiksha Abhiyan
Initiatives for girls and women
Teacher education
Mid-day meals
Vocational education
Various measures taken by the University Grants Commission including issuance of “the Mandatory Assessment and Accreditation of Higher Educational Institutions Regulations, 2012”

However, numerous news reports raise many questions about the efficacy of the above measures. The apprehensions of large-scale systemic corruption in respect of one of the most debated measures of the RTE seem to be unfortunately coming true.

In an otherwise dismal scenario of higher education, the IITs and IIMs appear to be the only bright spots and their claim to quality and excellence is globally accepted. Of late, even these institutions have been surrounded by avoidable controversies and the Government must take steps to protect and strengthen them.

The Education Strategy 2014-2021 document of the UNESCO referred above puts significant emphasis on technology to support cost-effective delivery of both basic and higher education, widens access, improves quality and aids in teacher training and professional development. It refers to the growth in open educational resources (OER) and free online courses by universities and institutions of technical and vocational education and training dramatically changing education. The massive success of the free online platform of the Khan Academy’s channel on YouTube is a case in point. Salman ‘Sal’ Khan, the Founder of the Khan Academy, has been named as the most influential person in education technology by the Forbes magazine.

The education system in India is in dire need of such cost-effective solution to bring quality education within everyone’s reach. Let us hope the policymakers will deliberate on how to exploit better the potential of the Information and Communication Technology in bringing significant improvements in this field.

In our profession, it has been a matter of pride that the CA education lays a considerable emphasis on practical training. Unfortunately, the evolving structure of the CA examinations with an excessive emphasis on rote learning through intensive coaching classes seems to have eroded the importance of the practical training. The exams are perceived to be more a test of memory than a test of the student’s understanding of fundamental principles.

In recently concluded IPCC exam in May 2015, I was astounded to see an example of the test of memory. Here, the students were asked to explain the conditions and the manner in which a company may issue depository in a foreign country under the Companies (Issue of GDR) Rules, 2014! I could not understand the objective behind asking such a question about a detailed procedure in respect of a completely new law to a student not yet exposed to any practical training. I believe even a qualified CA could not have answered such a question without reference material.

Let us hope the ICAI takes into consideration various comments and suggestions, including from the BCAS, in respect of the New Proposed Scheme of Education & Training announced in February 2015 and its reported move towards open book exam from 2017 brings about a much-needed improvement in the CA education as well.
Friends, this is my last communication with you as President of this august organisation. It has been an honour, privilege and labour of love to have been able to communicate my ideas, thoughts and views with all of you. I hope that I have done justice to the responsibility bestowed upon me. As always, I do look forward to your frank feedback and comments.

By the time this issue of the BCAJ reaches you, my friend Raman Jokhakar will have taken over reins as the next President of the BCAS. With young and energetic Raman at the helm, I am sure various initiatives to rejuvenate the BCAS will gain further momentum. I wish him, the new team of the office bearers and other members of the managing committee for 2015-16 all the very best for a fulfilling and successful year.

FROM THE PRESIDENT

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Dear members of THE BCAS family,

As I sit down to write my last communication with you as the President of the Society, I have only one feeling – a feeling of utmost satisfaction. I have thoroughly enjoyed the privilege of communicating with you. Your response, feedback and critique have motivated me to air my views freely and frankly. On my part, it was a conscious decision to not reproduce ‘society news’ and more importantly, not to try and sound like an expert on a host of topics, most of which I know precious little about. Instead, I have used this medium of communication by sharing with you my thoughts in, what I would like to believe, a responsible manner. I thank the Publisher, Mr. Narayan Varma and the Editor, Mr. Anil Sathe for giving me a freehand.

You may wonder why I need to thank someone for the ‘freedom of expression’ accorded to me. Isn’t this my fundamental right? What’s the necessity to be thankful for something I was born with? But certain events of the recent times have left me wondering if this freedom of speech and expression could really be taken for granted.

For lack of any other index or benchmark, consider this – as per the 2013 World Press Freedom Index, India ranks a miserable 140th, out of the 179 countries on the list. Going by the number of books banned in India (example: The Satanic Verses), the number of art galleries vandalised (example: M F Husain’s paintings), the number of scholars condemned (example: Ashis Nandy) and the number of films censored (example: Ram Leela), it seems to me that the freedom of expression is not as much a right but a rare and precious privilege. In today’s times, when even the posts, likes and sharing on Facebook has met with dire consequences (example: Pune incidents), responsibility in using this privilege is the need of the hour.

I have often been plagued by questions on this fundamental right. What about you? Have these incidents irked you? What views have you formed from this? Is freedom of expression an absolute right? What does the law on this say? Is it a right that must be used at all times? Must one exercise every right just because it exists? Should one be tolerant to another’s views? My views have evolved over time and the evolution still continues.

We all know that Article 19(1)(a) of the Constitution of India, 1949 guarantees the freedom of speech and expression. But how many of us know that there are exceptions to this freedom? Anything that affects the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order or decency and morality or relates to contempt of court, defamation or incitement to an offence, is prohibited. While most of these are unambiguous enough, there are a few grey areas, viz., public order, decency and morality.

The standards of decency and morality vary from time to time, place-to-place and person-to-person. At times, the greatest of issues go unnoticed while in other cases, the slightest provocation is enough to create a law and order crisis. I will admit, I am sometimes tempted to shout out to get heard, if only to vent frustration. Giving up my fundamental right of freedom of speech looks like a big thing then. But then, I wonder about the possible consequences. By speaking my mind, am I spreading hatred, creating animosity, causing harm to life and property and general mayhem? If so, then must I exercise restraint?

What wouldn’t we give for people to be tolerant and respectful of our right to say what we feel! But for that to be possible, we must first educate ourselves. If we want the right to speak, then we must also fulfill our duty to hear views which are divergent from ours. If we don’t agree with an ideology, let us learn to fight back with reason and not power. Let’s learn to attack the ideology and not the person. Alas, this isn’t the situation presently. Till the society matures, we will have to use our judgement and discretion on what we say out loud.

If I were to do a cost-benefit analysis of exercising my freedom of expression, here’s what I will ask: What do I achieve by speaking my mind? If my saying something wouldn’t impact the situation, will it affect anyone else? Will that effect be positive or negative? If it wouldn’t affect anyone else, will it help me in any way? If the good coming out, using my freedom of expression outweighs the bad, nothing in the world could, or should, stop me from saying what I feel. But if not, then I need to step back. As they say in Gujarati “Na bole nav gunn”.

Like me, all of us would be coming across such situations daily. What we forward or like on Twitter, WhatsApp and Facebook, all in the name of humor, has so much potential to cause discord. We ridicule communities by labeling them dumb, stingy and what not. We involve religious leaders/figures in our jokes. We forward half truths, unconfirmed ‘news’ and help spread fear and falsehood. What’s the good that is achieved?

Before I start sounding too preachy, let me however highlight that this phenomenon is not peculiar to just our country. Almost all democracies face this dilemma. Boycotts, fatwas and excommunications are rampant all around. Let us work towards creating an environment where all are free to speak their minds. Let’s educate ourselves so that we can identify and distinguish a mischief monger from amongst us and either let law take its course or ignore him completely as a non-serious person. Let’s abhor violence or taking law in our hands.

Over the last year, I have tried to air my views. I have tried to cover a wide range of topics, all with the intent of promoting a debate and hearing views different from mine. Fortunately, I have the satisfaction of succeeding in that. Your responses to my communiqué have been overwhelming. To those who encouraged me, thank you. To those who disagreed, I respect your views. As Voltaire said, “I disapprove of what you say, but I will defend to the death your right to say it.” And If I have ,despite having no intention to do so, hurt anyone’s sentiments or sensibilities, I offer my apologies.

I thank you all and hand over this space to the incoming President, Nitin Shingala. I am sure you will give him as much love and affection as I received from you. Communicating with you has become a habit and I will miss you all.

Here’s wishing everyone happiness and love.

With Warm Regards

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FROM THE PRESIDENT

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Dear members of BCAS family,

Appearing for any of the CA exams? I am not going to wish you luck, for I don’t believe in luck. Let me instead extend my congratulations to you for choosing this profession. It is one of the most respected, versatile and lucrative professions. I say this with confidence as I have received all this thanks to my being a CA. This profession has given me a solid grounding. It is not superficial. Thanks to the hours put in for the exams, I have proved to myself that I can work very hard if the situation calls for it. A very important aspect in my future career. All the juggling that we, as CA students, have to do between the library, coaching classes, office and then yet being socially active, teaches us the need for planning and prioritising. This is something that all successful people do all the time. It is thanks to the solid grind that this profession has given me, which encompasses self-study, articleship and tough exams, that I have benefitted a lot. That’s the power of the reputation of this course.

But for me the most important gain was the in-depth exposure to the businesses of my clients during articleship and thereafter. While the curriculum gave me financial acumen, I learned commerce from client interaction. This came in good stead when I headed business units for an MNC. Today, CAs can be seen in all walks of life. “Versatile CA” as the BCAS calendar for this year says. Mr. Nandan Nilekani – in politics and in the legislature, Mr. Shekhar Kapoor – in the film industry, Mr. Deepak Parekh -in the banking industry, Mr. Prannoy Roy and Mr. Ronnie Screwvala – in the media, to name a few. All these luminaries are CAs.

All of them went through the same rigmarole as I did and now you will. They had a dream and so do you. They worked hard and smart at the same age as you all are today. Are you willing to work hard too?

Recently we had Mr. Nilesh Vikamsey speak to over 400 students on how to study for the exam. He gave some excellent practical tips and tricks. The video is available on BCAS WebTV. Please do view it.

My daughter is appearing for her IPCC this May. As a father, I am pained to see her put in so many hours preparing for her exams. I am aware of so many parties, outings and other programmes she gives a skip. She doesn’t show it but I am sure she must be sad and somewhere deep down has doubts. Both, on whether she can clear her exams and whether all this is worth it. Fortunately, I am a CA and having gone it through myself, I know exactly what her state of mind is. But seeing her toil so much, much more than I did, I am confident she will triumph. If it is of any solace, let me tell you that sadly every CA student goes through this state of mind. And when you clear the exam all that is forgotten. You walk taller.

Hard work never killed anyone. But hard work has a pattern. Our bodies are designed to withstand hardships when we are young and healthy. With age, your ability to work hard diminishes. The smart people recognise this and put in as much hard work in their younger age and reap benefits of that as they grow older. Even if you want to one day at the age of 50 decide that now you will work hard, your body will not support you. So while you could and had no need, you didn’t and when you needed and were willing, the body failed you. Think what is smarter.

That doesn’t mean that it should be all work and no play. But what is the right balance? Should play be a reward for all the hard work or should hard work be a filler between the partying? If you take the 16-17 hours of your waking time, how much of these can be devoted to studies? Are 9-10 hours too much? The average hours put in daily by a working individual are over 10 hours. The really ambitious ones do this and more, easily and happily. Take any successful person as an example. Would Sachin Tendulkar have been the world’s best and most revered cricketer if not for the hours of practice he put into the sport at a very young age? At the start of his career, Shah Rukh Khan slept on the streets of Mumbai and worked day in and out to now become known as the King Khan. Till date he is reputed to be a workaholic. Dhirubhai Ambani was born in a middle class family. He made the famous Ambani family. He started working towards his goal from a very young age.

If you are appearing for the exams this May then you have already dreamt of being a CA, invested some time in either self-study or attending coaching classes, many of you even cleared IPCC and started articleships. But you have developed self-doubts; confidence is wavering, frustration setting in. Right? This is no time for such emotions. I urge you to not give up now. In fact, give it your best. Study like you have never studied before. Work hard. Take care of your health. Indulge in your favourite activities to refresh your minds. Eat well. Sleep well. Hug your parents. Pray not for results, but the ability to work hard. Assume the results will be just 3% again and believe you will be part of that 3%. Go watch Chak De! again. Watch that motivational speech again and again. He who perspires in practice bleeds not in war. If you dream of heaven, be prepared to die for it.

May I request all my CA friends reading this, to convey this message to their article students in their office and outside.

I once again compliment all the students. Yashasvi Bhavva.

Here’s wishing everyone happiness and love.

With Warm Regards
Naushad A. Panjwan

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FROM THE PRESIDENT

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Every one of us eagerly waited for and watched Prime Minister Narendra Modi’s historic address to the Nation from the Red Fort on our 68th Independence Day. Over the last several years, a major ailment that has afflicted the vast majority, especially the educated middle class, is corrosive cynicism, as pointed out by the noted thinker Pratap Bhanu Mehta. He berated that the cynicism had become a self-fulfilling prophecy. Few believed anything could change, and so little changed. With this exhilarating address, the Prime Minister reinforced a much-needed hope that things can and will certainly change. The Prime Minister has rightly exhorted the Citizens to shed the attitude of “Mera Kya” and “Mujhe Kya” and contribute to the Nation building. This inspiring address will go a long way in helping the Citizen overcome the cynicism. Let us be a part of the change instead of remaining shackled as an argumentative Indian.

In this address, the Prime Minister raised an important and extremely critical issue that has been largely unaddressed in Independent India. An all pervasive filthiness has plagued large parts of our beloved country. A search on Google reveals millions of web pages full of articles about filth in India with nasty comments that make us feel deeply ashamed. Some critiques also allege that Indians by nature are unhygienic! The then environment minister Jairam Ramesh went to the extent of saying that if there was to be a Nobel Prize for dirt and filth, India would get it.

It has come as a pleasant surprise that the topmost leader in independent India is leading from the front in the combat against this menace of filth. Given the magnitude, this push coming from the highest level was perhaps overdue. As rightly stated by the Prime Minister Modi, the solution requires whole-hearted participation from every single Citizen of India. Mahatma Gandhiji made cleanliness an important priority in his ashrams, teachings and writing. He gave us the golden quote “Cleanliness is next to Godliness” He also said “…a meticulous sense of cleanliness, not only personal, but also in regard to one’s surroundings is the alpha and omega of corporate life”. Indeed a Clean India will be the right tribute to Mahatma Gandhi on his 150th birth anniversary in 2019. Let us all commit ourselves to this noble cause and contribute our mite to it.

It is not just physical space, the way society conducts itself has been affected by this filth. Corruption has enhanced the decline in ethical standards. Various institutions and organisations too have been afflicted by this malaise of corruption. They are in need of urgent clean-up as well. A case in point is recent revelations exposing corruption in Judiciary by Justice Katju in his blog. This has created a storm and triggered a debate about one of the most important pillars of our democracy. In reply to allegations that exposing corruption defames the judiciary, Justice Katju has rightly asked: does corruption by Judges defame the judiciary, or does exposing such corruption defame it? Hitherto, the response from the custodians has been largely to brush such issues under the carpet.

Going by the well-known quote by the U.S. Supreme Court Justice Louis Brandeis, “Sunlight is the best disinfectant” from his book “Other People’s Money, and How the Bankers Use It” published in 1914, such open forum discussions will certainly help in the clean-up process. Incidentally, Justice Brandeis, while being a counsellor to President Woodrow Wilson, continued his investigations of the implications for democracy of the growing concentration of wealth in large corporations and set down his anti-monopoly views in this book that remain relevant even 100 years after it was first published.

In this season of being candid and forthright, the RBI Governor Raghuram Rajan, while delivering a lecture last month, expressed his concerns about crony capitalism. It was an admission that allegedly the rich and the influential have received land, natural resources and spectrum in return for payoffs to venal politicians. He lamented on how the vicious circle has perpetuated, whereas the poor and the underprivileged need the politician to help them get jobs and public services. The crooked politician needs the businessman to provide the funds that allow him to supply patronage to the poor and fight elections. The corrupt businessman needs the crooked politician to get public resources and contracts cheaply. And the politician needs the votes of the poor and the underprivileged.

The Governor suggests direct cash transfer instead of the promise of free or cheap public service as a solution to this problem. He believes that the financial inclusion and direct benefits transfer can be a way of liberating the poor from dependency on indifferently delivered public services, and thus indirectly from the venal but effective politician. This new approach seems ambitious and puts faith in the market economy. Let us hope that this innovation will eliminate corruption, reduce poverty and drive India towards true political independence.

As per the Annual Report of the Ministry of Finance for 2013-14, the gross non-performing assets (NPA s) of the public sector banks (PSBs) increased from Rs.1,55,890 crores (GNPA Ratio 3.84%) in March, 2013 to Rs.2,04,249 crores (GNPA Ratio 4.44%) in March 2014 (provisional). The Ministry reasons that the increase is due to sluggishness in the domestic growth in the recent past, slowdown in the recovery in the global economy and continuing uncertainty in the global markets. The recent arrest of the Chairman and Managing Director of a Public Sector Bank, however, suggests that growing political and bureaucratic interference in governance of the PSBs that has led to corrosive corruption is perhaps the major factor behind increase in the NPA s.

It seems that no lessons have been learnt from past episodes of such scandals and consequent bailouts. Bank finance is one more area that is in dire need of a clean-up. The debate is on as to how to improve the quality of governance in banks. Various suggestions are pouring in. However, the most effective remedy lies in stern and timely actions against the highly connected perpetrators without fear or fervour. While addressing recent meetings in Haryana and Maharashtra, the Prime Minister has termed corruption as a “disease and sin” deadlier than cancer and reiterated his Government’s commitment to banishing it from the country. One hopes these statements will translate into concrete and quick actions and help change the reality on the ground.

On the BCAS front, the new committees are lining up a slew of activities. The Human Resources Committee with the help of the Youth Brigade has planned a very ambitious program “JhanCAr”, a “Togetherness and Networking Carnival” for Chartered Accountants on 13th and 14th December, 2014. Do go through the announcement and look for further details of this very exciting event.

By the time this message reaches you, we will be celebrating the Teachers’ Day on 5th September. Our profession requires each one of us to be a student as well as a teacher and hence this day is special for us as well. I fondly remember all my Gurus, including my principals and seniors during my articleship and at the BCAS, and offer my deepest respect to each one of them. When we remember our great teachers, we should also think of how we should be a good teacher and mentor to the younger generation and be remembered for having inspired them and bringing positive changes in them.

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From The President

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Dear Members,

The curtains have finally come down on direct tax and corporate law compliance season of FY 14-15. I hope that with the work season cooling down, the weather turning cooler, you all will have some time to relax, reflect and rejuvenate.

Cause for concern
Terror struck again. Since a major city was the target, it caused major furore. A wave of intolerance rhetoric also took centre stage in parts of the media. As intellectuals, we are trained to separate substance from form. It is time for us to pause and assess and see what really matters to us and what difference we can make. My personal understanding is this – anything that creates DIVISIONS will eventually result in CONFLICT. Although human race has amassed tremendous amount of knowledge, we remain fragmented and insecure to the extent that we still kill fellow humans1. Yes, the situation is grim and therefore requires concerted EFFORT . In context of the Paris event, the Dalai Lama put the responsibility on us, saying, prayers will not help, and people should not expect God to sort out the problems created by humans. It is the responsibility of each of us that every division, especially in our minds, is challenged, tested and left only in its right place.

Menace of unemployment
Last month I wrote on unemployment. This is actually a ticking time bomb. With a large unorganised sector (85% of workforce) and data about it not captured adequately, issues get further magnified. Three problems – unemployment, unemployability and the sheer numbers, pose a challenge.

The last Economic Survey of India brings out some startling statistics. No major state in India has achieved more than 6.2% employment from registered manufacturing in last 30 years2 . It further talks about declining industrialisation. Productivity is lowest in unregistered manufacturing and therefore the prospects of its transformation are grim. Although, the returns on education are increasing, the supply of requisite education is ‘notoriously inadequate’. According to government figures, fewer than 5% of India’s 487 million workers have received any formal skills training. In other industrialised countries, this figure is closer to 60%. Add to that the trend of automation and robotics in every manufacturing sector, which can eventually shift the manufacturing bases back to where the markets are. On the other hand, global demand is waning, industrial overcapacities remain bloated. These could prove to be strong challenges for the ‘Make in India’ program.

Chasm between the underprivileged and the wealthy
Juxtapose this to the findings of a recent research report3. 1% of Indian population holds 53% (36.8% in 2000) of the country’s wealth and it will continue to head in that wrong direction. 10% of Indians own 76% (65.9% in 2000) of nation’s wealth. The lower half of the pyramid owns only 4.1% (5.3% in 2000) of the country’s wealth. Even though in the last 15 years, the increase in absolute value of wealth was $2.284 trillion, the top 10% took 81% of it. Unless we deal with this riddle with rapid, simple, and out of the box approach, reversal of this trend could remain a mirage.

Regulators & Regulations
Your Society was invited to meetings with the Mumbai Income Tax Department and RBI. The Tax department has launched e-Sahyog which is being popularised and the members are requested to look up for more data on the portal of the department. The RBI is going digital for certain FDI filings such as FC GPR, FC TRS etc. If the stakeholders, participated well we might see mandatory e-submissions of these RBI forms soon. Even at present, you can file them through EBiz portal.

A special mention must be made about the announcement by the Prime Minister on performance appraisal system in which weightage will be given to a deadline bound quality assessments by the Income Tax Department. With this, the regular assessments of both assessees and officers will eventually become balanced and fair. The PM also spoke about online assessments becoming a reality. Some of this has already begun in northern suburbs of Mumbai, we are informed.

With Bihar election results, the government will be pushing harder for faster reforms. Some recent steps include – committee formation, with a short timeline, to suggest simplification of tax laws, invitation of comments on ICDS implementation, consensus building on GST bill passage, amongst others.

Your Society and Profession
I am sure that each one of you will go out to vote for ICAI elections. The voter turnout in the last election was not befitting the stature of our profession. The challenges before the profession are serious and several. The ICAI recently posted a letter on its website regarding an issue created about appearance by CAs before the tax authorities. These amongst others, are serious challenges faced by the entire profession. A strong, wise and sound Central Council is what we need.

I hope each one of you will be as active as you can, if not already, and write to the Council about your dreams, expectations and what you are willing to work for. I wish to share a few expectations:

1. Technical consultation and discussions on key technical matters be recorded and placed in the public domain. This will serve all stakeholders, show case the technical inputs from various participants in standard setting, and bring about inclusion, transparency and confidence.

2. Further attempts be made to up the competencies of the CAs to a much higher level in both Technical and Ethical spheres. True and long term branding can only come from how a CA performs on the ground. Competence and Credibility alone will create a better image of the profession and ICAI can be an enabler, but it’s a two way street.

3. E nd the CPE monopoly and make it broad based. We all know that today even if you took a course at an IIM or at Harvard, they will not be eligible for CPE. In spite of so many other courses being equivalent and relevant to individual professional education, they are delinked from CPE. With passage of time, such mechanism does not sound reasonable, contemporary and congruent with international best practices.

Your Society has put a new material on its website in the free section. Paper books from past Residential Refresher Courses, Residential Study Courses and other study material is now on the website of the Society. We have put several videos on You Tube channel of the Society. Please subscribe (free) to BCAS You Tube channel and receive update on your email as soon as a new video gets placed there.

Although Diwali and Indian New year just got over, Gregorian New Year holidays are only a few weeks away. Every holiday season calls for giving. For giving makes our consciousness expansive. In the Indian tradition there is a beautiful verse, a thought that brings down every division. May I leave you with its message that we all need every day of the year 2016:

The one with a constricted mindset considers some
to be his own and others to be not. Whereas, the one
with an expansive consciousness considers the entire
Universe as his own family.
Wishing you a Merry Christmas and a Happy New Year!

From the President

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Dear members of BCAS family,

Chai-Chunauti-Chunav

By the time this President’s page reaches your desks, the bulk of the voting would have been over and post counting on 16th May 2014, we will all see round two of this long winding tamasha. Horse trading will begin if no clear majority emerges. But that’s another story. All of us were so caught up with this well-orchestrated frenzy that talking about anything else was just not possible. We have done our bit by voting. Now, it’s out of our hands. Phew! But this message is not about that.

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Our Government consists of three branches; the Executive, the Legislative and the Judiciary. According to the Constitution, the Legislative branch is to make the laws, the Judicial branch is to review the laws and make sure that they are Constitutional, and the Executive branch is to enforce the laws. We have all seen and read a lot about the current state of our Executive and the Legislative. I haven’t read much about the Judiciary. By the 73rd and 74th amendments to the Constitution, the Panchayat Raj system has become an institution for local governance, which makes our Judiciary very unique. We are all aware about the statistics of the pending cases, the pace of the discharge cases and many other issues that fraught our legal system. A Judicial Reform is the next big leap in our evolution that we are all waiting for. But this message is not about that.

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My message is about the emerging role of the Supreme Court (SC) in India. But before I progress, a few disclaimers:

1. These are my personal views and not that of the Bombay Chartered Accountants’ Society.

2. In the unlikely event of this message causing any kind of legal or other issue, the Editor of this journal be completely absolved of any repercussion.

3. I have the highest respect for our judiciary, in particular the Supreme Court.

4. Contempt of Court is not intended. As we all know, according to the Constitution, the role of the Supreme Court is that of a guardian of Constitution and that of a federal court. The Supreme Court has extensive original jurisdiction in regard to the enforcement of the fundamental rights. The Supreme Court also has the power to take cognisance of matters on its own.

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The SC has come a long way since then. It has been playing an exemplary role in our democracy in discharging its constitutional duties. Nature abhors vacuum and hence, in recent times, time and again, we have seen that the SC has gone beyond deciding on the legality of a case. Many judgments have preambles which are ‘sermons’ to the Executive, Legislative or the society. Here are a few examples of such recent judgments which were sent to me by my friend CA. Anup Shah (he is an unwitting partner to this and he too maybe absolved).

1. Sahara’s case: the Court has placed Subroto Roy under its custody and is personally monitoring the repayment schedule proposed by Sahara.
2. Black Money / Liechtenstein Bank Accounts Case – the Court has again pulled up the Government for failing to reveal the names of all Liechtenstein Bank Account Holders.
3. 2G Case – Spectrum Allocation Case was personally monitored by the Apex Court.
4. Open Spaces in Mumbai –6 mt. wide open skirting around building projects and minimum 10% of project to be kept open to the sky.
5. Lal Batti – The Supreme Court slammed the indiscriminate use of the Red Beacon on Cars.
6. Vishaka’s Case: The Supreme Court laid down the law on Sexual Harassment in the absence of any legislation on the subject at that time.

One respects all the judgments and most of these sermons. But doesn’t this reek of Judicial Activism? Black’s Law Dictionary defines judicial activism as a “philosophy of judicial decision-making whereby judges allow their personal views about public policy, among other factors, to guide their decisions.”India has a recent history of judicial activism, originating after the Emergency which saw attempts made by the Government to control everything, including the judiciary. During the emergency period, the Government passed the 39th Amendment, which sought to limit judicial review for the election of the Prime Minister. Subsequently, the parliament, with most opposition members in jail during the emergency, passed the 42nd amendment which prevented any court from reviewing any amendment to the Constitution with the exception of procedural issues concerning ratification. A few years after the emergency, however, the SC rejected the absoluteness of the 42nd Amendment and reaffirmed its power of judicial review in the Minerva Mills case (1980). Another example of activism is the Public Interest Litigation which was an instrument devised by the courts to reach out directly to the public, and take cognizance though the litigant may not be the victim. Suo moto cognisance allows the courts to take up such cases on its own.

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The original intent was that the three branches would be able to check and balance one another so that no single branch would be able to claim too much power. And this balance is sought to be changed time and again. At times the SC takes on the Legislative (Eg: drafting the Vishaka Guidelines) and the Executive (Eg: taking Subroto Roy in the SC custody) roles. The SC can uphold or overturn decisions of all lower courts. This highest of courts can make decisions that cannot easily be overturned. But the Legislative tends to reign supreme and the retrospective amendments post Vodafone judgment is an example of how the Government of India, instead of accepting the SC verdict, made retrospective amendments in the Incometax Act to nullify the effect of Vodafone’s case.

The trend has been supported as well as criticised.The New York Times author Gardiner Harris sums this up as “India’s judges have sweeping powers and a long history of judicial activism that would be all but unimaginable in the United States. In recent years, judges required Delhi’s auto-rickshaws to convert to natural gas to help cut down on pollution, closed much of the country’s iron-ore-mining industry to cut down on corruption and ruled that politicians facing criminal charges could not seek re-election. Indeed, India’s SC and Parliament have openly battled for decades, with the Parliament passing multiple constitutional amendments to respond to various SC rulings.”

We are glad that there is at least one wing of the government which has a conscience and has the courage to act upon it.Having said that, this trend is neither intended nor desired. If each wing of the government discharged its role diligently then this debate and tussle would not arise. We need the courts to discharge their primary duties, an area where there is a lot of scope for improvement. The vast number of pending cases is an area that needs highest attention. If the courts get distracted by activism then this issue will only get more severe. Justice delayed is justice denied.

Errata: In my previous communique I erroneously referred to Mr. Nandan Nilekani as CA. Correct examples would have been Mr. Rahman Khan,
Mr. Suresh Prabhu, Mr. Piyush Goyal and Mr. Harish Salve. I thank my friend Narayan Pasari for pointing out this error.

Here’s wishing everyone happiness and love.

With Warm Regards
Naushad A. Panjwani

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From the President

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Dear Fellow Members,

As I write this first ‘From the President’, I am filled with a sense of humility and honor. It is a singular honor for a third generation member of the Society to write these pages as its 67th president. As my team considers the road that will unfold before us, I am well aware of the diversity of the BCAS membership and our credo to serve members with the best possible learning events and tools.

At the Society, we have based our theme on three words – Learn, Share and Grow. The next 12 months are bound to be professionally stimulating ones, with Ind ASs, GST, Income Computation and Disclosure Standards, the Black Money Act and Internal Financial Controls amongst other topics taking shape. BCA Journal, as always, will cover those topics through articles and features.

When you receive this Journal it will be August, a month when we celebrate our 69th Independence Day. For some of us who grew up without any sacrifice to win independence, do not know and cannot feel enough of what it is to live in a nation that is Independent of foreign rule. It is never enough to look back and understand what foreign occupation does to a civilization.

When the British arrived in India, our share of the world Economy was about 20%, and when they left it was less than 4%. India was governed for the benefit of a few million British or even few hundred Englishmen. In fact, Britain’s rise was financed by India. That was not it though! The entire fabric of India’s strength was attacked in 150 years of colonisation. The weavers, the artisans and the tradesmen, whose products were sought after across the globe, became beggars. From being an exporter of goods, India became the world’s biggest purchaser of British goods. Indian taxes were used to pay British civil servants and running the government machinery that oppressed the Indians and benefited the British private enterprises.

The impact on collective social capital was even bigger. This invasion was of a higher order, an invasion on our mindset and fundamental values. For example, the colonial rule brought an education system that was perhaps diametrically opposed to India’s own temperament. It projected Europe as democratic and progressive, and on the other hand, they pursued a systematic condemnation of Indian culture, traditions, crafts, cottage industries, and social institutions. Anand Coomaraswamy, the famous art critique writes:

It is hard to realize how completely the continuity of Indian life has been severed. A single generation of English education suffices to break the threads of tradition and to create a nondescript and superficial being deprived of all roots—a sort of intellectual pariah who does not belong to the East or the West, the past or the future. The greatest danger for India is the loss of her spiritual integrity. Of all Indian problems the educational is the most difficult and most tragic.

A form of that colonisation still continues in our present rote learning based education system and socialistic pattern. Consider, delegitimizing business class in a pseudo socialistic pattern adopted post 1947. However, nearly 50% of GDP comes from unincorporated or informal sector and about 15% from corporate sector, (listed companies being only 5%). Most of these smaller, independent enterprises are really the cornerstone people’s dignity and self-sufficiency. But the media remains focused on this small segment of listed entities, flashing them in news and giving an impression that they are the barometer of our progress.

In the last 68 years, we have not overcome all our problems, we have even created some. As a nation we perpetuate racial, ethnic, religious, narrow minded whims and bad governance. Yet, we have come a long way – we developed indigenous missile technology, our scientists sent a spacecraft to Mars at a cost lower than that of a Hollywood movie, our communities uplift their fellowmen out of deprivation, family values still hold good, we are a surplus food grains country, our banking system opened millions of bank accounts in just a few months, Indians living abroad sent more than $70 billion in 2013-14 which is more than the total FDI inflows.

On 15th August, we celebrate this socio culturally unique phenomena called INDIA. It can neither be run as a market economy nor through a socialistic policy. We have poverty, but we are not poor, we are tolerant, but aren’t weak. Workers may not have a degree, but have skills. Whether you are a Chartered Accountant sitting on the 16th floor office or living in a village cooking from a bio gas stove, slowly but firmly colonisation of our mind is ending. We are BELIEVING that TOGETHER we can be a developed nation. Paradoxes don’t stop us from marching on in our common journey with greater youthful confidence.

Gurudev Tagore, in his immortal prayer, portrayed a dream of a new and awakened India in the most exquisite and heartfelt way. Reading it even for the 100th time, still gives me goose bumps. I leave you with it:

Where the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards perfection
Where the clear stream of reason has not lost its way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father,
let my country awake.
Jai Hind!!!

PS: The 11th President of India Dr. A. P. J. Abdul Kalam, the missile man, suddenly took off and crossed the mortal orbit. He lived and passed away on the wings of fire. He set so many young Indian hearts on fire. He said, “If you want to shine like a sun, first burn like a sun” A true son of the soil, a people’s president, Dr. Kalam ko Salam.
levitra

FROM THE PRESIDENT

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Dear members of BCAS family,

I am a movie buff. I remember dialogues and songs of more movies than most of you would remember case laws. (Okay, barring the likes of Pranav Sayta.) And hence, when I read some news or see some incident, either a relevant song or dialogue pops up in my mind. Take for example these two news items in January:

1. Posco steel plant, India’s biggest FDI, gets environmental approval

2. Cairn India under income tax lens over share sale

I am visualising a scene from old Hindi movies where the villain will brag “yahan log aate toh apni marzi se hai, par jaate hamari marzi se hai”. It is so frustrating to see that the same government stalling clearances on environmental grounds for eight years, grants clearances overnight when the minister changes. Did the environmental norms change overnight or the compliance occurred overnight? Is FDI welcome in India when the country needs it or is FDI welcome when the political compulsion sets in?

Someone please tell me this was done for the good of the economy and not with the polls in mind.

On the other hand were the events regarding Vodafone, Nokia and Shell not enough that we now have Cairn’s disinvestment coming under tax scanner? Are multinationals easy preys to meet huge deficits in tax collections? Why bother improving tax administration machinery? Why bother with tax defaulters who get away with bribery? Go after honest tax payers. Make frivolous additions. Disallow genuine expenses. Apply absurd interpretations and deny exemptions and deductions. Raise demands. If all that is not enough then hold up genuine, legitimate and in many cases, much needed refund.

Someone please tell me this was done for the good of the economy and not with the polls in mind.

Take another front page headline:

Currency notes issued before 2005 to be withdrawn post March 31: RBI

This reminds of another villainous dialogue “Hum toh doobenge sanam, par tumko bhi le doobenge”. The reason attributed for the withdrawal of pre 2005 notes is that it could counter black money and help weed out fake currency circulating through the system. Noble. Laudable. Much needed. But look at the timing. At a time when it is more than apparent that the odds of winning these elections are tilted against us, how do we make it difficult for them to win? Attack their poll contributors.

Someone please tell me this was done with a motive for the good of the economy and not with the polls in mind. “There have been issues like regulatory clearances but government realised and we have started working on those areas. Many clearances have been fast tracked. There are further reforms, including some structural reforms, in the pipeline.” – Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Sir

“Bahut der se dar pe aankhein lagi thi, Huzuur aate-aate bahut der kar di.
Maseeha mere toone beemaar-e-gam ki , Dava laate-laate bahut der kar di”

As a citizen I am happy that finally we are back to doing business. But I cannot help rue the fact that we did digress. We did derail. We did not do business. We indulged in politics. We did not even do welfare. We did politics. We didn’t do governance. We did politics. We lost steam. We frittered opportunities. We did politics.

Someone please tell me this was done purely for the good of the economy and not with the polls in mind. But to be fair, it is not just the UPA playing politics. Every party is beating their war drums as a build up to the ensuing elections.

“India’s main opposition Bharatiya Janata Party (BJP) is considering a measure to scrap, or reduce, income tax”. Isn’t this a plank in an election manifesto designed to win over crucial middle-class and urban voters?

Free water, electricity, LPG and much more promised by all and sundry.

Minority statuses, Wars with neighbouring countries and Abolition of babudom by some.

The stakes are high. The spoils are aplenty. The bounty too large. The power too alluring. The greed for power too high. The interest of the nation secondary.

“Yeh Mehlon,Yeh Takhton,Yeh Taajon Ki Duniya,
Yeh Insaan Ke Dushman Samaajon Ki Duniya,
Yeh Daulat Ke Bhookhe Rawajon Ki Duniya,
Yeh Duniya Agar Mil Bhi Jaaye Toh Kya Hai.”

Someone please tell me all this is being promised purely for the good of the nation and not with the polls in mind.

There is a silver lining in the sky. There is light at the end of the tunnel. There is hope in my heart. By 2020, India is set to become the world’s youngest country with 64 per cent of its population in the working age group. In the ensuing elections, there will be about 15 crores first time voters. As a proportion, this works out to about one-fifth of the total electorate of 73 crores estimated by the Election Commission of India. These young adults would be anywhere between 18 and 23 years of age.

These voters are surely not going to be swayed by dynasties or dictators. They are going to vote for whichever party promises them a better future. A future not based on aid, subsidies, freebies or wishy washy lures. This generation is going to look for opportunities for economic advancement and wealth creation on their own competencies and steam. Just give good governance. Just create an enabling environment. Just stop the current nonsense. Agree that your business is politics but just don’t do only politics. Please please please do business too.

Meri taqdeer badal dengey mere jaanbaaz irade…!
Meri kismat nahi mahutaj mere hathon ki lakiron ki.
Yakeenan aasman se oonchi hogi meri mulk ki udaan..
Zara mere pairon se tere siyasat ki zanjeer toh hata de.

Here’s wishing everyone happiness and love.
With Warm Regards

levitra

From The President

Dear Members,

The
countdown is over! The fireworks have lit up the sky, and 2017 is here! My
colleagues at the BCAS join me in Wishing You All a Very Happy and
Prosperous New Year. With each New Year, we get a fresh, clean page to
start over. Here’s hoping that life writes a beautiful new chapter for you this
year.

Hits & Misses – 2016 – The year has gone by

It
is said, don’t forget the past, learn from it! Seldom one witnesses such an
eventful year. Let’s begin with the Olympics at Rio where India sent its
largest contingent of 100 athletes. Pushing the limits many of them qualified
but failed in nail-biting finishes. In the end, it was Sindhu and Sakshi who
beat the odds to win two medals for India. Another dismal performance for India
but an apt demonstration that Indian women are winners!

Sixteen
years in the making and finally in the first week of August both houses clear
the Goods & Services Tax. A major tax reform and a game changer, GST which
is slated to be rolled out in April (may be July) next year, calls for a total
revamp of systems and will be a huge opportunity for the government, companies
and all of us.

Then
there was the Income Declaration Scheme which offered tax evaders an
opportunity to come clean after paying 45% of the undisclosed amount. It got
off to a slow start but at the end turned in some impressive figures that
enabled the government to toot its flute.

On
the international front, we have the BREXIT which made it abundantly clear that
nationalism is on the rise. Winning with a wafer-thin margin, the people of
Britain opted out of the European Union, highlighting the disadvantages of globalization.

Donald
Trump’s sweeping victory is another endorsement that is blindly embracing
globalization is not the best policy. Countries are looking at ways how they
can harness the ‘take’ of globalization without too much ‘give’ going out.
Inward looking and capitalizing on local is becoming the norm.

On
November 5, there was the 2016-17 Mid-Year Review of the Indian Economy by the
National Council of Applied Economic Research (India’s oldest and largest
independent think-tank). The figures were looking good; the economy was
buoyant, and there was distinct optimism in the air.

The
overall GDP growth was a healthy 7.6%. The agricultural sector fared well with
normal rainfall enhancing crop output 11% to touch 124 million tonnes. More
importantly, rural demand was strong too. The manufacturing sector displayed
growth with the Purchasing Managers’ Index and the Index of Industrial
Production inching north. The service index indicators continued to be muted
while urban demand was predicted to remain strong.

On
the global front, demand continued to be volatile. India’s merchandise exports
turned positive in June 2016, with exports rising in June to $ 22.57 billion.
India was on a good wicket with inflation too. After an upswing, it fell
sharply in September 2016 to 4.31%, as measured by the Consumer Price Index
(CPI). After declining for 17 months, the Wholesale Price Index (WPI) inflation
turned positive in April 2016, hovering at 3.5-3.7%. Tax collections were
better at 42.5% of the budget estimate with the escalation in both direct and
indirect taxes.

It
was amidst this relatively rosy scenario that the demonetization bomb dropped.
A second explosion hit India with the shock election of Donald Trump’s
widespread victory, sinking all benchmarks instantly. Targeting counterfeiting,
black money and terror funding, Notification No. 2652 nullified 86% of the
value of all cash in the market. It was a bold move that was hailed by many
within India and across the world. The secrecy and suddenness were calculated
to be effective in combating the shadow economy and corruption that was
plaguing India’s real growth.

But
the great expectations from the culling of the currency seem to have
evaporated. Out of the 15.4 trillion rupees that were voided, about 13 trillion
have already been deposited in the banks, reducing substantially the huge
windfall the government expected. The monumental mismanagement of replacing the
currency has severely impacted the economy and the image of the government.
Over 90 people have lost their lives, and the key indices of the economy have
all plummeted!

The
long-term gain from the short-term pain that the government is harping about
appears remote and of little consolation to the innocent common man and the
rural poor who have had to bear the brunt of the currency purge. The drought of
currency has caused immense losses to agriculture…crops rot unharvested and
wholesale markets have collapsed without cash.

The
unorganized sector which generates 30% of the national income is among the most
severely affected. This sector constitutes the majority of the economy in terms
of investments, savings and value addition. A whopping 90% of the Indian labour
force powers this sector. Largely rural, it lacks proper documentation as it is
unable to access banking or credit facilities. Its oxygen which is cash has been
thoroughly throttled.

Corporate
and consumer confidence have both slumped. The cash crunch has decelerated
sales to a trickle, disrupting manufacturing plans completely. The MSME sector
that feeds large companies is crippled with huge inventories and their
production is thrown out of gear.

The
only silver lining is the banking arena which has received a huge quantum of
deposits. Serpentine queues outside the banks have swelled the coffers and have
helped alleviate the bank’s NPA woes. Interest rates have dropped but credit
offtake however is down with both consumers and corporates staying away.

Cashless
payments have been given a huge impetus. E-wallets, net banking, debit/credit
cards, mobile banking, NEFT/RTGS…are all witnessing phenomenal growth trajectories.
The banks and payment companies are going all out to woo customers with high
decibel promotions reiterating the benefits of going cashless. Even the
government has joined the bandwagon by offering a spectrum of incentives for
cashless payments.

So,
is demonetization really working? Will it succeed in tackling the bane of black
money? Will there be sustained efforts to eradicate black money? Or was it all
just a ploy to choke funds to the opposition in the forthcoming elections? Will
the long-term gain actually translate into achhe din? Only time will tell!

Looking ahead

Now
all expectations are on the Budget 2017 which will be delivered for the very
first time on 1st February. The Government will surely look at
soothing the wounds of the common man either by reducing the tax rates or
increasing the basic taxation limits or may be both. The FM remarked, “What you
need is a broader base of the economy, for which you need a lower level of
taxation”. Only 3.3% of the population pays tax in India, which is very low
compared to 39% in Singapore, 46% in the US, and 75% in New Zealand – even if
the number here could be doubled to 7%, it will amount to a windfall of tax
collections. With GST around the corner, the stage is set to bring in all the
unorganized sector into the tax system by increasing compliance and vigilance.

The
government seems to be all ready for the GST rollout and has already trained
three-fourth of the targeted 60,000 field officers who would be instrumental in
implementing the new GST regime. But it seems that the industry is falling
behind. It will be a herculean task to train the unorganized sector in this new
law, many of whom probably may for the very first time pay any taxes. BCAS is
gearing up to take this challenge of training the industry and soon will
rollout a schedule in this regard.

With
the tax scrutiny season and the last date of depositing demonetized currency
into the bank coming to an end, we may be witness to a slew of notices being
issued inquiring about the source of the cash deposits. Though it is within the
power of the Income Tax department to ask questions, unless and until the
officers are made accountable for unnecessary harassment and without any proper
direction, this can be a new avenue of corruption. It is high time that there
is transparency and accountability of those governing the law and respect given
to the honest tax payers.

They are listening

The
Expert Group formed to consider issues related to Audit Firms appreciated the
representation made by BCAS and were receptive. I had an occasion to personally
interact with the committee and explain the issues faced by Indian Audit Firms.
We are hopeful that the interest of the profession is taken care of and our
suggestions are considered in the right spirit.

From The President

Dear Members,

November has been an eventful month with lots of events both within India and on the global front too. In contrast to the not so pleasant memories of the 26/11 attack; we have had several happy moments where India has scored and fared well. Let us look at some of them.

Moody’s upgrade was possibly the most eagerly anticipated and positive news. After 14 long years, Moody’s revised India’s sovereign rating to Baa2 from Baa3, putting it ahead of Russia, Brazil and South Africa; but behind China.The new rating – India’s highest ever will pave the way for capital inflows into the country and will provide a tremendous boost to the Modi government. The Sensex spiralled upwards and the rupee strengthened reflecting the upgrade.

Kumar M. Birla, Chairman of the Aditya Birla Group and also a Chartered Accountant says, “Moody’s upgrade is a hugely welcome endorsement of the government’s reform policies and the economy’s enormous potential.” The Government’s aggressive and impressive track record in devising and implementing tough economic initiatives is finally paying off. Demonetisation, GST, direct transfer bank accounts, insolvency & resolution laws and recapitalising the banks have all been stepping stones to achieving the new upgrade.

However, Standard & Poor’s maintained a more cautious approach than Moody’s, having kept India at the current rating of BBB-minus. S&P would need to see more evidence that the ongoing reforms would “markedly improve” the government’s finances and reduce its net general government debt to justify an upgrade.

Ease of Doing Business is another benchmark in which India has surprised the world, declining 30 places to reach the top 100 club. Last year, India moved just one spot reaching the 130th position. Realising the importance of scoring in the ease of doing business arena, the government rolled up its sleeves and faced the challenge. The spectacular ascent up the list has now caught the attention of governments and multinational corporations.

The GST Council has been responsive to the difficulties faced by the tax payers in implementation of GST by bringing in the necessary measures. However, many of these including transitional provisions, clarity of provisions, preparedness of IT infrastructure among others could have been envisaged by the Council and even postponed for implementation thereby helping the index of ease of doing business in India.

The Ease of Doing Business Report 2018 is now in its 15th year and currently ranks 190 nations on various parameters. The report mentions that since 2003, India has adopted 37 reforms, out of which nearly half have been implemented in the last four years. On the ten parameters considered, India improved on eight, helping propel its rank upwards. The Insolvency & Bankruptcy Code, 2016 which accelerates the process of winding up loss-making companies has been pivotal to India’s ranking this year. Starting a business, dealing with construction permits, getting credit, protecting minority investors, paying taxes and trading across borders were areas in which India showed great commitment and reform. Enforcing contracts, labour market regulation and getting electricity too were areas in which India made considerable headway and sustained improvement.

Russia tops the BRICS countries ranking 35th, while China retains its 78th place on the list. India has surprised the authors of the list, who say it’s very rare that a major economy makes a massive jump in a single year. India has done it, but Prime Minister Modi is not yet satisfied…he has set a goal of achieving the 50th rank!

Interestingly, recently India got the 1st rank in the Miss World Contest. Manushi Chhillar was recently crowned as Miss World after a gap of 17 years which brought glory to the Nation.

Non-Performing Assets (NPAs) have become a buzz word in Indian banking. The sky-rocketing NPAs have turned the banking industry into a giant problem and the rot is so deep it threatens the buoyancy of the economy. Estimates peg the NPAs at around Rs. 8-10 lakh crore with the biggest defaulters being in the power, steel, infrastructure and textile industry.

In a bid to jumpstart the industry, the government has approved Rs 2.11 lakh crore plans to recapitalise public sector banks. Rs.1.35 lakh crore would come from recapitalisation bonds and 76,000 crore would come from the government or by banks tapping the financial markets. The news sent the public sector banks stock prices shooting up. Moody’s and Fitch hailed the move…so did many corporate veterans.

The big challenge ahead is which of the 22 public sector banks are going to be recapitalised. And more importantly, from where is the money going to come. It will be tough to raise capital for banks that have been for long projected as loss-making and sinking. The other big question is, who will issue the bonds…who will subscribe to these bonds and who will pay the interest on the bonds.

In addition to recapitalising the banks, major reforms are the essential need of the hour, particularly in governance and accountability. The ‘extend and pretend’ policy practised by the banks over so many years has today snowballed into a giant problem because of a lack of accountability. Also most of the loan defaulters – the creators of the NPAs are politically connected individuals who could not be refused! Independence and accountability should become the thrust of reform for a healthy public sector banking industry.

The government’s decision to set up a Committee to review the Income Tax Act, 1961, is unexceptionable. The current statute is bulky, and with multiple court rulings over the past five decades have made Indian tax law confusing and opaque. In any case, direct taxes do need a dosage of reforms to bring them in line with current needs and international best practices. This could include incorporating the latest provisions of base erosion profit shifting (BEPS) and clarity on taxation of new types of business models and digital transactions. Apart from rates and rules, the critical demand from trade and industry is for a sea change in the nature of tax administration, from being enforcement oriented to focusing on simplicity and clarity. The focus should be to address the concerns of uncertainties and needless tax litigation rather than going through another elaborate exercise. The Committee is expected to submit its report within six months.

Last but not the least, I would like to compliment the Income Tax Department for their concerted and well-planned efforts in effectively managing “Operation Clean Money” The key steps taken in the wake of demonetisation were strengthening of data collection and focussed enforcement actions. The mission was to “create a tax compliant society, through a fair, transparent and non-intrusive tax administration, where every Indian takes pride in paying taxes.” I think they have started well and wish them all success in executing their endeavour.

Wishing You All a Merry Christmas and A Happy and Joyous New Year-2018! I urge members to take a well-deserved break and spend quality time with their near and dear ones to start afresh with renewed vigour for the New Year.

Feel free to write to me on president@bcasonline.org

With kind regards

CA. Narayan Pasari

President

From the President

Dear Members,

We witnessed an
innovative Navratri celebration in Mumbai this year. Enthusiastic dandiya
raas dancers decked in all their colourful attire were swaying to music
till the early hours in the morning. What’s unique is that they are all wearing
cordless headphones – so now they can celebrate without disturbing anyone! An
ingenious mind and a little technology have saved the day…or rather the
night. This is silent garba beating the noise deadlines !! I hope other
communities may take cue from this and pursue their celebrations without
creating any nuisance or heartburn for others.

Let me also in advance take this opportunity to extend to all of you and
your families my sincere greetings for a truly Happy Diwali and a Prosperous
New Year. May the triumph of light and truth illuminate our lives and the
future of India. And may our festive celebrations overflow with colourful
rangolis, sweet temptations, surprise gifts and a sky ablaze with sparkling
sound proof fireworks of many hues.

Across the
Pacific, there are fireworks between the US and North Korea sparked off by
North Korea’s missile and H-Bomb testing and UN sanctions. Tensions have
escalated with a petulant North Korea Foreign Minister declaring that the US
President had made “their rockets’ visit to the entire US mainland inevitable”
by calling the North Korean leader a “rocket man”. The war of words accompanied
by threats and a show of military strength from both sides have sent stock
exchanges across the world tumbling. The prospect of an all-out nuclear
confrontation looks remote but nevertheless the markets are still on
tenterhooks.

Indian markets
too have been impacted by the geopolitical pressure, but have also taken a
beating for several other reasons. India’s GDP growth rate has slipped to 5.7%
in the June quarter and demonetisation and the GST seems to have been partly
responsible. Both economic measures were very much needed but possibly their
unplanned and hurried implementation has caused the markets toreact sharply.

The proactive
government has already announced a stimulus package to arrest any further
market descent. But it is in a quandary…should it choose to spend and risk
overshooting its fiscal target which it has so carefully maintained. Or should
it reduce expenditure and add to the ferment and pessimism in the market. Both
the avenues have the potential to further unnerve both domestic and foreign
investors.

Against the
dismal economic stagnation, the Indian e-commerce market, which is slated to
touch $100 billion by 2020, is clearly the silver lining. Flagging off the
festival season, the giants in the business Flipkart and Amazon held their big
annual sales. Piggybacking on the buzz generated, several smaller e-commerce
companies too joined the sales bandwagon. The response to the sales has been
phenomenal.

Flipkart claims
that it has doubled sales over the previous year and hopes to touch Rs. 6,000
crore. The high point of their Big Billion Sale is that they sold 1.3 million
smartphones in just 20 hours of the sale. Amazon too scored high saying that it
was their biggest shopping event…the largest in terms of units, sales value,
sellers, customers and pin codes they served. What’s notable is that they
garnered 85% of their new customers from tier 2 & 3 cities. Amazon claims
sales were spectacular with 50% of the 32 categories on offer doubling in value
terms over last year.

What’s
significant is that these e-commerce companies attract a lot of funding which
goes into creation of jobs and infrastructure. E-commerce has disrupted
traditional business models and has turned into a money spinner for all and a
money saver for millions of customers. May their tribe increase!

The journey began
a long time ago…on 18 April 1966, the first protest march against triple
talaq was held. And only in 2017, the Supreme Court has finally decreed it as
unlawful. Post the verdict, activists have now swivelled their attention
towards decriminalising homosexuality and marital rape. Today the focus has
widened considerably and the debate now centres on developing and introducing a
Uniform Civil Code.

Is it possible or
practical to reconcile divergent laws and formulate a common code that is
acceptable to all communities? Those in favour believe a common code will
provide a potential platform to unite India. A stronger argument is being made
that a common code will ensure gender justice and discourage gender bias. But
after a thorough comparative study of personal laws of India’s many
communities, the sheer diversity of laws and the zeal with which they are
adhered to defies any possibility of uniformity.

Those against,
argue that there already exists an optional civil code with several acts that
may be used by those who wish to avoid the religion and custom based laws.
There is also a suggestion, which I like, that instead of trying to force a
common code it would be better to take a few key aspects such as marriage,
adoption, succession and maintenance and progressively work them into a common
code.

Before I conclude
this message, I would like to make this earnest request to all of you to join
me in the BCAS membership drive. The Society needs to increase its membership,
specially the youth. This will help us to generate more revenues, besides the
Society will be taken more seriously when it comes to interaction at all levels
of the Government. After all, numbers do matter. If all of us adopt the
initiative of “Each one brings one”, we can target to double our membership,
which will be a big step forward.

I would like to
end by paying tribute to our Past President Shri Pradeepbhai Shah who left us
this month. As a Trustee of the BCAS Foundation, he was actively involved in charity
and had organised many campaigns for the needy. The drive for cancer afflicted
children at Tata Memorial this year was one of his initiatives. A walking
encyclopaedia of jokes and anecdotes, he helped inspire people and transform
difficult situations with his effervescent optimism. We pray that Shri
Pradeepbhai may reap the abundant rewards he sowed and enjoy eternal rest.

Feel free to
write to me on president@bcasonline.org

With kind regards

CA. Narayan Pasari

President

From The President

Dear Members,

Open
any newspaper today, and you are bound to be bombarded by news about the
elections. Five states in India: Goa, Uttarakhand, Punjab, Manipur and Uttar
Pradesh are gripped by the fever of assembly elections, and it has spread
across the country. Slated to conclude on 8th March, the nation has
its fingers crossed, tensely awaiting the results.

Ballot ‘box offices’

This
is more so since this election has witnessed record crowds at the ballot ‘box
offices’. Goa tops with 83% polling, Punjab follows with 75% turnout and
Uttarakhand finishes with 65%. The elections are on in UP where the turnout is
over 60% and is yet to start in Manipur. With huge implications at the centre,
parties seem to have gone all out with alliances, rallies, advertising and
social media to sway the masses.

Mumbai
had been dragged into the election maelstrom too. BMC — Asia’s largest and
richest municipal corporation with 91.8 lakh voters decided the fate of 2,275
candidates from 7 political parties as they battled for 227 wards. Alliance
partners BJP and Shiv Sena, now bitter rivals both won voters’ confidence with
82 and 84 seats respectively. With no clear majority, horsetrading is in full
‘gallop.’ Meanwhile, a cartoonist has aptly depicted two potholes celebrating
their existence for another five years… I HOPE NOT!

But
the big question today is that after being urged to cast our vote…what next?
The politicians that come into power more often than not continue to do their
own thing. Five years are seen as an opportunity to indulge in practices which
are ideal examples of ‘form over substance’. From ill-spent public money to
both overt and covert corruption, from being not accountable for promises to
breaking commitments made to voters and from covering up the stream of reason
with that of allegations and excuses. After all, as Jonathan Swift once said, “Promises
and pie-crust are made to be broken.” I believe unless there are some
serious and periodic accountability and appraisal mechanism, we can expect
another five-year ride!

Economic health barometer – Are we really healthy?

On
the last day of January, the finance minister tabled the economic state of the
Union through the Economic Survey. Authored by India’s Chief Economic Advisor,
Arvind Subramanian, the survey has been hailed as a magnum opus on development.
This economic report card is a reservoir of the key statistics of various
elements of the economy and also contains some interesting ideas to make India
better…a lot faster!

The
survey addressed the impact of demonetization claiming that it will be
transitional, with real GDP expected to be from 6.75 to 7.5% in 2017-18. It
also stressed on the importance of quick monetization along with a slew of
initiatives like pushing digitization, bringing land and real estate under GST,
reducing taxes and stamp duties and improving the tax administration system.

In
fact, three exclusions from GST viz. electricity, real estate and petroleum
products reflects the re-thinking on the part of GST Council. It has been
agreed to bring petroleum products into GST ambit after 5 years. A similar
agreement is necessary for electricity and real estate. In fact, by bringing
real estate into GST fold would encourage investment, since real estate
development is a critical part of fixed capital formation.

The
survey, however, was strong in its criticism of the excessive regulation that
continues to plague the agricultural sector. It expressed disapproval that
farmers in many states were forced by an Act to sell only to specified
intermediaries in authorized mandis – thus depriving them of better returns.

Non
Performing Assets in PSU Banks is another cause for concern. At 12% of the
gross advances, this level has choked the credit flow to industry especially
the MSME. This dismal situation calls for some urgent corrective action, like
setting up of a central public sector asset rehabilitation agency to tackle
this growing challenge.

The
survey also proposed a new idea of Universal Basic Income (UBI) for all, in place
of existing welfare schemes and subsidies. In essence, an amount of Rs.7,620/-
would be deposited into Aadhaar linked bank accounts annually which would
drastically cut absolute poverty from 22% to less than 0.5%. The funding for
this UBI would come from recycling funds from around 950 existing welfare
schemes; which add up to roughly 5% of GDP. The survey believes that “UBI is
a powerful idea whose time even if not ripe for implementation, is ripe for
serious discussion.”

Budget 2017-18

This
year’s Budget can be termed as a TRULY UNION Budget – one BUDGET for the entire
Union – as after decades someone thought of discarding Railway Budget as a
separate element of parliamentary business. The Budget gives a DISHA, that will
determine the DASHA of the country in the year ahead. Having said that, we do
acknowledge the problems with the government, politicians and tax laws. It is
always possible to do more and some of it is of urgent necessity. But that
applies to our society too and perhaps to each one of us here. If
transformation and innovation can touch the core of all four – citizens,
government, politicians and tax laws, the positive impact of change could be so
much more that it can be miraculous in its effect. BCAS has the benefit of
Senior Advocate Shri S. E. Dastur for last 28 years for unraveling the hidden
amendments in the Finance Bill. This year was special due to the sheer size of
people taking advantage of his spectacular analysis, in person and virtually.
Rumours are that even the Finance Ministry was tuned in when Shri Dastur was
delivering his speech. I only hope that the Ministry takes into cognizance the
various anomalies pointed out by Mr. Dastur and takes appropriate action. BCAS
had advocated strongly for scrapping the Income Computation and Disclosure
Standards, but was grossly disappointed that the bureaucracy has again won over
advocacy. So we have one more legislation to understand, implement and
litigate. All the best!

The
Finance Minister has announced a new programme consisting of ten distinct
themes which would “Transform, Energize and Clean India” (TEC). This
broad agenda is to be executed through several welfare initiatives concerning
farmers, the rural population, youth and the underprivileged.

To
project India as an attractive investment destination, the budget abolished the
Foreign Investment Promotion Board, exempted FPI investors from indirect
transfer provision and lowered corporate tax for MSME to 25%. Personal income
tax rates have been rationalized and digitization promoted with a ban on cash
transactions above Rs. 3 lakh while cash donations have been capped at
Rs.2,000.

Much
is expected to be achieved while containing the fiscal deficit at 3.2% of the
GDP in FY18, which would be further curtailed to 3% by FY19. This fiscal prudence is aptly reflected in the
pragmatic budget which is bereft of any populist largesse.

Change is welcome

After
a span of 7 years, we again have the President of our alma mater, from Western
Region. My heartiest congratulations to CA. Nilesh Vikamsey and CA. Naveen N.
D. Gupta for their ascension to the coveted post of President and Vice
President of the ICAI. It is all the more proud moment for BCAS that one of our
core group members is now the torch bearer of this esteemed profession. CA.
Nilesh Vikamsey, as we at BCAS know him can be described as a person committed
to excellence, massively innovative and wears passion for the profession on his
sleeve. I am reminded of a quote which CA. Nilesh Vikamsey aptly follows; “Leadership
is action, not position.”

Through
this message, I would also like to convey to the torch bearers of the
profession that we at BCAS are always at the forefront to take up the cause of
the profession and ICAI can very well bank upon us to further the cause of our
profession.

Warm
Regards,

Chetan Shah

From The President

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Dear Members,

As I pen this message, the curtain has come down on the 2016 Olympics in Rio in a grand and spectacular closing ceremony. Around ten thousand sports people competed aggressively for 2,488 gold, silver and bronze medals. Amidst the outstanding victories and whisker-close defeats, one message comes out very strongly – “Good is the enemy of best”. India has to learn this lesson well if it is going to score in the 2020 Tokyo Olympics. The Indian contingent will have to be truly world-class – wellhoned physically and mentally to win. Clearly, mediocrity, inconsistency, and half measures won’t take us anywhere near the victory stand!

With India’s encouraging six medals in the London Olympics in 2012, and its large Olympic contingent, which exceeded 100 participants for the very first time, expectations were running high. With just two medals, the “Make in India’ lion has returned to India to lick its wounds and do some serious introspection…and maybe some passing the buck too!

The silver lining in the dismal performance is that the women of India have clearly demonstrated where the ‘Citius, Altius and Fortius’ lie. Undoubtedly, the sportswomen have proven their prowess and their power to win in spite of all odds that sports persons have to face in our country. It is the time that the women in India, especially in the smaller towns and villages are empowered to live their dream and go on to achieve…not just in the Olympics but in the everyday journey called life!

Sindhu and Sakshi have returned to a hero’s welcome with people lining streets to applaud their grit, determination, and success. The central government, state governments, sports federations, companies, and individuals have been falling over themselves to shower them with cash, cars, land, jobs. Several companies also are lining up to sign them up as brand ambassadors. One wonders if all these resources and facilities were provided earlier, wouldn’t it have changed our medal tally?

GST – Ultimately
Let us leap to another very significant happening in the last month, the passing of the Goods and Services Tax (GST) Bill. It took sixteen long years in the making and was finally cleared in both houses in the first week of August. The Prime Minister, Shri Narendra Modi promptly tweeted: “GST will give strength to our economy and all parties are to be thanked for its passage.”

GST is now at our doorstep and is set to be the biggest game changer in the Indian economy by creating a common Indian market and cutting out the cascading effect of tax. Its implementation demands a complete overhaul of the current indirect tax system, right from tax structure, incidence, computation, payment and compliance to credit utilization and reporting. The impact of GST will be far reaching and require a revamping of pricing, supply chains, IT, accounting, and tax compliance. There’s huge opportunity staring us in the face!

Being a major tax reform, the GST will stoke several conflicts: between political parties; the union and state governments; and between producing and consuming states. The Centre is keen on rolling out GST by April 2017, but there are several challenges that need sorting out to ensure its smooth implementation. Replacing several taxes and harmonizing them across the union and state governments is a giant challenge. The IT platform for implementing GST will need to be all encompassing to accommodate state, central and integrated GST provisions.

All these daunting challenges have rallied the captains of industry to request the government to defer the switchover to GST for another six months. Over 40,000 suggestions have poured in, offering a wide range of comments and feedback. Whatever happens, let’s get GST ready! BCAS has planned full day workshops on GST Model Law this month, and the response has been tremendous.

The CBEC invited the BCAS for an interactive meeting with the policy makers on GST at the North Block. From the BCAS, Mr. Govind Goyal and Mr. Sunil Gabhawalla attended the meeting and made a detailed representation of the draft model GST Law. The authorities found some of the representations unique and practical to implement. A copy of the representation is available on the website.

Income Declaration Scheme
Let us now shift our focus to the government’s Income Declaration Scheme (IDS) that has been in the daily news. Stung by repeated criticism about its inaction in tackling the herculean black money problem, the government hurriedly launched a one-time compliance window to attract black money squirreled abroad. The scheme predictably bombed. Now we have an India avatar of the scheme to draw undeclared income and assets into the tax net. Tax evaders are being urged to declare their unaccounted assets voluntarily, pay the applicable tax, cess, and penalty aggregating 45% of the undisclosed income; and enjoy total immunity from any further penalty or prosecution under the Income Tax Act or Wealth Tax Act.

The government has taken pains to reiterate that the IDS is not an amnesty scheme to reward dishonest tax evaders by giving them an escape window. The ten amnesty schemes that were launched at regular intervals between 1951 and 1997 were largely misused. Tax evaders escaped stringent action and on the contrary paid lower than normal taxes, yet got blanket immunity. Assets declared under many of the schemes were grossly undervalued for tax purposes, and so the corresponding tax collection was much lower.

The IDS in its current form must, therefore, appear very harsh, and as of now, the response seems to be lukewarm. There are many reasons that may have deterred tax evaders from coming clean but importantly immunity is currently granted only from Income Tax and Wealth Tax, leaving the evader open to prosecution from Service Tax, Sales Tax, and other authorities.

BCAS, along with three other associations, made a detailed representation pointing out the anomalies, most of which were taken care in the latest FA Qs issued by the CBDT. Additionally, BCAS has brought out an excellent publication on IDS to help professionals understand the contours of the scheme and make their filings accordingly.

Meeting of revenue targets – is this the way?
There was a small article in the corner of the newspaper which I thought I should draw your attention to. It pertained to the unfair and deceitful means adopted by IT officials to ensure tax targets were met. Colluding with SBI officials, IT officials quietly collected Rs. 10,000 crore on 30th March and promptly refunded it on 1st April. This modus operandi including altogether stopping from issuing refunds in the first quarter of each year was being employed with several corporate entities, and it ensured robust figures that made the books look good. On investigating the massive refunds in the first week of April, the scam came to light, and officials got transferred. The Finance Ministry has taken a tough stand, warning officials that engage in ‘taxtortion’ that they will be dealt with sternly. As CAs we are all aware of such modus operandi and now it is the time not to take things lying in case our clients also suffer such unjust.

International Tax Conference
The International Tax and Finance conference (ITF) a popular event of the Society crossed borders for the first time, it was successfully held in Sri Lanka. The participants included participants from all across the country as well as some international participants There was a balanced combination of learning with fun. The day used to be full of brainstorming sessions and discussion with enlightenment from elite speakers, whereas the evenings used to be full of interaction and amusement. The highlight of the conference was the one to one interaction with the Minister of Finance of Sri Lanka who was very candid and appreciative of India and its prowess.

Ganapati Bappa Morya! Micchami Dukkadam!

From the President


Dear Members,

April was a remarkable month with a golden
lining. At BCAS, we celebrated the golden anniversary of our monthly journal –
BCAJ. And India celebrated a sporting victory as it struck gold 26 times at the
21st Commonwealth Games in Australia. After a dismal performance at
Rio, India showed its true mettle by winning 66 medals and surged to the third
place behind Australia and UK. The 200 strong Indian contingent fought hard and
performed brilliantly, ensuring a steady stream of good news in the media. In
addition to many veterans, there were many first timers that did India proud.
BCAS extends its congratulations to all the sports people, coaches and
officials who kept the Indian flag flying high!

It has been a dream for millions of Indians
in lakhs of villages. A dream that was shared by Prime Minister Modi too! On 28th
April, that dream became a reality with Manipur’s Leisang village getting
connected to India’s mainline power supply network. Now all of India’s approx.
6 lakhs inhabited villages scattered across the length and breadth of the
nation have access to power. Taking to Twitter, the Prime Minister proudly
revealed, with a sense of satisfaction and achievement that, “we fulfilled a
commitment due to which the lives of several Indians will be transformed
forever.” Overcoming numerous obstacles and defying tremendous odds, the
Government left no stone unturned in ensuring all villages get electricity in
1000 days, starting 15th August 2015. The next step is providing
connections to all households and ensuring adequate supply to the villages.

Last year the world was on the edge, as North
Korean leader Kim Jong-un defiantly tested nuclear devices and missiles. The
geopolitical tensions had stock indices plummeting, erasing trillions in equity
markets. The recently concluded Inter-Korean Summit seems to have dissolved a
lot of those tensions. North Korea’s Kim has declared to President Moon of
South Korea that he will abandon nuclear weapons, if the US would formally end
the Korean war and agree not to invade his country. Last week, Kim and Moon
signed a joint declaration recognising “a nuclear free Korean peninsula and
complete denuclearisation” as a common goal of both Koreas.

However, Kim has a long way to go in winning
the world’s confidence. Critics have discounted the genuineness of Kim’s
actions and are sceptical of Kim’s sugary overtures – underlining that he never
publicly renounced his nuclear weapons. It is hoped that Kim will be sincere in
his actions and help his impoverished country to progress as the region enjoys
greater stability.

There are many reasons why India’s justice
delivery is becoming rigid and unresponsive — there are over 3.2 crore cases
pending across courts, of which over a quarter are pending for over five years
at the district courts and the high courts. Judicial-strength gaps are one. The
Government clogging the courts with mindless litigation are another. The fact
that 46% of all pending cases have been filed by the Centre and State
governments makes the “State” the most prolific litigant in the country.

Noting how frivolous and prolific litigation
by the Government has clogged justice delivery, the SC advised the Union
Government to be mindful of the burden on ordinary litigants who have to fork
out “a small fortune” to get justice, thanks to long drawn trials. To be sure,
fixing the government’s ‘fondness’ for litigation needs a raft of policy
changes.

The National Litigation Policy 2010—which
talked of making the Government an “efficient and responsible” litigant—is
hanging fire. The 2015 review was supposed to remove the anomalies of the 2010
proposal, by including provisions such as fines for officers engaged in drawing
the Government into needless litigation. But with the policy itself pending,
there seems to be no template with which the flow of government litigation can
be fixed.

On the economic front too, India has been
inching upwards! The International Monetary Fund (IMF) in its latest “World
Economic Outlook” has projected that India will grow at 7.4% in 2018 and ascend
to 7.8% in 2019. IMF acknowledges that India’s growth is the direct result of
the continued implementation of structural reforms that will raise productivity
and incentivise private investment.

India’s biggest challenge in the months ahead
is to broaden inclusiveness. Efforts have also to be directed towards achieving
fiscal consolidation and budget deficit targets. Key to sustained growth will
also revolve around the Government’s ability to ease labour market rigidities
and reduce infrastructural bottlenecks. Clearly the best is yet to come!

Data is the ‘new gold’. This surprising
revelation has surfaced in the aftermath of the data privacy scandal that has
sent shock waves across the world, even India. The crux of the matter revolves
around the unethical compilation and analysis of personal data from Facebook,
without the permission of the users. Applying complex algorithms, data
scientists were able to unlock the psychographics of the targeted people, who
were then bombarded with appropriate content to alter their preferences. This
process of personality profiling is extremely subtle and has been used to
manipulate minds during elections.

Clearly the need of the
hour is stringent regulation that will ensure that data privacy is
uncompromisingly safeguarded and not viciously employed to manipulate
commercial or political success.


In keeping with his aim of building and reinforcing relationships with
countries across the world, Prime Minister Modi made his second trip to the UK
this year. PM Modi had bilateral meeting with British PM, Theresa May where
India and the UK signed multiple agreements and MoUs. Both countries decided to
deepen ties, especially in the areas of technology, trade and investment. The
PM also attended the Commonwealth Summit – making him the first Indian PM to
attend in a decade. As UK gets ready to exit the EU, the summit is seen as an
opportunity for Britain to boost its trade and increase its diplomatic clout
with all Commonwealth countries.

For India, visa liberalisation was on top of
the agenda. New Delhi has been pushing for many years an increase in the number
of student visas and the simplification of the process. India’s participation
at the summit was also useful as it gives it the chance to talk to other Asian
countries without China ‘being in the room’. Britain is keen on signing a trade
agreement with India, as it has to aggressively explore new markets once it
leaves the EU.

By the time this edition of the Journal
reaches you the exams for the CA IPC and Finals must have resumed. I take this
opportunity to request you to convey my best wishes to all the students
connected with you for these exams.

Please feel free to
write to me at president@bcasonline.org

With kind regards

CA. Narayan Pasari

President

 

From the President

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Dear Members,

Greetings! It is already summer! The heat waves have been severe in many parts of the country. Bhubaneshwar, breaking a 30 year record with the temperatures touching 45.7°Celsius in April. Mumbai recorded 38°Celsius in April. About a quarter of our countrymen, spread in 10 states, are facing severe water shortage. For those of us, who receive water on tap, should certainly not take it for granted, and should rather be mindful of our water usage and support relief measures of which I have written later in this page.

ICAI Leadership visits BCAS & ICAI
The ICAI President Mr. Devaraja Reddy and Vice President Mr. Nilesh Vikamsey, both members of the Society, were kind enough to accept our invitation and visited the BCAS on 23rd April 2016. It was a wonderful opportunity to interact and exchange ideas with the leadership of our profession, get to understand their vision and extend our support in endeavours that will strengthen the profession as a whole. Both were candid, open and emphatic about challenges and pathways ahead. The new council has 15 first time entrants and we can expect a fresh set of ideas from that larger leadership. One notable development this year has been setting up of Digital Transformation initiatives which will result in superior and faster member services and experience.

You may be aware that recently Bank of Baroda cancelled the existing panel of internal auditors without giving any reasons on 30th March and launched an RfP for FY 2016-17 setting an eligibility condition of having an audit practice of Rs. 150 Cr in FY 2014-15. Obviously this is unprecedented and would disqualify most firms. The ICAI issued a notification, which was timely and required. It is worth taking a note that there could be more than what meets the eye.

The Guidance Note of CAR O 2016, was issued in record time of less than 30 days of the issue of the CARO 2016. This is commendable and deserves a special mention. I congratulate the AASB teams that worked behind the scenes. I am given to understand that several other GNs are on their way such on implementation issues in Ind AS, ICDS.

Tax Payer Data
The CBDT released an interesting paper giving data of Direct Tax collection, Contribution of Direct Taxes to total tax collection, Tax-GDP Ratio, Pre and Post Assessment collections, Cost of collection, Number of effective assessees, and disposal of cases. Although the basis and details are not adequate to decipher the exact impact, it’s a good start to see this statistically. We hope that this will develop further. You can refer to the document at: http://www.incometaxindia.gov.in/Documents/Time- Series-Data-Final.pdf

Although there is increase in number of assesses from 4.36 Cr (11-12) to 5.16 Cr (14-15) resulting in 18% growth in 3 years, it still is a low number. The cost of collection has remained around 0.60% for last 10 years in spite of rise in the tax collection by more than 3 times.

CHANGE – SPEED, EXTENT AND IMPACT
For centuries, we have thought LINEAR for growth. In recent times the growth has been EXPONENTIAL. The primary engine of this shift is the INNOVATION LIKE NEVER BEFORE. So unprecedented that it has created opportunities to leverage tools that can make an idea into a reality.

Let me explain. In 1980s the apps that your smart phone has today, would cost about $900,000 in retail. Kodak, rated as one of the top 5 brands in the world (till 1990), employed 145,000 people (in 1988), accounted for 90% of film and 80% of camera sales in America in 1976, had peak revenues of $16 billion (in 1996), but filed for bankruptcy in 2012 with 17,000 employees. In contrast, Instagram in 2012 was sold to Facebook at $1 billion, and today is valued at $35 billion. Kodak thought that its business was of chemicals and paper, whereas Instagram thought – that people wanted to store their memories (through photos) and it fulfilled that need. Paper and Chemicals were no longer needed with advancement of technology. Kodak thought that it was not worthwhile to switch from making 70 cents on a dollar to 5 cents in digital, although it invented the digital camera in 1975. A 132 years old complacent monopoly, therefore, faded forever in 2012.

The story tells us a number of things: Change – Speed – Impact. One study says that between 2010- 2020 about further 3 billion people will have access to internet. This itself, is a phenomenal opportunity. Today you can reach almost anyone, anytime, without any difficulty. Today, almost every THING is better, faster, accessible and cheaper than what they were years ago. Material has lost out to dematerialisation (tickets, paper, photos, for example), and there is huge emphasis on DEMOCRATI SATION – more and more people having access to things that seemed out of reach some years ago. Are we moving from a scarcity mindset to an era of abundance? Technology, being intangible, and changing so fast, cannot be controlled or regulated. One can control nuclear arms or drugs, but not human curiosity which drives technology. This is not causing change, but turbulence. In January, San Francisco’s largest yellow cab company was reported to be filing for bankruptcy due to Uberisation. Being UBERED is not relevant to taxi business alone, but it will reach professional services too!

Revamping of BCAS Office into a Learning Centre
In the last several months, we have launched several projects to strengthen the infrastructure at the Society. One of them was to convert the existing office into a learning centre and give more space to the administrative and support staff of the Society elsewhere. We have reached a milestone in that direction by finally converting the BCAS office at Jolly Bhavan into a learning centre which will accommodate about 90-100 people in the hall and also seat people in the overflow area outside. The renovated premises will have better infrastructure including facilities for recording and live streaming. This will allow us to have more events in house and use of technology to reach out to members where they are.

Water and Drought
To counter the drought situation, your Society is reaching out to its members through BCAS Foundation, to collect funds to support the drought affected. It will launch an appeal this month for urgent action required. We request you to support the appeal in whatever measure you can to participate in the relief work.

On the other hand, a recent water footprint numbers speak of a tragic saga. As per recent reports, 2173 litres are required for growing 1 kg of rice and we have exported 37.2 lakh tonnes of basmati. About 2 trillion litres of water out of this would be ground/surface water. Therefore, according to this report, India remains virtual exporter of water. The obvious says – we should export what we have in abundance and import that which is scarce. So the question here is should we continue to do this?

It is quite clear that there are adequate amount of water resources but not adequate amount of thought at a strategic level to see that our farmers do not suffer and die due to water shortage. Clearly, the situation is not a natural phenomena alone but has significant man made inputs.

Times have always been challenging, perhaps they will remain so for all time. There have always been opportunities, and they will remain so for all time to come. Challenges and Opportunities are embedded in the same continuum. Yet within that turbulence of change, we have Choice – to be courageous, giving, and grateful. There is something that each one of us can do, each day, to make a small difference. I leave you with the words of Tom Hanks:

When I was a kid, only Batman had a cell phone. He had a car phone. I was like: Man, can you imagine having a car phone? But technology has not altered our lives, other than how we go about them. We are still in the position of waking up and having choice: DO I MAKE THE WORLD BETTER TODAY SOMEHOW; OR DO I NOT BOTHER?

Wishing you a magnificent day, and more to come!

From The President

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The month of June has been one of the busiest at BCAS. We had four Lecture meetings this month on ITR Filing, Audit Finalisation, Insolvency and Bankruptcy Code and Model GST Law. The third lecture meeting was webcast live, from the BCAS Hall. Even the weekends were packed with incredible seminars on Practice Management and Fraud Reporting and Data Mining. The 10th Residential Study Course on Service tax and VAT at Lavasa was the largest. TARANG 2k16, the annual student event was also the largest ever till date. For the first time, we did a live webcast of one of the Lecture Meetings out of BCAS hall.

Brexit showed how divided our societies are. A chalk board at a café said it all – 48% Sense and Sensibility and 52% Pride and Prejudice. The iconic Thomas Friedman wrote “The British vote by a narrow majority to leave the European Union is not the end of the world — but it does show us how we can get there.” It shows how a few politicians can create a “binary choice on an incredibly complex issue”. Brexit shows that anxiousness has prevailed over reason. Friedman goes on to say that countries with pluralism will thrive as they will have offer stability, talent retention and collaborative environment to live in. If we couple this with what Trumps talks, we can appreciate the value of pluralism in India offers. In contrast to all this, the recent interview of the PM has been a heartening, especially when it is from a political leader of 1.25 billion people.

Model GST Law
While the ‘model’ GST Law is out this month, reading the GST law gives a feeling similar to arrival of the incoming flight after a six hour wait at the airport. Just as the pent up anguish and expectancy is settling down, one hears a second announcement. The apologetic voice says that they have found a serious technical snag and are not sure if the flight will even depart. Bummer! After 15 years of wait, the model GST law gives you that kind of a feeling – is this model law good enough to take off?

GST is the largest tax reform ever, because it is really an economic integration in a federal democracy like ours. While the state laws taxing goods don’t talk to the central laws on production and services, we can now expect that the UNION will work like one – a union in both letter and spirit. Although it is an achievement to arrive at a consensus, the ‘model’ is nowhere close to being model in every sense of the word. A lot of definitions are picked up from VAT regime and critical definitions lack clarity and completeness. Compliance heavy mechanism of matching invoices will make small traders want to find a ‘way out’ than ‘stay in’. The heart of GST, seamless credit mechanism, is murdered by the condition of actual payment of tax by the seller. Even if a buyer has paid the tax, credit can be denied in case the seller hasn’t deposited that collection.

Going back to the airplane analogy the GST law seems more like a highjack story written by the VAT authorities. In both design and structure, the model law does give a sense of disbelief. Before becoming a Goods and Services Tax, GST needs to meet the test of GOOD and SENSIBLE TA X. A law to be good and sensible at inception is CRITICAL for its success. Success of GST will now depend on the government’s ability to absorb stakeholder comments in the final legislation and the States adopting and enacting the law in its fullest form. I believe, that will truly give us a UNIFIED MARKET and a sense of efficient federal democracy.

Meeting Expectations
Stephan Hawkings wrote, “Intelligence is the ability to adapt to change”. 2.5 Lac CAs are faced with an incredible opportunity and phenomenal challenge like never before. The greatest risk in a world changing at the speed of light is VANISHING MARKETS. Due to changes in technology some markets that we are used to, could cease to exist. For example, considering BIG DATA , a lot of Audit will happen by matching data from various sources. As CAs we will need to watch this closely and carefully and to keep learning new skills and sharpening those that are still relevant. This could be the singular capability we all will need. I leave you with the words I love – If you have learned how to learn then you have learnt enough.

The times ahead will be fascinating. I am sure, as a profession, we will meet the expectations of all our stakeholders and be of service – not lip service, but of service to humanity at large. I hope that as accountants we will remain accountable and remain ‘awake’ in the true sense of the motto our Institute. And therefore, like the BCAS motto says we won’t be bogged down by fear. I wish, hope and pray that the profession holds its pure essence of serving the client above every other consideration and never convert to ‘business of profession’. We will continue to dig, question, counter distortion and take a stand on behalf of what we believe is true and will not need to sacrifice our objectivity. BCAS is a living testament to that and I am sure will remain so.

It is 30th of June as I write From the President for the 12th and the last time! What a delight it has been to talk to you all through this page and receive your responses. For every President, his year at BCAS is tight, pressing, exciting, challenging, exhilarating and satisfying. It was an opportunity to stretch my boundaries, to learn, share and grow. On the technical front, the profession is passing through a stimulating and gainful time – Ind ASs, GST, Companies Act, 2013 with numerous new opportunities before us. To be sharing this time with all of you and lead its leading light – the Bombay Chartered Accountants’ Society – is a special honour and privilege! The highlights of the year are enumerated in the 67th Annual Report uploaded on www.bcasonline.org. I hope you will take a look.

Like all the presidents before me, I will pass on the baton to the next president. Chetan and his able team of Narayan, Manish, Sunil and Suhas will commence their tenure from 7th July. They all have served the Society for years in various capacities and therefore well aware of its ethos. I am sure they will lead with purpose and passion. After a great ride, it is time to hang up the boots. I look forward to continue to serve the BCAS through the Journal and other committees in the years to come. I thank you for your support and trust in BCAS. Let me conclude with an Irish blessings for you – May your troubles be less and your blessings be more, and nothing but happiness come through your door.

From The President

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

From the President

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Dear Members,

Greetings!

Spring is here. Many trees in Mumbai have fresh light green leaves. Mumbai streets sprinkled with yellow Peltophorum blossoms are quite a sight! Hues in heat give some respite to our eyes, at least. Indian Laburnum should bloom soon and you can identify them, as these are totally golden yellow blossom laden trees without any greens. To the otherwise sultry weather, trees with bright flowers give a colourful and cheerful touch.

The Lecture Meeting on Finance Bill 2016 addressed by respected Shri S. E. Dastur, Senior Advocate has been a sought after lecture meeting each year. This year, the number of proposed amendments in the direct tax provisions were numerous and therefore the interest was even more. The lecture meeting held at Yogi Sabhagruh, at Dadar was packed with nearly 2,500 professionals and tax payers. The proceedings of the meeting were also webcast live. There were 4,000+ connections watching the live webcast. This was his 28th speech on the Finance Bill and we are indeed grateful to him for that.

Just like we had short videos on budget expectations, which I hope you had a chance to look at, a short video on post budget analysis by various professionals is posted on the Society’s You Tube channel. A number of tax professionals have given their views on various aspects of the Finance Bill. This video was shot at Yogi Sabha Gruh just before Mr. Dastur’s lecture. I believe that we have to go digital in many more ways. Video as a medium often is easier to comprehend the topic than reading, especially when it is focussed on a specific topic and is succinct. At the Society we will roll out more digital initiatives, especially after our office is renovated.

The Society conducted its Annual FEMA conference where the RBI officials were present. The Executive Director, Mr. B. P. Kanungo inaugurated the conference and gave a wonderful keynote address. On hearing the RBI senior officials one would feel tremendous amount of comfort about this regulator which is critical to the economy of the nation. He mentioned that the spirit of FEMA is carefully preserved by the RBI resulting in a shift from intrusive monitoring to document based monitoring. He mentioned that RBI was committed to facilitate ease of doing business and therefore numerous regulations / circulars will be folded back to 19 regulations. In this context even master circulars under FEMA have been replaced by 17 Master Directions from 1st January 2016. Two more master directions are soon to be kept in the public domain. It was heartening to learn that the RBI was committed to the principle of growth with stability. He mentioned that the laws had to be simple, comprehensible and easy to enforce and that the central bank was working at reducing definition differences with other Acts such as the Companies Act, 2013 amongst several other changes that are likely to get rolled out in the coming months.

The changes in tax provisions brought out by the Union Budget give a mixed picture. The compliance burden remains and faith in taxpaying citizens is low. However, the economic growth seems to be in focus in a big way. Several changes either through the budget or otherwise are notable in this context. The unified agricultural market scheme on e platform will be a major boost. The National Digital Literacy Mission will cover more than 6 crore households. The Real Estate Bill finally brings in a regulator to regulate important areas affecting millions and is rightly skewed in favour of the consumer. The recent Companies (Amendment) Bill, 2016 clarifies, amends several facets of a badly drafted and hastily enacted law. The government opened the gates for FDI for e-retail. This sector with about Rs. 65,000 crores in investment in the last 10 years is bound to see massive changes in the way this sector works in a digital age. The FII inflows are at 3 year high. A rate cut from RBI is impending. The budget seeks to curtail fiscal deficit to 3.5% of GDP in accordance with the FRBM Act, 2003. The clearance of new defence procurement policy, categorising Indian Designed, Developed and Manufactured (IDDM) could spell a boost to manufacture of defence material in India. We are eager to see the bankruptcy code become a reality. In other words there are positive indicators, in spite of severe challenges meteorologically, economically, and politically.

This year we can celebrate 25 years of liberalisation of Indian economy. The present government will complete 2 years too. Overall, India has come a long way from where it was. The Modi Sarkar seems to be doing something right, at a level that can change the game in many areas. The Prime Minister certainly has been a pragmatic modernizer of the role of the government in an economy like ours.

The virtuous cycle of creating demand by putting money in the hands of a billion people is still a moving target. Large investment in India in the private sector still looks risky. Although creation of jobs is the top priority, there are about Rs. 13 Lakh crores of projects stuck in some approval issue. Even if most of these are unlocked, it can result in meaningful employment and gainful compensation for millions of youth entering the work force.

Wishing you all happy new financial year beginning from 1st April!

From the President

 Dear Members,

 

Surfing the net one evening, I found an interesting quote:


Contentment is the highest gain, Good
Company the highest course, Enquiry the highest wisdom, and Peace the highest
enjoyment

How true, how true… but I realised
it’s even more relevant if you are a highly respected and eagerly awaited
Journal and now on its way to celebrate the fiftieth anniversary of the
prestigious BCA Journal starting this April.

It has been very exciting and eventful
five decades that have gone by; and BCAJ has captured the essence of a growing
India as it oscillated between turbulence and smooth sailing. I see BCAJ as a
tireless marathon runner striding effortlessly as it straddles time, with well
researched and incisive articles for tax and accounting professionals, both in
practice and industry.

BCAJ has also been in a way like a
compass, pointing us all in the right direction with its vast spectrum of
analytical articles and updates, on diverse subjects such as Direct Tax,
Indirect Tax, International Tax, Accounting & Auditing and Information
Technology. Keeping pace with the requirements of the ‘digi-gen’, E-journal
access has been made available with the added advantage of a repository
spanning 17 years.

I would like to extend hearty
congratulations to the entire team behind the Journal – past and present on
behalf of all its readers. It is their long hours of painstaking efforts that
have made the BCAJ a solid foundation and a beacon of inspiration to all! I
wish the team all the very best in the years ahead in taking the journal to the
next level.

Last week around thirty thousand
farmers marched to Mumbai to press for their various demands to the Government.
What was remarkable is that these farmers protested with dignity and discipline.
On the last lap of their journey they walked almost 15 hours to avoid
disrupting the students from taking their final exams. What’s commendable was
the pain the farmers took to ensure no pain to the citizens of Mumbai. The
farmers dispersed as quietly as they came, but not before getting written
assurances.

When one looks at the statistics, the
enormity of the problem dawns with tremendous clarity. We have 90 million
families or around 54% of Indians engaged in agriculture, who after toiling
relentlessly day after day, generate a mere 14% of the nation’s GDP. Worse
still, the farmers seem to be on a lose-lose treadmill. If their crops fail,
they have little to sell and no profit. And in case of a bumper crop, the price
gets depressed, curtailing any serious profit. I believe some serious thinking
is required to go far beyond merely providing remedial aid. Innovative
solutions need to be chalked out in tandem with modern technology to transform
their lives and raise their living standards.

Grappling with the challenge of
employment generation, the government has focused on giving an impetus to the
services sector. Accounting for over 55% of the nation’s GDP, the service
sector has the possibility of stimulating domestic growth as well as winning
lucrative export opportunities. In this direction, twelve Champion Sectors in
services have been identified and a fund of Rs. 5,000 crore has been proposed
to accelerate support initiatives.

Accounting & Finance Services is
one of the 12 identified Champion Sectors where the Government is promoting
development to realize their true potential, increased productivity and
competitiveness which will further boost exports of diverse services from
India. However, experts feel that “there are miles to go…” before this sector
can harness the global opportunity. Being a regulated profession with a
licensing regime globally; there is a need to enter into many more MoUs with
foreign accounting institutes and mutually recognise each other’s
qualifications. The Indian accounting education system needs to be revamped to
match the challenges of globalisation. And lastly the curriculum is outdated
and needs to be in sync with market realities. Technology and new economy will
impact our profession immensely. Probably curriculum needs to capture that
impact in coming times. In fact curricula need to be futuristically and not
reactively structured if the profession has to meet these challenges. These
impediments need to be sorted if Indian accounting firms are to transit from
back end transactional processing work to big ticket contracts.   

Related to this, the Hon. Supreme
Court recently in a case ordered the Government to set up a panel to suggest
changes in laws to regulate multi-national accounting firms. The Bench ruled
that the panel to also look into the framework needed to enforce Sections 25
and 29 of the CA Act and the statutory Code of Conduct for Chartered
Accountants needs to be revisited appropriately. The Panel will also look into
the need of an exclusive oversight body for the auditors’ profession because of
conflict of interest of auditors with consultants.

The PNB scam has opened quite a can of
worms and has been in the news right from the day it broke. The general public
is outraged at the audacity and arrogance of the key accused. They are furious
with the bank officials who colluded or were scapegoats in the racket. They are
upset with RBI and market regulators for not unearthing the fraud…and the
politicians who allegedly allowed the swindlers to scoot with the loot. The
auditors too are being investigated and castigated for not raising a red flag.
Action and measures have been initiated by the government and RBI to prevent a
recurrence. Even ICAI has demonstrated its commitment to discipline errant CAs.

Representations to the Government on
key issues have always been taken up by the Society and it is regular in
interacting with the regulators. Recently BCAS along with the CA Associations
of Lucknow, Karnataka and Ahmedabad made an appeal to make statutory branch
audits of PSB banks more stringent. In a joint representation to RBI it has
listed several important issues/recommendations that need to be urgently
addressed by RBI and others for an effective audit coming up for the year ended
March 2018.

The World Bank in its bi-annual India
Development Update has been mildly critical of GST, calling it one of the most
complex with the second highest tax rate in the world. Comparing 115 countries,
the report says as many as 49 have a single slab; while 28 use two slabs and
five (including India) use four non-zero slabs. The Update also points out to
the positive impulse expected from India’s novel GST system which, is likely to
improve the domestic flow of goods and services, contribute to the
formalization of the economy and sustainably enhance growth.

Despite the recent momentum, attaining
a growth rate of 8 percent and higher on a sustained basis will require
addressing several structural challenges. India needs to durably recover its
two lagging engines of growth – private investments and exports – while
maintaining its hard-won macroeconomic stability. Crucial steps in this process
include cleaning up banks’ balance sheets, realizing the expected growth and
fiscal dividend from the GST, and continuing the integration into the global
economy.

As we start the new fiscal year each
member has jotted new ideas, new goals and new budgets and will be translating
them into action points. What is important to note is that the digital
revolution is cascading across every sphere of practice causing widespread
disruption besides redefining clients’ expectations. For the professionals of
the future, the ability to adapt their skills to the changing needs will be
critical. The time it will take for skills to become irrelevant will shrink.
There will be work for people with growth mindsets, but those with fixed
mindsets will be replaced with machines. The skills of yesterday will be
obsolete tomorrow. The future workforce need to align its skillsets to keep
pace with time.

As sunshine energy and a green
environment become increasingly the priority of our lives and nation, we at
BCAS have decided to discontinue our hard copy version of the monthly
Newsletter. Its content is being majorly covered in the BCAJ and regular
updates regarding upcoming programmes are accessible on our website and through
email. The VP Communique and a snapshot of programs of the Society will be sent
as a e-copy each month. We do hope our members will understand our
responsibility to practice green initiatives, instead of merely talking about
them.

With the start of the new fiscal year,
I look forward to getting more feedback from all of you about the opportunities
and challenges we should tackle in the months ahead.

Feel free to write to me on
president@bcasonline.org

With kind regards

 

 

CA.
Narayan Pasari

President

 

 

 

From The President

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Dear Members,

It was a beautiful Sunday morning with some light drizzle, while enjoying masala chai I was trying to catch up with the news. Alas! My enjoyment disappeared with the immensely distressing news…Eighteen Indian soldiers were martyred by Pakistani infiltrators using grenades and AK 47 rifles. Uri, the picturesque garrison town at the border had plumes of smoke emanating from the site where our Indian soldiers sleeping in tents were killed. The four militants were promptly neutralized in a shoot-out with the Indian army, but the dreams and happiness of eighteen families were irrevocably shattered.

Over the past few decades, Pakistan has been ravaged by its stupidity and short-sightedness. It allowed religious fundamentalism to proliferate unfettered and today it is repeatedly bitten by the monster it nurtured. Its economy is in a downturn; exports are negligible and remittances are contracting drastically. Hardliner Army Chief calls the shots while Prime Minister has been effectively reduced to a puppet. In an attempt to distract its suffering and disgruntled population, it is desperately raking up the Kashmir issue.

Pakistan appears to be spoiling for a fight; from Kargil to Pathankot Air Station and now the army camp in Uri. India has always exercised restraint, but now India has gone on the offensive! Moving quietly but decisively it responded with a campaign of prudent and well-timed initiatives.

First off the block was a stinging rejoinder to Nawaz Sharif’s vitriolic speech at the UN. First Secretary Eenam Gambir minced no words no words as she dubbed Pakistan as the epicenter of terrorism, adding that the effects of its toxic curriculum (imbibed in its extremist madrassas) is felt across the world. She boldly accused Pakistan of channelizing billions of dollars of international aid to training and financing terrorist groups.

International condemnation of the Uri terror attack put Pakistan in a spot. With Nawaz Sharif’s plan in shambles, India pulled out yet another ace as it brought the Indus Water Treaty up for review, with Prime Minister Modi saying “blood and water can’t flow together”. It followed this diversion with External Affairs Minister Sushma Swaraj lambasting Pakistan at the UN for nurturing and harbouring terrorists responsible for attacks worldwide. She bluntly underlined the fact that “Jammu and Kashmir is an integral part of India and will always remain so.”

With Pakistan clearly on a back foot, it was time for a master stroke. On a moonless night, two hundred Indian para commandos crossed the Line of Control and destroyed seven terror launch pads. The surgical strikes are believed to have killed at least fifty terrorists and more importantly sent an unequivocal message to Pakistan…that India will not remain complacent any more.

Having gained traction in the diplomatic arena, India needs to be more proactive than reactive. India must continue a concerted and sustained diplomatic campaign to isolate Pakistan. The US, EU and Middle East countries need to be consistently addressed to severely limit aid and trade support to Pakistan in order to force it to give up cross border terrorism.

 “A day will come when people of Pakistan will go against its own government to fight terrorism,”

PM Modi.

Bright Spot? – Modi vs Moody
The silver lining through all the dastardly acts discussed earlier and international economic turbulence is that India’s economy is growing at over 7%. The Prime Minister, Shri Narendra Modi, speaking at a global summit took pains to reiterate the many achievements of his government. He showcased, increase in FDI, reining inflation, lowest balance of payment deficit and fiscal discipline as achievements, so far, of the Government. Another strong factor of fiscal discipline to be considered is the Debt/GDP (%). India had Debt/GDP in C.Y.2015 of 140 as against the Global Average of 235. This would be more glaringly appreciative when considered against this ratio of some of the Developed Markets(DMs). US – 251, Euro Area – 291, Japan – 481 and UK – 279. This is despite having a growth momentum of more than 7% in GDP.

Jan Dhan Yojana, one of the key initiatives of the government has been hailed as the world’s largest and most successful financial inclusion plan. Two hundred million people have been introduced to the advantages of banking and their accounts today have a balance exceeding a phenomenal $4 billion! It’s relatively new Startup India, Stand-Up India and MUDRA programs are a step in the right direction as they are designed to empower youth, women, SC/ST and OBCs.

In the sphere of good governance, the government has already identified 1,877 old and unnecessary laws. 125 of these have already been repealed, while 758 are in an advanced process of being pulled out of the system. The government’s focus on good governance is highly visible in the passing of the Goods and Services Tax too. Cleared in both houses in the first week of August, the government is now working overtime to ensure its smooth rollout on 1st April 2017.

All these concerted efforts of the government seem to be bearing fruit. Some big global financial institutions have applauded India’s growth rates; and the string of reforms that have been implemented and are already transforming lives.

To take one example, Morgan Stanley Research, in its latest Global Macro Briefing, while dealing with India in Country Highlights has stated that the growth recovery is becoming more broad based, driven by public capex, FDI and consumption. Improved macro-stability conditions should minimize the impact from external uncertainties.

These global financial institutions believe India is “on the cusp of a major growth phase” and “looks to be firing at last”. With the global growth rates inching along, India’s enormous market potential appears to be an oasis for international investors.

The makeover of India is happening due to tone at the Top – Mr. Narendra Modi’s approach of working like a Rock Star for the progress of India. He has been walking on the stage for momentous days of India and playing his heart out. He is delivering the performance of his life. He has instilled a sense of confidence and urgency in his team and also in each and every Indian to deliver the best.

Here I would like to quote Henry David Thoureau, an American Poet –  “I know of no more encouraging fact than the unquestiobale ability of a human being to elevate their life by conscious endeavor.”

However, not all share this gung-ho sentiment. International credit rating giant Moody’s has not been swayed by all the hype and gloss of a media-savvy government. India continues to languish with a ‘Baa3’ rating – the lowest grade of investment rating. India’s pitch for an upgrade has been firmly dashed by a plethora of serious issues; which range from spiraling debt, stagnant revenue, massive NPAs in public sector banks, the slow pace of policy reforms, corruption in some sectors, geopolitical risks and the reluctance of private sector investments.

So is the Indian growth story, economy and prospects all hunky dory? You have heard it from the well informed, Shri “Modi” and got a nutshell analysis from “Moody’s”, the no-nonsense global credit rating agency and now it’s time for you to give India your very own rating!

“In economics there are no miracles, there are only consequences-ruthless and inescapable consequences. Inflation is the invisible tax which has never been passed by Parliament”.

 Nani Palkhivala

After the busy ‘extended’ tax season, this Diwali let us take an opportunity to take a break from the routine of multi-tasking and rushing from one deadline to another and instead spend quality time with our loved ones. Let us embrace these celebrations with open hearts and relearn how to enjoy life.

Wishing you all a happy and joyous Deepavali!

With warm regards,

Chetan Shah

From The President

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Dear Members,

Greetings from Mumbai! The 49th Residential Refresher Course (RRC) just got over, with 6 papers of contemporary importance. The participants enjoyed the learning in leisure, which is the basis of the RRC. RRCs started with this idea 50 years ago and now we are just a year away from the golden jubilee year of the RRC. In several countries professionals, like doctors, get paid leave of up to 2 weeks to study the developments in their specific fields. An RRC is this dedicated time, earmarked to study the current changes through discussions with fellow professionals and experts.

The Union Budget will be announced on 29th February 2016. This will be the second full fledged budget from Modi Sarkar. Recently, BCAS was invited to present before Mrs. Sushma Swaraj, Cabinet Minister for External Affairs who was asked by the PM to conduct a ‘Samvaad’ session to receive direct feedback from the Chartered Accountants fraternity on tax matters. She appreciated some of the points suggested by the Society especially on the attitude of the tax officers towards the assessees. Although the Society makes representations to the MOF, for more than 4 decades, from what I know, the voice of the profession is ‘heard’ only infrequently. We hope that the government that has a plank of ” Sab a Sath Sab Ka Vikas” will hear what the professionals have to say.

Nani Palkhivala, a fighter of civil liberties and defender of our constitution wrote: “Elections can change the governing faces; budgets can change the face of the state” The budget each year brings a sharp focus on economic and tax reforms. The motivation for change in the present government is certainly there, however the pace of execution needs to match it.

Tax laws above all should be Clear, Just and Simple. Every citizen expects tax legislation to be fair, balanced, easy to use, reasonable, low on procedures, less prone to interpretation and litigation. Over the years the Income Tax Act has become more of an incomprehensible monster. Disfigured by thousands of amendments, qualified by provisos and blunted by ‘deeming’ fictions. The size, shape, teeth, colour, feel of the law has become incongruent with the basic forces of human nature, where its acceptability has diminished.

If the meaning of  “Sab a sath sabh a vikas”  was to be actioned, then, collaboration would be the essence of law making. Today the budget has become an exercise carried out by the administrators alone to collect more revenue. What Mr.Palkhivala wrote still rings true “The budget should not be an annual scourge but should partake of the presentation of annual accounts of a partnership between the government and the people. The partnership would work much better when the nonsensical secrecy is replaced by openness and public consultations, resulting in fair laws and the people’s acceptance of their moral duty to pay.” A larger debate, participation, responsiveness from the law makers is the need of the hour to create nation building. Collaborative approach is where the world is headed, be it social interactions to running successful businesses; people are coming closer, exchanging ideas and feel a sense of belonging. The Indian government is a segment that is left behind, to make people feel it is ‘of the people’ and ‘for the people’. With several schemes announced recently let’s hope that ache din are coming closer.

Each of us has a wish list for the budget. I thought of taking this opportunity to share some thoughts playing on my mind and hope they mirror yours too:

1. Attitude change – The officer needs to think that the tax payer is his customer, a respectable citizen of the country to whom he is there to serve. A tax payer is not a cheat and earning more money does not imply that a business is carried out with unfair means. In fact every healthy business is vital to the nation. Attitude change on the part of the tax officer is vital and it has to come from the ones who govern before the governed. Being helpful, fair, respectful, reasonable, supportive and not just an agent to meet tax targets, will mean ache din for the tax payers.

2. Ease of Paying Taxes – The ‘ease’ aspect must become pivotal to all tax laws. For example, TDS procedures, which are tedious for small and medium businesses should be eased for smaller tax payers. Thresholds for TDS are increased. Yearly compliance for filing statements and issuing forms should be allowed. This will make smaller tax payers come around and reduce dodging. Another example could be of having a Tax Paid Passbook system, which can be used by tax payers to attribute taxes so as to end issues of non-payment, interest. Or even bring presumptive taxation for many other trades and professions to make it easy to do businesses and promote entrepreneurship.

3. Master Circulars – Compile all tax clarifications in a systematic manner to be useful and sensible. Just like the Reserve Bank of India, the Tax Department should come out with sets of Master Circulars once a year. Each topical Master Circular could cover an updated compilation of all circulars on that topic and clarify the position of the tax department. This will bring some method to madness and bring sense to the tax laws.

4. Stop Mutilation – Amendments should be restricted. In the words of Mr. Palkhivala – “Today the income-tax Act, 1961, is a national disgrace. There is no other instance in Indian jurisprudence of an Act mutilated by more than 3300 amendments in less than thirty years.” Today it has crossed about 8000 amendments. Certainty and respect for law and administration can only come when there is stability in the law itself.

5. Use of English – The language in Income Tax act is at best awful, crude, boring, distasteful and obnoxious. Use of such language to make laws in a country like ours should be included as a form of intellectual cruelty on citizens. Why should our laws not be written in PLAIN ENGLISH when millions are uneducated, where interpretation related litigation is rampant, and language should rather be a means of communication and not complication? Clarity, precision, brevity, freedom from legalese should be the hallmark of drafting. Can we not write a law where the writing is of a natural and normal human being? New Zealand Parliamentary Counsel Office has brought out a paper where such despicable use of English language in law making is forbidden. It’s time we do the same, then ache din will not be too far.

6. Discretion, Interaction and Transparency – It may be worth attempting to reduce / minimize interaction with the tax officers. Establishing Accountability for passing orders that are reversed at next levels, transparency in disclosing key data such as pendency, reversal of orders, average time of assessment, average time for rectification, average time for granting refunds, average time complaints resolved, customer satisfaction surveys, total compliance with citizen’s charter at a jurisdictional level would bring better administration and tax payer confidence. Clarity of department’s positions should be mandatory. Every use of discretion / interpretation should be made with signing off by higher levels. The department requires enormous efforts to make its positions clear on new laws, contentious issue, and must be held responsible for litigation costs where orders are reversed. We welcome some steps in this direction taken recently.

The Society has made a representation to the MOF on substantive provisions, which is placed on our website. We eagerly hope to see action, reaction or response. Without some fundamental changes, the Union Budget will just be another yearly event, celebrated by CAs, followed up by a few talks, a few meetings, few CPE hours and few more publications. But will it really bring ache din to the tax payer? Will it change the face of the state? Will it end our wait? Will it finally address aspiration of the people? Will it result in ” Sabh Ka Sath Sabh Ka Vikas” ? Let’s see.

From The President

Dear Members,

You can start over as many times as you want...seems to me one of the most simplest, yet
sensible mantras with which to leap into the New Year. The key word being
‘start’, for all too often we stay in a rut of complacency or indifference,
severely harming our well being. So let’s start making our dreams happen, by
changing the old ways that keep pulling us down. Let’s make resolutions…and
even if we break them…let’s start again! Let’s fly higher on the wings of our
intuition and imagination…and should we falter, we can always start again!

 

As we work for a better New India, let us all try to be part of the
solution. Let’s earnestly remove the blinkers of prejudice and hate and start
building bridges with people of all strata, religion and region. Let us
cultivate a sense of integrity and responsibility that we may enhance the world
around us. In doing this, I truly believe that we will be better equipped to
work together and grow our economy much faster. And more importantly, we will
be able to enjoy the fruits of the economic growth, much better. Can we start
now…and start again…and again?

 

GST was successfully launched this year but now is facing some
implementation hiccups. It was basically designed to streamline the tax
systems, while raising revenue, but now after five months it appears to be
falling short on the revenue side. GST tax returns filed for the July to
September 2017 period by around six lakh assessees under the ‘composition’
scheme show a meagre tax payment of around Rs. 250 crore thereby hinting at a
massive tax evasion by these smaller taxpayers. The composition scheme is a
special one to make GST filing easier for small firms; apart from simpler tax
procedures, the returns have to be filed once a quarter. To that extent, the
government’s plan to bring in the e-way bill and other ways to plug tax theft
are quite justified.

 

The focus of the Council is clearly now on boosting revenue collection.
The Council has already decided to do a nation-wide roll-out of the electronic
way bill from June 1 to enhance enforcement and eliminate any leakages. The
roll-out of the bill for inter-state movement of goods is being advanced to
February 1. Only after revenue collections stabilise and compliance increases,
will the Council consider any further streamlining of rates or merging of
slabs.

 

During the entire year 2017, BCAS also played a significant role in GST
by educating its members and the public through its various lectures, seminars,
workshops and conferences. More than 5K people benefited from these initiatives
of the Society. 

 

The year is on its last legs but there’s plenty of enthusiasm in the
stock markets, with the Sensex crossing the 34K mark. The Nifty on the NSE too
spiralled up closing at a record high of 10K plus. The buoyancy reflects the
widespread optimism that prevails in the markets. With SEBI paving the way for
Universal Exchanges, investors will soon be able to trade both securities and
commodities on a single platform, which will further catalyse growth.

 

And there’s more good news in the making…the Centre for Economics and
Business Research in its recent report has said that India is set to become the
fifth largest economy in the World in 2018, overtaking France and UK. The 9th
edition of the World Economic League table that tracks economies and forecasts
changes, believes that India will witness robust growth having got over the
effects of demonetisation and GST roll-out issues. The IMF too re-echoes this
projection, estimating a growth of 7.2% this year and 7.7% in 2018-19.

 

2017 was a year filled with some notable achievements for Indian Space
Research Organisation (ISRO). Our scientists set a world record with the launch
of the largest number of satellites in a single launch, and a rocket launch
(GSLV Mark III) with the heaviest payload. Providing a reliable, low cost
option, it launched a whopping 130 customer satellites in this year alone! And
not just the numbers, ISRO launched satellites ranging from 3136 kg to a meagre
4g! ISRO has now recognized its ability to launch satellites on a commercial
scale with multiple multi-satellite launches. Continuing with its tradition to
encourage student participation, ISRO also launched another student satellite
this year.

 

Today India is the toast and envy of many nations. One of its biggest
assets is its youth which is estimated to be around 968 million (people above
15 years). According to a survey conducted by BSE-CMIE, the number of employed
people in the country is around 405 million. Every year around 26 million join
the workforce, but only about 1.5 million get employment. A leading newspaper
put it very appropriately saying, “… if the pace of job creation is not
accelerated, the demographic bonus could become a demographic onus”.

 

Niti Aayog, the government’s premier think-tank is clearly on the job.
Its Vice Chairman Rajiv Kumar, who is working on the vision document of New
India@2022 says the new focus is on agricultural transformation, malnutrition,
higher education and employment generation. One of the priorities for 2018 is
to push India’s exports as out-bound shipments play a critical role in creating
high quality jobs.

 

The Society’s various Committees are putting in lots of efforts to
organise quality programs for the benefit of its members. However, it is really
alarming that many of these programs are not finding the right number of member
audience planned to make them effective both in terms of costs and also
inviting top notch speakers. The organisers get disheartened when these are
curtailed or even at times cancelled. I sincerely appeal to all members to take
benefit and enrol themselves to such top-quality programs for which BCAS is
known for across the country.

 

I would like to end with an inspiring quote delivered recently by
Mukesh Ambani to the Reliance Family, “…achieving your potential is the quest
of the ordinary…conquering the impossible is your destiny.” The new year is
here…let’s make the best of it…even if we have to keep starting again…and
again! All the very best, Dear Members!

 

Wishing you a happy Makar Sankranti, Pongal and of course our 68th
Republic Day!!

 

Feel free to write to me on president@bcasonline.org

 

With kind regards

CA. Narayan Pasari

President

From The President

Dear Members,

America
has ‘turned out’ some great people, but there are others not so great that
ought to be ‘turned out’. This clearly seems, to sum up, the sentiment
as Donald Trump stormed into the White House. On inauguration day, the aerial
pictures revealed the real picture – few turned up for the swearing-in
ceremony, but millions took to swearing in the street in protest. On his first
day in office, Trump exited the Trans-Pacific Partnership, a trade agreement
that took years of negotiation. He has signed documents for the 3,200 km
Mexican Wall and is tightening visa norms. The world is watching with crossed
fingers. Back home, seat sharing agreements and election rallies are being
watched closely, while the media is all abuzz with the budget expectations.
Here in India too people are anticipating the future with crossed fingers.

Tax Reform – Are we expecting too much?

Before
we speculate about the impending budget, let us first examine a very core issue
that plagues India. Tax Reforms, is a crying need in India today. The nebulous
world of Indian taxation is a major impediment in opening the floodgates of
investment, both by Indian companies and multinational giants. Gauging the
pulse of the situation Prime Minister Modi has asked officials to “move towards
digitization” in a bid to make tax administration better and more efficient. He
also stressed the need to build a “bridge of confidence” between taxpayers and
officials so that taxes are paid without fear or harassment. He urged tax
officials to act as “mentors of taxpayers” and not treat them as tax evaders.

So,
what is really happening at the grassroots level? Are individuals and corporate
India enjoying a better tax experience? Is there an eagerness or great
reluctance towards the task of paying tax? The real truth is nothing much has
been done. As Arvind Panagariya, Vice Chairman of NITI Aayog has admitted,
“We need to simplify our tax system and codify rules with precision, so that
room for interpretation by tax officials is minimized.” He advocated the
usage of data analytics for audits, instead of letting officials taking a
call…the elimination of the interface between officials and the tax payer would
minimize the scope of corruption.

The
key thrust of tax reform should be on re-drafting the tax statutes with utmost
clarity leaving minimum room for misinterpretation. Taxpayers interpret the tax
statutes to minimize their tax liabilities while tax officials focus on
maximizing revenue generation. Needless to say, this has resulted in disputes
and litigation – the Finance Minister in his budget speech in 2016 declared
that there are about three lakh cases pending with the first appellate
authority with tax liability amounting to a whopping Rs.5.5 lakh crore!

It
was Nani Palkhiwala, the eminent lawyer who once remarked: “Don’t call me an
expert in income tax laws. Indian income tax laws are drafted in much of a
subjective manner that no one can be expert in that.” Thirty years have
elapsed, but the situation is very much the same, if not worse! The subjective
and arbitrary interpretation of tax laws is just one side of the coin. In
India, tax officials are not penalized for misinterpretation of tax statutes.
On the contrary, they are protected even though they are responsible for
incorrect and undue demands. This lack of accountability has emboldened tax
officials, leading to much corruption at many levels. Remedial action in the
form of an appeal is available against the order, but not against the tax
officer. Moreover, the taxpayer must endure interest, penalty, and prosecution
all because a tax official decided to read between the lines!

Taxtortion
flourishes in India! There are so many examples of misinterpretations of
sections by the assessing officer, leading to a legal logjam. Predictably there
are lakhs of cases…but interestingly most of the disputes were settled in
favour of the tax payers. It is a known fact that nearly 80% of the assessments
get reversed either at the first appellant level or the second appellant level.

Minimum
Alternate Tax (MAT) is another classic case of how the government is demanding
a tax in an extremely arbitrary manner. MAT was devised to tax companies that
took advantage of the numerous exemptions leading to little or no tax
liability. The predominant view was that this provision did not apply to
foreign companies. Then in 2012, the Authority for Advanced Rulings made MAT
applicable to all companies. In 2014 tax notices have been slapped on companies
to cough up around Rs. 40,000 crore. Many more demand notices are being issued.
Is the government serious about attracting international investment with such
haphazard, arbitrary tax claims? We now have GAAR and government is aware what
effect it can have on investment sentiments. But it has still thought it fit to
go ahead by issuing set of 16 clarifications to allay investor fears over GAAR
regime. But subjectivity and powers of officers still remain without
accountability. What is the guarantee that GAAR will not be misused?

A
senior leader of a traders’ association strongly felt that businesses currently
were harassed and victimized by the cascading demands of multiple tax
authorities. He said: “Most of the time we are busy in complying with tax
formalities, collecting taxes, depositing taxes, submission of forms, pursuing
money stuck in the system…that we don’t find time to do business!” Sachin
Bansal, co-founder of Flipkart – India’s number one e-commerce site echoes the
same thinking. He believes the idiosyncratic tax codes that his company must
work around are a serious bottleneck to doing business…there’s double taxation
at Karnataka warehouses, a $75 limit on shipments to UP and confiscation of
goods and cash in Kerala.

This
chaotic situation is set to change with the Goods and Services Tax which is
expected to be implemented in the second half of this year. It is clearly a
winner in clearing the tangled thicket of tedious state after state tax codes.
It has been rightly hailed as “India’s reverse Brexit moment” as
it replaces 15 existing state and central taxes, paving the way for India to
become a single economic zone. It is slated to attract foreign investment,
reduce capital goods cost, boost manufacturing and exports and create
employment. But as Arvind Subramanian, the government’s chief economic advisor
warns that GST will be “fiendishly, mind-bogglingly complex to administer.”

It
is my hope, an ardent hope that the government will diligently re-look at tax
statutes and embark upon a concerted plan to fine-tune them so that they are
neutral, precise and completely objective. Introducing an amendment that
will ensure accountability of tax officials will be a step I think in the right
direction. This I believe is as important as the many sops, exemptions,
and concessions that I expect will be dished out in the coming budget to soothe
the wounds of demonetization.

Golden Jubilee RRC – What a celebration!

It
was Henry Ford who once said, “Coming together is a beginning; keeping
together is progress; working together is success.” This 50th
Residential Refresher Course was a testimony of those words. Let me thank all
the speakers, team leaders, animators and participants of the recently
concluded Residential Refresher Course in Jaipur. The level of participation
was excellent and it was more like a National Conference with 145 out of 270
members from various cities other than Mumbai. I am sure we have all benefited
in different ways from the invaluable insights and learning that came up in the
many interactions. The highlight was the celebrations evening where Padma Shree
CA T. N. Manoharan and Vice President of ICAI CA Nilesh Vikamsey enlightened
the participants with their wisdom and experience. I can surely say that they
poured their heart out through their eloquent speeches, reminiscing their
association with BCAS and the RRCs. It was an ideal opportunity for us all to
learn and relearn and to grow our professional network all across the country.
Being the golden anniversary of the course, I hope it continues to sparkle in
our minds and spark many innovative ideas and practices.

On
successful completion of a momentous event at BCAS, I would like to end my
communication with following lines by renowned spiritual mentor Mahatria Ra:

“In the journey of success, every finishing line is the new starting
line. In your career, year after year, you have to prove once again. You’ve to
challenge yourself once again. After every accomplishment, the heartbeat of
success remains, ‘What next? What else? What more? How else?.” 

Warm
Regards,

Chetan Shah

From The President

Dear Members,

By the time you read this, India must have enjoyed and celebrated its most awaited colourful festival of Holi. This year I would like to extend my Holi Greetings, with a prayer for the entire country…that as winter turns into spring, we may all be rejuvenated and allow good to triumph over evil in our lives and the world around us. I also hope that as we splash and frolic in multiple colours, may we accept the diversity of all people and grow together.

Let’s dive into the month that was…beginning with the Budget 2018. It was a witty person who once said, “A budget is what you stay within if you go without.” Our FM Shri Jaitley had to walk a delicate tightrope in allocating adequate resources to only the most compelling issues. The media had a field day in reporting the Budget and all the views and criticism that was generated, but I believe this year’s Budget is an effective and very viable stepping-stone for the economy. It has a very judicious mix of populist initiatives and disciplinary measures that will continue to spur growth in the years ahead. Agriculture, rural development, MSME and the world’s largest healthcare program were the key features of the budget.

With a total expenditure of Rs.24.4 trillion, the fiscal deficit is set to escalate marginally to 3.3% of the GDP in the year ahead. But that was not the big dampener that sent the stock exchanges spiralling downwards. It was the much-anticipated Long Term Capital Gains Tax of 10% without the benefit of indexation. Both individual and institutional investors dumped stocks causing the Sensex to crash over 1100 points wiping around 9.6 lakh crore in just three market days.

This was coincidentally the start of the global mayhem. The US Dow collapsed unexpectedly and dramatically sending ripples across the world. This situation was inexplicable as the World Economic Forum at Davos reported optimism in the growth of the global economy. Trump’s tax reforms were seeing results as corporate earnings and jobs were growing. So, what was spooking the markets? Was it the hardening of US interest rates? Or the expected $1 trillion deficit compounded by dropping tax revenues?

However, a positive aspect was the unanimous agreement of top global leaders at the ET Global Business Summit that India is poised to be a $10 trillion economy by 2030 – that’s four times the current GDP. India could tap into the tailwinds generated by the world economy that’s currently growing at 3.9% to surge ahead at 9% in the years ahead. E-Commerce could also be a key driving force of India’s growth story. With higher internet penetration, e-commerce sales could balloon to $150 billion in 10 years.

India’s meteoric growth will also propel innovation, which will in turn accelerate growth. To achieve all this, India will need to streamline its tax structure, improve digitisation and infrastructure as well as skill its workforce. With international confidence running high, we need to seize the opportunity and reclaim our position as a leading economy in the world.

The talk of the country for the past few weeks has been the PNB scam of Rs. 114 million and growing. This perfectly orchestrated scam has devastated PNB’s share value by 25% and has dragged down several other public-sector banks. In the wake of the PNB scam, some more frauds have been unearthed; raising some very pertinent questions.

Hon. PM Shri Modi expressed his displeasure as he declared, “the system will not tolerate loot of public money”. He also took the regulatory institutions to task saying that they need to discharge their responsibility with utmost sincerity and integrity. FM Jaitley too found fault with RBI, management of PNB and the auditors for being unable to detect the scam. He said that, “If you periodically have frauds of this kind the entire effort of ease-of-doing business goes into the background”. He has asked the supervisory agencies to introspect and deploy additional systems to prevent any further recurrence.

The government has made it clear that CAs cannot get away just by citing red flags. It is exploring measures to fix auditor responsibility in frauds. In response to the alleged lapses on part of auditors, ICAI has been proactive. It has served show-cause notices to the auditors. It has requested RBI to share a list of corporate borrowers with over Rs. 2,000 crore loan outstanding in PSBs so that their accounts can be examined for any violation. It has also requested SEBI and CBI to share their findings to enable it to act against any chartered accountant involved in fraud.

After this spell of not-so-good news…here’s a rainbow. Schools in Delhi are soon to have ‘Happiness Classes’. Experts debate on whether it’s a subject that can be taught, but a Good Life course in Yale on similar lines has achieved unexpected popularity. Here are some details that could help us spark some happiness in our lives too!

The course underlines that a pivotal factor of our happiness is our intentional effort – especially practising gratitude and kind behaviours. It cites research which suggests that changing life circumstances won’t make us happy…to be happy we need to consciously work on it. Students are taught that in making others happy, you can make yourself happy. Students use tools from psychology to live their happiness goals. In addition to readings and assessments, the students are encouraged to ‘rewire’ through a series of exercises that make them happier, healthier and resilient. It’s still a new concept, but I hope it catches on and spreads to schools and colleges across India.

This year, Mr. S. E. Dastur, Senior Advocate addressed his last & the 30th BCAS Public Lecture Meeting on ‘Direct Tax Provisions of the Finance Bill, 2018’. Three decades is a long time in any organisation’s time span. We at BCAS, were fortunate enough all these years to avail of his masterly analysis year after year. This year apart from the 1,000+ personally present, we had more than 11K viewers from 13 different countries who joined us through Live Screening.

As the Society enters its 69th year of existence, we continue to acknowledge your affiliation with us and value the same. Hope you find this platform adding value and nurturing you to groom yourself in the profession. I request to please renew your Membership & Subscription for the coming financial year 2018-19 to avoid any disruption of BCAS membership benefits. Kindly note, the renewal notice along with the form has been sent to your addresses.

The Society has lined up number of programs in the months of March and April. I request members to take benefit of the same.

Wishing you a Happy Gudi Padwa, Ram Navami, Mahavir Jayanti & Good Friday!

Feel free to write to me on president@bcasonline.org
 

From the President

“Come to India if you want
wealth and wellness. Come to India if you want health and wholeness. Come to
India if you want prosperity with peace…You will always be welcome,” Prime
Minister Modi spread a lot of hope and sunshine in snow-blanketed Davos while
addressing the World Economic Forum Annual Summit last month. Being the first
Indian PM going to Davos in 20 years, Mr. Modi was determined to make a strong
impact by hard-selling the “New India”. In his stirring speech, interspersed
with shlokas and quotes by Mahatma Gandhi and Rabindranath Tagore; PM Modi made
a convincing case for investors to touch base with India. Citing recent data
and surveys, he explained that India was open for business, emphasising that
his government had streamlined the way with revamped policies and fast-tracked
clearances and “Red tape is out, red carpet is in.” He rightly asserted that
“New India” will be a $5 trillion economy by 2025, where Indian innovators will
become ‘job givers’ and just not remain ‘job seekers’.

 

The PM also pitched hard
against protectionism that has become increasingly visible in recent years. He
slammed this trend saying, “Countries are becoming inward focused,
globalisation is shrinking…this is no less a risk than terrorism and climate
change”. He even chided the international community for only talking about
lower carbon emissions, but not providing any resources or technology to deal
with the challenge. Similarly, he also vented his disappointment with countries
who are openly supporting terrorists…and splitting hair by talking of good and
bad terrorism. PM Modi has delivered – both in India and now in Davos, now only
time will tell if it’s working.

 

The Annual Economic Survey
presented by the finance ministry’s economists, projects that the Indian
economy will expand between 7% to 7.5% in 2018-19, a number not very different
from that estimated by the World Bank and the IMF. History will likely
recognise the implementation of the GST and the introduction of a Bankruptcy
Code as fundamental structural reforms, and the survey acknowledges both. Apart
from this the effort to recapitalise banks, addresses what is popularly called
the ‘twin balance sheet’ problem (bad loans on the books of banks, and debt on
the books of borrowers). The survey also points out that there is an increase
in the number of enterprises that pay indirect taxes. The big picture presented
by the survey is of an economy that is becoming increasingly tax compliant, and
is poised for growth, although, as the document admits, there are still
challenges when it comes to both consumption-driven growth and increasing
private investment.

 

The
major issues faced by the Modi Government are employment and the ongoing crisis
in agriculture. The survey picks both as issues that need to be addressed
immediately. Worryingly, it points out that “climate change might reduce farm
incomes by 20-25% in medium term”. The solution will involve more science, but
it should also involve more markets. For employment, the survey is right in
listing “private investment and exports” as the only two “truly sustainable
engines”. India would do well to focus its efforts on creating an environment
conducive to private investment and on increasing its export competitiveness.
That might well hold the key to creating jobs, although doing so against the
countervailing forces of increasing automation and rapid strides in all will be
difficult to achieve.

 

The World Economic Outlook
Update from the IMF estimates that the Indian economy would perform well and
will be the fastest growing economy in 2018 and 2019. China on the other hand
notched 6.8% last year but is expected to decelerate to 6.6% in 2018 and slip
further to 6.4% in 2019. Adding to the good news is the PwC Global CEOs survey
which has seen India rising one place to become the fifth best investment
destination in the world, overtaking Japan. This has been the result of
concerted and committed implementation of structural reforms. The government
has demonstrated strong dedication for upgrading infrastructure and upskilling
the people, in addition to opening up several key sectors.


There’s a lot looking good
for India but there are also some issues that need to be tackled on a war
footing for India to truly be an outstanding and model country. One of them is
the horrific fact from an Oxfam survey which declares that 1% of India has 73%
of its wealth. This inequitable distribution of wealth could pave the way for
many problems in the near future. The government is already looking at an ‘Ease
of Living’ index and should actively explore some initiative to make India’s
prosperity more inclusive.

 

It was something of a coup
to get all the ten heads of state and government of the Association of South
East Asian Nations (ASEAN) to congregate in Delhi. They were all invited as
Chief Guests of the Republic Day parade and to attend the Indo-ASEAN
Commemorative Summit that marks 25 years of their dialogue partnership. With
America looking inward and withdrawing from the world, China has been flexing
its economic and military might. Currently most of the ASEAN countries are
heavily dependent on China to keep their economies going. But they are alarmed
with the high-handed attitude of China in handling territorial disputes.

 

The ASEAN countries are now
eagerly looking at India in being the counterweight in the region. Many of the
countries are keen on boosting investments and economic ties with India. This
is significant as India and the ASEAN countries have a combined population of
1.8 billion which is a quarter of the world population. The combined GDP is
around $4.5 trillion and Indo-ASEAN trade has climbed to over $58 billion in
2016. There is much scope for developing tourism cooperation and more
importantly maritime security among the member countries. With a lot in common
like young populations, growing internet user bases and surging middle-class
households there are tremendous opportunities for all countries. In fact, the next big idea could even be about Indian membership in ASEAN!

 

Students’ activities are
core to BCAS and the Society takes several initiatives to promote them. The
results of Final CA and IPCC examinations held in November 2017 were announced
recently. On behalf of the Society, I take this opportunity to congratulate the
new entrants to the profession and to those taking first steps in their quest
to become CAs.

 

In order to encourage the
young students passing CA to become members of BCAS, even this year the Society
will be felicitating them with various benefits which has already been
announced. If your articled clerk has secured a rank or you know about a rank
holder in CA Finals, BCAS offers one-year membership free. Till date, I am
happy that 22 rank holders have already become members of BCAS. I request all
the members to encourage their students who have successfully qualified to
become members of the BCAS and those serving articleship to become student
members of BCAS. 

 

At the Society, the
flagship program – the 51st RRC at Mahabaleshwar held in January 2018 was a
grand success. As a boost to the “Yuva Shakti”, 3 paper writers at the RRC were
youth members and the participants applauded their presentations. The other
highlight was the 3 hours Panel Discussion where the 4 panellists drawn from
diverse backgrounds expressed their thoughts on variety of subjects on the
profession. The participants immensely benefitted from the panel discussion.
The Society has lined up a number of programs in the months of February and
March. I request members to take benefit of the same.

 

Wishing you a Happy Budget,
Happy Maha Shivaratri & a Colourful Holi ahead!

 

Feel free to write to me on
president@bcasonline.org

 

With kind regards

 

 

CA. Narayan Pasari

President

 

 

 

 

 

From The President

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Dear Members,

Greetings! The vacation month of May is over and hopefully summer heat will soon end. However, the heat of new amendments continues throughout the next few months! Changes include modification of Accounting Standards Rules and a new SEBI circular on LODR (Listing Obligations and Disclosure Requirements) applicable w.e.f. 1st April 2016. Additionally, the first quarter results will be reported under Ind ASs. Internal Financial Controls reporting has entered the audit report even for smaller companies. Although changes keep us on our toes and keep the wheels of learning and unlearning moving, the applicability and timing of these changes awakens a strange sense of astonishment in me!

Two years of the NDA
Our elected government just celebrated its 2 years. Although as accountants we are trained to be sceptical, analytical and judge things a bit more than others, the Modi sarkar does deserve special compliments on doing what it has done so far. I do feel that to run a country like ours, is anything but easy.

For one, it did something at a fundamental level. There is a clear sense of leadership and direction, a visible sense of purpose, passion and initiative to work for the country. It has focussed on important yet simple things that tangibly affect ‘the little guy’ in a big way. What used to be perennial epitomes of dirt and disorder, the railway stations are now much cleaner and orderly. Take thousands of old useless laws lying unaccounted for decades. Some 1100+ old laws were junked in two years (1301 scrapped in 64 years before it). Take sanitation in villages and schools. What was visible and yet never resolved has been brought under zoom lenses. Addition to solar power capacity has been the highest ever. Taking people along – Giving up of LG subsidy by 90 lakh people is not a small number. Corruption at high levels is not heard of. Emphasis on Digital through apps by several ministries, from power ministry to customs, has lead to ease and transparency. Check out the mobile seva app store and you will find the digital side of the government. Initiatives such as enhancing the use of existing infrastructure, like the post offices, which is possibly the largest network of branches, to serve the citizens is both thoughtful and innovative. Yet a lot of work seems to be just cleaning up, completing, debottlenecking, catching up and rebuilding the building blocks.

Yes, there are shortcomings and they too must not be overlooked. Just recently one of my office bearer colleagues told me about businesses shifting base out of India due to taxing of commission received from overseas on goods sold overseas. Such laws make no sense, and make businesses models fall flat to the detriment of the country. Take another example taxing dividend income over Rs. 10 lakh. Such a law would eventually result in less dividend declaration and eventual loss of DDT itself. Since rule of law is really the bedrock of a liberal democracy, but in case of India, it has to be rephrased as ‘rule of good laws’. Today there are over 2500 Acts just at central level whereas a lot of the states do not even have full inventory of laws made by their legislatures. What we need today is – mandatory review and sunset clauses embedded within every law like in other countries. This will result in assessing the objectives and anticipated effects of every law. Such fundamental shifts are expected so that our laws are not catalysts of ‘not doing business in India’ but serve as enablers. We hope the pace, depth and extent of work continues to touch areas that require attention, areas which are fundamental and which makes lives of billions significantly better, self reliant and meaningful.

PG Portal – pgportal.gov.in
This is a facility available for redressal of grievances relating to Central Government. This is a nodal portal where you can lodge a complaint relating to several ministries and departments and it will be recorded, monitored and redressed within 60 days. We wanted this to be brought to your notice as several members who have used it, found it useful particularly for service related issues. The portal has features which allow you to upload documents, get a complaint registration number and also view status. I wish you use this portal and popularise its use amongst your friends and clients.

BCAS Events
June is particularly packed with events. We have four public lecture meetings on preparation and filing of ITRs, on Audit Finalisation for the year ended 31 March, 2016, Bankruptcy Code and on Stock Market and Economy. There are other events like the Residential study course on Service Tax and VAT , workshop on fraud reporting and data mining and a workshop on practice management. The most exciting event seems to be the one organised by CA students. A very sought after 9th Jal Erach Dastur Students’ Annual Day named TARANG 2k16, Tarasho Apne Talent ke Rang. The entries and auditions reached new heights for all 6 competitions. I have to thank the members for encouraging their students to take part.

Attitude of Gratitude
I wanted to share this with you that all of us are part of a miniscule minority that is truly and phenomenally blessed. From having a roof over our head, to having running water in our taps, to having received education, to having gainful employment, makes us a part of a ‘privileged’ minority. If you take a moment and look around, and see what is happening to millions, you will realise that you are not lucky, but blessed. Although we are trained to be accountants we can never master an art – the art of counting our blessings. Like Eric Hopper said “The hardest arithmetic to master is that which enables us to count our blessings”. I want to leave you with this beautiful thought and with a secret wish that it will expand within you and manifest in the most magical way that it possibly can.

Wishing you a magnificent day, and more to come!

From The President

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Dear Members,

At the outset, I express my heartfelt gratitude to all of you for bestowing upon me the honour to be the 68th President of the Bombay Chartered Accountants’ Society. It is indeed a great privilege since BCAS has evolved over the years as an organization committed to the development of the profession and society at large. Along with the honour of being the President of this august institution, I am also aware of responsibility and challenges. I look forward to diligently performing my duties and striving to achieve the vision of the Society. I am sure of support and encouragement from the managing committee, respected past presidents and members. It will indeed be a privilege of interacting with you through BCAJ which is one of the most prestigious and widely read professional Journal.

25 years of Economic Reforms
Mr. Manmohan Singh, a true visionary, concluded his budget speech in 1991 with the words “India is now wide awake. We shall prevail. We shall overcome.” Yes, we did overcome and time has come when India speaks, the world listens. We are living in exciting times. A buoyant economy and a robust growth rate have made India the toast of the entire world. Foreign direct investment is pouring in steadily and many multinationals that ignored India are now scrambling to either set up manufacturing facilities or tap its burgeoning market. There are opportunities aplenty for everyone! This happy situation was not always so – it has been in the making over the last twenty-five years when liberalization of the Indian economy first began.

The unshackling of the Indian markets and the freeing of enterprise from a plethora of controls has facilitated accelerated growth. India has leapfrogged from being dependent on foreign aid to one that stands tall, shoulder to shoulder with the developed countries of the world. Per capita income and GDP have spiraled up steadily, and India is today the third largest economy in the world in PPP. One of the finest reflections of India’s growth story is the fact that many Indian companies are today multinationals acquiring global assets and operations. India’s image of a cheap labour market has been replaced by that of a knowledge hub.

Indian rockets are now ferrying satellites into space and Indian software specialists are coding success stories across the world. But there are still many initiatives and programmes that need to be undertaken to improve the life of the common man. In underlining India’s stratospheric success, I am only reminding all of us of the huge opportunity India is, and of the vast potential that lies ahead. In fact, India’s economic success will complete only if it is more inclusive – extending to citizens in big cities and small villages alike. I am sure that most of you share my feeling of living in dual India – India on one side and Bharat on another. While many citizens enjoy the growth story, nearly 300 million people are reeling under endemic poverty. Our country is home to one-third of the world’s poor. The gap between haves and have-nots continues to widen, malnutrition still consumes 100 children every hour while 30% of grains do not reach the intended beneficiaries. To summarize, prosperity has begun to spread across India, but has yet to reach the last man, woman and child at the bottom of the pyramid.

Abuse of power had become an acceptable routine in the world’s largest democracy, and the entire political class had been hand in glove till the last elections to prevent game-changing reforms. However, since the current government has taken up reins, there are green shoots of major reforms initiated or in the offing. India is on the cusp of achieving in the next decade much more than what has been achieved in past twenty-five years.

The Lokpal and Lokayukta Act
Let us take a look at an Act that has been in the news for the wrong reasons. The Lokpal and Lokayukta Act has been equipped with teeth to check allegations of corruption against public functionaries. In its enthusiasm to regulate and restrict corruption, NGOs, and charitable institutions have been brought under the purview of this act. As a result, trustees and its officers – who are volunteers, have now become public servants and are expected to declare their assets in the public domain. This action is responsible for many genuine people who have volunteered to serve the public to step down and relinquish office. The uproar has reached the ears of FM and a decision seems to have been taken to refer the matter back to the Standing Committee for review. We look forward to playing a role in resolving the issue and ensuring that there is no mass exodus of good people from NGOs and charitable organizations.

Member Deliverables
My resolve for the year is to offer members an enriched service experience from BCAS. I am aware of certain grievances of members remaining unattended. To resolve these and to compress timelines for attending to them, we have set up a dedicated task force at BCAS, which I am sure would improve upon service to the members in a timely and efficient manner.

It is our resolve to bring BCAS to your doorstep be it through website, through live streaming or online payment for all services. By the time you read this page, online payment facility for all transactions with BCAS would have become a reality. May I request you to use this facility to the fullest and save your staff time of sending cheques to BCAS. From buying a book to renewing your membership to paying for an event, www.bcasonline.org will be your window to ease of doing business with BCAS.

As I sign off, I would like to draw your attention to a unique opportunity. You can now open the doors of learning by gifting BCAS membership to freshly qualified CAs. Be it your article student or an acquaintance who passed out from the May 2016 batch, you can make a gift that will take their new prefix to a new height. The icing on the cake is a complimentary e-kit that is being offered to such qualified CAs. The Society, as a mark of recognizing the rank holders will be giving them free membership. I request all the members to make this endeavour a grand success.

From The President

Priyanka Chopra, the
internationally acclaimed actress recounted how an American Indian once
remarked to her “Thank you for making us relevant”. I take this opportunity to
extend my deep gratitude to all members for electing and accepting me as the 69th
President of the BCAS…but more importantly I want you all to assist me in being
relevant and useful in my role as President. I count on all of your support and
suggestions to make the Society more visible and an opinion leader that’s more
audible and respected in financial, economic and political circles.

For the benefit of the many
thousands of members who could not make it to the Society’s AGM, I would like
to share some thoughts from my incoming speech (printed elsewhere in this
journal). The theme was on “Building Bridges”, as a way to go ahead
successfully. We need, as members of BCAS, to constantly keep building
bridges…not only internally with different members and committees, but also
externally with other associations, bodies, organizations and the government at
all levels. 

A bridge is a structure built over
an obstacle to provide connectivity and accessibility. Bridges unite us and
bring us together on the same page; enabling us to understand each other’s
challenges. With bridges, come two way exchange of ideas and thoughts…a
dialogue to help us to figure out how we can collaborate with each other and
grow mutually.

Having worked extensively within
the society at different levels over the last two decades, I suggest that we
concentrate our efforts in building four key bridges. I believe as we
transform, we grow! So TRANSFORMATION is high on my list of priorities.
I want to focus on increasing the resources of BCAS and one way is by expanding
the membership of our Society. Let’s target to reach the10000 mark in this
year, then to add greater momentum to our transformation and growth, we need to
have more youth in the BCAS. I think YUVA SHAKTI will be the key to
invigorating the Society. We must encourage young talent to participate and
take up larger responsibility in the functioning of the Society.

DIGITIZATION has been happening across the world, in India and
even in the BCAS. We need to step up the pace of digitization so that we are
better empowered to manage our resources and conduct our business. In addition
to being able to disseminate knowledge faster, we would be able to translate
information into action more effectively. In today’s highly competitive
business environment, NETWORKING
is the oxygen for success! Networking is an avenue that I feel we should use
more often; be it the government, corporate or fraternity level, we need to
step up our efforts.

These are just some of the ideas
that I have put together to get started. I appeal to all members to freely
offer your suggestions, so that collectively we can transform BCAS for renewed
growth.

The
68th Annual General Meeting of 
BCAS was made special by the Guest Speaker, Shri Piyush Goyal, Union
Minister of State for Power, Coal, New & Renewable Energy and Mines. In his
talk titled “Energising India – Changing Paradigm for Professionals”, he
invited Chartered Accountants to participate actively in the successful
implementation of the Goods & Services Tax (GST) by ensuring that their
clients do not engage in profiteering.

In his talk, liberally punctuated
with anecdotes and humour, he referred to GST as the “biggest transformation
that our nation has seen in our 70 years of independence”. He added that it was
redeeming for the CA community that it was introduced on July 1, which is also
celebrated as ‘CA Day’.

Shri
Goyal, a top ranked Chartered Accountant gently warned his fellow professionals
against tax evasion. “I request you not to evade taxes yourself and not to help
your clients evade tax. Every time you do that, remember you are depriving the
poor and needy of that resource,” the minister cautioned the CAs.

I believe there is considerable
merit in what our Prime Minister Shri Narendra Modi said at the Foundation Day
of the ICAI on July 1, after launching a new course. After defining the scenario
in India with figures, he appealed to the conscience of CAs, earnestly
requesting them not to support the menace of black money. He urged them to give
the right advice to their clients so that black money and corruption are kept
in check. Shri Modi went on to tell CAs that their signature is more powerful
than the PM’s; and that the government believes in the accounts signed by them.
“Your signature” he added, “carries immense faith, please do not break that
trust that is placed in you.” 

The Prime Minister lamented the
fact that among the Big Four accounting firms in the world there is no Indian
firm. He urged the CAs to think big; saying that he hoped by 2022, there will
be a Big Eight, where four of the firms will be Indian. As a follow-up to his
address, Prime Minister Modi also sent out personalized emails to over two lakh
chartered accountants exhorting them “to pull their weight in combating
corruption and black money.” The networking platform which BCAS provides to its
members has earlier enabled many a professionals and firms to come together.
This year “Networking” is one of the agenda which we have set to exactly
promote this idea of enabling collaboration amongst the various professionals
which can ultimately help us realise the dream of some large Indian Firms.
Earlier also at BCAS we have experimented with this idea of networking
conclaves and time is now ripe to carry out such activities with more vigour.

Shri Ram Nath Kovind has emerged
victorious to become the 14th President of India. The NDA candidate, Shri
Kovind had the support of forty political parties winning 65% of the votes. The
71-year old President is the second Dalit to get a five year term at
Rashtrapati Bhavan, the country’s highest office. Hailing from Paraunkh village
in Bihar, a farmer’s son, President Kovind’s journey to Raisina Hill has been
quiet and unexpected.

Unassuming Shri Kovind is a law
graduate and has even cleared the civil services exam but did not join. He
practiced as a lawyer in the High Court and later in the Supreme Court and has
been the government’s standing counsel for over a decade. He is well equipped
to be President having vast experience of the inner workings of the Indian
democracy as a two-term Rajya Sabha MP and Governor of Bihar. He has a
spotlessly clean record and is known for his impeccable integrity.

He has devoted his life to public
service, working for the poor and marginalized. In his first speech after being
elected President, Kovind recalled his impoverished childhood and pledged to
represent all those struggling to make a living. On behalf of the BCAS, I
congratulate President Ram Nath Kovind and assure him of all our support in the
years ahead.

In
yet another well-thought out strategy to ensure tax compliance, the IT
Department declared u/s. 139AA of the IT Act that linking the PAN and Aadhaar
is mandatory for filing tax returns. The Supreme Court threw its weight behind
this move, upholding this section. This linkage aims at de-duplication, as many
unscrupulous people have multiple PAN cards. Predictably, there was an outcry
with many protests citing privacy issues. As a result the Supreme Court has set
up a nine judge bench to examine whether the right to privacy is a fundamental
right under the Indian Constitution. Let us wait for the decision.

Resenting the measure to link
numbers, a large section of the public has remained defiant and has not done
so. Only 25% of citizens have linked their PAN and Aadhaar…out of 32.41 crore
PAN Cards only 8.19 crore have been linked. Some have dug in their heels and
have decided to wait it out till the court delivers its judgement. Others have
declared they will snail mail their returns to the Central Processing Unit
instead of filing it online.

The good news is that the tax base
has widened to 62.6 million at the end of the last financial year from almost
40 million. This is the result of demonetisation and the numerous measures and
schemes offered by the government to come clean and avoid sleepless nights.
Speaking at the Income Tax Day celebrations in New Delhi, Finance Minister
Jaitley said that a deterrent had to be used to prevent anonymous people from
hiding ill-gotten wealth; and that the PAN-Aadhaar linkage was one such an
anti-evasion measure. He also added that tax rates need to become more
reasonable, but for that to happen the tax base needs to be expanded.

Before I sign off, I would like to
thank you all once again and look forward to your suggestions and support. Feel
free to write to me on president@bcasonline.org

Wishing you and your near and dear
ones a Happy 71st Independence Day !!

With kind regards

CA
Narayan Pasari

President

From The President

Dear Members,

It is that wonderful time of the
year when the sizzling summer sun gets subdued by the dark moisture-laden
clouds. A cool refreshing breeze blows in from over the sea and swirls away
from the sweaty stillness of summer. To the shrill trill of the cuckoo, the
rains pour down in full gusto. The layers of dust and pollution get washed away
from the buildings and trees, and the air smells ‘clean.’ The parched yellow
landscape is now carpeted with lush green foliage.

When you are finished
changing, you are finished

Yes, there is CHANGE all around us
and not only because of the arrival of the monsoon. There have been sweeping
changes on various fronts, and their impact is now being felt in ever widening
circles and in a positive manner. It’s often been said that change is the only
constant in life, yet we are sometimes so averse to change and the hidden risks
that come with it. Let’s face and embrace change with a spirit of challenge and
adventure or else… as Benjamin Franklin once said, “When you are finished changing,
you are finished!”

For the last three years, India
has been experiencing a ‘season’ of change. The NDA government propelled by the
seemingly inexhaustible energy and enthusiasm of the Prime Minister has ushered
in numerous programs and laws. The many initiatives have met with widespread
criticism and appreciation and have in some measure transformed India. Jan Dhan
Yojana, Make in India, Digital India, Stand-Up India, Startup India and Swacch
Bharat Abhiyan have strived to empower Indians and add greater momentum to our
economy and society at large. India’s gift to the world, yoga, was celebrated
throughout the globe on June 21 as International Yoga Day.

We have also seen swift and bold
strikes against the perpetrators of the black money economy and counterfeiting,
with demonetization and income declaration schemes. Consciously indifferent to
the strident calls to defer the implementation of GST, the government has
pushed ahead but has decided to be lenient with procedural non-compliance in
the first few months. Ensuring that GST is properly implemented will be a huge
challenge for the government keeping in mind a large number of small businesses
which are scattered in the rural hinterland that are plagued by infrastructural
constraints and low awareness.

Change before you have to

Jack Welch, who led General
Electric to this scale of success, once said, “Change before you have to.”
This wisdom is visible on the numerous changes that you now see at BCAS.
Keeping pace with geographically scattered and technologically savvy members,
the activities of the society can now be easily accessed in the digital arena.
Investments have been prudently poured into live streaming technology
especially for the many outstation members. YouTube, Facebook, and LinkedIn are
actively used to ensure anytime, anywhere access to the many activities of
BCAS. Online payment facility has been activated for greater convenience, and a
knowledge portal with multi-device connectivity is being set up. Even the
website has been revamped to make it more user-friendly. BCAS is also tying up
with regional institutions to offer more local events to its outstation
members. Even in Mumbai, it is stepping out by having joint programs with other
organizations. With its strong commitment to disseminating knowledge, BCAS is
organizing many more programs by reaching out to fulfill the diverse needs of
its many members.

Publications are the agents of any
knowledge based organization and BCAS publications are always cut above the
rest and much sought after. During the year there was a renewed thrust for
quality publications on diverse topics. BCAS committees brought out sixteen
publications, a record of sorts, on varied subjects of interest to the
profession, industry, and public at large which received an overwhelming
response. It is indeed a matter of pride that some of the publications are
already out of print. This prestigious publication, BCAJ, will be entering its
50th year and this itself speaks volumes of the quality and
technical contents of the Journal over the years. I  am 
sure that this Journal (which is also having a change of guard from 6th July 2017) will
reach many more milestones in terms of quality and its reach.

To improve is to change; to be perfect is
to change often

Now that we have witnessed a
change in India and the BCAS; it’s time to share some thoughts on how we as CAs
can change to effectively capitalize on the changing national and global
scenario.

In the recent past, the government
has come with a wide spectrum of laws and compliances to streamline business
operations and control. The single most game changer GST itself is an ocean of
opportunity as corporates, SME businesses and traders all are looking upon
professionals to navigate them through the fine print and provisions. Clearly,
with the burgeoning of the Indian economy, there is a new paradigm of
sophistication and complexity in our quiver of services. In this newly defined
arena, we are now called to deliver incredible and awesome services.

Small practices will increasingly
find themselves fighting for survival. We will all need to think big and even
bigger! It’s time to scale up! To consolidate operations and boldly venture
into unchartered territories. In addition to up-scaling operations, we will also
need to up-skill human resources to tackle the comprehensive new laws and
compliances with all their intricate details. Mindsets too would need to be
changed so that we are motivated and enabled to deliver consistently to higher
standards with more demanding deadlines.

Chartered Accountants need to
graduate to take up the mantle of trusted business advisors to their clients.
Staffed by committed, enthusiastic professionals with a high level of energy
and integrity, we should be able to suggest constructive ideas within the
realms of the legal framework and meticulous plans that will revitalize our
clients’ business. And at the end, we should get a merciless performance
appraisal from our clients. How did we perform? Are we pushing the limits? Are
our suggestions path-breaking or middle-of-the-road?

I truly believe that we need to
re-invent ourselves as Chartered Accountants. We need to be able to see beyond
today’s horizons and stay one step ahead. We should assimilate and actualize
what Winston Churchill said, “To improve is to change; to be perfect is to
change often.”

Change is a new beginning

When I penned my first thoughts in
this prestigious Journal and took over the reins as the President, I was aware
that my journey would be exciting, invigorating and stimulating. Yet, at the
end of the journey, I can only confess that BCAS has given me much more in
return than what I could possibly do during my tenure. The positive responses
that I have received from my members on the various initiatives taken during
the year are the testament of the committed core group who worked so
dedicatedly as a team. During the year, we have strived to work towards
fulfilling the Vision of the Society. The 69th Annual Report, which
details the various activities of the Society, is already in your hands, and I
do not intend to reiterate the same. The Report is a testimony to the amazing
level of work done by all sub-committees. In the end, BCAS is a clear winner
because it has been uncompromising in maintaining the quality of its programs.

It has been
an eventful and very pleasant tenure as BCAS President, and before I sign off,
I would like to take this opportunity to express my deep gratitude to the
Chairmen, Past Presidents, Core group members, faculties, authors, BCAS staff,
members and various associations. Thank you all very much for the unstinted
support you have extended to me and all the confidence you have had in me. And
last but not the least my office bearers who untiringly worked alongwith me to
keep the flag of this great institution BCAS flying high. I look forward to
continuing serving you all in the years ahead in different capacities. Let me
end with this very relevant sloka which personifies team BCAS;

Trees
stand in the sun and give shade to others. Their fruits are also for others.
Similarly, good people go through all hardships for the welfare of others.

I had started this message with
stating that change is in the air, at BCAS also there is a change of guard at
the helm and my colleague Narayan Pasari takes up the coveted position as
President of BCAS from 7th July 2017. I am sure that this change
will also take BCAS to newer heights of excellence and he shall bring the fresh
thoughts to fruition. I convey my best wishes to him and the new team of Office
Bearers for the ensuing year.

Thank You once again

Warm Regards,

Chetan
Shah

From The President

Dear Members,

“The achievement we celebrate today
is but a step, an opening of opportunity, to the greater triumphs and
achievements that await us. Are we brave and wise enough to grasp this
opportunity and accept the challenge of the future?” These words
of Jawaharlal Nehru at midnight on 14th August 1947 still hold
tremendous truth and remain valid even today. As India celebrated its 70 years
of Independence, the citizens have much to be proud of and can look to a future
that is radiant with opportunity.

 

Prime Minister Narendra Modi
re-echoed this optimism as he spoke from the ramparts of the 17th
century Red Fort in New Delhi. In his fourth Independence Day address to the
Nation, he called upon the citizens of India to build a New India that
will be free from the shackles of caste and religion…where terrorism and
corruption will be defeated and people will have access to better standard of
living. His speech reflected his vision for a New India…where people
will come together to realize the dreams of youth, women and farmers…where shanti,
ekta and sadbhavana shall flourish.

 

The PM stressed that we need to
work with determination, in an environment where all are equal…no one is big
or small. To accelerate ahead on the path of development, he said we need to
give up the “chalta hai” attitude and be driven by “badal
sakta hai”. He emphasized in the past it was the “Bharat Chhodo”
for freedom…today it is “Bharat Jodo” for a New India!

 

From enumerating his high
expectations from the people of India, PM Modi went on to explain what the
government and he were working on to transform India. Good governance
remains a priority but with greater speed and simplification of processes. The
fight against corruption has been initiated and is expected to continue relentlessly.
Technology, he promised is increasingly being used to harness and track
corruption as well as to facilitate greater transparency in all government
actions. The PM explained how his government is working with universities to
expand their operations. In the last three years his government has been
instrumental in setting up six IITs, seven IIMs and eight IIITs. In addition to
education, the focus is also on more affordable and widespread availability of
critical medical facilities besides capping of prices of vital drugs. 

 

At the macro level too, there is
change. The PM talked of cooperative federalism and competitive federalism in
which the Centre and the State now work more closely together. The Centre is
now lending a helping hand to the States in implementing policies such as: GST,
Swachh Bharat Abhiyaan, Smart Cities and Ease of Doing Business.

 

The PM’s speech clearly mirrors
India – a young nation, comprised of yuva shakti that is already
growing fast, but poised to grow a lot faster. The government has embarked on
several initiatives to step up the pace of the economy.

 

Ganesh Chaturthi is an auspicious
time when the Lord removes obstacles and paves the way for progress and
happiness. And by a happy coincidence, the Supreme Court delivered a landmark
ruling which elevates privacy to a fundamental right and declares that it is
intrinsic to right of life and personal liberty. What’s remarkable is this that
the largest bench of the SC was ever constituted…and that the nine-member
bench was unanimous in their verdict. This ruling is probably the finest in the
history of the Court but is likely to set open a Pandora’s box of cases and
legislations.

 

The absolute right to privacy
resides in Article 21 and other fundamental freedoms contained in the Constitution.
But for long they have remained obscured from public attention. It was the
petition challenging the Aadhaar project that provided the spark for this
judgement. Overturning a 63-year old verdict, this historic 547 pages ruling
boldly demarcates the limits of the state’s intervention in the lives of
citizens. Coming on the back of India’s 71st Independence Day, the
Right to Privacy, I hope, will open a new era of freedom and well-being for the
citizens of India.

 

Disruption appears to be a negative
word, but in the world of technology it appears to be the guiding force.
Researchers are constantly seeking ways to innovate by upsetting the applecart.
Participants at the ITF Conference in Pune last month organised by the Society,
were taken down the ‘road not taken’ and shown how technology is re-inventing
our world and lives. Keynote speaker, Mr. Ravi Pandit, CEO, KPIT Technologies
and a CA too, shared how cutting-edge technologies in robotics, nanotech,
genetics, software, computers and sensors are disrupting the normal.

 

Another vital facet was the rapid
proliferation of technology. He traced how it took 119 years for spindles to
reach the 50 million mark, TV happened a lot faster with 50 million users in
just 30 years. Internet spread much faster, getting 50 million users in just 4
years. Jio was exceptional, got 50 million users in 83 days! Clearly change is
here to ‘stay’ so let’s keep pace!

 

“Champions of Change” is a novel
initiative of NITI Aayog, the government’s think tank to spark innovative ideas
of change. This two-day deliberation of around 200 young CEOs from all corners
of India was a platform for brainstorming; to chart out a blueprint for “New
India” and drive Transformation across sectors. The young CEOs had a
unique opportunity to interact with each other as well as with secretaries and
cabinet ministers of various ministries. Among their many concerns were the
high number of regulators…they also questioned as to who evaluates the
performance of the regulators.

 

The young minds were divided into
six groups and were assigned an issue which is a challenge for policy making.
The issues included: world-class infrastructure, reforming financial sector,
doubling farmer’s incomes, smart cities, Make in India and New India 2022. They
made their presentations to PM Modi, who told them, “You are my team, and we
need to work together to take India forward.” He urged them to adapt to change
as they work for the welfare of the people and the nation.

 

Clearly, the nation is heading for
even better times with abounding opportunities and enhanced stability. World
leaders, renowned economists and multinational heads have all reiterated the
vast potential and immense optimism they believe India possesses. To help us
chart our way ahead we return to the question that Pandit Nehru posed at the
dawn of India’s independence…“Are we brave and wise enough to grasp this
opportunity and accept the challenge of the future?”

 

The festive
season has set in. Hope you enjoyed the Ganpati Festival. Wishing you a Happy
Dussehra in advance!!

 

Feel free to write to me on
president@bcasonline.org

 

With kind regards,

 

 

 

CA. Narayan Pasari

President

From The President

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Dear Members,

A Happy New Year 2016!

Time changes everything. Time is insurmountable, incomprehensible. Time is short and Time is infinite. Time cannot be owned, it is that which we cannot hoard. Our relationship with time changes our relationship with life itself. Time is the sphere in which all that we know appears and vanishes. New beginnings appear in time and endings seem to stop time.

On the Christmas Eve we lost a person to whom BCAS meant a lot. Shri Narayan Varma, our president in 1978- 79, was a bedrock of support and a fountainhead of inspiration to the Society. He contributed to the activities of the Society in every way possible, for BCAS was so dear to his heart. He carvednew pathways, innovative events and programs and was a living example of what dedication meant. I remember, one day he came to a BCAS committee meeting after being discharged from the hospital the same day or a day before, after a long and serious condition he had undergone treatment for. In spite of his age, experience and seniority he was always approachable and happy to help. Each time I met him, he had a new idea about what we can do at the Society. But he never stopped at giving suggestions alone, he would make things happen. He was relentless, offering voluntary services to several institutions through his time, ideas and money, to initiatives that could result in larger well being of all. We all know him for his remarkable contribution to RTI activities, Shri Narayan Varma authored books, arranged events, ran free RTI clinic, and joined hands with other likeminded institution to foster RTI . BCAS salutes his generous and active voluntary service of more than 5 decades in several roles – as office bearer, president, publisher of BCA Journal, trustee of BCAS Foundation, a member of the managing committee for the longest ever and as someone who was there always, and in all ways.

South India floods & Climate Change
Our hearts go out to people in Tamil Nadu, where several hundred people lost their lives. BCAS launched its fund raising drive to support relief efforts. Many people responded instantly and contributed generously. We are grateful for your support.

Such catastrophe brings into focus the issue of climate change that is likely to affect more than 800 million people in India. A more common sense, urgent and simple solution is what we need. It is said that nearly 2/3 of permissible emission target for the 21st century is already crossed and Homo sapiens continue to poison the roots of its own survival. There is a lot of talk about saving our planet. However, earth does not really need us. Earth has survived millions of years and is more intelligent than our species which has evolved from it. What is needed is – for us to save ourselves.

As I write, December 2015 witnessed devastating floods in the UK too, estimated to have caused damages of more than £ 1.5b. Texas was hit by a tornado during the Christmas weekend. This Christmas has been one of the warmest ever in several parts of the world. Blizzards, storms, floods, tornadoes, forest fires, are some common words we read in news. Our obsession with the word economy and careless disregard for ecology has brought us to the edge not far from a chasm that is deep and dangerous. Although, etymologically, both words come from the root ECO (Oikos, in greek) which means home. Today’s economists still ‘manage’ our home without understanding what ‘home’ is. Unfortunately, all this is making a large number of people walk on the knife’s edge, making us believe we can dodge warning signs that are loud, visible and eloquent. Gaylord Nelson, founder of Earth Day wrote, “The wealth of the nation is its air, water, soil, forests, minerals, rivers, lakes, oceans andbiodiversity. That’s all there is. That’s the whole economy. These biological systems are the sustaining wealth of the world.” Money as the sole measure of growth seems like a silly, absurd and bizarre proposition. Until we end the rule of money, we are stuck in the reverse gear. Like Pope Francis told the World Economic Forum in 2014 – “I ask you to ensure that humanity is served by wealth and not ruled by it”

Many paradigms of ‘growth’ are redundant to the extent that they are misleading. The theme of more and more money, as the pre dominant measure of ‘success’, is leading our species towards the edge of its own destruction. The paradigms of development propounded by the ‘developed’ world have become sure pathways to trouble. In the coming years, India will have to work towards paving a road that is simple and straight. Recent news about one Mr. Manoj Bhargav, bringing out a solution where through cycling one can generate enough power to light a rural household is heartening. India has several innovations that can be quickly implemented and are affordable, and we hope this can be one such solution that will serve our rural brethren. When asked, what he considered as important attributes of such innovations, Manoj said – common sense and a sense of urgency.

A new year is a time to reflect, refresh and re-chart the course of life. It is that time, a threshold that is filled with opportunity, anticipation and fresh perspectives to be explored. I hope we can take up at least three things, one to work on ourselves, one to work for our fellow men and one to improve our personal and family’s environmental record. May the New Year bring peace, love and joy and may you be its mascot in your circle of influence

As I write, December 2015 witnessed devastating floods in the UK too, estimated to have caused damages of more than £ 1.5b. Texas was hit by a tornado during the Christmas weekend. This Christmas has been one of the warmest ever in several parts of the world. Blizzards, storms, floods, tornadoes, forest fires, are some common words we read in news. Our obsession with the word economy and careless disregard for ecology has brought us to the edge not far from a chasm that is deep and dangerous. Although, etymologically, both words come from the root ECO (Oikos, in greek) which means home. Today’s economists still ‘manage’ our home without understanding what ‘home’ is. Unfortunately, all this is making a large number of people walk on the knife’s edge, making us believe we can dodge warning signs that are loud, visible and eloquent. Gaylord Nelson, founder of Earth Day wrote, “The wealth of the nation is its air, water, soil, forests, minerals, rivers, lakes, oceans and biodiversity. That’s all there is. That’s the whole economy. These biological systems are the sustaining wealth of the world.” Money as the sole measure of growth seems like a silly, absurd and bizarre proposition. Until we end the rule of money, we are stuck in the reverse gear. Like Pope Francis told the World Economic Forum in 2014 – “I ask you to ensure that humanity is served by wealth and not ruled by it”

Many paradigms of ‘growth’ are redundant to the extent that they are misleading. The theme of more and more money, as the pre dominant measure of ‘success’, is leading our species towards the edge of its own destruction. The paradigms of development propounded by the ‘developed’ world have become sure pathways to trouble. In the coming years, India will have to work towards paving a road that is simple and straight. Recent news about one Mr. Manoj Bhargav, bringing out a solution where through cycling one can generate enough power to light a rural household is heartening. India has several innovations that can be quickly implemented and are affordable, and we hope this can be one such solution that will serve our rural brethren. When asked, what he considered as important attributes of such innovations,
Manoj said – common sense and a sense of urgency.

A new year is a time to reflect, refresh and re-chart the course of life. It is that time, a threshold that is filled with opportunity, anticipation and fresh perspectives to be explored. I hope we can take up at least three things, one to work on ourselves, one to work for our fellow men and one to improve our personal and family’s environmental record. May the New Year bring peace, love and joy and may you be its mascot in your circle of influence.

From The President

Dear Members,

March 20, International Day of
Happiness slipped by like a ship without lights in the night. There was no
deluge of messages on social media or a blast of advertisements trumpeting
‘happiness offers’ as this day has yet to be noticed and commercialized. What
caught my attention was a relatively inconspicuous piece in the newspapers
about the World Happiness Report. Going through it I felt a tinge of
unhappiness as India was poorly rated – plunging four ranks from 118 to 122…and
rubbing salt into the wound was the fact that altogether there were155
countries being ranked. 

Jeffrey Sachs, the report’s
co-editor said, “The World Happiness Report continues to draw global attention
to the need to create a sound policy for what matters most to people – their
well-being.” The happiness ranking is derived from six criteria: GDP per
capita, healthy years of life expectancy, social support, corruption level in
govt and business, freedom to make life decisions and generosity. From the
elaborate analysis, it is clear that happiness is not just about money, though
it is a part of it. This is evident in the fact that oil-rich Norway (which
toppled three-time leader Denmark) zoomed to the top despite depressed oil
prices and a gloomy future for energy.

There is a lot that is going right
with India – we have an economy that’s growing at a healthy pace; strong global
inflows into the financial markets; proven credentials in space; several
successfully implemented programs and reforms that are the envy of the world…We
are even on the verge of rolling out GST which would be another remarkable
achievement for an economy that’s so complex. So with such an upbeat scenario
why is there such a strong disconnect between happiness and Indians? More
importantly, should we sweep the World Happiness Report with all its analysis
and insights under the carpet? Hopefully not! There’s much to be gained from
tackling the demons that plague the well-being of the Indian citizens
especially the rampant corruption, meagre social welfare and ideological
repression that’s sweeping the nation.

It is a little late, but I would
like to celebrate World Happiness Day with all of you by sharing a few of my
favourite quotes that could be beacons of inspiration in riding the ‘downs’ in
our lives.

“Happiness is when what you
think, what you say and what you do are in harmony.” Mahatma Gandhi

“If you want to live a happy
life, tie it to a goal, not to people or objects.” Albert Einstein

“Folks are usually about as
happy as they make their minds up to be.” Abraham Lincoln

“Some cause happiness wherever
they go; others whenever they go.” Oscar Wilde

GST –
Inching Forward

GST is the other news that
dominates the media and is being eagerly anticipated by all – individuals and
businesses of all sizes across India. Ten years in the making, GST is set to
harmonize the indirect tax system by creating one of the largest trade zones in
the world. Prime Minister Narendra Modi is confident that GST implementation
will result in the economy notching at least two percent growth. Finance
Minister Arun Jaitley believes the economic growth in India could escalate to
over eight percent in the immediate future. Defining the immense potential of
the Indian economy, a research paper from the US Federal Reserve projects a
4.2% upswing in real GDP depending upon the tax rates…the lower the rate, the
bigger the boost!

The ball is clearly in the court
of the GST Council to ensure that the supporting rules are framed and the
applicable tax rates for different product classes and sectors are clearly
defined in good time and in a manner which will not leave much ambiguity in
classification. This is essential as both the rules and rates have to be
configured into the systems of the businesses to facilitate the seamless
transition to GST. Some businesses and opinion leaders have suggested differing
the launch to September to enable organizations to re-orient their accounting,
compliance and regulatory processes for GST.

GST is a win-win reform for
everyone. Companies are looking at a simplified tax structure that will boost
productivity and lower costs. The formalization of the economy will minimize
corruption and substantially boost tax compliance; providing larger revenues
for development. In subsuming most of the indirect taxes, GST will eliminate
tax ambiguity and improve the ease of doing business…ultimately attracting even
more investments. With the elimination of the cascading impact of taxes, Indian
exports will become more competitive and be in greater demand across the world.
However, with the states insisting on ePermits for interstate transfer of
goods, the major benefit of borderless states for goods will be lost and the
truck queues at the check nakas will still remain.

Society is going all out in
organizing workshops, seminars and lecture meetings on GST in the coming few
months. It is reaching out to various trade associations to impart systematic
training based on the NACEN guidelines. We are committed to the Government to
shoulder some of its responsibilities of training maximum trade, industry and
stakeholders to be GST ready.

Bulls
on a roll

In a not so surprising
development, a 30 kg cake was cut to celebrate the BSE bellwether index Sensex
successfully scaling the 30,000 mark. The Sensex had earlier crossed the 30,000
milestones in intra-day trading on two occasions but for the first time closed
at this level. The strong perception that the enhanced political stability will
facilitate progressive reforms and in turn channelize investments is one of the
pivotal reasons of the D-Street buoyancy.

The strong cues of a revival in
global economic growth particularly in Europe and Japan have lifted investor
sentiment, ensuring substantial inflows from foreign portfolio investors and
domestic mutual funds. Keeping pace with the Sensex, the Nasdaq Composite too
crossed the 6,000 mark for the first time reflecting Wall Street’s optimism
about President Trump’s much-awaited tax reforms. The first round of the French
presidential elections which hints at a centrist victory too has sent stocks
spiraling upwards across the globe.

Clearly, the bulls are ruling
the market right now and happy times are here again…I hope India will climb in
the World Happiness Report next year.

eLearning
platform

BCAS has initiated a programme on
how to reach out to its members who are located at far off places away from
Mumbai but are so very keen to attend the various workshops, seminars and long
duration courses organised. The Society will soon be launching an eLearning
platform which is cloud-based and works on a “responsive” framework. It will
have an option to allow the members to access content using any device, from
any location and at any time. The possibilities of its training initiative are
limitless. So, you will now be able to see and hear the expert speakers right
at your location. Through this initiative, the Society also intends to reach
out to the CA fraternity and students who are yet not the members of the
Society. I request all my dear readers to popularize this platform once
launched.

Honing
skills of CAs

There is always a comparison
between a CA and a MBA and it boils down to the conclusion that CAs are
academically much more sound and great number crunchers but lack management
skill sets due to which many a times MBAs are preferred as leaders. To put an
end to such a dogma and to equip our members to acquire management and
entrepreneurial skills, a course has been launched by BCAS along with Indian
School of Management and Entrepreneurship (ISME) termed as “Executive MBA for
CAs” – “CAMBA”. I am sure members would avail the benefit of this
course.

Warm Regards,

Chetan Shah

From the President

Dear Members,

Imagine you want to buy a new laptop. You are a little nervous because it’s your first time and you are not a tech geek. So, you connect to your e-commerce store and a chatbot comes to your rescue. What…chatbot? Chatbot is a computer program which conducts a conversation via auditory or textual methods. You share your needs with a chatbot and instead of tediously searching the vast selection; it will suggest a few solutions perfectly matched to your specifications. And if you have a problem understanding some terms, the chatbot will be also ready to explain it to you.

Welcome to the world of chatbots! It’s a service that’s powered by rules and artificial intelligence where you interact via a chat interface. And making purchases is not the only function of chatbots. Used in conjunction with many messenger platforms, chatbots are proving their worth in providing accurate and specific information, entertainment, customer service, lead generation and sales. Chatbots are replacing people in call centres and are increasingly present in toys providing an educational experience. It can guide you in buying a diamond, making investments, booking flights & hotels and even being a life coach!

With more people using messenger apps than social networks, chatbots are growing at a phenomenal rate. Today there are chatbots that teach you how to design and develop chatbots! In China there is a bot called Xiaoice, developed by Microsoft that’s a friend to 20 million people. Bots are changing the human resources landscape too – Engazify bot enables a person to appreciate their teammates…it captures team wins and turns the entire celebration into a game. Micromax has introduced AISHA which is a voice assistant very much like SIRI from Apple. It can initiate a Google search, give movie reviews, make calls and even give stock exchange news. Powered by artificial intelligence it has emerged as one of the most popular bots in India.

Predictably chatbots are revolutionising workplaces and business environments right here in India. They are inexhaustible and eliminate errors when it comes to managing tedious jobs like filling out formatted forms in the fields of medicine, insurance and finance. They can sift through details, undertake cross referencing and provide solutions at incredible speed. Many banks and financial organisations already offer bots, and many are in the process of introducing them to enhance customer experience.

Clearly chatbots are happening and are the future of many exciting opportunities and solutions in the years ahead. Professionals like us need to keep a track of its developments. The growing popularity of chatbots is the direct result of the vast number of mobile phone users in India along with the low data rates. According to the TRAI, there are near to 1020 million active mobile connections in India in May 2017. The sure versatility and convenience of the mobile is now turning us into unashamed addicts.

Opportunity – one of the best professional employment and business networking sites on the web surveyed its two million members worldwide to reveal some interesting trends. Phone addiction among professionals is real and is also one of the disadvantages of technology including chatbots. On a scale of 1 to 10 (10 being highly addicted) the average professional rated themselves with a level of 6.26. Most (around 60%) rated themselves as moderately addicted; while 20% claimed that they were highly addicted. Interestingly iOS users had a higher level of addiction vis a vis the more widespread Android users. What’s a bit alarming is that 42% of respondents said that they were getting more addicted to their mobile phones with each passing year.

Another interesting trend is that 34% checked their phone around 50 times a day while 10% checked their phone 6-10 times a day. And what were the most popular uses of the phone? Social media, checking mails and phone calls topped the list, with texting, checking news and business processes coming in next. What’s interesting is that the use of WhatsApp was nearly triple the next most popular app which was emails. Clearly mobile addiction is fast becoming a problem for people of all ages. We will need to learn how to disconnect and start communicating with people face to face without a technology interface. Our obsession with the phone is boxing us in and making us more robotic and less human…surely we can be successful and enjoy life without being chained to the mobile phone.

In the beginning of October, Brand Finance released its Nation Brand 2017 report which like a ship without lights slipped by with little media attention. India was ranked as the 8th most valuable nation brand with a total value of US$2.04 trillion. The recent slowdown in economic growth is considered the key reason behind India dropping one place from last year.

India improved its brand rating from ‘AA-’ to ‘AA’ but it failed to make it to the top ten best performing or strongest brands. Brand analysts have identified democracy, diversity, young population and technological receptivity as the pillars of India’s brand value. To ascend the rankings, India needs to introduce reforms to maximise job creation, provide fiscal support and boost economic growth. US retained its top spot as the most valuable nation brand growing a meagre 2% while China took the second spot notching an impressive growth of 44%. The interesting trend was that established European nation brands recorded negligible growth or a decline; while Asian nation brands have raced ahead at high speed.

The Ministry of Finance in early August had extended the ‘due-date’ for filing Income Tax Returns and various reports of audit prescribed under the Income-tax Act,1961 from 30th September 2017 to 31st October 2017 for all taxpayers who were liable to file their Income Tax Returns by 30th September 2017.Tax payers whose returns were required to be audited for fiscal year 2016-17 got an extra month in their hands to file their returns.

But the pressure of GST filings and other compliances in October led to heavy load of work in this month. It became the month of ITRs, Balance Sheets and Audit Reports. No matter how much you plan through the year and extensions you get, one still ends up racing towards meeting the due date. Your breakfasts, lunches and dinners, all take place in office. While the boss hopes for an extension of due date, the staff and articles pray for things to end as soon as possible. Lack of sleep may leave you with red eyes, the work pressure makes you go crazy. The best way to mitigate all this is to take concrete efforts to educate the clients not to be ready at the last moment in order to meet the various deadlines comfortably. This will ensure that a practicing CA can also find to spend quality time with his family even during the pressure months.

As we come to the end of this month of very hectic compliances, various programs are being planned and organised by several Committees of the Society in the  coming few months. We have the “Finserv Conclave” on 10th November followed by the “Allied Laws Seminar” on 17th November, both at Mumbai. In December we have 2 joint programs. One at Bengaluru on 1st / 2nd on “Start-up Conference – Challenge Perspective” with KSCAA and the other at Kolkata on various subjects with DTPA on 8th. Our 51st Residential Refresher Course will be held between 11th to 14th January 2018 at our evergreen venue- Mahabaleshwar. Request members to enrol for these programs and enrich their knowledge besides build new networking among the fraternity.

Few of the valued members of the Society may have missed out to pay their renewal fees for the current year 2017-18. We request them to pay the same at the earliest and continue to be our worthy members and enjoy all benefits of BCAS membership.

Feel free to write to me on president@bcasonline.org

With kind regards,
 

CA. Narayan Pasari

President

from the president

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Dear Members,

Greetings!

We had a wonderful 6th Residential Study Course (RSC) on IFRS and Ind ASs. Three papers for discussion and two papers for presentation took the participants through a number of facets of Ind ASs implementation. One key takeaway for me was an analysis where the speaker proved the impact of Ind ASs will be minimum and manageable. He demonstrated that in terms of number of adjustments and impact on Revenue Statement and Balance Sheet will not be substantial for most businesses. The excessive hype generally around implementation issues, impact and requisite changes should therefore largely prove to be just that.

It was also heartening to find people from non audit disciplines at the Ind ASs RSC. In recent times, we have seen a tilt towards specialisation and hyper specialisation. However the business universe is far more interconnected and dynamic than ever before. Often specialisation works in compliance arena, but when it comes to giving advice, the approach calls for sound knowledge of a number of facets of the issue. Perhaps there will be some balancing in the profession, and CAs will function as advisors who give comprehensive solutions and direction. Such turnaround, stepping out of compliance practice, would bring a larger part of the profession in a superior trajectory. A speaker did point out that out of what a CFO typically requires; only 9 % relates to tax and accounting which we CAs deal with. I hope as CAs we will step up to deliver the other 91% that market requires.

Make in India – Manufacturing and Job Creation
Global demand remains sluggish and seems to stay that way. Manufacturing in India does have serious disadvantages, from poor infrastructure to terrible regulatory mechanism. The simplest of things could be painful and the obvious could be crammed with unimaginable hurdles. Our advantage is the market. But whether serious value addition can happen in India or not is still a question. Unfortunately, we need urgently a whole ecosystem where an Industry can come, along with all its paraphernalia of suppliers and others and set up a base. The Make in India week seemed to have brought this in focus and now the Rs. 15 lac crores of investment commitment need to translate into actual investments.

What we need today is jobs, more jobs and better jobs. Statistically the correlation between Manufacturing and job creation has weakened. Between 2004-05 and 2009- 10, the employment in manufacturing fell by around 5 million. Presently the chances of high job creation look steep. Automation and artificial intelligence (AI) pose strong challenge to the man who created them. Industrial robots sold increased by 56% in the last year, driven by emerging markets. I heard that AI is being developed to an extent that even call centres will be driven by AI where you will be able to get responses by machines which are faster and in the right tone. Our government has been talking about all the right things, and bringing initiatives such as Digital India, Start up India, Skill India and so on. However, the level of urgency cannot be over emphasized and therefore the scale and pace will need a greater push.

New Leadership at ICAI
Our parent body, ICAI has a new leadership in place with the President Mr. Devaraja Reddy and Vice President Mr. Nilesh S. Vikamsey at the helm. It so happens that both are BCAS members and Mr Vikamsey has been an integral part of the accounting and auditing committee for many years. The Society conveys its best wishes and continued commitment to partner with ICAI in its endeavour of Nation building.

Parliament Functioning
Today, the parliament’s fascination to remain focussed on one or two issues at the detriment of larger problems faced by the nation is becoming rampant and serious. Where farmers commit suicide, where people cannot find meaningful and gainful employment, where investment proposals in industrial sector in value terms are at an 11 years low, where rupee is weakening, companies are over leveraged, banks are ridden with NPAs, should the parliament not focus on matters that have enduring positive effect on the lives of our people? Could we have more deliberations than accusations, can we expect normal functioning rather than pandemonium, will adjournments be replaced by extended hours of working to clear pending business?

Tax Policy
The FM announced the creation of Tax Policy Council (TPC) and Tax Policy Research Unit (TPRU) to make coherent tax policies and ensure independent, multidisciplinary analysis before decisions are made. This is a welcome move arising from the TAR C report. TPRU will carry out impact analysis of new tax measures on immediate state revenues and also the medium and long term impact on behaviour of economic agents and the economy as a whole. We can now hope that this unit will bring out the baneful consequences of issues such as retroactive amendments, and point out side effects of sudden changes, reversals, negation of lawful judgements, that discourage investments. The actions of bureaucracy to collect more taxes, has resulted in creating a perception of Indian tax system as predatory and unfair. Having a bad tax policy and administration is akin to killing the geese that lays golden eggs. We hope that TPRU will be fair, independent and vociferous and brings out projections that will inform formulation of tax laws.

Finance Bill
The Society started a new initiative to have short videos of about 2 minutes by some of our members practicing in tax laws and young professionals speaking about their Budget expectations under specific areas. We received good feedback and therefore we will post more videos after the 29th February on our You Tube channel, Social Media and also circulated via email.

As you read this page, the FM would have presented a Union Budget that we all were looking forward to. No one knows better than the FM that behind good looking macro indicators, lies over capacity, high debt, rancid bank loans, and slackening demand and much more. In the spirit of Holi, let us hope that the FM will sprinkle the colours of structural reform, controlled spending, and big bang tax reforms, if not more. Time is running out and destinies of a billion plus people are involved!

From The President

Dear Members,

8.00 PM, November 8, 2016: Prime Minister Shri Narendra Modi – Addresses the nation, not to inform about any launch of an assault on warring neighbour or any terrorist group, but it’s an assault on the twin evils plaguing and decaying the Indian economy for seven decades viz. unaccounted (‘Black”) money and counterfeit money. The deadly weapon for the attack being “DEMONETISATION.”

He thundered “The 500 and 1,000 rupee notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper.” However, he reassured honest people of the country, “The rights and interests of honest, hard-working people will be fully protected.”

Suddenly, the word ‘Demonetisation’ had become both a buzzword as well as a dreaded word amongst Indian citizens from all walks of life. I was deluged with calls seeking clarifications on the effects and impact of such a monumental step taken by the Government. WhatsApp messages have just not stopped since then. The most surprising moment for me was when my son a student of 10th grade also inquired as to what is Demonetisation? Why should hard-earned money in the form of 500 and 1,000 rupee notes suddenly become invalid? How and when will Government replace my 500 and 1,000 rupee notes?

Yes, Demonetisation is a big word, and on 8th November, the full weight of this word was felt in a big way across the length and breadth of India. This move has come on the heels of a much publicized and successful Income Declaration Scheme. Mr. Modi had been cautioning citizens to fall in line and declare unaccounted money under IDS and not to blame him if later stringent steps are taken. However, his warnings were considered as rhetoric and ignored. But as we all know him to be a man of action, the suddenness of demonetisation had the nation scampering to deposit and exchange their notes.

Mr. Modi’s actions echo the spirit of the statement of Abraham Lincoln – “Determine that the things can and shall be done, and then we shall find the way.”

The effects of demonetisation are still hotly debated not just in India but across the world. The entire world has taken notice of such a bold move with bated breath. Its effects on the Indian economy will be felt and analyzed in the times to come.

Though there may be positives and negatives of the move, we as citizens of India should ensure to be part of this initiative of weeding out corruption and terrorism from our country. We all must act as responsible citizens and avoid getting carried away by the naive analysis and prognosis of vested interests who want this initiative to be scuttled so as to unabashedly generate black money and support terrorism on Indian soil.  Yes, the Society wholeheartedly supports demonetisation as a means to beat larger evils of corruption and black money.

Trump – Better sense prevails

The other big news that relentlessly dominates the media is from the land of the big apple. Donald Trump, the US President-elect, is working long hours at Trump Towers as he assembles his cabinet and White House team. In addition to very select media interviews, he has enthusiastically embraced new media. He has over 15 million followers on Twitter and is now using YouTube to get his message across.

In a 150 second infomercial, he chalked out his plans for making America great again. With great conviction, he declared, “I want the next generation of production and innovation to happen right here, in our great homeland: America – creating wealth and jobs for American workers.” In his no-nonsense style, speaking directly into the camera, he vowed to create jobs, re-negotiate trade agreements, end restrictions on energy production and impose ban on lobbying.

What’s interesting was his deliberate silence on many issues which he ranted about in his electoral campaign. There was no mention of the Mexican border wall, deporting illegal immigrants, fighting terrorism or confronting Russian aggression. Instead, there was a rather tame statement about directing the Labour Department to investigate visa abuses.

However, tough-talking Trump is adamant about the fate of many acts and treaties that are now on the death row. The Trans-Pacific Partnership that was seven years in the making, Obama’s Affordable Care Act and the Dodd-Frank Law regulating Wall Street are all set to be dumped by Trump. He is also averse to climate treaties and will most certainly pull the US out of the Paris Climate Agreement and nullify Obama’s global warming regulations. I hope Trump’s arrogance doesn’t lead him into destroying other economies and cause irreversible environmental damage.

Stalemate – Judiciary and Government

Back home, the stalemate between the judiciary and government is snowballing, and the situation that is already in shambles is only growing more dismal. The politicians have been critical of the collegium system which appoints judges under the veil of secrecy. To ensure transparency in the appointing process, the Parliament unanimously passed the National Judicial Appointments Commission Act to appoint judges. The Supreme Court struck down the act and continued with the ambiguous process of appointing judges.

The big tussle is over the revising of the Memorandum of Procedure for judicial appointments. The government proposals focused on bringing transparency, objectivity, and accountability to the appointments, but the Supreme Court has shot down most of the proposals. Currently, the system is absurdly opaque. More importantly, there appear to be no definite criteria for the selection of judges.

The legal logjam continues, and the situation appears to be getting alarming. According to official figures, around 30 million cases await hearings in trial courts where 4,432 out of 20,502 sanctioned posts of judges are yet to be filled. In India’s 24 high courts, there are nearly four million cases pending while 478 out of 1,056 sanctioned posts remain vacant. And in the Supreme Court too, there are only 28 judges against the sanctioned strength of 31 judges to tackle around 60,000 cases.

India is having one of the largest judicial systems in the world, the figures for the future only get more mind-boggling. It is estimated in the next three decades, the number of cases in court will balloon to 15 crores and will require at least 75,000 judges to handle them. It is my hope that a solution will be worked out mutually to provide ease of access to justice system. After all, the world, especially the rating agencies, are closely watching India. 

Leading from the front – Voicing concerns

BCAS is always known to voice the concerns of the CA fraternity and also if any particular law is unjust or unwarranted. The Society has requested the Finance Minister to scrap the Income Computation and Disclosure Standards (ICDS) and has launched a petition to urge that the ICDS should not just be deferred but should be withdrawn completely.

The Indian Audit Firms (IAFs) have long being impacted by the manner and way of operating in India by the Multinational Audit Firms (MAFs). It was always felt, and rightly so, that there is no level playing field and MAFs have the upper hand over IAFs due to various reasons. Voicing concerns of the IAFs, the Society has also made a detailed representation to the Experts group set up by the Ministry of Corporate Affairs to examine and make a suitable recommendation on the adverse impact on IAFs. The society is also supporting the concept of Joint Auditors. To create more awareness and garner more support to the representation, the Society has started a digital signature campaign through a survey which is receiving an encouraging response.

I request all my dear members to sign these petitions, the link of which is available on the BCAS website, in support of this movement and create more awareness of this campaign amongst fellow professionals. As they say “Drive the change.”

With warm regards,

Chetan Shah

From The President

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Dear Members,

It is that wonderful time of the year when you can see hundreds of colourful ‘Kandils’ gently swaying in the breeze, while thousands of shoppers’ surge in and out of brightly lit showrooms snapping up festival gifts. By the time this issue reaches you, you will have relished the celebrations, the fireworks, the sumptuous food and embarked on the new year. I am sure most of you will have enjoyed the much-needed holiday and family time. The best way to celebrate is isolating oneself from the clutches of technology, be it your mobile or laptop, and be in the company of family and friends.

Hillary-Trump – Is India affected?

As we leap across continents and oceans, we encounter a different sort of fireworks as a part of the US presidential elections. The clash of the Republican and Democrat candidates has been dominating the news for the last couple of months. The presidential election debates have seen sparks flying, dirty linen being washed in public and hidden agendas being exposed and brash allegations made. 

Motor mouth Trump, a paragon of aggression and arrogance has driven himself into the loser’s corner with his careless locker room talk and hate speak directed at Muslims and immigrants. A dismayed and disgruntled Bible Belt, the stronghold of the Republicans and disgusted women across the nation have truly blunted if not scuttled Trump’s chances of moving to 1600 Pennsylvania Avenue.

Hillary Clinton, on the other hand, has come across as an admirable woman who has ably wielded power. Well informed and focused, with extensive experience as Secretary of State, she is well equipped to be the next POTUS (President of the US). But there are several issues that keep tripping Hillary – she has well-publicised health problems, and big lapses in Benghazi, Libya which resulted in the death of the American Ambassador. Even more serious is her breaching national security procedures by keeping her Secretary of State mails on a personal email server.

Now it’s only a matter of time that will see Hillary Clinton becoming the first woman president of the US, unless…Trump has still got an ace up his sleeve. So is India on a good pitch with Hillary? Most analysts believe so, despite the fact that Trump went on to light Diwali lamps on a stage and assert that if he became president, the “Indian and Hindu community will have a true friend in the White House.”

John Podesta, Bill Clinton’s Chief of Staff, is today a big wheel on Hillary’s campaign committee, and he believes that she has demonstrated credentials in fostering strong and healthy relations with India. With India having emerged as a powerful and buoyant economic force and a strong counter to China, Hillary is unlikely to adversely change the existing policy of working with India.

Analysts believe there will be no big swing in policy for the region. Tracking the situation from the end of the Cold War, US policy and diplomacy with India and other South Asian countries have remained consistent. Considerable conflict in the region and four presidents later, the situation appears to be very much a status quo. Even in handling the Indo-Pakistan conflict, the US has been reiterating the importance of talks to diffuse the heightened tension.

Great Show at BRICS

Back home, the government is riding a wave of immense popularity. The crippling surgical strikes and the successful Income Declaration Scheme are two more feathers in the government’s crown of achievements. This was closely followed by the recently concluded 8th BRICS Summit hosted by India in Goa. Prime Minister exhorted the nations to work together to give an added impetus to trade saying, “In a world of uncertainties, BRICS stands as a beacon of peace, potential, and promise.”

More importantly, India coaxed all the countries to unanimously condemn terrorism. Prime Minister spoke eloquently saying, “Terrorism casts a long shadow on our development and economic prosperity… our response to terrorism must, therefore, be nothing less than comprehensive.” What is noteworthy is that even China, Pakistan’s staunch ally, signed on the dotted line in the agreement to combat terrorism including cross border terrorism

CA exam – another change

It’s a well-known quote which declares that. “Change is the only thing that’s constant.” The world’s toughest exam is all set to undergo change to keep pace with the rapidly evolving needs of the market. The Institute of Chartered Accountants of India which conducts the CA exam has approached the ministry to revamp the curriculum, introduce new subjects and electives; and even allow open book tests in a few papers.

Globalisation has re-invented the benchmarks and language of business. ICAI believes that an updated course will prepare Indian auditors, accountants, finance executives and CFOs to tackle the emerging challenges and opportunities. The Bombay Chartered Accountants’ Society welcomes the proposed changes in the CA exam and hopes the revised syllabus and possibly the new methodologies of training will result in better-equipped CAs and earn greater respect for the profession.

Government interactions

As part of the BCAS vision to be a catalyst for bringing out better and more effective Government policies and laws, BCAS interacted with the Government officials on two occasions. On the first occasion, BCAS representatives met the Easwar Committee and made a detailed representation, and appraised officials of various anomalies in the Income Tax Act and offered suggestions for efficient administration and governance. On another occasion, BCAS had an interactive dialogue with Shri Upendra Gupta, Commissioner, GST Policy Wing, Ministry of Finance. It seems that the government is on track on its road map of GST and it will be implemented from 1 April 2017. One thing that deserves appreciation is the receptiveness shown by the government in discussing the suggestions from various associations and trade bodies, and hopefully many suggestions will find their way into the final legislation. The Commissioner assured the Society that the main areas of concern on valuation issues and issues of free supply of goods/services raised by industry would also get addressed in final law.

Reverence

Before I end, I pay my homage to an exemplary human being and a distinguished professional. Shri Rajesh G. Kapadia, past president of the Society, was not only an excellent chartered accountant but a nice archetypical person to scores of people. He will surely be missed by everyone whose lives he touched in so many ways. The contribution of the Kapadia family to BCAS (his brother Late Shri Shailesh Kapadia was also a Past President of the Society) is immense. It is only ironic that he was the Society’s president when BCAS celebrated its 50th year, and he left us when the Society is celebrating its 50th year of RRC. I can sum up the persona of Shri Rajesh G. Kapadia by stating that he had the guts to stand for something right, and the humility to be of service to others. He shall always have a place of pride in the hearts of BCAS family.

With warm regards,

Chetan Shah

From The President

Dear Members,

“What I object to, is the craze for machinery, not machinery as such. The craze is for what they call labour-saving machinery. Men go on ‘saving labour’ till thousands are without work and thrown on the open streets to die of starvation.” These words of Mahatma Gandhi mirror his frustration with mechanization that swept through factories way back in 1924. Today the world and India are stuck in the quagmire called ‘technological unemployment.’

Technology is constantly re-inventing the world, and now it appears to be doing it at an incredibly accelerated pace. Today there are robotic arms that perfectly prepare Michelin starred recipes and pilot programs for self-driving cars, buses, trucks, and trains all across the world. Artificial Intelligence is blurring the line between rule and process driven tasks and creative jobs. It is already making its presence felt in the world of commercial music, like jingles and background scores for events. It is only a matter of time a higher quality of music will be composed by more complicated algorithms. Basic journalism and putting together legal briefs are some of the other areas being invaded by artificial intelligence. It is expected that biggest tech-driven disruption will be in the banking sector.

An excited doctor friend was telling me how wearable medical devices are teaming up with machine learning to save lives. Machine learning, also referred to artificial intelligence, he explained allows us to see patterns in data that were invisible before. And with high-speed data analytics and complex algorithms at work, this distilled data can be used to diagnose earlier and intervene faster to prevent suffering and save lives.

Undoubtedly, technology is a very fascinating topic, but what is more interesting is the repercussions it can have on the Indian economy. Technology is a two-edged sword – it can cut time and obstacles and dramatically multiply productivity and abundance. Technology also cuts a substantial quantum of costs and human labour. So, we have greater efficiency at reduced costs, but it also means widespread loss of jobs! In India where there is no welfare system that could mean well-stocked shelves but no people to buy them.

Numerous techno breakthroughs are rapidly shrinking the job market. The writing is on the wall! Industry veterans have warned that automation and artificial intelligence are rapidly displacing people and causing large-scale job losses. This situation is only set to get further aggravated in the near future. By 2025, 200 million young people in India are expected to be unemployed.

Technology has already demonstrated that cars can be assembled and surgeries performed by robots. Yes, technology proliferation will lead to widespread loss of jobs across all strata…from equity analysts to lower paid and less skilled workers. Even audit is prone to tech-driven disruption. So, what is the way ahead? Should India just avoid certain technologies and focus on the ones with the greater application? Or should we keep our R&D centers going full speed ahead and capitalize on marketing the patents and breakthroughs to a globally receptive market? These questions will keep bothering us and time will only tell…

Disruption also in Elections

March was a month that had us gripped by election results. What a finale it was with the BJP getting a sweeping majority in UP and Uttarakhand. It did not end here but continued its magic by grabbing both Manipur and Goa where it did not get a clear majority. One wonders whether Artificial Intelligence could have predicted this outcome. After crunching the data and trends, it is clear that the high voter turnout was the result of strong and continuous communications, particularly through rallies and social media. Voter mobilization was also undertaken in a more systematic manner with greater planning. Finally, it was the promise of a bundle of benefits that swayed voter direction. Now the key question is whether UP can shed its shady past and be re-invented to become a preferred destination for individuals, companies, tourists…

GST- knocking at our doors

The much awaited GST is progressing at a brisk pace and is very much on track to be rolled out from July 1. Designed to replace a slew of central and state taxes, GST is all set to transform Asia’s third largest economy into a single market for the first time. The GST Council, the driving force and apex decision making body for GST (with representation from the central govt. and all the state govts.) has met twelve times and ironed out many contentious issues.

Finance Minister Arun Jaitley was very appreciative of the operating style of the council when he remarked, “…not a single decision had been taken by voting…it was a deliberative democracy and federalism in action that all decisions have been taken by consensus.” As you read this, Lok Sabha too has cleared all four GST bills now all the action in State assemblies.

The GST regime will have a set of nine rules, out of which the council has already approved five – pertaining to registration, payment, refunds, invoices and returns. The remaining four rules, viz. composition, valuation, input tax and credit transitions are in the process of being formulated. Early April, the council will undertake the key task of assigning various commodities to the different tax slabs – 5%, 12%, 15% and 28%.

GST Training at BCAS

It is estimated that there are some 22-lakh indirect tax assessees currently in India, a number which will balloon to 70 lakh with the implementation of GST. The government is roping in various bodies to help in the task of familiarizing and training people in the basics of GST. BCAS has been recognized as an Accredited Training Partner by the Government for imparting GST training to the trade and industry. A team of ten volunteers from the Indirect Taxation Committee has agreed to devote their time and efforts for this mission and to work with the Government in Nation building. My sincere regards to them. A two-day GST Workshop with 380 participants from all over India has just concluded, and there will be many more in the months to come. Indirect Tax RSC has been planned in the month of June with GST as the focus. I request you all to keep a check on the announcement and enroll at the earliest to avoid disappointment.

YRRC – an event to remember

10th to 12th March 2017 marked the 4th Year of the flagship BCAS Youth Event – the Youth Residential Refresher Course, organized jointly with the YMEC of ICAI this year. This year’s YRRC was a trend-setter from which a cue shall be taken for all future Youth events across the profession. The days were loaded with top-of-the-line speakers across various professions with topics ranging from tax and accounts to leadership and entrepreneurship to workshop on mock stock markets and nights packed with fun activities like treasure hunt and movie night; the YRRC was everything it promised to be and more. It was heartening to see the participants attend 100% and participate 110% in each and every session. The sincerity, commitment, dedication, intelligence, capabilities, excitement and energy of this new breed of Chartered Accountants gives me hope that the future of our profession is in able hands.

Felicitation and Interaction with President of ICAI – Shri Nilesh Vikamsey

Another landmark event was felicitation of Shri Nilesh Vikamsey – President of ICAI on 9th March 2017 and very candid interaction on the future of the profession. Shri Nilesh Vikamsey outlined his approach of showcasing the efforts of the profession for the society at large and towards nation building through contribution at various ministry levels on the upgrading of their accounting systems. He also lauded the efforts of BCAS for its contribution in upgrading the knowledge base of the professionals and also in providing pro active suggestions at the economy level. Vice President Mr. Naveen N. D. Gupta though not able to attend due to his pre-occupation at New Delhi, conveyed his sincere thanks for organizing the meeting. We also acknowledge the active participation of Central Council Members Shri Nihar Jambusaria and Shri Prafulla Chhajed, who interacted actively. There was presence of managing committee members, many past presidents, and active core committee members, who aired their views.

“Great minds discuss ideas. Average minds discuss events. Small minds discuss people.” – Mahatria Ra

From the President

Dear Members,

Four years ago, the Modi
Government was voted into power with a stupendous majority that shocked its
critics. Vowing to transform India and accelerate it on the path to progress
and prosperity, the government rolled up its sleeves and got on the job with
diligence. Today many of the results are visible in concrete and steel; and
well researched figures to back up its track record of nation building. Clearly
the promises of yesterday are now the springboard of today’s growth and global
success.

 

Apart from the ruling party, major
publications and media houses have put together a report card for the
Government. There is a consensus on the capability of the NDA government to
deliver solid results to very difficult deadlines. Perhaps its most spectacular
achievement is the slew of tough economic reforms it launched and faithfully
carried them through. Global institutions and rating organisations have
acknowledged these efforts and upgraded India’s credit rating.

 

With numerous reforms under
implementation, India shot up on the rankings of ‘Ease of Doing Business’. This
ranking opened the floodgates for considerable investment in India. The stock
exchanges too reflected the buoyant nature of the improved economy touching new
highs. GDP growth has climbed up and so have exports. The government, however,
is facing criticism for low domestic investment and job growth. The ballooning
NPAs and losses of the nationalised banks are another cause of concern that
have to be addressed.

 

The countdown for the FIFA World
Cup to be held in June-July in Russia has started. 32 teams will play over 30
days to decide the world champions. But PM Modi’s informal summit with
President Putin at Sochi didn’t happen to talk football. The two leaders are
believed to have had “extremely productive” discussions during which they
reviewed the complete range of Indo-Russian relations as well as various global
issues.

 

The informal summit was the
stepping stone to give an impetus to bilateral ties and to cement strategic
defence partnerships. The timing is particularly significant as the US is
imposing sanctions on Russia and is slowly escalating a trade war with India.
The ‘agenda less’ summit has raised many eyebrows and fuelled much speculation,
as there was no joint statement by the leaders at the end. Traditionally Russia
has been the cornerstone of Indian foreign policy. Today, however the situation
has changed with China becoming a mega trade partner and the warming of
relations with Washington. New Delhi today is treading the tightrope very
carefully not to upset the delicate balance between these global giants.  

 

The world’s largest retailer
Walmart this month bought 77% of India’s largest e-commerce marketplace
Flipkart because this is the only way it can tap the retail market in India as
for now. The Indian market is worth $672 billion currently and set to cross the
$1 trillion mark by 2020. It provides Flipkart, which needed money and prevents
it from worrying about working towards a public share sale. The deal will also
create jobs, directly and indirectly, and help create much-needed supply chain
and cold chain infrastructure — something that could improve India’s appalling
farm-to-fork efficiency, thereby benefiting farmers.

 

Besides, the transaction is a
milestone for India’s internet industry. Although a handful of internet
start-ups have achieved multibillion-dollar valuations on paper, this is the
first time that any of them have cashed out in a big way.

 

The rivulets of sweat coursing
down our faces every time we step out to brave the sweltering summer, focuses
my attention on water. It’s a resource India desperately needs, yet water gets
blatantly wasted across India. To understand the gravity of the situation,
let’s look at some figures. Groundwater accounts for 40% of our supply but it
is getting depleted faster than it is being replenished. Rain water is another
vital source, and here again, we manage to capture only a dismal 8% of it.
Water infrastructure is plagued by leaks causing losses of 40% of piped water
in urban areas. And to top it all we recycle only 15% of used water.

 

Droughts are becoming a frequent
reality, as farmers become increasingly dependent on the monsoon. India
desperately needs a concerted water management and conservation policy to save
it from an economic disaster.  It is believed
that if we continue with status quo, the demand will soon outstrip supply which
will result not only in GDP tumbling but also in a civil war!

 

Change is essential on four fronts
to prevent this problem from snowballing! Firstly, policy needs to be revamped
making water a national resource with the government as the ultimate owner.
Secondly, extensive water infrastructure needs to be built and maintained to
optimally distribute water to all sectors and corners of India. Thirdly,
behaviour needs to change so that we respect water as a blessing and not waste
it frivolously. Finally, we need to collect and build a water data system that
will enable the government to allocate and price water efficiently. All in all,
the mantra is to conserve water effectively. At the Society we need to salute
the efforts of Late CA. Pradeepbhai Shah and CA. Rashminbhai Sanghvi under
whose leadership, BCAS got the opportunity to support check dam projects in
Gujarat which is now a boon for those villages.

 

The Southwest Monsoon hit Kerala
as predicted marking the arrival of the rainy season in the country. As per
forecast, the monsoon is set to have a normal advance over the subcontinent.
Two consecutively good monsoons have played a key role in reviving demand for
consumer goods in rural India which led to better crop yields.
Equally-distributed rain usually sees a healthy uptick in demand for products
from rural areas and results in an increase in rural citizens’ purchasing
power. Hopefully this year also we should get adequate rains in all parts of
the country.

 

Reading the papers today has
become such as arduous and torturous task. The reason being the high quantum of
‘bad’ news in the media. By bad, I refer to the callous and cold-blooded
perversions being inflicted on humanity. Even the marginalised are being
ruthlessly exploited and heaped with such indignities that it causes one to
shudder with shame. And sadly, a lot of these atrocities are now becoming so
commonplace in India; it does not even elicit a reaction.

 

What happened to India, considered
one of the greatest civilizations of the world? India, the birthplace of some
of the most profound religions, influential philosophers and apostles of peace;
now seems to be sliding downhill. The bankruptcy of ethics is visible in the
hopelessness, weak morals, lack of empathy and low willpower that’s rampant in
society. Perhaps it is time to confront the situation more aggressively, with a
greater emphasis on ethics in education.

 

There is already a provision to
learn moral science and religion in schools, but I fear most schools and
teachers don’t feel this is an important facet of education. Students
well-grounded in ethics will choose compliance, construction and inclusion and
not promote defiance, destruction and exclusion. Students should understand the
importance of acting responsibly and respectfully even when they are using
forums, social media, or mobile devices. Ethics and value-based education needs
to be ‘hardwired’ into students so that as adults they rediscover their soul
and infuse hope into an otherwise bleak future.

Value education is rooted in Indian philosophy and ingrained in every tradition
of Indian culture. After all, educational institutions play a significant role
in the promotion of ethics.

 

Feel free to write to me on president@bcasonline.org

 

With kind
regards

 

CA. Narayan Pasari

President

 

 

 

From the President

Dear Members

It’s that
time of the year when the Nation celebrates the “Festival of Lights”. On
occasions like this, it is also time to revisit our ancient scriptures of
wisdom and apply them in the current context of our profession. To my mind, of
the many incidents in the “Ramayana”, a few specific incidents clearly charted
the story.

One such
incident is that of King Dasarath granting three boons to Kaikeyi since she
saved his life. Kaikeyi deferred the exercise of these ‘boons’ to a later point
of time, much to the peril of the entire generation. As accountants, we can
easily correlate this with the concepts of ‘contingent liabilities’ and
‘unforeseen risk’. As assurance professionals, do we somewhere ‘grant’ or
‘communicate’ an assurance without fully realizing or foreseeing the possible
consequences thereof? While the statutorily prescribed GST Audit Report
primarily anchors itself around reconciliation, the Technical Guide suggests a
much larger involvement / expectations from the GST Auditors. As auditors we
understand that the Technical Guide does not bind the members. Will all
stakeholders clearly understand this? Is any purpose served by suggesting open
ended assurances? Let us hope and pray that more deliberations are undertaken
before the Technical Guide transitions itself into a Guidance Note.

The eventual
exercise of the boons, the principle one being the preference of Prince Bharat
over Prince Rama as a successor to the throne really brings to the fore the
complex and conflicting interplays in succession, especially to positions of
leadership. As the Central and Regional Council Elections come nearer, the
incident would remind our members of the implications of prioritizing any
parameter other than merit in the selection process of an able leader to
represent the profession.

The “Golden
Deer” episode clearly suggests the need for professional skeptism especially in
situations where things appear too good to be true. Be it investment or
professional services, if the returns or compensation exceed the value
proposition, it is likely that we are entering the “Golden Deer” trap.  

The
“Sanjeevani” episode is one more interesting example. The inability of Hanuman
to identify the correct herb resulted in the entire mountain being mythically
transported. When we train our juniors, do we make mistakes of not clearly
communicating our expectations and thereby resulting in getting general answers
from which we have to sift the specific answers that we want?

The last
incident that I would like to touch upon is that of the washerman, whose
comments resulted in the exile of Seetaji. One can also couple this incident
with the Manthara incident and can clearly make out the need to drive decisions
based on inherent and coherent substance rather than mere external narratives.
While debates and alternative arguments (including social media and internet
sources) help mould the opinion, they may not always be the right approaches.

For many
professionals, October marked the end of a very busy season. It is now time to
relax and spend time with your families and enjoy the festivities. Such
periodic breaks help a person to re-energise and strategise for the future. At
the Society, a series of events have been planned in the next few months to
help the members develop relevant technical skills and reflect on the future
course of their careers.

One
such innovative programme is the 52nd Residential Refresher Course.
While the time for early bird incentive has already expired, it is better to
enrol late than never. This time, the RRC is at a luxurious venue of ITC Mughal
in the historic city of Agra. Packed with innovative formats, relevant topics
and best faculties, this RRC promises to be an experience of a lifetime. It has
a full day devoted to practice management sessions where members can
collectively reflect on the future of the profession. The detailed announcement
is available on the website and I would urge the members to enrol at the
earliest to avoid disappointment.

On
31st October, the Prime Minister dedicated the “Statue of Unity” as
a tribute to Sardar Vallabhbhai Patel. At 182 metres, the Statue is the tallest
in the world and was constructed in a very short time frame of 33 months. Many
of us see our house renovation projects span across more than 6-8 months! It is
perhaps this efficiency and many more structural reforms like this which
prompted the World Bank to improve the ease of doing business rankings from 100
in 2017 to 77 in 2018.

These
are indeed times of confusion. On one hand we see such massive improvements in
rankings and periodic revalidations from international agencies of the
correctness and the decisiveness of the reforms, while on the other, we see
murmurs of hazy implementation and biased approaches. What is the correct way
forward? As highlighted in the earlier anecdote of the washerman and Manthara,
each of us will have to find the answers from within.

Well,
in the meantime, do celebrate the festivals. Wish you a very happy Diwali and a
prosperous New Year.

Yours
truly

 

Sunil Gabhawalla

From the President

Dear Members,

As I sit to write this
communication on the 2nd October, the Nation celebrates the birth
anniversaries of two great leaders – Mahatma Gandhi and Lal Bahadur Shastri.  Born in 1869, Mahatma Gandhi steered the
country into independence with his weapons of “truth” and “non-violence”. Born
in 1904, his disciple Lal Bahadur Shastri went on to become the 2nd
Prime Minister of Independent India and made a marked difference in the lives
of citizens with “the White Revolution” and “the Green Revolution”.

 

For such principle-centred
leaders, independence did not mean just transferring colonial era British power
brokering system, favours-driven, bureaucratic, class exploitative structure
and mindset into Indian hands. In fact, Gandhiji had warned that such a
transfer would still be English rule, just without the Englishman. Seven
decades post-independence, as we (as professionals and as citizens) inch closer
towards the Council Elections and the General Elections and cast our votes to
choose the leaders, it is time to take stock and identify leaders whose birth
anniversaries our next generations would be inspired to celebrate.

 

The GST Audit Report was
notified recently. The Society is pleased to note that most of the suggestions
made by it towards simplification of the report and alignment of the same with
the objectives of audit sought by the Act have been accepted. While the Society
is in active dialogue with the Government for certain clarifications and
ironing some gaps in the audit report, it is now time for the professionals to
step up the technical capabilities and live up to the trust placed by the
Government. The Society was invited by the CIT (CPC TDS) to provide inputs about
Phase 2.0 of TRACES Project. This phase will use latest technologies and would
totally transform the TDS Administration in the country and promote the ease of
doing business.

 

For professionals,
September was a very busy month. As members struggled to complete their
obligations and sought extension of due date, the initial reactions were not
very positive resulting in a panic situation. Ultimately, the much-needed
extension was announced. Is the 15-day extension sufficient? Is it fair for the
Government to expect interest in such cases? The social media was abuzz with
various news, views and information in this regard. I would believe that rather
than spending time on such questions, it would be gainful for the members to
concentrate their energies on work, make the most of this extension and
complete the balance work before the extended due date. After completing the
pending work at hand, it may also be a time to strategise the way forward for
better time and work flow management in the coming years.

 

The enrolments for the 52nd
Residential Refresher Course have already gained momentum. This time, the RRC
is at a luxurious venue of ITC Mughal in the historic city of Agra. Packed with
innovative formats, relevant topics and best faculties, this RRC promises to be
an experience of a lifetime. It has a full day devoted to practice management
sessions where members can collectively reflect on the future of the
profession. The detailed announcement is available on the website and I would
urge the members to enrol at the earliest to avail the early bird benefits.

 

Many other interesting
programs have been announced – the long duration study course on GST, full day
panel discussion on burning issues in real estate sector (jointly with IMC),
panel discussion and case studies on GAAR, a specially designed workshop for
senior citizens on using mobile apps. I would request the members to attend
these events and encourage the organisers to innovate and provide you relevant
and best events.

 

During the last quarter,
the Society could release a series of publications on diverse topics and most
of them were sold out within a fortnight. As a matter of convenience, the
Society has a publication imprest scheme whereby books are couriered to members
immediately on their release and the amount is debited to the imprest. Those
who are interested can enrol for the said Scheme.

 

I also take this
opportunity to wish all the members a great festive season ahead. Do take
periodic breaks from your busy schedule and energise yourself with your family and
friends.

 

Warm Regards

 

 

 

CA.
Sunil Gabhawalla

President

 

FROM THE PRESIDENT

Dear Members,


One more month, one more
opportunity for communication, in a slightly relaxed month of May, the
preferred month for taking vacations. Vacation for anybody is a chance to take
a break from work, see the world and enjoy time with your near and dear ones. Today’s
world is full of choices – right from the choice of destination and
accommodation to the travel options, the sight-seeing itinerary and the like.
In an attempt to optimise the vacation benefits, at times, we cramp too many
goals into one vacation. As if there is no tomorrow!

 

The objective of vacations
is to increase the happiness levels. The attempt is not only to increase
happiness levels but to portray happiness. Substantial time is spent in taking
selfies, photographs and updating social media rather than really sinking into
the new environment and enjoying the moment. In an attempt to capture and store
the moments, do we compromise on the real feel of the environment?

 

A slew of notifications was
issued under the GST Law to implement the GST Council recommendation of a lower
rate of tax for builders and developers. The objective was to simplify, but a
cursory look would suggest that the outcome is complex. The taxpayer is
expected to procure at least 80% of goods and services from registered vendors.
What is the genesis of such a provision? Is it the mindset of the taxpayer to
use every possible opportunity to optimise tax outflows or is it reflective of
the government mindset to not trust the taxpayers enough? Whatever may be the
genesis, one thing is certain, we are back to the old days of complex laws,
litigation and uncertainty. Before things really go out of hand, we need to
bring back the much desired simplicity in the law.

 

GST Law prescribes for a
mandatory audit in case of assessees having aggregate turnover above Rs. 2
crore. This audit represents an opportunity as well as a challenge. In view of
the implementation of GST from the middle of the financial year and the concept
of rectification in subsequent periods rather than revision of returns, the
approach towards audit will have to be fine-tuned. At the same time, by its very nature there will be substantial
transactional volume. Initial months of GST resulted in a lot of chaos. The
auditor will have to walk the tightrope of ensuring strict compliance as per
the law as well as be sensitive to the compliance and portal-related issues.
With this challenge also comes the opportunity of showcasing the abilities of
the members to rise to the occasion and provide valuable and balanced inputs through
the audit report both to the government officials and the assessees.

 

The renewal fees for
ordinary memberships, subscriptions for journals (including new life members)
and study circles have become due and the Society has already sent emails in
this regard. I am happy to inform that a substantial percentage of renewals are
already effected. In case you have missed the email in view of your busy
schedule, I urge you to kindly renew your memberships or subscriptions at the
earliest.

 

The ITF Conference to be
held in August, 2019 has already been announced. The preparations for the Jal
Erach Dastur CA Students Annual Day event “Tarang 2K19” are in full swing. This
event will be held in June, 2019 where about 500 CA students will showcase
their talent in various extra-curricular activities. The Youth RRC, specially
designed by young chartered accountants, has also been announced and is
receiving encouraging response. In addition to the above, your Society has
lined up a series of educational programmes, the details whereof are available
alongside. I would request you to participate in large numbers and take benefit
of the same.

 

Regards

 

 

 

 

CA.
Sunil Gabhawalla

President

 

FROM THE PRESIDENT

Dear Members,


Wishing you and your loved ones a very
Happy, Healthy and Prosperous New Year!


It’s New Year, friends! As the New Year
stands before us, it’s another 366 days of opportunities and reasons to be
happy. It’s like a new chapter waiting to be written in the book called LIFE.
So let’s all of us resolve to seize this opportunity and promise ourselves that
we will strive towards happiness and make this world a better place to live in
for ourselves and others around us.


I hope 2020 will mark the beginning of a new
decade of hope, trust and well-being of our profession. As I communicate with you
for the first time at the beginning of this decade, I would like to emphasise
certain recent developments in our profession that will have a great impact on
the way we discharge our professional responsibilities and obligations.


ICAI Code of Ethics: The Code of Ethics issued by the ICAI was aligned with the
International Ethics Standards Board for Accountants (IESBA) Code of Ethics
2005 for the first time in 2009. Now, after a gap of ten years, the ICAI has
decided to revise the Code of Ethics applicable to the profession with effect
from 1st April, 2020. As in the case of the code issued in 2009,
this edition, too, is divided into two parts, Part A representing provisions of
the IESBA Code of Ethics as suitably incorporated after modification, and Part B
representing the domestic provisions of India governing the Chartered
Accountants’ Act, 1949.


Part A of the Code of Ethics was revised in
2018 on the basis of the IESBA Code of Ethics, 2018 edition; and now the ICAI
has proposed a revision of Part B of the Code of Ethics, 2019.


Since the past decade (when this code was
last revised), multiple changes have taken place in the domestic rules and
regulations governing our profession. Changes in the CA Act, 1949, ICAI Council guidelines and decisions and clarifications
of the Ethical Standards Board have been incorporated in the new code. Further,
other developments and contemporary requirements like New Companies Act, 2013,
revision of Accounting Standards (AS) and Standards of Auditing (SA) also
mandated compilatory updating and upgrading Part B of the code.


Various new provisions, clauses, sections
have been proposed to be inserted in Part B such as: Responding to
Non-Compliance of Laws and Regulations; provision of taxation services to the
audit clients; prohibition on management responsibilities to the audit clients;
restrictions on total fees from a client; duty of accountant in case of breach
of Independence Standards; advertisement guidelines; guidelines on website and
social networking sites; affiliations with networks; long association with
firms and so on.


The ICAI will carry out mass awareness and
educational programmes but it is important for us to be aware of the changes to
maintain the inclusive and ethical culture of our profession and ensure that
none of us is caught unaware of these changes.


Report on Audit Quality Review (2018-19): Cases of financial irregularities continue to haunt the corporate
world, both domestically and internationally, bringing to the forefront
concerns on the need to improve the quality of audit services carried out by
auditors. Last year, the Financial Reporting Council of the UK expressed
concern over falling audit quality and partly attributed this deterioration to
a failure to challenge management and show appropriate professional scepticism.
So far, the Quality Review Board (QRB) of ICAI has being carrying out reviews
of listed and other public interest entities and issuing a report on the
observations from the Audit Quality Review carried out by them annually. This report
of the QRB for reviews carried out during financial year 2018-19 was issued in
October, 2019. It highlights the key findings and observations from reviews
carried out on audit quality of 51 entities (which included 51 audit firms, 64
audit files and 22 industries) indicating the QRB’s approach, key trends, their
expectations and other focus areas.


Though the reported observations are from
reviews carried out on the said 51 entities, these deficiencies can act as
check-points for others to improve their audit quality. The report highlights
in detail non-compliance of SA, AS (standard wise) and other relevant
regulatory requirements. Out of the total observations, 66% required
improvements, 33% were generally acceptable and 1% required significant improvement.
I am sure this will make for interesting reading and help in improving the
quality of audit services rendered by us.


Audit Quality Review (AQR) by NFRA: More recently, the NFRA carried out its first AQR on the statutory
audit of IL&FS Financial Services Limited for F.Y. 2017-18. NFRA has
verified the compliance of SA, assessing the audit quality control system of
the audit firm and the extent to which the same was complied with in the
performance of the audit. This report has made some startling observations and
comments on the compliance of independence requirements, role of engagement
partner, communication with those charged with governance, evaluation of risk
of material misstatement, management’s written representations, evaluation of
going concern assumptions and documentation of the audit quality control
system. A reading of this report will also go a long way in overall improvement
in the quality of services rendered by us.


‘Professionalism: It’s NOT the job you
DO, It’s HOW you DO the job.’


With Best Regards,

 

 

 

CA Manish Sampat

President

 

FROM THE PRESIDENT

Dear Members,


It has
been just a month since I communicated with you, but the events that have
unfolded in the last 30 days make it appear as if a long period of time has
elapsed. There have been some major developments (both positive and negative)
in the socio-economic and political landscape of our country that would have a
significant impact on our future. Beginning with the successful launch of the
Chandrayaan 2 mission to the moon, the scrapping of Article 370 of the
Constitution which provides a special status to the state of Jammu and Kashmir,
the passing of the Triple Talaq – Muslim Women (Protection of Rights on
Marriage) Bill, 2019, the floods situation across many states, the enactment of
the Companies (Amendment) Act, 2019, re-emergence of the Direct Tax Code and,
above all, the Prime Minister’s meetings with the Finance Minister and the
industry leaders on the state of the economy.

 

I was
recently reading a report which points out that the just-concluded budget
session of Parliament was the most productive in decades. It was one of the
busiest sessions in the past 20 years, both the houses spent nearly half their
time on legislative business, passing 30 bills and working more than 70 hours
extra. As citizens of the country we feel proud of this but, at the same time,
also hope that a healthy debate has taken place before any enactment and that
the Government has taken all the stakeholders on board.

 

Is it
fair?

 

The
Companies (Amendment) Act, 2019 received the assent of the President on 31st
July, 2019; this has made a U-turn on certain provisions relating to Corporate
Social Responsibility (CSR) spending by companies. Initially, when CSR was
introduced in the Companies Act, 2013 it was purely voluntary and without any
penal provisions. However, the said Amendment Act introduces provisions like
deposition of funds for mandatory CSR expenditure for a given fiscal in an
escrow account in case of certain ongoing projects and transfer of unspent
funds (within three years) to the National CSR Fund. Further, if a company does
not have an ongoing project that requires funding in stages, then such a
company will be required to transfer unused CSR funds to the National CSR Fund.
For the first time, non-compliance would attract a fine and imprisonment for
the officer in default. We need to ask the question: ‘Is it fair to all
concerned? Are such provisions aiding in the Government’s efforts of “Ease of
doing business in India”?’

 

It
gives me immense pleasure to inform you that we had made a joint representation
to the Hon’ble Union Minister of State for Finance and Corporate Affairs who
gave us a personal hearing; a number of major points causing difficulties to
tax payers and professionals were explained to the Minister. Both direct and
indirect tax issues were brought to the table and explained in detail. He was
appreciative of the various issues raised by us and we hope that, as in the
past, many of our suggestions would be accepted and concrete corrective action
would be taken in time.

 

The
Consumer Confidence Survey of the Reserve Bank of India indicates that not only
was the sentiment negative for three of the five parameters in the month of
July, but it was expected to deteriorate further compared to two months ago. We
are witnessing a weak consumer sentiment which is also reflecting in the
business sentiment, with businesses being less upbeat about production, order
books and capacity utilisation. The good news is that the Government is aware
of the overall slowdown in the economy and might take corrective action very soon.
This, coupled with the upcoming festival season following a healthy monsoon, is
expected to bring cheer to the stressed sectors of the economy in the second
half of the fiscal.

 

Fortunately,
soon after I penned the above thoughts, the Finance Minister announced a
recovery package to provide immediate succour to some of the worst pain points
of the economy in the hope of effecting a turnaround – including a rollback of
CSR violations being treated as a criminal offence!

 

Wishing
all of you all the best for the upcoming busy September tax audit season.

 

With
Best Regards,

 

 

 

CA
Manish Sampat

President

FROM THE PRESIDENT

Dear Members,

Welcome back after a long and
exhausting tax audit filing season and the refreshing Diwali break.

 

As per the 2020 edition of World
Bank’s Ease of Doing Business ranking, India jumped 14 places to 63 in the
overall ranking, riding on the sustained business and economic reforms
undertaken by the government over the past several years. India has climbed 79
positions in the last five years and has been among the top ten performers for
the third year running. According to reports, India improved its ranking on
seven out of ten indicators tracked by the World Bank with the highest 56-place
jump to 52 in resolving insolvency. The lowest gain was with regard to starting
a business. PM Narendra Modi had, in 2014, set a target of breaking into the
top 50 by 2020. We are hopeful and confident that this will indeed be achieved.
This will help us in attracting foreign investment, boosting the sluggish
economy and thereby enhancing the country’s overall competitiveness.

 

On a different note, I also came
across another world ranking on a diverse parameter. According to the Global
Hunger Index 2019 Report, India ranked 102 out of 117 countries in the Global
Hunger Index (GHI) 2019, placed below its South Asian neighbours such as Nepal,
Bangladesh and Pakistan. This report suggests, ‘India is suffering from a
serious hunger problem’. In 2014, India’s ranking was 55 out of 76 countries,
which has worsened in 2019 to 102 out of 117. It is ironical that we are making
all-out efforts on the economic fronts but are lagging behind in taking care of
the basic necessity of life, i.e., food. I am sure the government has taken
cognisance and will take all the necessary corrective steps for the well-being
of our fellow countrymen.

 

Recently, the ICAI announced that it
had come to its notice that certain members in practice were listing their
services with certain online application-based service provider aggregators,
wherein other business persons, technicians, maintenance workers, event
organisers, etc. were also listed. ICAI cited that subject to fulfilment of
certain conditions and guidelines, publication of name or firm name by
Chartered Accountants in the telephone or other such directories published by
telephone authorities or private bodies is permissible. However,
application-based service provider aggregators are not covered in this
category. Therefore, it is not permissible for members to list themselves with
such aggregators. Members are advised not to be tempted by any such offers and
refrain from listing their or their firm’s name or services on such websites or
mobile applications. 

 

Our society has announced two marquee
events which are open for enrolment. The first-ever Internal Audit Residential
Refresher Course (RRC) is planned for 21st and 22nd
November at Lonavala with the theme ‘Let’s Converge’. It’s for the first time
that such an event is being organised specifically for internal audit
professionals; we have a galaxy of distinguished paper writers on various
topics, which would help them to become better internal auditors. The flagship
53rd RRC has also been announced. It will be held in Tirupati
between 9th and 12th January, 2020. Its theme is
‘Emerging Areas of Practice’, apart from routine papers on direct tax and a
multi-disciplinary panel discussion. Refer to the website and event
announcements for other details. Members are requested to enrol for these
events, which also provide an excellent networking opportunity.

 

On 21st October, 2019 our
Society lost one of its most respected and illustrious Past Presidents, Kahan
Chand Narang, or Narang Saheb as he was popularly called. He was the President
in 1992-93, but his association with and contributions to its activities go
back decades before that. Apart from other Committees, he was an integral part
of the Accounting & Auditing and Journal Committees to which his
contributions have been invaluable. His ideas and suggestions have also been
vital for the Editorial Board of the BCAJ, of which he was a member for
more than two decades. He was a thorough professional and a perfectionist. A
man ahead of his times, he had a passion for reading and research. He always
had the interest of the Society and inspired many young members to take up
leadership positions. On a personal front, I was very fortunate to have known
and worked with Narang Saheb for almost 25 years; in fact, he was the person
who introduced me to this wonderful organisation. May his soul rest in eternal
peace. We will deeply miss you, Sir.

 

With Best Regards,

 

 

 

 

CA Manish Sampat

President

 

From the President

Dear Members,

Thank you for the trust
placed on me by electing me as the President of the Society. I will try my best
to fulfil the expectations of the members. My detailed acceptance speech is
published elsewhere in the Journal and reflects the annual plan focussing on
the prioritisation of BCAS activities to align with the member expectations
from the Society.

 

The month of July, named
after the Roman General Julius Caesar, is a busy month for most chartered
accountants. Immediately after exchanging festive greetings of the CA Day, the
action begins. The month is flooded with a series of tax and compliance
deadlines. With a mandatory late filing fee for personal income tax returns
introduced for the first time, the intensity of work for tax practitioners had
increased manifold. Considering various representations, the Government did it
well to extend the due date by one month. However, do such ad hoc last minute
extensions help or do they only increase the agony of those who religiously
planned their activities and filed the returns in the stipulated time? It is
obvious that such extensions can result in cluttering of personal income tax
returns with the tax audit returns. In effect, such extensions become a ‘curse
in disguise’.

 

At BCAS, July was a month
full of activities. The Founding Day Lecture by CA. Nilesh Shah on “India –
2019 & Beyond” was full of empirical data, wit and in-depth analysis. Two
lecture meetings, a curtain raiser event on “Internal Audit – Rising to the
Expectations”, an interactive panel discussion on “permanent establishments”,
numerous study circle and study group meetings – all of them received good attendance
and participation. The month saw release of four publications on diversified
topics. The Society was also active in making various representations under the
direct tax law, GST law, FEMA, etc. A detailed report of various activities
conducted by the Society in July is available in the Society News Feature. The momentum of activities will continue in the month of August as well, the
details whereof are available elsewhere in the Journal.

 

July was also a month where
we decided for the first time to open up the soft copy of the BCAJ to general
readers without login. This was a part of a onetime outreach program to
increase both the subscriber base and the advertisement opportunities. The
Journal Committee and the Editorial Board undertake substantial efforts, month
after month, every month to provide the readers content which is crisp,
in-depth and extremely qualitative and relevant. It is now for each of us to
make sure that the fruits of these efforts reach a much wider spectrum of users.

 

July will always be
remembered as the month when the landmark indirect tax reform called GST was
introduced. This being the first anniversary, it was all the more special!
While the reform had its own teething troubles and difficulties, some of which
continue to exist even today, what is important is the positive impact that it
has created for the industry as a whole. Many surveys were conducted last month,
including one by the BCAS. Most of them gave a ‘thumbs up’ to this extremely
controversial reform.

 

July is also a month which
brings rains in abundance. While rains bring in a respite from the hot sultry
weather and envelop Mother Nature with a lush green cover, the story in
metropolitan cities like Mumbai is very different. The rains invariably bring
to forefront the crumbling infrastructure of the city – be it the potholes on
the roads, the inadequacy of the drainage system resulting in waterlogging, the
falling bridges, miserably inadequate public transport and totally chaotic
situation of traffic, the average Mumbaikar bears it all and emerges as a
winner. While from a citizen’s perspective that is the spirit to emulate, from
the Government’s perspective, a lot of introspection and corrective action may
be required.

 

July also started with
anxiety on the face of lakhs of students who aspire to be future chartered
accountants. After all, the results for all the levels of examinations were due
this month. Ultimately, when the results were presented, the feelings of
anxiety were replaced with moments of joy or disappointment. My congratulations
to all the students who cleared the examinations. Enjoy your moments of glory
and get set for the next phase of your journey either as an article student or
as a qualified professional. After all, an examination/result is not a
destination, but merely a milestone in an eternal quest for knowledge. The
Society invites all freshly qualified professionals to become its members.
Through its time tested volunteering model, a strong ethical fabric and the
unwavering faith of its existing membership, the Society will leave no stone
unturned in grooming these young professionals into leaders of tomorrow.

 

As we move closer towards
the Independence Day, it is time perhaps to look at the attribute of
‘independence’ afresh, especially in the context of some of the recent
happenings in our profession. Each profession offers a distinct value
proposition to its stakeholders. Unlike many other professions, in my view, the
unique value proposition of the profession of chartered accountancy is the
assurance offered by the profession about the truth and fairness of the
financial statements. Any compromise on independence, either in form or in
mind, can severely compromise the quality of this assurance and therefore
independence is identified as an inextricable attribute of the audit
profession. It is for each of us to introspect and examine whether we have been
able to not only maintain the highest standards of independence but also
portray the same to all the stakeholders. We may like to defend the few
incidents as aberrations but we cannot make the mistake of disregarding them.
Think we must brainstorm, we must and then execute a proper action plan to
transform the profession. I would be keen to know your inputs on the steps that
we as individuals and the Society as a collective vehicle could take to restore
the pride towards the profession.

 

The profession also cannot
be oblivious to the rapid strides in technology and the impact that it is
likely to have on the profession. Many professions and products have vanished
since they were unable to keep pace with the changing times and technologies.
Adaptation is the key to survival and I am sure our profession will adapt to
the changes in the landscape. The Society will line up a series of events which
address this need of the profession.

 

I would be glad to receive
any feedback or suggestions on the functioning of the Society, events and
publications that you would like to witness, or any other matter concerning the profession.
Do write to me at president@bcasonline.org. 

 

Warm
Regards

 

 

CA.
Sunil Gabhawalla

President

 

FROM THE PRESIDENT

Dear Members,

 

General Elections are just
around the corner. The role of elections in ensuring a vibrant democracy and a
progressing nation cannot be underplayed. For the incumbent government,
elections present an opportunity to showcase their achievements and also promise
a path of continuity of policies. For the opposition, elections present an
opportunity to highlight the shortcomings of the incumbent government and offer
an alternative narrative towards various policies. In a sense, the elections
have the potential of acting as a reality check. As citizens, we regularly
voice our support or concerns to various initiatives (or the lack of them!) of
the government. At times, we feel frustrated that our voices go unheard. To
citizens, elections present a once in five years (subject to certain
exceptions!) opportunity to make their voices heard. How can we miss this
opportunity? Actually, it is not just an opportunity, it is our duty towards
the nation.

 

In a crowd of conflicting
noises and opinions, it is easy to get disillusioned, either due to
disagreement with policies or inability to see immediate outcome of the
policies. At the same time, not having many superlative alternatives may also
make one think whether there is really a choice and whether one vote matters?
Having an election day near a weekend may entice one to make simple choice of
enjoying a vacation. For the sceptics who believe that one vote may not matter,
let me remind them that each drop builds up the ocean. As accountants, we like
numbers. So let me draw up some eye-opening statistics from the General
Elections 2014 – in a whopping 524 constituencies, the vote margin of the
winning candidate was less than number of voters who did not turn up for
voting. While it is too ambitious to assume that everyone from the nation would
vote, even if 50% of the non-voters would have additionally voted over and
above those who actually voted, 427 constituencies could have reported a
different scenario since the vote margins there were less than even 50% of the
non-voters. Dilute this to 25% additional turnout of non-voters, one would
still see 240 impacted constituencies. In the past, we have seen political
parties with less than these many numbers calling the roost with other
coalition partners. In my view, these are eye opening numbers to suggest that
the biggest damage is done to the nation by voter apathy. The sum and substance
of the message is very clear – Come what may, Vote we must.

 

Closer to our profession,
the BCAS had the opportunity of an interaction with the newly elected
torch-bearers of the Institute-President Shri Prafulla Chajjed, Vice President
Shri Atul Kumar Gupta and Chairperson of WIRC Smt. Priti Savla. The meeting was
very fruitful and many issues of topical interest were discussed. BCAS
congratulates all of them and reiterates its commitment to complement the
efforts of the Institute towards long term development of the profession.

 

The month of March
witnessed varied activities and events at the Society–starting with an RRC on
Ind As, followed by two lecture meetings covering recent decisions in direct
taxes and Banning of Unregulated Deposits Scheme respectively, a series of
study circle meetings and workshops, a four-day intensive study course on FEMA,
two-day Company Law Conclave and a full-day Tech Summit were events cherished
by the members at large. The Society also felicitated rank holders and new
entrants to the profession. Acknowledging its responsibility towards the
Society, a Blood Donation Camp was organised, which also received good response.
The Journal Committee celebrated the occasion of completing 50 years of the
BCAJ with a bang and felicitated various feature writers and editors.

 

Though the financial year
has come to a close, the activities at BCAS continue unfettered. The JOSH is
high – the organising teams have planned the GST RRC at Vadodara, the Youth RRC
is also announced and the preparation for the annual student event Tarang is in
its final stages. It is the members’ enthusiasm and whole hearted participation
which motivates the organising teams of the volunteers to devote their time,
effort and energy to make each event more memorable than the earlier one. I
would urge all of you to participate in these events and contribute towards the
collective growth of the profession.

 

The membership for the
Society was due for renewal by 31st March and reminders were sent a
couple of months ago. In your busy schedule, if you have missed out on your
renewals, I would request you to kindly renew the membership at the earliest.

 

Please
feel free to write to me at president@bcasonline.org

 

Regards

 

 

 

CA.
Sunil Gabhawalla

President

FROM THE PRESIDENT

Dear Members,


On October 2, 2019, the
whole world will celebrate the 150th birth anniversary of the
‘Father of the Nation’ – Mahatma Gandhi. India will mark the event, both
nationally and internationally, by propagating the message of the Mahatma. A
national committee headed by the Prime Minister has been set up for this
purpose. We at BCAS are also making efforts to celebrate this momentous
occasion in a unique way. The October, 2019 issue of the BCAJ carries
special articles and a collage of quotes and thoughts of Gandhiji. We have also
planned an event for members which will include a talk by a senior Gandhian on
the ‘Gandhian’ way of life, some of Gandhiji’s favourite bhajans, a short skit
by members, followed by poetry recitation and exchange of thoughts on
Gandhiji’s principles.

 

There are many lessons from the Gandhian way of
life that we can adopt in our lives. The one Gandhi thought that has made an
everlasting impression on me is: ‘Service which is rendered without joy helps
neither the servant nor the served’. This is very, very true. I try to practice
this in my personal and professional life. In today’s fast and frenzied age, we
are totally immersed in providing service to our clients or the organization
where we work, but the question we need to ask ourselves is, ‘Are we happy with
what we are doing’? If the work that we are doing gives us pleasure and
satisfaction, that is a big motivating factor which keeps us going. It is
rightly said that ‘all other pleasures and possessions pale into nothingness
before service which is rendered in a spirit of joy’. So let us work with this
mindset of joy and enjoyment for ourselves, motivate our staff and students to
enjoy what they are doing and look forward to another day with anticipation;
let us reach our workplace happily every morning rather than out of compulsion,
without energy or enthusiasm.

 

On a different note, on August 26, 2019 the RBI
transferred a record Rs. 1.76 lakh crore of its surplus for F.Y. 2018-19 into
the government’s coffers (more than that of the preceding three years). As per
Section 47 of the RBI Act, 1934, the balance of the RBI remaining after making
all required provisions shall be paid to the Central Government. The current
year’s highest-ever transfer was a result of bumper / higher / exponential
surplus and a one-time exceptional transfer from RBI’s Contingency Fund
amounting to Rs. 52,000 crore. Transfer of surplus funds from Central Banks to
their respective governments has always been a topic of debate and discussion
across the world because every government likes to extract the maximum and the
Central Banks want to retain the surplus to make the balance sheet stronger.
The Dr. Bimal Jalan Committee constituted for this purpose recommended that the
equity reserves be in the range of 6.5% to 5.5% of the balance sheet size (it
was 6.8% prior to this transfer). The recommendations of the Committee were
accepted and reserves in excess of the minimum 5.5% (Rs. 52,000 crore) were
allowed to be transferred, thus leaving no buffer for future contingencies.
Further, the transfer came from a bumper profit triggered by interest income
and gains from foreign exchange transactions. Further, as per the
recommendations of the said Committee, the unrealised gains sitting in the
RBI’s balance sheet have remained untouched.

 

The government has not yet come out clearly about
how and where it intends to use this windfall bonus. Ideally, it should be used
for purposes like recapitalisation of public sector banks, reduce government
borrowing to control the fiscal deficit target, or provide a much-needed
stimulus to a slowing economy, rather than a thoughtless carnival of government
spending. Later, in September, the Finance Minister announced huge direct tax
cuts to boost investments and consumer spending and it appears this revenue
loss will be fully met out of the RBI surplus. Hopefully, this is a one-time
solution and the exception does not become the rule and precedent for future
governments.

 

Before I sign off, 
let me offer my warm wishes to you and your family on the joyous
occasion of Diwali! May this auspicious festival of lights illuminate every
pore of your being by adding sparkling moments of Love, Happiness, Success, Joy
and Good Health.

 

With Best Regards,

 

CA Manish Sampat

President

 

From the President

Dear Members,

The month of August, named after
Augustus, the first Roman Emperor is also celebrated as the “Happiness Happens
Month”. Even though it may sound trivial, it does have a very important
purpose. The month reminds us that happiness happens one small moment at a time
and it is our job to recognise those moments when they happen. It reminds us
that sometimes a small action boosts our happiness. It reminds us that
happiness is a personal experience and it is also contagious! So, step back and
reflect, what were your happy moments during the last month? When did you make
someone else happy?

 

Happiness was what a team of 37
volunteers witnessed when they visited the tribal areas of Dharampur as a part
of the social initiative of BCAS Foundation. Members and students were thrilled
to spend two days together with lots of fun during the journey to visit various
social and religious projects coupled with the environmental initiative of tree
plantation.

 

The BCAS Foundation also had the
privilege of jointly hosting the 3rd Narayan Varma Memorial Lecture
Series, where Mr. Vallabh Bhansali spoke on an interesting topic of
“Re-building India”. In a thought-provoking session, he highlighted that the
key stakeholders of this re-building exercise would be the Government, private
enterprise, charities and individuals and that each of these stakeholders
should work in close co-ordination for optimal results. As the Hon’ble Prime
Minister rightly said in his Independence Day Speech, “When 125 crore
countrymen become partners, then each and every citizen joins us in the
progress of the country.”

 

The recent natural disaster in Kerala requires necessarily this
type of co-operative effort. While the immediate work of rescue and relief is
more or less taken care of, experience suggests that rehabilitation is perhaps
something which is frequently neglected. BCAS Foundation is in the process of
identifying a suitable rehabilitation project in the field of education and
would endeavour to create a visible long term impact by direct or assisted
intervention. I request the members to contribute generously to this noble
cause.



Technology was the flavour of the
month at the Society. While delivering an insightful talk on the “Impact of
Technology on the Role of Auditors”, Mr. P. R. Ramesh minced no words while
pointing out that only those CA firms would survive who would accept change and
flow with the flood of technology impacting every aspect of human life. A week
later, the talk on “GSTN Portal – Experiences” by the GSTN CEO Mr. Prakash Kumar,
showcased the benefits of technology in improving data analytics. This was soon
followed by an interactive session with Mr. Purushottam, from TRACES and Mr.
Deepak Wayal from NSDL. A common thread across all the three meetings was that
technology will play a larger disruptive role than ever, especially in the
manner in which the profession conducts its activities.

 

The 22nd International
Tax and Finance Conference, 2018 held at Ahmedabad was a grand success with a
record number of participants. Residential course not only provide the members
with the specialised technical knowledge on the respective domains but also
foster networking amongst the members, presenting further opportunities of
growth, all in a relaxed and luxurious environment. The Seminar and Membership
Development Committee is in the advanced stage of finalisation of the 52nd
Residential Refresher Course and the members can expect the announcement very
soon. Some innovative ideas are being implemented at this RRC and I would urge
the members not to miss this event.

 

There were many more activities at
the Society – a visit to Reliance Industries Limited to understand their
consolidation process, a two day event on “Internal Audit – Let’s start at the
very beginning”, a full day seminar on “Tax audit including new amendments
therein”, lecture meeting on “Proposed GST Returns Formats”. A common thread
across all these events was the huge turnout. In fact, for four of the paid
workshops, we had to close enrolments and turn down last minute requests. I
would earnestly request all the members to enrol early to avoid disappointment.
The Committees curate the best of the programs for our members and early
enrolment helps them in planning the events better.

 

I would be glad to receive any
feedback or suggestions on the functioning of the Society, events and
publications that you would like to witness, or any other matter concerning the
profession. Do write to me at president@bcasonline.org. 

 

 Warm Regards

 

 

 

CA. Sunil
Gabhawalla

President

 

FORTHCOMING
EVENTS

COMMITTEE

EVENT NAME

SPEAKER

DATE

VENUE

NATURE OF EVENT

September, 2018

Human Resource
Development
Committee

Success in CA Exams

CA. Nikunj Shah and
CA. Mudit Yadav

Saturday,
8th September, 2018

 

BCAS Conference Hall,
7, Jolly Bhavan No. 2,
New Marine Lines,
Mumbai- 400020

Student Programme

October, 2018

Indirect Taxation
Committee

Long Duration Course on
Goods and Services Tax

 

Various Speakers

October 5th, 6th,
12th, 13th, 19th, 20th October,
2018 Fridays and
Saturdays)

BCAS Conference Hall,
7, Jolly Bhavan No. 2,
New Marine Lines,
Mumbai- 400020

Course

STUDY CIRCLE

Indirect Taxation
Committee

Intensive Study Group on
GST Batch ll

Only For ISG Members

20th & 21st
July/

24th & 25th
August, / 26th & 27th October/ 16th &
17th
November / 7th
December,  2018

BCAS Conference Hall,
7, Jolly Bhavan No. 2,
New Marine Lines,
Mumbai- 400020

Study Group

FROM THE PRESIDENT

Dear Members,

I am extremely honoured to be elected as the
President of our Society and to lead an organisation that has contributed so
much to my own career and personal growth. I became a member of our Society
about two decades ago and along the way I have been mentored by stalwarts and
have also formed several close friendships. I would like to thank all of you,
in particular the Past Presidents of our Society, for bestowing this honour on
me, showing confidence in my capabilities and considering me worthy of this
position. I am looking forward to an eventful and exciting year ahead along
with all of you.

 

Today, our Society is considered as a
leading voluntary organisation of Chartered Accountants in India and enjoys a
very high level of credibility amongst its members and in the profession. It is
known for its value systems, ethics and innovativeness. The quality of its
programmes and publications set a bench-mark for others, and its journal is
probably the best in the profession. However, we are today living in a
disruptive and challenging age. The environment around us is changing
constantly and the needs, preferences and profiles of our members are also
changing at a rapid pace. New and emerging areas of practice are gaining in
importance, technology is also changing the way we approach our work. In such a
situation, if our Society has to maintain its prime position then it needs to
constantly innovate and adapt to cater to the changing needs and aspirations of
its members. I realise the importance of this fact and will always strive to
not only fulfil your expectations but also anticipate them. The Annual Plan for
the year 2019-20, including the thrust areas, is reproduced elsewhere in this
Journal.

 

Over the past seven decades of existence,
our Society has been liaising and collaborating with the various regulators and
government departments by sending representations for rationalisation and
improvement in laws, administration and governance. Recently, on 16th
July, 2019 we submitted a written representation to the Hon’ble Finance
Minister relating to the hardships caused to the tax payers while filing
returns of income for A.Y. 2019-20 due to delay and constant tinkering of the
ITR forms and other such matters. This representation received a lot of
attention in the social, digital and print media. I hope this initiative will
have a positive impact and corrective action will be taken to provide relief to
the taxpayer as well as the tax practitioner.


The English cricket team might have won the
Trophy at the recently concluded World Cup, but the New Zealand (losing
finalist) team touched so many hearts of fans around the world and won their
love and respect. That Final will remain one of the most exciting,
controversial and perhaps most-talked-about matches for a long time to come.
The New Zealanders were so gracious in their defeat and, despite being at the
wrong end of a bizarre rule, they accepted the final verdict without any
complaint or fuss. They really proved that ‘Cricket is indeed a gentleman’s
game’. The final also gave us many important lessons of life: You will
always have a second chance in life; never give up till the last ball is
bowled; luck and labour go together; and finally, always be graceful in your
defeat.

 

The month of August will witness the
declaration of the results for the CA Final examinations held in June, 2019.
This was the first examination wherein the question paper pattern of the
theoretical papers had 30% objective questions. This was done by the ICAI to
strengthen conceptual clarity among the students. These results will decide the
fate of thousands of students taking the exams and I wish them all the very
best to be successful and to pass with flying colours. They will be the future
torch-bearers of our profession.

 

United States President Ronald Reagan had
once said: ‘The greatest leader is not necessarily the one who does the greatest
things. He is the one that gets the people to do the greatest things’.
Similarly, our Society is a collective organisation of volunteers and only one
person gets a chance to lead it for one year, so I cannot do anything alone and
it will only be a team effort throughout the year. I look forward to your love,
support and encouragement throughout the coming year. Please feel free to
connect with me on any matter.

 

Wish you all a very Happy Independence Day,
a day on which we celebrate the indomitable spirit of those brave hearts who
gave us this gift of freedom.

 

With Best Regards,

 

CA Manish
Sampat

President

FROM THE PRESIDENT

Dear Members,


As I sit down to write this
communication, the Finance Minister has just concluded presenting the Interim
Budget. In an invigorating Interim Budget speech, for the first time by a
Chartered Accountant, the Finance Minister left no stone unturned in highlighting
the series of measures taken by the Government to overcome policy paralysis and
bring the Indian economy back on track. 
While a bystander may get a perception that some of these recollections
amount to blowing one’s own trumpet, perhaps in these times of persistent
negativity and noise, some element of positive assertion helps build
confidence.


Departing
from established conventions, the Finance Minister also proposed certain
amendments in the tax laws. Interestingly, there was a departure not only from
convention but also from a traditional mindset. Essentially, the proposals do
not aim to merely provide incremental benefits but appear to suggest a
recalibration of tax laws and limits to accept ground level realities and
changing times. The doubling of the basic exemption limit for individuals from
Rs. 2.5 lakh to Rs. 5 lakh and the quadruplicating of the threshold limit for
TDS on interest on bank fixed deposits from Rs. 10,000 to Rs. 40,000 cannot be
simply brushed aside as incremental changes. Nor can one ignore the concession
granted for the second residential house, both in terms of interest deduction
and the reinvestment benefit.

 

GST has been a classic
example of how multiple Government agencies having distinct taxing powers can
collectively administer and recover taxes from the common subject. Perhaps
taking inspiration from the said success, the Interim Budget also proposes
reforms in the levy and collection of stamp duty on financial securities
transactions. Collecting such stamp duty at one place through the Stock
Exchange and sharing the same backend with the State Governments seamlessly on
the basis of domicile of the buying client, could bring in much needed
simplicity in the administration of the said duty.

 

One more reflection of the mindset
change could perhaps be an elaborate thanksgiving to the tax payers. Through
some examples drawing an emotional connect with the tax payers, the Finance
Minister acknowledged the stellar role of the tax payers in contributions
towards nation- building. While it is always said that taxes are the price that
the society pays for building civilization, it is not very common for a Finance
Minister to acknowledge such contribution wholeheartedly through the Budget
speech.


This mindset change is now clearly visible in many of the interactions with the
Government officials. The CPC – TDS is on a mission to roll out the next phase
of reforms in the field of filing of TDS Returns. In an inspiring talk at the
BCAS, the Commissioner Mr. Sunil Sharma with full humility outlined the
proposed system and wholeheartedly invited suggestions and constructive
feedback for improvements.


The Society had the
privilege to have an interactive discussion with the IIA Global Chairman Mr.
Naohiro Mouri and IIA Global President Mr. Richard Chambers on the side-lines
of the International Conference on Internal Audit. It was interesting to hear
about their life journeys and we could carry home many lessons for the growth
of the internal audit profession. The discussion will be transcribed and
carried in the next issue of the Journal.


A host
of amendments proposed in the GST Act were ultimately made effective from 1st
February 2019. Many of these amendments are carried out retrospectively and
clearly represent a mindset of the Government to understand the ground level
difficulties and provide workable solutions to such difficulties. Notable
amongst them is the permanent burial of the reverse charge mechanism in case of
supplies received from unregistered persons.

 

It is perhaps now time for the industry and
the professionals to welcome this mindset change with positivity and build up
confidence and assurance in the long-term reforms and growth. While
constructive criticism is an essential ingredient of any live and vibrant democracy,
too much of criticism without a logical basis for the same could result in the
economy reverting back to policy paralysis.


The next edition of the
Journal will mark the conclusion of the 50th year of the Journal. 50
years is a very important milestone. In the context of a magazine published by
a voluntary organisation, it speaks volumes about the contents and the
relevance. The next edition of the BCAJ will do its bit to spread this
positivity especially in the context of the accounting profession and would be
a must read for all the professionals. The Editorial Team led by Raman Jokhakar
has ably curated the best of articles and features and I eagerly await the said
edition. In the meantime, I wish you all a very happy reading.

 


Yours truly

 

 

 

CA.
Sunil Gabhawalla

President

FROM THE PRESIDENT

Dear Members,


At the outset,
let me take this opportunity to wish you a Happy New Year 2019. 2018 is a year
which will be remembered in the history of accountants and finance
professionals for a variety of reasons – both good and not so good.

 

The year started
with the unravelling of a massive scam of unsubstantiated LOUs issued by the
Punjab National Bank. Though it is traditionally an off balance sheet exposure,
the role of the auditors was widely discussed and criticised. This, followed by
the recent ILFS episode, brought to forefront various systemic issues and to
some extent the inefficacy of the audit process. While the ICAI has acted fast
on such issues, one thing which is evident is that the profession of chartered
accountancy has taken a turn which needs immediate course correction.

 

Overambitious
expansion plans and / or systemic diversion of funds by corporates coupled with
bad lending decisions by banks resulted in an alarming ratio of NPAs, which to
some extent were window dressed. However, recent trends suggest a good recovery
ratio of such NPAs. It appears that the new Insolvency and Bankruptcy Code is
now deriving the desired results. Despite the same, there are lots of issues
surrounding the banking sector resulting in a virtual liquidity crisis with major
public sector banks being under the prompt corrective action plan of the
Reserve Bank of India.

 

The tiff between
the Reserve Bank of India and the Government apparently on issues ranging from
PCA and liquidity crisis to the withdrawal of reserves took an ugly turn. This
was immediately followed by a change in guard at the helm of RBI.


The year also did
not augur too well in terms of growth in the economy. Unemployment continues to
remain an issue. Farm debt and waivers became an election issue. Coupled with
many other factors, it resulted in change in Governments in a few States.
Perhaps such incidents made the Government rethink on some of the policies
surrounding GST. The GST Council in its 31st Meeting brought in a
slew of measures to simplify the burden of the businesses and also reduced the
rate of GST on many goods and services.

 

The results of
the Central and Regional Councils of the ICAI have been announced. Our
congratulations to all the winners. The task before the winners is clearly cut
out. The Regional Council members will have to strive hard to improve
administrative efficiencies and provide better member services including
disseminating knowledge to the members. The Central Council members have a much
onerous duty to perform – to provide thought leadership, ensure effective
representation and also take concrete efforts for the overall development of
the profession. The Society is always available to provide constructive
suggestions in this regard and work hand in hand with the Institute.

 

The year ended
with a series of high profile weddings – be it Bollywood or industry tycoons.
Each of these weddings entailed a lavish display of wealth. While such
expenditure is a personal choice and is also helpful in generating domestic
employment to some extent, one wonders at the disparity in the wealth which
becomes so apparent and visible and is further fuelled by social media.


As we proceed
towards 2019, all eyes will be on the General Elections. Will it be a contest
fought on the agenda of development and growth or will caste, religion and
populism take priority? It is for the nation to decide. We as professionals can
initiate an informed debate and convince our circles of influence to cast their
vote.

 

After hectic
professional season, this period is relatively relaxed in terms of professional
work. It is perhaps time to ponder on some larger issues facing the profession.
It is also time to sharpen the knowledge base. The Society has lined up a
series of events which are relevant for the membership at large. I trust the
members will take the benefit of the same.

 

Yours truly

 

CA. Sunil Gabhawalla

President

FROM THE PRESIDENT

Dear Members,

A lot has been written and said about the impact of technology on our
lives. We often read about how technology will influence every aspect of our
lives. Technology used in a positive way leads to innovations, which in turn
result in an improved and enhanced lifestyle and better standard of living.
This improves the quality of life, fuels investments and if handled wisely
could even create employment opportunities. Technology has changed the way we
live, behave and interact, both at work and at home. It has changed the way we
communicate, the way we entertain ourselves, the way we seek information and
much more. On the flip side, technology has made a number of traditional jobs
redundant, raising a fear that machines and automation will replace low and
semi-skilled workers and newer technologies like Artificial Intelligence (AI)
will be a threat to skilled workers. The new advancements are forcing people to
continuously update their knowledge to stay relevant and productive in this
competitive world.

 

In the midst of all the debates on the influence of technology, I was
very happy to come across a very comforting report about the Chicago-based
aircraft maker Boeing. Boeing is said to be dumping one of its most ambitious
automation projects of using advanced and sophisticated robot technology to
build two main fuselage sections for its 777 jetliners and an upgraded version,
the 777X. Boeing will now rely on skilled mechanics to manually insert
fasteners into holes drilled along the circumference of the airplanes. This is
so because the manual solution has proven more reliable, requiring less work by
hand and less rework, than what the robots were capable of doing. This proves a
point, that however tempting it may be to trust automation and technology,
there are and always will be certain areas where technology can’t match the
dexterity, creativity and precision of the human mind, hand and eye. This
debate will always go on, but I strongly believe that humans, human skills and
emotions can never be replaced by technology. Humans remain one up against
machines!

 

Mistakes: A mistake ‘is an action,
decision, or judgement that produces an unwanted or unintentional result.’ We
are all humans and we all make mistakes. So the best solution is not to try and
hide or disown your mistake, but to face it head on. Depending on the nature of
a mistake, it is more important to acknowledge this fact and apologise (if
needed), introspect over the reasons, learn from it and ensure that it does not
happen again.

Everyone makes mistakes and everyone deserves a second chance. Some
mistakes have little or no significance and can actually be a great learning
experience. But some mistakes may have huge ramifications and may involve a
huge cost not just financially but on relationships and on emotional
well-being. As mentioned earlier it is vital to learn from mistakes and have
the courage to own up to them. Here are examples of some well-known
personalities who have spoken about and owned up mistakes made by them:

 

a)   Bill Gates has said that ‘his
greatest mistake ever’, reportedly worth US$400 billion, was not to create
Android at Microsoft.

b)   Mark Zuckerberg said that ‘one
of the biggest mistakes’ of Facebook was not digging deeper into the Cambridge
Analytica scandal, in which the data mining firm misused data to try and
influence the elections, which caused a huge public outcry and more than US$100
billion was knocked off Facebook’s market capitalisation.

c)   Ace investor Warren Buffett
admitted that his decision to take control of Berkshire Hathaway was a
‘monumentally stupid decision’ taken only because it was available cheap. He
kept on investing in Berkshire’s textile mills, which eventually shut
operations in 1985.

d)   Chinese e-commerce giant
Alibaba’s founder and CEO Jack Ma reportedly said ‘My biggest mistake was I
made Alibaba’. He was just trying to do a small business but it grew and
brought on greater responsibility and more trouble. He became so busy that he
did not have personal time.

e)   Ratan Tata, Chairman of Tata
Trusts and former head of Tata Sons, said his greatest mistake was branding the
Nano car as the cheapest instead of the ‘most affordable’, which was the
intention of the company. Branding it as the cheapest created negative impact on
the market.

 

Well, we must learn from the mistakes of others because we can’t live
long enough to make them all ourselves!

 

With
Best Regards,

 

 

 

CA Manish Sampat

President

FROM THE PRESIDENT

Dear Members,


Immediately after the
completion of the deadline for transfer pricing audits, we now have one more
deadline for uploading of GST Audit Reports by end of December. This would be
the first time that the members would be undertaking the assignments for GST Audit
for their clients. While the statutorily prescribed GST Audit Report primarily
anchors itself around the auditors providing a true and correct view of various
reconciliations listed in the Format, the Technical Guide suggests a much
larger involvement / expectation from the GST Auditors in terms of compliance
with various legal provisions. It is therefore important that the scope of
audit be clearly understood and communicated to the clients at the outset. It
would also be fruitful to have proper engagement letter spelling out this scope
and the inherent limitations of any assurance assignment. Last but not the
least, the fees charged should be commensurate to the work done and the
complexity of the assignment and the risks involved.


While as professionals, we
would gear up for the new responsibility cast upon us, it is also important for
the Government to act fast. Though the formats are prescribed since quite some
time, the portal is still not ready to receive the reports. It would be
appropriate for the Government to expedite this process and also announce an
extension well in advance since the time left for uploading is obviously very
limited.


In a recent judgement, the
Supreme Court held that action can be taken against chartered accountants if their
conduct brings ‘disrepute’ to the profession even if such an action was not
related to professional work. This decision reinforces the extensive regulatory
powers of the Disciplinary Committee of the ICAI in handling various complaints
against the members. At the same time, it acts as a wakeup call for
professionals who are expected to not only ensure that their behavior in the
profession or otherwise is in compliance with laws but also follow accepted
norms of social behaviour.


The year 2018 was a crucial
one for the profession. In the earlier months, the Nirav Modi Scam brought to
forefront the expectations of various stakeholders from the profession. As more
and more financial failures came to limelight, the role of chartered
accountants was widely discussed in the media reports. In the meantime, NFRA as
an independent regulator to oversee the auditing profession was also set up.
While we may have our own lines of defence, it is also time to wake up to the
expectations of the stakeholders.


It is in the above context
that the Council Elections become very important. I am sure that each one of
you will go out to vote for ICAI elections. It may also be useful to make the
best use of the preferential voting mechanism and vote for as many deserving
candidates in orders of preference.


The year 2018 is about to
end, it’s time to take stock of all that was good and relish those memories. It
is also time to take stock of all that did not end up well and analyse the
reasons for the same. If required, it could also be an opportunity to
strategise and find solutions for improvements in the future. Here’s wishing
You All a Merry Christmas and a Happy and Joyous New Year-2018! I urge members
to take a well-deserved break and spend quality time with their near and dear
ones to start afresh with renewed vigour for the New Year.


Yours truly

 


 

CA.
Sunil Gabhawalla

President

 

FROM THE PRESIDENT

Dear Members,

The
results of the 17th Lok Sabha elections have been announced and in a
decisive mandate, the Narendra Modi-led National Democratic Alliance (NDA) has
been voted back to power with a clear, resounding majority. At the outset, I
would like to congratulate the Prime Minister and his entire team for this
thumping success. It is very heartening to note that amidst the chaos prevalent
before and during the elections, the citizens of India have acted in a mature
manner and have voted sensibly.


As
the new government takes up the task of moving ahead with and accelerating the
unfinished agenda, it is time for us to take home a few learnings.


A
cursory glance at the names of the candidates who lost suggests that the Indian
voter has matured and has rejected a candidate whose primary raison d’etre
has been that he / she is the son / daughter / relative of an established
politician. The writing is on the wall – there is no room for dynasty politics.
The successor has to prove his credentials and cannot bask only on past glory.
As many middle-aged professionals see their sons qualify the CA examinations
and introduce them into the family practice, both the parent and the child
would be well advised to bear this aspect in mind while planning the succession
in the firm so that the clients and the team accept the successor in his own
right and not under the shadow of the parent.


The
entire plank of the opposition was built on the premise of criticism and a
one-point agenda to stop Modi from returning to power. In the absence of a
constructive agenda, the citizens were mature enough to turn a blind eye to
such criticism and move to the party which focussed on and promised growth,
stability and national pride.

 

As
professionals, scepticism is built into our approach and conduct. But a thin
line divides the concept of scepticism from criticism. While we may have
reasons to not like many facets of the law, regulations and the environment,
clients may not perceive value from criticism of such provisions. The advice
and conduct of a professional have to provide value and solutions rather than
mere criticism. The unjust aspects of the law may be addressed suitably through
representations before appropriate forums.

 

One
of the factors which perhaps worked in favour of the NDA was the open
communication channels and regular interactions with various stakeholders. Such
interactions kept the government connected with the ground-level realities and
helped it to provide tangible benefits to the citizens. Isn’t it time that we
increase our interaction levels with our clients as well? When was the last
time that we had a no-agenda meeting with our clients? Such gestures of genuine
care create connectivity and help in ensuring long-term growth of our profession.

 

One
more striking feature of the elections was the extensive use (and perhaps abuse
as well) of technology. Information spread like fire on social media. A random
glance at a few such posts would highlight the extent of creativity (perhaps
wasted!) latent amongst the citizens. As professionals, it is important for us
as well to harness the use of technology in our activities and also be active
on social media for projecting the right image and value proposition of the
profession.

 

One
can go on and on; there are many learnings from the election results and I will
leave it to each one of you to reflect and ponder upon some of these and
implement them in your professional practice. One clear message from the
results is about the way forward. It is more than evident that the unfinished
agenda will be taken up at a much faster pace. This will imply many regulatory
changes. As chartered accountants, we have time and again demonstrated our
ability to act as catalysts in case of such regulatory changes. Such changes
also present professional opportunities to us and therefore we should gear
ourselves up and look out for emerging opportunities that may come our way.


At
the same time, we would also be moving towards a stricter framework, which
would bring with it the associated professional risks. We need to ensure that
our technical skills, conduct and documentation jointly help us in ensuring
that such professional risks are reduced to the minimum extent possible.

 

Closer
home, the new team for the coming BCAS year is already in place. I wish Manish
Sampat, President-Elect, and his team all the best for an eventful year ahead.
Please feel free to send in your suggestions for the activities that you would
like to witness at the BCAS during the coming year.

From the President

Dear Members,

The
FIFA World Cup 2018 has taken the globe by storm. Sweeping across continents,
it is the cynosure of the world, commanding the attention of an estimated 4.5
billion people. In football there are 22 players on the field with just one
mission – to score goals! The word ‘goals’ is a short word, but behind it is a
long and rigorous regime of hard work, perseverance, sacrifice and love of what
you are doing. Those seemingly effortless passes and taps that lead to goals
are the result of gallons of sweat and an eternity of mental discipline. 

This
is my last communication to you as President of BCAS; and I too would like to
talk about goals…but a different type! In July 2017, at the ‘kickoff’, I
defined four goals that I would like to focus on to keep Team BCAS a consistent
winner and champion. They were Transformation, Yuva Shakti, Digitisation
and Networking. At the end of my tenure, I wish to review those goals
and achievements with you. Details under each goal are only illustrative though
we as a Team could achieve much more. The Managing Committee Report lists all
of them.  

With
the accelerating pace of change, Transformation has become a key
goal. By constantly scoring here, one will be well equipped to surge ahead on
the wings of new technologies, systems, ideas. At BCAS, we smoothened the path
to transformation by offering a wider spectrum of contemporary topics that were
effectively covered through events, publications and new media during the year.
These include:

–    Experts reviewed topics including new
reforms like GST, BEPS, POEM, benami transactions, strengthening the
profession, NIFTY 10K and beyond among others.

–    BCAJ introduced three new features –
Decoding GST, Revisiting FEMA and Statistically Speaking.

–    Recorded and provided free access of short
GST videos by experts on 28 topics which got over 39,000 +  views.

With
65% of India being under 35 years, India is a young nation with a fantastic
demographic advantage over many nations. And therefore, Yuva Shakti
was made a pivotal priority in our annual plan. It is India’s youth who have to
be empowered to lead the nation in the decades ahead. Here are a few steps we
took at BCAS in this direction.  

–    Encouraged the youth as speakers at Lecture
Meetings, Conferences, Workshops & others. They also contributed towards
the Journal and the annual Referencer.

–    Organised a felicitation program for newly
passed CAs where 100+ participated in the interactive and motivational session.

–   Tarang 2K18 – the Jal Erach Dastur CA
Students Annual Day offered youth a platform to showcase their talents and
creativity…it was a great success with over 600+ students attending the
event.

We are
living in a digital generation whether we like it or not, Digitisation
is fast displacing the conventional in most spheres. At BCAS, we made it a
commitment to keep pace. Having harnessed digitisation, we are now better
placed to disseminate knowledge to our members across time and geographical
boundaries with enhanced convenience. Here are some of the fruits of our
efforts.

–    BCAS E-Learning Platform – Courseplay was
launched. This intuitive and user-friendly platform offers enhanced learning
through greater interaction and ease.

–    The power of social media was explored and today
we have crossed 22K+ followers on our handle @bcasglobal. Successful campaigns
were conducted on the budget and there are always ongoing campaigns.

–   YouTube is another avenue through which BCAS
popularity is spreading. There are over 6000+ subscribers who regularly tune in
to the videos to catch up on the many initiatives of the Society which is now
put up after most of the events.

Networking is a
critical goal to sustain the long-term growth of our careers, firms and the
Society. We stepped up our efforts to building and bettering relationships with
the government, government bodies, like minded professional organisations,
institutions and others. To pave the way, we embarked upon a few new roads.

–   Organized GST training programs with NACIN
for our members and also retail traders.

–    To give an impetus to corporate relations
and networking, we organised a 2 day Start Up Conference at Bengaluru, jointly
with the Karnataka State Chartered Accountants’ Association.

–   Joint Programs were conducted with Indore
Management Association, Direct Tax Practitioners Association-Kolkata, Jaipur
Chartered Accountants Group and Chartered Accountants Association, Ahmedabad.

On the
national front the ruling Government scored an amazing goal – with GST becoming
an acknowledged success. It united the national market with a single tax and
most importantly it ensured that the inflation rate did not rise. The other key
benefit of GST is the formalisation of the economy with the adoption of
transparent digital processes. More individuals and firms have now entered the
tax system and collections have gone up considerably. The government hopes to
stabilise GST revenues at collections of Rs.1 lakh crore per month.

Many
improvements have been planned to enhance the GST experience. The compliance
process and registration system are two key steps. Also on the anvil are fewer
slabs, bringing more goods under GST and lowering of tax rates. Undoubtedly,
GST has been a big success and government hopes that bogus bills and other
means of dishonesty will soon disappear.

1st
July was the CA day of our Institute and BCAS will celebrate its Founding Day
on 6th July . Both organisations enter their 70th year of
existence. BCAS has always been a principle-centered and learning-oriented
organisation promoting quality service and excellence in our profession. The
organisation has been a catalyst to bring out better and more effective
Government policies & laws in order to have clean & efficient
administration and governance. We have been reinforcing the importance of
Principles, Values and Ethics which remain the core of the BCAS Vision to
ensure that the flag of CA profession keeps flying high.

It is
with a considerable measure of contentment that I end my tenure as President of
BCAS, one of the finest organisations I have been associated with. I sincerely
believe that this Society with its proven credentials is on a solid foundation
to face the future specially as it approaches its Platinum Jubilee Year.

Before
I sign off, I would like to express my sincere gratitude to the many people who
walked the talk with me. A big ‘Thank You’ to all my office bearers Sunil,
Manish, Suhas and Abhay who worked diligently with me to steer BCAS on the way
to success throughout the year. I also appreciate the earnest efforts of all
the past presidents including the chairmen of the nine sub committees who have
wrestled with tough deadlines and budgets to come up with excellent programmes
during the entire year. Many, many thanks to all the convenors, coordinators,
contributors and speakers …. it is your unflagging efforts that have raised the
standards BCAS is known for.

I
would also like to express my gratitude to the back office of the Society,
Events, Accounts, Knowledge, Communications, IT and Marketing Teams along with
the Office Boys who through their hard work and team spirit have kept the
wheels of BCAS turning smoothly, no matter what ! And lastly, but not the
least, I would like to extend a huge ‘Thank You’ to each and every member of
the over 9,000 strong BCAS family and all the journal subscribers for their
unstinted support and enthusiastic participation in all activities that have
made the Society the respected winner it truly is!

At the
AGM of the Society on 6th July 2018, I pass on the baton to the
incoming President CA Sunil Gabhawalla. I convey my best wishes to him and the
new team of Office Bearers for the coming year.

I flag
off for the last time from this communication by sincerely wishing that each
one of you target and achieve all your goals in life !

With
kind regards

CA.
Narayan Pasari

President

 

FROM THE PRESIDENT

Dear Members,

As I
sit to write this last communication, my thoughts race back a year in time when
I took over the mantle as the President of this esteemed Society. In the
acceptance speech, I had defined the theme of the annual plan for the BCAS Year
2018-2019 to be that of aligning its priorities to members’ expectations, which
broadly revolved around four key sub-sets – “Re-engineer my Profession”,
“Rekindle my Passion”, “Restore my Pride” and “Rejuvenate my BCAS”.

 

Reflecting
back over the past year, I feel happy and satisfied that our Society has
undertaken numerous steps and initiatives to ensure that the said expectations
are reasonably met. The Annual Report has already been circulated by email and
significant changes have been made in its presentation to make it more
meaningful. I would request you to download and go through the same. I would
not like to repeat the initiatives since they are listed in it but would only
highlight some major steps taken during the year:

 

  •  Making dissemination of knowledge crisp,
    relevant and participative through the format of panel  discussions and expert
    chats;
  •   Bringing in multi-domain events and
    industry-specific events;
  •   Organising various long-duration courses to
    develop skill sets of the members;
  • Organising more programmes highlighting the
    use of technology and its impact on the profession;
  • Rejuvenating the students’ study circle with
    relevant and timely topics;
  • Revival
    of various study circles catering to specific domains;
  • Meeting various social causes like
    tree-plantation, providing flood relief, blood donation camp, etc.;
  • Regular interaction with government officials
    and effective representation of issues faced by the profession and the
    industry;
  • Regular coverage of issues in the media;
  • Publications being released at regular
    intervals.

 

As my
term draws to a close, I feel a deep sense of satisfaction at having lived a
year with a purpose. It was a special year and many people made it even more
special. As a leader of the Society, I had occasion to interact with many
senior professionals and experts, government officials, members, staff,
students, etc. While the context of such interactions was varied, one thing
which was constant was the warmth and the respect during such interactions. No
phone call went unanswered and no request was turned down. The selfless
dedication of all such volunteers was truly a humbling experience. I would like
to thank all the speakers, authors, compilers, conveners, course coordinators,
chairmen and numerous well-wishers for their continued goodwill and support.

 

Special
mention is due to my team of office-bearers – Manish, as an able
Vice-President, provided the vital back-end support throughout the year and
also acted as a wise sounding board for any new adventures or misadventures
that came to my mind. With Suhas ably handling the Treasury, I did not have to
worry about finance and accounts. Mihir was the go-to person for all
Information Technology-related initiatives and issues, whereas Abhay was the
strong support for the events, including the Committee meetings. I just cannot
thank them enough. Together, we could divide activities based on our strengths
and generate synergies which helped us achieve what we had dreamt of. If I have
to summarise my journey in a single sentence, it has to be this – the
journey of making new friends for a life-time!

 

Before
I hang up my boots, I would like to acknowledge the feedback provided by all of
you. Your constructive feedback has helped in evolving my persona. My best
wishes and congratulations to the new team at the BCAS; I would like to wish
Manish all the best for an illustrious year ahead. Having interacted with him
closely, I am fully confident that he will take the Society to even greater
heights during his tenure. It will be my pleasure to interact with you and be
of any service to all of you at any point of time. Abhar – Shukriya –
Thank you.

FROM THE PRESIDENT

Dear Members,

 

Fifty years, six
hundred editions and countless impact points it is. As BCAJ crosses one more
milestone of completing its Golden Jubilee, my thoughts are full of pride.
Starting with humble beginnings in 1969 with a 40 page bulletin priced at an
annual subscription of Rs. 18/- and covering only direct taxes, the BCAJ has
matured into a 140 page edition containing all relevant laws, regulations and
practice areas for the Chartered Accountant. In essence, the BCAJ represents
the chartered accountancy profession.

 

The essence of
the Journal, to my mind, is the passion of its volunteers to deliver latest
relevant content, in an easily readable form with impeccable quality of English
and Grammar. The ability to stay relevant in ever changing external landscape is
derived from countless efforts undertaken at the Editorial Board Meetings and
the Ideation meeting popularly called “Marathon Meeting”. Indeed, the annual
event in January is nothing less than a marathon of ideas – some implementable,
many not so. However, to my mind, this Marathon Meeting sets the fertile ground
for the development of the most relevant content.

 

The task of the
Editor of such a prestigious Journal is very intense. The countless ideas and
suggestions thrown up at the Marathon Meeting need to be garnished with a pinch
of realism and then actioned out. This is where the biggest challenge of the
Editor lies. Identifying potential authors, requesting them to write and making
them actually write is by no means an easy assignment. Doing this month after
month requires tremendous commitment and deserves special acknowledgement.

 

As we celebrate
the Golden Jubilee of the BCAJ, it is time to step back and reflect and
identify some learnings.

 

One thing which
strikes me the most is the fact that over the last fifty years, the BCAJ has
never fallen short of content. The ability to disseminate something of extreme
relevance month after month for more than 50 years tells a lot about the ever
changing external environment. Be it the birth and death of taxes like fringe
benefit tax, or the progression of principle centred accounting standards to
rule and disclosure based standards and thereafter to the Ind AS, the
consolidation of various state level indirect taxes into VAT and the ultimate
consolidation of state as well as central indirect taxes into GST, the Journal
has witnessed and reported it all. The learning is evident, the only thing
which is constant is change.

 

Another important
aspect which I observed during the Editorial Board Meetings is the extreme eye
for detail – not only for the legal and the interpretational aspects but also
the semantics like the consistency of writing style, the acronyms used, the
placement of the nouns, choice of correct words, etc. There is just so much to
learn from these meetings.

 

One can go on and
on. But it is not the ethos of the BCAJ to rest on past laurels but to move
ahead and scale even larger peaks. Knowing fully well that going digital is the
need of the hour, the BCAJ has its online avatar in the form of www.bcajonline.org.
The Journal also regularly includes articles and features on effectively using
technology in the professional practice. The traditional journal which had
features and articles now caters to multiple needs through multiple formats
like interviews, view and counterview, surveys and the like.

 

While the BCAJ always evolves to identify new topics, features and
articles, it also nourishes existing features and articles which are relevant
to the readers. The feature “Tribunal News” is the oldest feature in the BCAJ
and is being carried out for more than 30 years. It requires tremendous efforts
on the part of the feature contributors to consistently find out time from
their busy schedules and contribute content month after month for such a long
period.

 

As the President
of this esteemed Society, I take extreme pride in the BCAJ achieving this very
important milestone and I congratulate the Editor Raman Jokhakar, who has put
in tremendous efforts to constantly “up” the bar every time, month after month.
I wish the BCAJ all the best and would look forward to the 60th year
as well.

 

This being the
Special Issue of the BCAJ, I feel it appropriate to only talk about the BCAJ
and not about the other happenings within and outside the profession. I will
cover those thoughts in my subsequent communication. Till then, happy reading.

 

 


 

CA. Sunil Gabhawalla

President

 

FROM THE PRESIDENT

My Dear Members,


I feel
very proud and satisfied as I write to you for the last time as President of
our illustrious Society. It is an honour and a privilege to have led the
Bombay Chartered Accountants’ Society during a memorable and
unprecedented year. We continue to march ahead and strive to achieve greater
heights of performance year after year by building on the excellent work done
by all previous Presidents. The last three months have been challenging and unmatched
for us in terms of conducting our normal activities of education, training and
spreading knowledge. But we converted all the challenges that came our way into
opportunities and continued with our endeavour of spreading knowledge with even
more vigour and zeal.

 

I am
happy to inform you that we quickly transited to an online platform and were
able to reach a much wider audience and get high profile and knowledgeable
speakers for the BCAS platform. All this was possible since there were
no geographical restrictions. To our immense satisfaction, our internal
assessment actually shows that we have been successful in delivering more
man-hours of training by way of live attendance and follow-up hits on our
YouTube channel. We managed to clock almost half of the man-hours of training
(during the three months of lockdown) that we were usually clocking in an
entire year through physical meetings. Things worked out best for us because we
made the best of how things worked out. I expect this trend to continue for
some more time yet and I thank all of you for supporting BCAS during
these testing times. This success is only because of the faith and the
patronage of all of you.

 

A balanced approach is required

It has
been more than three months into the national lockdown and work from home (WFH)
has caught the fancy of many, including some marquee IT and multinational
companies. However, according to a reported survey, some of the employees want
to get back to office. ‘The lack of human interaction is a problem – there’s
something about face-to-face interaction that can’t be replaced.’ According to
some HR professionals, there are groups of employees who enjoy working from the
office and want to get back there. At the same time, there are several
companies mulling the possibility of shifting to a complete WFH mode on a
permanent basis. According to them, productivity has gone up and a lot of
travel time is saved. But the question remains: does work from home really
work? According to the survey, it is premature to conclude whether WFH has
succeeded. The survey adds that social capital is missing and this is built by
social interactions while working together and knowing co-workers well enough
to establish a bond of human relationships and emotions.

 

Success
is achieved by teamwork and because co-workers have known and have intimately
interacted with each other for years. Banter over a cup of coffee during a
break is very much part of team-building and camaraderie and this social
capital is missing while working remotely from home. People will continue to
work from home, but in my view if a balanced view is not taken, they will
become robots lacking the all-important human touch. In time, fatigue will set
in and productivity may actually come down in the longer run. So, at least till
normalcy returns, we will have to adopt a hybrid or mixed model of WFH by
allowing some people to choose their preferred option. However, follow-up with
physical interactions (with all required safety norms) at regular intervals
should be integrated into the work culture.

 

Final Good-Bye!

On 6th
July, 2020 I complete my term as President of this esteemed institution
and I bid farewell to all of you with a great sense of happiness, satisfaction
and achievement. In the past twelve months I have tried to deliver my best to
the Society and tried to strengthen its existing goodwill, brand value
and reputation built over the years. During the year gone by, we strove to
increase our reach by reaching out to a much wider range of constituents beyond
our traditional cycle of influence. We tried out new formats for our
educational events, invited trainers from across fields and from a
cross-section of professional backgrounds and tried out new mediums of
dissimilating knowledge. We also had focused events on specific sectors,
emerging areas of practice and various non-technical but important areas of
personal and professional development. Besides serving our members,
organisationally also, the Society consolidated its position by various
measures of financial prudence, cost savings and infrastructure building. We
also worked earnestly to harness talent and build future leaders. At a personal
level, this tenure as President helped me further to develop leadership skills
and I have learnt how to handle different people and different situations more
efficiently.

 

Finally,
I wish incoming President Suhas Paranjpe and the new team all the very
best for the coming year. I have no doubt that it will be full of events and
innovative programmes.I am sure under his leadership our Society will
successfully venture into uncharted territory while continuing to flourish in
its traditional areas.

 

I started
this journey with anxiety, not knowing how the year will pan out but I created
some beautiful memories, made wonderful friends on the way and now I say good-bye
and a big THANK YOU for all your love, support and affection.

 

With Best
Regards,

 

 

 

 

 

CA Manish
Sampat

President

From The President

Dear Members,

 

India continues to witness a
spike in new cases of Covid-19 and mounting casualties. The number of active
cases is close to 30,000 patients as of date. The silver lining in India’s
casualty number, however, is our low fatality rate of 3.3%, which is almost as
low as South Korea and China. Our Nation continues to battle bravely to cope
with and against the spread of this pandemic. I take this opportunity to salute
the real heroes, warriors who are fighting this war for us, all the sanitation
workers, medical staff, health workers, police and other officials continue to
put their own life at risk for the safety of others.

 

Social distancing and lockdown is
the best option available to control the spread of the virus. Lockdown hurts
the economy but saving lives is more important at this stage. But the lives of
millions of migrant workers and daily wage earners also depends upon their
livelihood, and they can survive this lockdown only if the Government can
provide for their basic sustenance.

 

We have entered the third phase
of the lockdown, and by the time this message reaches you, the country would
have gone through more than 40 days of lockdown. These lockdowns have brought
most of the economic activities, investments, exports, discretionary
consumption and spending to a standstill. Only essential goods and services and
public services are allowed to operate, resulting in a substantial economic
loss to the country. Our economic growth had already slowed down before the
outbreak of this pandemic and now we are faced with this unprecedented problem.
Hopefully, soon there will be some relaxations and opening up of normal
activity in a phased manner over time. According to World Bank, Indian economy
is expected to grow 1.5 per cent to 2.8 per cent (and even that sounds
optimistic) in the financial year 2020-2021, which will be the slowest growth
rate recorded since the economic reforms of 1991. It is not whether we get
knocked down; it’s more important whether we get up. Our future is in our
hands, and I am confident that we will emerge stronger after this crisis and
will be well on our way to recovery much before the advent of the monsoon.  

 

We at the BCAS, have also
converted this challenge into an opportunity and have immediately moved into
action to stay connected with our members. We have organised various online
events, lectures, courses and panel discussions. I am happy to inform you that
during this phase on the lockdown, we have successfully held more than 30
online events reaching out to approximately 20,000 viewers resulting in almost
40,000 person-hours of training. The videos of all these events are available
for viewing on our YouTube channel, free of cost. In these challenging times,
we are committed to our members and would also like to thank all our members
and online viewers for their continuous love and support. It is also heartening
to know that we added more than 1,500 new social media followers, and now we
have close to 37,000 social media followers in all. I would request all of you
to stay updated and connected with BCAS on our social media platforms
of LinkedIn, YouTube, Twitter and Facebook at bcasglobal.           

 

Another challenge to our
profession this year will be the conduct of bank branch audits of public sector
banks (PSB). April has been the month where many of our fellow professionals
have been busy with these bank audits. This year, due to the lockdown executing
these audits has not been possible. There were representations made by the
Indian Banks’ Association to RBI to restrict with the number of bank branch
under audit and relaxation in the audit coverage to 60% of bank’s portfolio in
the current year; however, ICAI made representation on this matter, on the
grounds of scope limitation to do an audit objectively, detrimental to public
faith and against the law of the land and the auditing principles. On 27th
April 2020, RBI has communicated to all PSB and relaxed the guidelines for bank
branches to be audited for FY 2019-2020. The revised guidelines continue to
cover the 90% of all funded and non-funded exposure of the bank and all
branches with advances of Rs. 20 crores and above to be compulsorily audited
but has relaxed the requirement of compulsory auditing 1/5th of the remaining
branches. This, in my view, will leave a considerable number of branches out of
the audit scope and may adversely affect our fellow professionals. The
unfortunate reality is that Bank branch audit fees form a significant portion
of fees for the profession.

 

Another challenge this year will
also be to conduct the audit remotely without visiting the branches. The IT
systems of many of the PSB are not robust enough and do not allow access to
their CBS network to the auditors. ICAI has come out with a detailed advisory
for conducting an audit under these circumstances. However, conducting audits
will not be easy, and there will be challenges in getting records and data and
verifying the same. Auditors will have to adopt different ‘remote’ audit
procedures of accessing and checking data on a virtual platform and at the same
time continuing to comply with the requirements of standards on auditing. It
might seem like auditing remotely is indeed a promising opportunity – but it
comes with its own set of challenges. All this when the role of the auditor is
already under increased scrutiny, and his work is put constantly under the
spotlight by both the public and regulators. Yes, it is true that some of the
frontline listed companies have declared their audited results as per the
schedule, and many of our fellow professionals are also part of this. I am sure
we as Auditors will rise to the occasion and discharge our responsibility and
obligations with flying colours. 

 

I want to end with an appeal to
all our members, who have not renewed their membership and journal subscription
fees, to do so immediately, so that you can continue to benefit from all the
knowledge enhancing activities of your Society. 

        

Take care and stay safe until we
meet again.

 

Namaste!!

 

 

CA Manish Sampat

President

FROM THE PRESIDENT

Dear Members,

As i write to you, india and the rest of the world is engaged in a ierce battle against the spread and damage caused due to COVID-19. Combating the coronavirus pandemic has created a war-like situation of complete lockdown, curfew and restrictions on movement of people and goods. Apart from the tragic human consequences, there is a complete standstill of business and economic activity resulting in uncertainty about the future of  the global economy. There are also talks about an emergency type of situation with panic amongst citizens. This is a Black Swan event for the world. Amongst all the gloomy and negative propaganda on the event, we should learn and practice to think positively and act accordingly to overcome fear and negative thoughts that can cause depression, stress and a lot of unhappiness. We need to focus on the good things, inculcate positive thoughts, spend time with positive-thinking people, learn to enjoy nature, be thankful and have gratitude and above all keep faith and hope. Positive thoughts de-stress the mind, help in having a positive outlook, improve mental health, thus leading to living a successful and happy life.

Positives from the situation. As I see it, in these times of compulsory staying at home (social distancing), we have been able to do so many things that make us happy, which we had forgotten and used to do once upon a time. Most importantly, we now get to spend time with our children, parents and family. We have been running a race away from them and now is the time to match our pace with that of our family. Get the basics right and learn to enjoy and respect nature. Read, upgrade your skills, work on your itness, meditate, listen to music, cook, talk to long-lost friends, cousins. Learn to live and help others too.

India is grappling with the concept of ‘work from home’ (WFH), a work culture that is not yet very popular and accepted, particularly with the small and medium enterprises. WFH is changing the way we live and the way we work. Many of us proactively worked on technologies like cloud computing, remote access, VPN, network security, data backup and recovery and other such collaborative tools to prepare for WFH. If used wisely and appropriately, WFH has the potential of building a smart and effective remote workforce for business and our profession. This could lead to substantial reduction in overhead costs, increased productivity, boost employee morale and eficiencies, thus resulting in better customer satisfaction and thus proitability. Despite the challenges, one thing seems certain, that the time for WFH has come and more and more people would like to experiment with it.         

CSR draft rules 2020: The MCA recently issued a draft of ‘The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020’. These Rules have proposed considerable and far-reaching changes in the existing Companies (CSR) Rules, 2014. The most signiicant and draconian change is in clause 4(1) – CSR implementation. The proposed new rule seeks to amend this to ‘CSR activities to be undertaken by the company itself or through a company established under section 8 of the Act, or any entity established under an Act of Parliament or a State legislature’. This amendment effectively makes registered societies and other public charitable trusts ineligible to carry out CSR activities, projects or programmes in future. This, I believe, is a potentially hazardous amendment. In India, historically, effective charitable work has been carried out by public charitable trusts and registered societies. Section 8 (or section 25 under the erstwhile Companies Act) are more recent phenomena. Charitable organisations depend heavily on donations and support from businesses and corporates in the form of CSR funds. I would like to believe that this is just a drafting error and will be corrected when the inal rules are notiied. However, looking at the recent trends and changes in various statutes (Income Tax Act, FCRA and others), it appears that the Government wants greater accountability, more transparency and stricter supervision of the NGO sector. We at the BCAS have made a strong representation seeking amendment to the draft CSR rules.
  
Normally, this is the time of year when all of us work towards inancial year-end compliances and prepare for the beginning of the new inancial year. However, this year is going to be completely different. A nationwide lockdown and the deferment of the statutory and regulatory compliances will ensure that March, 2020 will be a different and a once in a lifetime occurrence.

India’s strengths, lexibility and adaptability have withstood many such challenges in the past. Ancient Indian philosophy has encouraged us, as a human race, to adapt to new ideas, absorb shocks and face challenging circumstances with equanimity. Over the years, we have developed endurance and resilience to ight any eventuality. I am sure that we will bounce back quickly and emerge as a more powerful, united and happier Nation in the days to come. 

Yes, this storm will also pass, humankind will survive, most of us will still be alive — but we will inhabit a different world.

Jai hind!

With Best Regards,
CA Manish Sampat
President

FROM THE PRESIDENT

Dear Members,

In my
message for the previous month, I had reached out to you, inviting suggestions
for initiatives which you would like BCAS to carry out. I am overwhelmed
by the response. I’m sure your feedback will go a long way in improving our
Society; we will try to implement the maximum possible suggestions.

 

ICAI Leadership: ICAI elected its new President and Vice-President for the term 2020-2021.
CA. Atul Kumar Gupta has been elected President and CA. Nihar
Jambusaria Vice-President with effect from 12th February, 2020.
Both leaders are widely respected for their strong organisational skills, deep
insight into the affairs of the profession and for their enormous contribution
to the cause of our profession during their terms with the Central Council. We
congratulate them on their new roles and wish them all the best for achieving
enormous success in taking the profession to new peaks and measure up to the
expectations of all members. I look forward to working closely with the ICAI,
especially its new leaders, and strengthen the co-operation between the ICAI
and the BCAS. I am also proud to inform you that Nihar Jambusaria
is a life member of our Society since 1995.

 

BCAS
@ your Doorstep: This is another initiative of our Society wherein
we provide tailor-made training to our corporate members and other corporates
at their doorstep, deploying our faculty and expertise based on the corporate’s
training needs. I am happy to inform you that last month we conducted training
for the credit officers of a large public sector bank on understanding
financial statements of borrowers prepared under Ind AS, various disclosures
and understanding the various comments like audit modifications, emphasis of
matter, Key Audit Matters and other matters in an Auditor’s Report. The session
was very interactive and two live case studies of large corporate borrowers
(under financial stress) were discussed threadbare. These credit officers could
gain experience in better understanding the financial statements, thus
substantially improving their credit appraisal, supervision and monitoring
skills. Our efforts were well appreciated and we look forward to undertaking more
such training for corporates under our umbrella of ‘BCAS @ your Doorstep’.

MCA’s
Consultation Paper: In February, the Ministry of Corporate
Affairs issued a notice inviting suggestions and comments along with
justifications on a consultation paper to examine the existing provisions of
law and make suitable amendments therein to enhance audit independence and
accountability. This paper has raised several questions on burning and
sensitive issues such as economic concentration of audits, non-audit services to
audit clients, joint audits in case of larger companies and public interest
entities, proposed panel of auditors (like CAG / RBI / NFRA), imposition of
concurrent audits, restriction on the number of audit firms a group can have in
the whole of India, disclosure requirement on probability of default on the
lines of credit rating agencies, submitting quarterly returns to SEBI of
unlisted companies whose parent is listed, development of a ‘Composite Audit
Quality Index’ for auditors and audit firms to improve accountability,
resignation of auditors and other similar matters. The sole objective of this
was to solicit the views and comments of other Government Departments,
Regulatory Agencies and the general public on suggestions relating to
amendments in existing law to enhance audit independence, audit quality and
accountability. The Accounting and Auditing Committee of our Society met at
short notice, deliberated in detail on all the issues raised by this paper and
sent our response and representation to MCA well in time, keeping in mind the
interests of our members. The response of the Society has been mailed to all
the members and is also available for viewing on our website and all other
social media platforms.

 

CARO
2020:
This is issued with the objective of strengthening the corporate governance
framework under the Companies Act, 2013; under the powers conferred under
sub-section (11) of section 143 of the Companies Act, 2013. the Central
Government has notified the Companies (Auditor’s Report) Order, 2020 (CARO,
2020). The eligibility criteria in CARO, 2020 have not been changed and hence
it shall be applicable to all those companies on which CARO, 2016 has been
applicable. CARO 2020 has 21 clauses and 47 sub-clauses, thus enhanced
reporting requirements by the auditors including reporting on proceedings
initiated / pending if any against the company under the Benami Transactions
(Prohibition) Act, 1988; stricter reporting on discrepancies noticed on
physical verification of inventory; reporting on mismatches in physical stock
and those reported to lending banks / financial institutions; disclosure of
unrecorded transactions in income tax assessments; utilisation of funds; GST
dues payments and cash losses; declaration of company as wilful defaulter by any
lender; disclosure of whistle-blower complaints; any resignation of the
statutory auditors during the year, and so on. Reporting under CARO, 2020 would
necessitate enhanced due diligence, reporting responsibility and disclosures on
the part of auditors and has been designed to bring in greater transparency in
the financial state of affairs of companies. Members are requested to be well
informed and equipped to report under CARO, 2020 as it is applicable for audit
of financial statements of eligible companies for the financial years
commencing on or after 1st April, 2019.

 

Before
I sign off, let me offer my warm wishes to you and your family on the joyous
occasion of Holi! I wish with all my heart that it brings more colours to your
life.

 

With
Best Regards,

 

 

 

 

 

CA
Manish Sampat

President

 




FROM THE PRESIDENT

Dear Members,

The Institute of Chartered Accountants of
India (ICAI) declared the results of the Chartered Accountants Final
Examination (old & new Course) held in November, 2019 on 16th
January, 2020 and totally 14,591 newly-qualified CAs were added to our
fraternity. This is comparable to the 14,185 students that qualified earlier in
the CA Final examinations held in May, 2019. A comparison of % of students
passing in both groups in the old course has increased in the November, 2019
attempt as compared to May, 2019 from 7.63% to 10.19%.– whereas under the new
course the same has fallen from 20.85% to 15.12%. A point to be noted is that
this % was 9.09% (old course) and 9.83% (new course) in May, 2018 and 15.03%
(old course) and 16.44% (new course) in November, 2018: 14,969 & 9,243 newly-qualified
CAs were added in November, 2018 and May, 2018 respectively.

In order to sharpen the analytical and
comprehension skills of students and to have an objective assessment of their
performance in the examination, ICAI has introduced an assessment system in
which 30% of the questions asked in the examination of select papers are
multiple choice-based questions (MCQ) of 1 and 2 marks. Thus making scoring
possible even in certain theory subjects as compared to the previous paper
pattern and eliminating subjectivity in the assessment process to some extent.
This system was put in place for the May, 2019 examination for both
intermediate and final levels under both the old and new courses of education
and has been one of the major factors in improved performance of the students
resulting in better results.

However, there is a rising concern about a
substantial decline in the number of fresh students entering our profession.
There has been an almost 70% drop in the students’ registrations for the CA
course in the last five years from 141,241 in FY 2015 to only 45,048 in FY
2019. This reduction in the number of new students wanting to enter our
profession is a worrying factor considering the fact that there are less than 3
lacs Chartered Accountants out of which only 138,874 are in practice (as on
01/04/2019) in a country with an estimated population of 1.37 billion people.
One of the possible reasons could be increased competition from other similar
courses in finance such as ACCA, CFA and CPA etc. Another reason could probably
be the structure of the entire examination system, where entry is relatively
easy but final qualification much more difficult. This creates uncertainty and therefore discourages newer entrants from taking up this course.

Recent developments in the profession have
also attracted negative publicity discouraging students from entering this
profession. Lastly, I believe that there is a perception that other professions
like MBA, Law, etc. are more contemporary and offer better earnings prospects.
This should be an area of concern for us and the Institute along with the
entire CA fraternity needs to work together to bring in changes to address
these concerns and meet the needs and aspiration of the young aspiring
students.

In my view, Chartered Accountancy is a very
respected and an evergreen course having lots of opportunities, great prospects
and a very bright future.

BCAS is reaching out: Our Society has a strong legacy of ethical values, culture of financial
discipline and focus on quality of service to its members. We also believe that
today our Society needs to increase its reach and circle of influence by
expanding beyond the traditional service delivery channels. We recognise the
facts that the demographic profile and preferences of our members are changing
and we need to embrace technology to stay relevant and deliver the best to our
stake holders. In this endeavour, we at the BCAS have taken many
initiatives like: (1) organising joint events with other professional, trade
and industry bodies, (2) organising lecture meetings in the suburbs, (3)
exploring maximum opportunities of having events outside Mumbai, (4)
digitisation of our course contents and educational materials (including the
publications and the Journal) (5) tailormade industry specific training
and educational programmes.

We are open to co-operate, coordinate and
collaborate with other like-minded organisations within and outside the city of
Mumbai. Please free to get in touch with me or write to me at president@bcasonline.org
for any initiative in which you would like BCAS to participate.

I very strongly believe that effective
implementation of your constructive suggestions and honest feedback will go a
long way in BCAS maintaining its vibrancy, position of eminence and inspirational
leadership for a long time to come.

 

CA Manish Sampat

President

 

FROM THE PRESIDENT

My Dear Members,

This is my first
communication to you through this column and I must tell you that I feel
honoured and humbled on being elected President of our Society for the
year 2020-21. I assure you with a deep sense of commitment that with such an
enthusiastic team of Office-Bearers and Managing Committee members, I will do
my best to continue the good work done year after year by Team BCAS in
the best interests of our members. I also convey my deep and sincere thanks to
all past presidents and seniors for reposing their trust and faith in me and
considering me fit to take up this prestigious and responsible position. Some
of my thoughts for the year are elaborately expressed in the Annual Plan
published elsewhere in this Journal.

 

I consider myself and my
team to be extremely fortunate that our term started with the 72nd
Founding Day lecture delivered by the incomparable Mr. Deepak Parekh, CA
and Chairman of HDFC Limited. He showered accolades on us by stating that

  •   72 years is a very long
    period for a voluntary organisation, not just to exist, but to thrive
  •  You have all stayed
    true to your vision of BCAS. I was surprised to see how apt is your
    vision statement of being a principle-centred and learning-oriented organisation
    which is proactive to change, and
  • It is this vision
    that has held this group together over the years.

So motivating and
encouraging! His statement that he is not the owner of HDFC but just an
employee till recently was so humbling. It is such simplicity, ethical
entrepreneurship and vision that can create large and globally-respected
organisations and brands.

 

Since mid-March, 2020, we
have conducted almost the entire range of events from lecture meetings and
panel discussions to workshops, and even virtual Residential Refresher / study
courses (including group discussions), in this manner. It is observed that
digital makes the contents and the participants much more systematic,
structured and disciplined. The faculties are at ease with knowledge-sharing
from their own location without hectic travelling and logistics issues. The
personal touch and warmth, fellowship and recreation is surely missed in case
of RRCs and other residential programmes, however, the commitment, dedication
and hard work of the volunteers remain the same with the change of platform
from physical to digital.

 

In retrospect, how true
are the words of the wise who said: Reinvention is never easy. One must devise
an entirely new way of working, without the reassurance that comes with
replicating already existing best practices. This isn’t just about finding new
applications for the technology; India needs to anticipate its impact as well.
Yet, this is precisely how every previous transformation has played out
and it is this attitude of flexibility, courage and judicious risk-taking that
will let India be in the forefront of the Fourth Industrial Revolution.*

 

The CA exams for May, 2020
were postponed and finally cancelled, to be merged with the November exams.
This raises the issue of preparedness for the future possibilities of
conducting CA exams online. I am sure the regulators have moved into action
mode to convert this challenge into an opportunity.

 

August is full of
festivities like Janmashtami, Ganeshotsav and Independence Day. It would be
advisable to restrict ourselves and celebrate within the family. Today, the
health, safety and well-being of one’s self as well as of others are of utmost
importance. We can pray to Lord Ganesha to free us from this unprecedented
situation so that next year we would celebrate in a normal manner. For
Independence Day we can seek our independence – physical and psychological –
from the lockdown situation so that normalcy returns to our lives.

 

Friends, please feel free
to write to me at president@bcasonline.org.

 

  • Bridgital Nation –
    Solving Technology’s People Problem,     by N. Chandrasekaran and Roopa Purushothaman



 

 

With Best Regards,

 

 

CA
Suhas Paranjpe

President

FROM THE PRESIDENT

My dear Members,
The 54th edition of the BCAS Residential Refresher Course (RRC) was a virtual affair this year and yet managed to make a mark with various initiatives, especially the high quality of the programme, the faculty and the participants.

It started with the felicitation of Past President Pradyumna Shah – it was during his term as President that the very first RRC was held way back in the year 1968-69. There was also the publication of a book on ‘Partnership’, the e-release of an e-version of ‘Gita for the Professional’ and the release of the long-awaited BCAS Mobile App.

All the members and the office-bearers of the BCAS felt honoured and privileged to felicitate the nonagenarian ‘student at heart’, Pradyumna Shah.

It would not be way off the mark to say that the month of January turned out to be a month of historical moments for all.

This year’s Budget season also started with the launch of the ‘Union Budget Mobile App’ by the Union Finance Minister, Mrs. Nirmala Sitharaman. Another historical initiative has been to make ‘Budget 2021’ completely paperless for the first time since Independence – with hassle-free access of Budget-related documents for both the Members of Parliament and also for the public. This is a huge digital achievement; of course, all thanks to the exigencies forced upon us by the pandemic. In the process, we conserved a very large quantum of paper, avoided humungous printing efforts and saved precious time, thus displaying solid social responsibility.

Turning to sport, it was a ‘Chak de India’ moment for Indian cricket lovers when our team created history with a 2-1 series win over the mighty Australians – in Australia – in the Gabba Test. It was even more commendable because this was achieved in spite of our team being adversely affected by injuries suffered by key players. The younger and fresher lot of players took charge along with a few from the experienced elders to create Test history.

Similarly, the BSE Sensex created history in the same month of January to cross the 50,000 mark for the very first time in the Indian stock market. It is a dynamic figure and would undergo ups and downs from time to time, depending on economic and liquidity conditions. However, achieving the 50,000 mark is a clear-cut indicator of investor confidence in the Indian economy in the long term.

Another history-making event was Kamala Devi Harris becoming the 49th Vice-President of the United States of America. She is that country’s first female Vice-President, the highest-ranking female elected official in US history and the first African-American and first Asian-American US Vice-President. After the complex US electoral process, Joe Biden took over as the 46th President and Kamala Harris as his Vice-President. Her Indian-American ancestry is an early indication that pragmatism will dictate the future of the Indo-US relationship. President Biden has long been an advocate of deeper ties with India and we should look forward to positive political, economic and trade relations between the two economies.

The results of the Covid-affected Chartered Accountants’ examination conducted in November, 2020 are expected in the first week of February, 2021. By the time this communication reaches you, the results would be out and new members would get added to our esteemed profession. The BCAS is ready to welcome these new entrants who are expected to carry the flag of our profession forward. Good luck to all of them.

We welcome these fresh professionals with the 8th Youth RRC planned in the month of April, 2021 by the BCAS HRD Committee. Please await a detailed announcement and enrolment for an interesting youthful experience. Do not forget to visit the site www.bcasonline.org for more announcements.

Before I close, I wish you Happy Budget Times!

Best Regards,

Suhas Paranjpe
President

FROM THE PRESIDENT

My Dear Members,


I take this opportunity to wish a Happy, Healthy and
Prosperous New Year 2021 to you, your family and your friends. For the
year gone by, 2020, the best we can say is, ‘the more unexpected something is,
the more there is to learn from it’. While 2020 was a forgettable year, there
were many leaps made in the digital arena for which we will always remember it.
The New Year comes with new resolutions and it needs determination and
commitment to drive these resolutions to make them part of our routine.

 

‘Approach the New Year with resolve to find the
opportunities hidden in each new day’.

 

On a personal note, I recently experienced my first
Himalayan winter trek to Kedar Kantha in Uttarakhand. It was around 12,500 feet
above sea level and I had an adventurous experience climbing to that height. I
will always remember and treat as a New Year resolution the following words of
our trekking guide which are relevant even in our everyday life, both
professional and personal:

 

‘In trekking, speed and competition is not relevant, it
is also not important who reaches there first, the endeavour is to experience
and explore the nature around us with heart and soul.’

 

Recently, the results of the first phase of the fifth
National Family Health Survey (NFHS-5) were released. There was good news in
the shape of an increase in childhood immunization, a drop in neonatal
mortality, a decline in infant mortality rates and so on. The bad news was a
rise in obesity, especially among women and children driven by the lack of
awareness of good food habits, resulting in greater consumption of high-fat,
high-sugar foods and sedentary lifestyles. Let’s resolve to follow a New Year
goal on the health front as described in the following lines:

 

‘Your body is the only permanent address where you live
and no one else can help your body other than you.’

 

In January every year, the BCAS with other sister
organisations supports a Lecture Meeting in memory of the giant personality,
the Late Nani Palkhivala. This year, the Board of Trustees has decided it will
not happen because of the pandemic. As President of the BCAS for 2020-21,
I will miss the opportunity to recall, remember and pay homage to that unique,
pre-eminent legal soul and human being par excellence and to interact with
seniors and speakers on the occasion. In the words of Nani himself:

 

‘India is eternal, everlasting. Though the beginnings of
her numerous civilisations go so far back in time that they are lost in the
pages of history, she has the gift of perpetual youth. Her culture is ageless
and is as relevant to our twentieth century as it was twenty centuries before
Christ.’

 

In the coming few days, the winds of the Union Budget
2021 would start blowing. The Budget will be presented on 1st
February by our Finance Minister, Mrs. Nirmalaji Sitharaman. BCAS
uploaded its pre-budget memorandum within the specified time limit and we
expect due consideration to various valid and ‘ease of tax compliance’
suggestions made by us on Direct, Indirect and International tax aspects. The
memorandum is available on the BCAS site and social media. Mrs.
Sitharaman’s following statement in the public domain is assuring:

 

‘I am conscious that the forthcoming Budget will have a
vibrancy that is so required for the economy’s revival, its sustainable
revival.’

 

The BCAS International Taxation Committee has
launched its flagship event, the 21st course on DTAA, to be
conducted on a virtual platform. It is a comprehensive course on international
taxation, including an overview of BEPS, MLI, digital taxation and so on. May I
request you to enrol on or before 15th January and avail the early
bird benefits.

 

I wish all of you a Happy Makar Sankranti, Lohri and
Pongal. On 26th January, 2021 India will celebrate its 72nd
Republic Day. I wish you all on this glorious occasion.

 

Best regards,

 

 

Suhas Paranjpe

President

 

FROM THE PRESIDENT

My dear Members,

In continuation of my message in November, 2020 on social
responsibility activities, the BCA Foundation (BCAF) in association with
the Dharma Bharati Mission (DBM India) has re-launched a social project ‘Chalo
English Sikhayein’ digitally for the benefit of underprivileged children from
vernacular medium schools. As expected, BCAF received good response from
our BCAS family to the appeal to participate in the noble cause to make
a positive impact on the lives of students. BCAF would also contribute
to donate digital assets to schools for use by the students for the above
project. I appeal to all of you to contribute for this noble cause and for more
such initiatives to come.

 

On 26th November, Padma Bhushan Faqir Chand Kohli
(F.C. Kohli), 96, India’s Information Technology (IT) sector pioneer, passed
away. He was a true visionary and was responsible for sowing the seeds of
India’s IT industry through a Startup in 1968, viz., Tata Consultancy Services
(TCS).The current generation is the beneficiary of IT, digitalisation,
artificial intelligence and so on, all of which developed on the foundation
laid by persons like the late Mr. Kohli. How true is the statement by Mr.
Chandrasekaran, Chairman, Tata Sons:

 

‘He was a true legend, who laid the very
foundation of India’s spectacular IT revolution and set the stage for the
dynamic modern economy we enjoy today.’

 

The BCAS Diary and pocket diary – conceptualised as a
professional commitment at your fingertips, and the BCAS Calendar, 2021,
articulated with India’s rich cultural heritage, are available for
subscription. These are well-designed professional tools of daily relevance and
much-sought-after as a New Year souvenir by clients, family and friends. May I
appeal to you to book the same in advance?

 

Forensic Accounting and Investigation (FAI) is a specialised
practice area that has gained momentum in the emerging economic scenario.
Organisations increasingly seek professional help to assess fraud risk, to
discover financial frauds, to assess the quantum of loss / damage caused by
frauds and to collect evidence to quantify and corroborate the loss / damage
caused as a result of frauds. FAI Services are regularly sought by banks,
insurance companies and now even the police.

 

In keeping with its tradition of making specialised knowledge
accessible to all professionals, BCAS, through its Internal Audit
Committee, has started a long-duration course titled ‘Forensic Accounting and
Investigation Studies’. Launched in association with CDIMS as the knowledge
partner, it is offered as an E-learning course, spanning over 45 hours of
digital learning content. A well-conceptualised training programme, this course
offers an opportunity to acquire specialised skills in an emerging area of
professional practice.

 

On 9th December we have planned a lecture meeting on
‘Recent Developments in GST Law and Procedures’ by Mandar Telang. The
learned speaker would cover the critical issues related to Input Tax Credit vis
a vis section 36(4), e-invoicing, GST audit, Department audit  and so on. It would be a very relevant and
timely programme for professionals engaged in GST compliances.

 

I am eager to meet you virtually at the 54th BCAS
Residential Refresher Course.

 

May I suggest that you visit www.bcasonline.org for the
detailed announcements and enrolments?

 

This is the end of the unprecedented year 2020. My next
communication would be in 2021. The year 2020 has taught us so much. It was a
year of extraordinary experiences on various fronts – health, work, education,
knowledge-sharing and so on. It was a case of a paradigm shift. From the
uncertain times of the pandemic and related anxieties to hope of a vaccine
coming in and which could be the year-end gift to human beings. We should enter
the New Year with hope, new directions and a positive attitude.

 

I wish all of you a Merry Christmas and a Happy and Healthy New Year
– 2021. Let’s hope that in 2021 we are back to our normal social life with
personal, face-to-face interactions.

 

Till then, we follow the dictum, ‘We isolate now, so when we meet
again no one is missing!’

 

Best regards,

 

 

 

 

Suhas Paranjpe

President

FROM THE PRESIDENT

I
could write this column in a slightly relaxed manner thanks to the income tax
and GST audit compliance dates being extended to the 31st of
December. The joint efforts by the BCAS Taxation and Indirect Tax
Committees with other sister bodies, who submitted a timely representation to
the Honourable Finance Minister, followed by a well-reasoned press release to
the Prime Minister, must have helped. It was a great relief, especially for
MSME / SME businesses and small and medium-sized practitioners with the
extension coming as a Dussehra bonanza / gift.

 

‘We make a living by what we get. We make a life by what we give’  – Winston
Churchill.

 

I wish to refer to the continuing commitment of
individuals and institutions to contribute to people’s development which
results in improving the quality of life of other individuals, groups and
teams, as well as society at large. The BCAS Foundation (BCASF) is an
associate charitable arm of the BCAS which is engaged in social
responsibility activities. Recently, the Foundation identified and selected
social projects in the area of education, including digital, environment and
other social objectives which could be undertaken and executed with a perspective
of three to five years. We at BCAS and BCASF are enthusiastic
about these initiatives and eagerly look forward to doing good work in the social domain. I appeal to
members to join this social initiative as volunteers and contribute digitally, physically
and / or financially. You may register your details on sp@bcasonline.org
and we will get back to you.

 

Insofar
as the history of human civilization is concerned, digital transformation is
considered to be the next giant technological leap forward, similar to
internet. The importance of digital transformation has accelerated manifold in
the last few months as Covid-19 has brought to the fore the importance of
digital technologies, including artificial intelligence (AI), in addressing the
healthcare crisis, restarting supply chains, enabling online education and
almost every other aspect of the economy. With AI possessing the power to
radically transform the economic and social fabric of the world we live in, we
need to use it with responsibility for the good of humanity and for inclusive
socio-economic development. As the situation stands today, AI can shape how we live, think, consume, vote, read, work and holiday. This brings in
the point about holding big tech firms accountable and the need for suitable
policy responses.

 

The
flagship event of the BCAS, the 54th Virtual Residential
Refresher Course (VRRC) was announced recently. It will be held between 7th
and 10th January, 2021 and is open to all Chartered Accountants. The
VRRC would offer some innovative and unique features enabled by digitalisation.
The detailed programme will be announced soon. But may I request all of you to
block the dates and enrol to Participate – Interact (Virtually) – Learn.

 

As I
was closing this page on 28th October, we had an Expert Chat in the
form of a Panel Discussion on ‘Post-Covid – Impact on Economy and Capital
Markets’. The panellists were Dr. B.K. Bhoi, CA T.N. Manoharan and CA George
Joseph with the moderation being done  by
CA Dipan Mehta; he brought out some excellent facets in the analysis of the
pandemic’s impact on the economy and industries and the way forward. All the
panellists were optimistic about the economic revival and rebound. They had a
similar thought process, that rebooting the economy requires strategy rather
than magnitude of stimulus and this is the right time to seize the
opportunities when the challenges are daunting. The Expert Chat is available on
our YouTube channel BCAS GLOBAL in case you missed the live event.

 

I take
this opportunity to wish a happy, joyous and Prosperous Diwali and New Year to
you, your family and your friends. May the festival of lights shower upon each
one of us super good health, lasting mental peace and, equally important,
plentiful prosperity.

 

Best
Regards,

 

 

Suhas
Paranjpe

President

FROM THE PRESIDENT

My Dear Members,

As I
sit to write this, the India Meteorological Department (IMD) has announced that
the city recorded 3,680 mm of rain, the second-highest total since 1958 (3,760
mm)! The downpour in the penultimate week of September was the heaviest spell
this season, causing severe disruption of life.

 

This
coincided with a ‘stormy’ monsoon session of Parliament which also set a new
mark of productivity. In one of the shortest sessions in history due to
Covid-19, Parliament approved 25 bills in ten days, although it was ‘stormy’
because of protests by opposition parties. Parliament clocked 167% productivity
in the session – the highest in its history! Among the key bills passed were
the Labour Code Bills, the Foreign Contribution (Regulation)
Amendment Bill, 2020 (FCRA), and The Banking Regulation (Amendment)
Bill.

 

The
three Labour Code Bills are crucial second-generation reforms to improve the
ease of doing business and make the Indian labour market competitive to realise
the ‘Make in India’ dream. The Bills are designed to protect the interests of
the workers and ensure compliance. Its success will need to be assessed in the
context of the Indian economy’s recovery from the impact of the current
pandemic.

 

As
for the FCRA Bill, 2020, NGOs are a vital and important element of civil
society. Many of them implement and monitor the Government’s welfare policies,
operating at the grassroots level where the official apparatus is often
non-existent. No doubt the NGOs need to be transparent about their finances,
sources of funding, etc. The provisions such as details of spends on
administration, restricting inter-NGO money transfers and funding to be routed
through a specified bank branch suggest too much micro-managing and would affect
the social objective which is the biggest requirement of the hour.

 

Coming
to co-operative banks, so far they have been under the dual control of
co-operative societies as well as the RBI. Now, to protect the interests of
depositors, the Lok Sabha passed an amendment to the Banking Regulation Act to
bring co-operative banks under the supervision of the RBI. The Bill seeks to
strengthen co-operative banks by increasing their professionalism, enabling
access to capital, improving governance and ensuring sound banking. The RBI
will also be able undertake a scheme of amalgamation or reconstruction of a
co-operative bank without placing it under moratorium. This would go a long way
in bringing much needed stability of the co-operatives under single window monitoring.

 

The BCAS
has made various representations individually and also jointly with other
sister organisations to address difficulties faced in compliances and for
extension of due dates. The same are reported elsewhere in this Journal.
Normally, we favour adhering to the original time lines of the compliances and
generally abstain from representations for extension of due dates. But the
current situation is an extraordinary one and the BCAS realised the
difficulties faced by small and medium-sized practitioners in adapting to the
requirements. We expect a favourable response from the Government. However, may
I appeal to the members to complete the compliances to the extent possible,
without waiting for any extensions.

 

In
September, our Taxation Committee released its first publication on ‘Income
Tax Settlement Commission – A Practical Guide’. It is an excellent law and
practice guide on a specialised subject with FAQs. Similarly, the Corporate and
Commercial Laws Committee released its twin handbook publications on ‘All
about Startups and all about MSMEs’ together with their E-versions. The
publications will be of tremendous use for professionals and also for the
business units in that category for practical aspects with FAQs. I am thankful
to all the authors and contributors. Both the publications are available for
sale with the BCAS.

 

October
is the month of Navaratri. I wish all of you a Happy Navaratri and good wishes
for Dussehra.

Best Regards,

 

 

Suhas
Paranjpe

President

FROM THE PRESIDENT

My Dear Members,

Many
things have happened all around us in the recent past. On 20th
August, the BCAS along with the BCA Foundation hosted the Fifth
Narayan Varma Memorial digital event jointly with other organisations.
Everything happened virtually in the true spirit of ‘the show must go on’ and
following the positive attitude of the Late Narayanbhai Varma. In the
panel discussion on Covid-19, the participants included a physician, a
psychologist and a Covid survivor CA professional who shared their thoughts and
experiences. As per tradition, the BCA Foundation recognised the social
contributions of its CA nominee Sanjay Hegde and felicitated him.

 

This
year, the volunteers of the BCAS and the BCA Foundation could not
visit Dharampur for the annual tree plantation programme. This initiative was
started in 2011 with the planting of a mere ten trees; but it has now gone on
to over 300 trees. We started with seven volunteers visiting the place and now
it is over 40 with a combination of young and old. And so, on 28th
August we arranged the tree plantation event via a digital meeting with the
trustees of the Sarvodaya Parivar Trust with video presentations of the Dharampur
site. We followed ‘Work from Home’ here, too, in an innovative manner with our
‘BCAS Green Warriors’. We felicitated the volunteers who planted trees
in and around their localities and carried out tree plantation this year
although they were working from home.

 

In
the West, tech companies have surged past every other industry in this digital
transformation regime amplified by the Covid-19 situation. Recently, the
world’s most famous equity benchmark, the Dow Jones Industrial Average of USA,
replaced the world’s biggest company of the last decade, viz., Exxon Mobile
Corp., from the index list with a technology company. This reflects the steady
challenges faced by commodity companies in the American economy; the trend is
similar in other economies, too.

 

‘Retire
from your job, but never retire your mind.’ These are golden words. Retirement
is a stage of life that could be a new beginning with new initiatives on the
family front, the social front, or in one’s personal space which might have
been missed during the days of one’s employment. The person who plans his
retirement years in advance – financially as well as post-retirement new
initiatives – is prudent and wise.

 

On
Saturday, 15th August, on the occasion of India’s 74th
Independence Day, the 39-year-old M.S. Dhoni (MSD) bid adieu to
international cricket and thus called curtains on his illustrious career
spanning 16 years. It was, as we know him well, done in his normally cool,
silent style, with very few words.

 

‘Looking
at you as just a sportsperson would be an injustice. The correct way to assess
your impact is as a phenomenon! Rising from humble beginnings in a small town,
you burst onto the national scene, made a name for yourself and, most
importantly, made India proud,’ – this is how the Hon. Prime Minister, Mr.
Narendra Modi, wished the hero of the Word Cup. How aptly the person and the
situation are portrayed in these few words. All Indians would always be proud
of MSD and he would be an inspiration to the next generation. I wish and hope
that post-retirement he would take up and initiate the setting up of a training
academy to create more MSDs for Indian cricket.

 

Recently,
the Reserve Bank of India (RBI) published its annual report 2019-20 (year ended
30th June, 2020). On a review of the report and certain comments
therein, I, as an accounting professional, observed three key perspectives –
accountants, auditors and economics / investment.

 

The accountant’s perspective

RBI’s
lower income and higher provisions resulted in the transfer of lesser surplus
to the government. It fell to Rs. 57,000 crores from Rs. 1.76 lakh crores in
the previous fiscal. The increase in provisions towards Contingency Fund from
Rs. 64 crores in the previous fiscal to Rs. 73,615 crores was the Covid-19
effect on the RBI financials.

 

The auditor’s perspective

The
cases of major frauds reported in 2019-20 added up to Rs.1.85 trillion, more
than double the previous year’s figure. Large credit frauds were the major
component, though low-value online cybercrimes arising out of net transactions
are a cause of worry, too.

 

Economic / investment perspective

The moratorium for loan
repayments with the infusion of more than Rs. 3 lakh-crore guarantees by the
Central Government has boosted the morale of the MSME sector where banks have
started disbursing funds to help the sector recover from the adverse impact of
the pandemic and migrant labour.

 

The sharp cut in corporate
tax announced in September, 2019 has been used by the corporates to reduce debt
and build up cash and other current asset balances rather than a fresh CAPEX
cycle. This resulted in a weakness in private investment demand and capital
expenditure in the economy.

 

In the present context of
rising inflation and slower growth, monetary policies cannot be traditional and
book-bound but progressive and innovative. The report narrates in detail the
various measures initiated by RBI including progressive reductions in the Repo
rate and the various windows to infuse additional liquidity to lead the economy
onto the path of growth.

 

Come September and let it
bring changes much awaited and longed for. May I close this page by requesting
you to visit our site bcasonline.org for extremely relevant and
innovative events in the month of September, 2020, such as M&A – Master
Class, Brand Building by professional firms and so on? You may also visit the BCAS
Global social media handle for the events missed, if any.

 

Best Regards,

 

 

CA
Suhas Paranjpe

President

FROM THE PRESIDENT

My dear Members,
Milestone 2.0 – Building a ‘CA’reer. This was the theme for the virtual event held on 23rd April to felicitate new graduates. Over 220 ‘fresh CAs’ logged in to hear a special interaction with three eminent panellists, Mrs. Bhavna Doshi, Robin Banerjee and Anand Bathiya, and Kushal Lodha acting as moderator. The rank-holders were offered free BCAS annual membership under our ‘Gift a Membership’ scheme and we look forward to these youngsters joining us and performing their Professional Social Responsibility (PSR), as also taking care of their careers and personal lives.

On 30th April there was an overwhelming response, with over 770 virtual participants, for the lecture on ‘Important amendments relevant for audits of F.Y. 2020-21’. The veteran Himanshu Kishnadwala gave an outstanding talk, covering all important audit provisions in the Companies Act, 2013, Accounting and Auditing Standards. He guided the members on the new CARO reporting which is applicable w.e.f. 1st April. His presentation was appreciated for being very helpful for small and medium-sized practitioners to carry out an assurance function with a lot of clarity and confidence. Incidentally, SEBI has extended the time of submission of financial results to 30th June in view of the continuing pandemic.

In an important regulatory development, the Reserve Bank of India has issued instructions to banks, including private banks, small finance banks, etc., that the post of the MD & CEO or Whole-Time Director (WTD) cannot be held by the same incumbent continuously for more than 15 years. The instruction also includes other guidelines such as a three-year cooling period for a subsequent appointment, transition arrangements, and continuous appointment for not more than eight years with the exception that the existing MDs & CEOs who have already completed 15 years to complete their current terms as per the permission already issued. This is an important regulatory measure, bringing in certainty and clarity for operation, succession and strict compliance with corporate governance in banks.
RBI has also issued guidelines for the appointment of Statutory Central Auditors (SCAs) / Statutory Auditors (SAs) of banks and non-banking finance companies (NBFCs), including housing finance companies, for F.Y. 2021-22 and onwards. The guidelines provide necessary instructions for the appointments, the number of auditors, their eligibility criteria, tenure and rotation, etc., while also ensuring their independence. The guidelines are a clear recognition of the role of the audit function in the management of banks and finance and, obviously, could not have come any later.
Both guidelines are a solid recognition of the need of the hour, particularly in the context of banks to face severe strain on their business operations both on deposits and advances due to the severe adverse pandemic impact, compounded by the Supreme Court decision of waiving off the interest on interest during the moratorium period.
May is historically a lean month for events and programmes, considering it is the time for vacations. Last year, and it looks like this year, too, the pandemic has changed the course of history with travel restrictions and social distancing norms. But these are some of the programmes planned for May.

  •  On Wednesday, 19th May, BCAS and IIA to jointly host a talk on ‘Internal Audit Lessons from Cricket,’ by Satish Shenoy.
  •  Second Direct Tax Home Refresher Course (DTHRC-2) from 20th May to 1st June, with 13 sessions, by the BCAS Taxation Committee.
  •  Analytics Boot Camp for Youth on 27th, 28th and 29th May by the BCAS Internal Audit Committee, jointly with Sama Audit.

Please log in to www.bcasonline.org for more updates and registration.

The times are tough for everyone, including the CA fraternity. It was painful to lose a few of our professional brothers in the last few days. We pray for the departed souls and for their family members. Positive attitude, building own body immunity with the right course of home fitness and diet and strong belief in saying ‘this too shall pass……..’ is the way forward.
Best Regards,
 
Suhas Paranjpe
President

FROM THE PRESIDENT

My Dear Members,
On 15th March we lost our evergreen Past President (1964-65) Shri Arvindbhai H. Dalal. He was also Past President (1989-90) of ICAI, our alma mater. A thorough and dedicated professional, he was always ready to guide and provide a helping hand to all professionals and juniors and mentored many. I had occasion to speak to him on call many times and he was very informed and keen to know everything, including new publications, joining BCAS events on a digital platform and so on. The March issue of the BCAJ published a photograph from 1951-52 in which he could be seen and I had occasion to speak to him for the last time – today I recall the saying, ‘coincidence means only a connection that’s not seen’. It’s the end of an era and the profession will truly miss him. Our sincere prayers for his soul to remain in eternal peace.
Recently, the ICAI Council approved ‘Guidelines for networking of Indian CA firms, 2021’. These were originally framed in 2005, revised in 2011 and in 2020 a group was formed for final revision to make them conducive for CA firms to grow through networking. It is now expected that Indian CA firms will network and grow big to handle larger assignments. These are domestic networking guidelines and do not govern international affiliations of CA firms, which need to be addressed in due course.
Our Taxation Committee submitted its post-Budget memorandum for consideration by Finance Minister Nirmala Sitaraman. The Finance Bill, 2021 was passed in the Lok Sabha on 23rd March with quite a few changes in the original proposals of the Union Budget. The overall theme was the ease of doing business and reduction in compliances. Certain amendments in the charitable trust space are a concern and could pose real challenges in operations and compliance for a genuine charitable organisation.
Recently, we completed one year of the pandemic-induced national lockdown. But we are not out of the woods yet with the anticipated second and third waves and the risk of infection spreading. The vaccination drive is on in full force with the Government agencies and local bodies doing their best. The last year taught us so much. It changed our work culture, our work habits, our work model. It changed our lifestyle with the domination of technology. It also gave us new directions, new possibilities and, on a positive note, taught us how to perform under constraints – physical, financial, and human.
At BCAS, the last year was a virtual year with all events and meetings held digitally. Over a period of time, we realised that it provided us with an opportunity to excel and become even more relevant. Participation in virtual events increased manifold with geographical spread all over India and in some cases international, too. Content is king and under virtual circumstances it became much more structured, disciplined and systematic. The faculties, national and international, happily came to our platform and we could reach more people at a reasonable cost. It was a blessing in disguise with real value unlocking for BCAS events. The message is loud and clear, that virtual realities are here to stay – maybe permanently, even after the pandemic recedes.
The Final CA results for the January, 2021 attempt were declared on 21st March and we congratulate and welcome all fresh CAs entering this noble profession. BCAS has planned a fresh felicitation on 23rd April for all CAs who entered the profession in February and March, 2021. Please remain connected with www.bcasonline.org for more details.
The beginning of a new financial year starts with the bank audit season and corporate audits and finalisation. Financial results will start flowing in and give us the full-year performance of companies in one of the most difficult years in corporate history. New CARO reporting is applicable from 1st April and will need deliberations to create awareness among small and medium-sized practitioners. We at BCAS would plan the same and keep you updated.
I wish everyone a Happy Gudhi Padwa, Ram Navami and Mahavir Jayanti.
Best Regards,
 

Suhas Paranjpe
President

FROM THE PRESIDENT

My dear Members,
As I started gathering my thoughts to pen down my last President’s Page, I felt humbled as I realized the honour and privilege bestowed upon me to lead this great voluntary society and communicate with all of you for the last 12 months. It was a rare and valuable opportunity to contribute to the profession and the public at large and one had to take it as gracefully as possible.

My memories go back to my early years as a volunteer at BCAS in various capacities. It was an unbelievably satisfying journey with reasonably smooth sailing. In the course of this journey, I was the beneficiary of the mentorship of several seniors and past presidents, and often even learning from juniors and youngsters, and the consequential personal development.

As President of the Society, I had occasion to interact with many senior professionals and experts, government officials, members, students, etc. The common thread in the different interactions was the respect that I could feel for BCAS. The selfless dedication of all of us, the volunteers, was truly a humbling experience.

I could correlate this to the santwani (an extract) by Tukaram Maharaj dedicated to Lord Vitthal and sung by none other than the Maestro Bhimsen Joshi:

The year started on a rather cautious note with a slightly negative bias. How will we remain relevant without physical events? How will we cover the fixed cost of running the BCAS? There were many unanswered questions. But at the back of our minds, the intrinsic superpower of brand BCAS, its dedicated and committed volunteers and the ‘never say die’ spirit engendered by the founders and forebears, kept me, my office-bearers and managing committee members motivated, all of it leading up to the point of satisfaction now and consigning all those unknown fears to the past.

The BCAS motto,

The theme of BCAS for the year Tradition – Transition – Transformation kept on reminding us that this year will be the year of new directions, a new way of life and new opportunities. The BCAS platform provided us with the power to perform at every stage. It was an opportunity to increase visibility for the BCAS with higher reach – territorially and with faculties from different parts of the world, joining hands with sister and regional organisations for events and representations to government and statutory bodies, and with publications on various live and relevant subjects. All the chairmen and members of the different comm.ittees took the opportunity to its fullest. I would like to thank all of them and also the speakers, authors, compilers, conveners, course coordinators and numerous well-wishers for their sincere efforts to take BCAS to the next level.

In the history of BCAS, the current year is a pioneering one, one that turned this managing committee into the first-ever virtual MC with almost all events, meetings and programmes being conducted on a digital platform. ZOOM, TEAMS, MEETS and so on became the lifeline of our events and meetings. Of course, all of us missed personal interactions, fellowship and bonding. To compensate for the lack of physical action caused by the pandemic, I planned three initiatives at the beginning of the year to create some permanent physical and long-term benchmarks by the otherwise virtual committee. The new initiatives were as under:

(1) ‘Project BCAS Chowk’: The ‘naming’ of the area of the BCAS office in Mumbai is getting visibility now; it will soon achieve reality and become a permanent physical landmark of the city and for the BCAS. This would be a dream-come-true for the BCAS family and its well-wishers.

(2) Formation of the ‘Project Management Committee of the BCAS Foundation’ with the help of Trustees and to fast-forward the execution of social initiatives undertaken by the Foundation and actual implementation of certain projects jointly with like-minded organisations.
(3) Fellowship, joint programmes and representations with sister organisations, regional CA associations, all due to the ease facilitated by the digitalisation of almost everything.

All the office-bearers actively participated in all these and other initiatives. Words are not enough to thank Abhay, Mihir, Samir and Chirag who stood by me, guided me and motivated me to do more. I wish the new team under the leadership of Abhay and Mihir an enriching and fulfilling term with the gradual commencement of physical activity. Team BCAS is the backbone and permanent resource for every President. I can’t thank them enough for their contribution. My family, partners and staff members stood behind me throughout the year with rock-solid support which I acknowledge and appreciate.

In all the good things that have happened, we should not forget the scars of the pandemic – the shocking and painful loss of some seniors and colleagues in the CA profession, including some very young members. This is a permanent loss to their families and the BCAS family which has created a deep void. BCAS will miss them forever. I take this opportunity to record our heartfelt condolences to the bereaved families in this hour of extreme distress to them.

The road ahead for BCAS is long and winding, with several challenges to the role of Chartered Accountants with, among others, the introduction of a special portal by the Income-tax Department, the fast-changing ways of accounting with Artificial Intelligence-aided digitalisation, the emphasis placed by SEBI with the introduction of Risk Management focus in corporates, and the efforts of the Government to lead the economy to $5 trillion GDP.

At this point of expectation of profound changes, I am taking my leave with great satisfaction and confidence that BCAS with its glorious tradition of adapting to all changes in its journey of the last 72 years, will stand up and hold its flag high and flying while marching towards the diamond jubilee mark – 75 years of uninterrupted voluntary service.

I thank all of you once again for your love, affection and respect and for giving me the opportunity to serve you to the best of my ability.

I can only say

Take care and stay safe.

Best Regards,

Suhas Paranjpe
President

FROM THE PRESIDENT

My Dear Members,
The BCA Foundation, a dedicated charitable off-shoot of the BCAS, recently tied up with NGOs SPARSH and Helping Hand to donate an ambulance purpose-fitted with oxygen support for Covid-19 patients, especially those in tribal and underprivileged areas. I thank all the donors for their spontaneous and generous response and we will disburse the amount on the necessary paperwork and execution. The BCA Foundation was motivated with the response to this project and has decided to undertake two more projects (in association with other NGOs), viz., ‘Helping Covid-affected families with ration kits’ and ‘Adopt a child’s education’. An appeal to this effect is printed elsewhere in this Journal and also on our website and social media handles. I call upon you to HELP us to HELP society.
The BCAS, along with other CA associations of Ahmedabad, Chennai, Karnataka, Lucknow and Surat, made a joint representation to the Reserve Bank of India complimenting it for its common guidelines of 27th April, 2021, bringing in the required transparency and formalisation in the appointment of the statutory auditors of major financial lenders. The representation has made a case to prevent monopolistic positions and concentration of audits within a few firms. The link to the representation is available on our website and social media. I thank all the organisations and contributors.
It was very thoughtful and considerate of the CBDT to provide relief for compliances under Income-tax in Circular No. 9 of 2021 dated 20th May, 2021 owing to the continuing pandemic. All the due dates of ITR / TDS filings and other compliances have been extended. CBIC also provided relief by way of waiver of late fees and reduction of interest for GST returns. May I request all of you to plan your work well in advance so that you are well ahead of the extended due dates to avoid the last-minute rush and technical glitches.
Cyclone Tauktae wreaked havoc across the west coast of India in the latter half of May. A week after that, Cyclone Yaas severely affected Odisha, West Bengal and Jharkhand. Last year, Cyclone Nisarga had devastated the lives of people. As per climate experts, all these can be linked to the climate crisis with the Indian seas becoming warmer than usual. The lives of people are permanently affected with loss of life, livelihood and homes. Nature is time and again giving us a wake-up call to fast-track measures to limit global warming.
As the world marks World Environment Day on 5th June, let us remember that global warming is no longer a philosophical threat, it is no longer a  future threat, it is no longer a threat at all. It’s our reality.
In the last few weeks the digital currency – Cryptocurrency (Bitcoins) – saw a lot of volatility with anticipated regulatory risks and transaction reporting requirements at the country level, adverse tweets by a class of people and also volatility driven by varying perceptions of the intrinsic value of the cryptocurrency. To understand the global and Indian perspectives, the legal aspects and the way forward on the subject, BCAS is in the process of planning an LM on Wednesday, 23rd June, by eminent faculties. Please log in to the BCAS website for more details.
Padma Vibhushan Mr. Azim Premji, Founder-Chairman of Wipro Ltd., Founder of Azim Premji Foundation and internationally-acclaimed Indian personality, will address us on a virtual platform on our 73rd Founding Day on Tuesday, 6th July, at 6.15 p.m. on the subject of ‘Professional excellence and social responsibility’. I invite all of you to attend and to hear him.
Please log in to the BCAS website for the link and more details.
I conclude this page with good wishes for International Yoga Day on 21st June.
Best Regards,
 
Suhas Paranjpe
President

FROM THE PRESIDENT

Dear BCAS Family,
We are in the phase of bidding adieu to the year 2021. At the same time, due to the extended Covid crisis and technical glitches with the Income Tax website, we are also in the midst of meeting the deadlines for filing income tax returns and concluding tax audits. I hope there is no more extension and we are all able to welcome 2022 in a relaxed atmosphere. This hope is based on the increased filings of income tax returns on the income tax portal, which has reached 26.62 million as on 21st November, 2021. The total estimated return filers is around 60 million. Normally, the pace gathers momentum as the deadline nears and with reduced glitches the taxpayers should be able to meet the extended due dates.

Whenever we are at the end of a year, it is usual to summarise the year gone by and evaluate the lessons learnt from the action taken during the year.

The year 2021 commenced with hopes of the gradual withdrawal of Covid and with it the revival of the beleaguered economy. However, somewhere in the month of March the second wave of the pandemic struck with much greater force and India was in a state of crisis. The medical infrastructure was found to be ill-equipped to handle a crisis of such magnitude. However, human resilience and proactive measures ensured that we were back on our feet by mid-2021. The fearless approach of many, including the medical fraternity, Government agencies and charitable institutions ensured a smooth transition to normalcy. A positive approach to any problem ensures surmounting it and finding a solution. I would quote my GURU Mahatria Ra who has aptly said:

Positive thinking may not guarantee success,
but negative thinking guarantees failure.
So, might as well be positive.

With the passage of one more year the one thing that is constantly showing itself up in our lives is change. We have to recognise that there will be change and we should desist from holding on to what we know and accept that things are changing. This recognition and acceptance of change will create opportunities in future and prepare us to face challenges positively.

To take stock of the current status of our economy, we are at present facing inflationary pressure due to the strong recovery in economic activities backed by increasing demand above normal levels. This is coupled with soaring prices of a majority of the inputs with high energy costs. At the same time, GST collections up to October in this financial year have crossed Rs. 1 trillion in all the months except June. This, along with various measures taken by the Government to boost economic activity, bodes well for the calendar year 2022.

The only dampener which has to be addressed with alacrity is ensuring that the new coronavirus variant ‘Omicron’ found in South Africa does not spread rapidly worldwide. The Indian Council of Medical Research (ICMR) has stated that the new variant need not be interpreted as lethal or highly transmissible.

For the profession we have a solemn task to perform on 3rd and 4th December. We have to ensure that each one of us casts our valuable vote at the triennial elections to the Central Council and Regional Councils of the Institute of Chartered Accountants of India. It is our duty to elect the most deserving candidates who will uphold the integrity of the profession and who have the passion and foresight to take the profession to greater heights.

On the Consultation Paper released by the National Financial Reporting Authority (NFRA) on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs) which has drawn substantial attention from professionals, policy-makers and the business community, I have pleasure in informing that under the leadership of the BCAS a Joint Representation along with six other professional associations has been submitted on the same. We were also able to obtain the views of Mr. Y.H. Malegam, a doyen of the CA profession, which were also made part of the Joint Representation. We hope that our views with elaborate reasoning shall be given proper weightage by the NFRA while finalising any policy affecting the profession at large.

Regarding the hardships faced on the Direct Taxation front, there were two representations made by the BCAS. One was regarding the impact of the new Rule 11UAE faced by the taxpayers for slump sale transactions. Another was relating to the issues arising from the orders of registration granted to Charitable Institutions in response to applications preferred u/s 12A(1)(ac) and the first proviso to section 10(23C) of the Income-tax Act, 1961. We have circulated all the Representations to the members for their information.

As part of the joint initiatives with other professional associations, BCAS had a Half-Day Joint Seminar with DTPA Chartered Accountants’ Study Circle – EIRC at Kolkata on 20th November. This was the first hybrid event by both the associations. The hybrid mode of seminars / workshops will be the order of the day, which will enable networking and interacting with professionals physically as well as providing opportunities for those who may not be able to attend physically to imbibe knowledge through remote participation.

Another joint initiative was with the Chamber of Tax Consultants (CTC) in organising a unique Workshop on a topic which is not in focus for CA professionals. It was on Customs Duties and Foreign Trade Policy. The Workshop was addressed by four eminent faculties and was well received by the participants.

There are many more programmes planned during the ensuing month which would be of interest to all the professionals. You are all requested to be in touch with BCAS through its website and through its social media presence.

At the end, I look forward to the year 2022 with a realisation that life is a series of new beginnings. We have to be disciplined enough to look at the future as if it is beginning today. We should develop ourselves in a manner that we don’t replicate the same experiences but try to learn from past experiences and chart out a new course for the future from those experiences. A disciplined approach provides the purpose of life. This is aptly explained through a statement by my GURU Mahatria Ra:

Discipline
is your ability
to subordinate your likes and dislikes
to the purpose of your life…

I wish all of you a Merry X’mas in advance.

Best Regards,
 

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,
It’s Diwali time and all of us are geared up for Diwali celebrations from 3rd November. Festivities are in the air. With retractment of our unwanted guest Covid who invaded our homes and caused agony for almost 18 months, there is rejuvenated vigour with which all have geared up to celebrate this year’s Diwali. The way we celebrate has undergone change and I am sure we all shall be conscious enough and will not throw caution to the wind. The best Diwali wishes this year will be to remain healthy with no further disruptions due to the pandemic. I convey my Diwali wishes with the following shloka:

Goddess Bhagwati Mahalakshmi, who gives success,
wisdom, enjoyment and salvation! I always
salute you.
To be successful one has to lay down goals with vision for tomorrow. We shall have powerful tomorrows emanating from the powerful goals set today. A goal-setting exercise enables one to come out of the comfort zone and accept the challenge of transitioning and achieve growth. My GURU Mahatria Ra has aptly described this evolution as follows:

Before change there is comfort.
After change there is again comfort.
But the transition, during the change, is never comfortable.
So, growth is your willingness to evolve from
lesser comfort to higher comfort,
through ‘NOT’ comfortable transitions.

At the start of this New Year, let us resolve to seed ambitious goals which shall be followed with conviction and courage so as to become better professionals and human beings.

On the economic front, India’s performance in exports has been phenomenal during this year. It is set to achieve the target of USD 400 bn. However, the rising crude prices are acting as a dampener which have increased the import bill and are offsetting the fast growth in export earnings, thereby affecting the balance of payments position. The stock markets have been on a roller coaster ride during the past fortnight with very high volatility and wiping out substantial gains registered earlier during the month. The major reason for volatility has been a sharp sell-off by FIIs to book profits at higher valuations due to downgrade of Indian equities by foreign brokerages. However, the underlying tone for the Indian economy and capital markets is strong. This is further endorsed by Chris Wood, Global Head of Equity Strategy, Jefferies, the author of GREED & Fear. He has stated ‘If GREED & Fear had to own one stock market globally for the next ten years and not be able to sell it during that period, that market would be India’.

The profession is passing through times when there are shifts in the expectations from professionals by the industry, regulators and policy makers. It is interesting to observe the views of two regulators on the auditing profession.

In my message last month, I had elaborately dealt with the Consultation Paper released by the National Financial Reporting Authority (NFRA) on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs). The Consultation Paper tries to project that there is less or no utility of audits for MSMCs and audits can be discontinued for certain size of companies.

On the other hand, Mr. Shaktikanta Das, Governor RBI, while speaking on 25th October at the National Academy of Audit and Accounts, dealt with the ‘Role of Audit in Modern Financial System’ during which he stated as follows, ‘The responsibility of risk management primarily rests with the Supervised Entities themselves; however, audit too has a critical role to play at the systemic level by examining the appropriateness of existing frameworks for plugging the control gaps and providing assurance to the Board and decision-makers’.

It is beyond doubt that audit is the first external line of defence for identification of issues and risks associated with the auditee enterprise which enables timely intervention to address issues and mitigate risks.

BCAS has floated a Survey on NFRA – Consultation Paper, September, 2021, soliciting the views of companies on the utility and necessity for statutory audit. We are receiving encouraging response to the Survey. We shall be collating the responses and include the findings in the representation to be made jointly with other associations on the Consultation Paper.

At BCAS the activities of imparting knowledge continue relentlessly with workshops and seminars being conducted by various committees. Several areas of professional interest were covered during the previous month, with (i) Workshop on Taxation of Partnership Firms – Section 9B & 45 (4); (ii) Seminar on Charitable Trusts; (iii) Curtain-Raiser on Enterprise Risk Management for CAs, jointly with IRM India affiliate; (iv) FEMA Master Class on Controversial Issues, jointly with CTC; (v) Internal Audit 101 – Basics of IA; and (vi) Webinar on Covid and CSR-Related Expenses, jointly with IMC, BCCI and CTC. There was also an interactive session to guide the students for achieving success at CA exams.

BCAS has also unveiled its iconic event, the 55th Residential Refresher Course (RRC). It is to be held from 24th to 27th February, 2022 in hybrid mode. After the Virtual 54th RRC on account of the pandemic, there were requests to have a physical RRC. Though we are not completely out of the pandemic, it was decided that we shall plan a ‘Hybrid RRC’ so that we can cater to the requests of both categories of participants. The physical event will be at Radisson Blu Hotel at Nashik and will also be in virtual mode for members who want to be connected remotely. I request members to enrol immediately for their physical presence as we have restricted the attendance to 100 participants and the response has been encouraging – we may have to stop registration in the near future. It is a great mode of learning, networking and unwinding.

To conclude, I am sure that at the turn of the New Year as per the Hindu calendar, we shall all endeavour to make decisions and act upon them so as to address the issues which we encountered in the year gone by. This will enable us to face the future with renewed hope and positivity. I leave you with a quote of my GURU Mahatria Ra, to enable you to act positively:

Time does not solve problems.
Rather, time makes you comfortable with problems.
You learn to live with them.
Making decisions and acting upon them alone will solve problems.
The only way you can improve any situation is by making fresh decisions and execute them.

Best Regards,
 

Abhay Mehta
President

FROM THE PRESIDENT

My dear Members,
It is said that the month of ‘March comes in like a lion’. So let me start by congratulating and complimenting our own lions, President CA Nihar Jambusaria and Vice-President CA Debashis Mitra of the Institute of Chartered Accountants of India (ICAI), our alma mater. It is a proud moment of all of us @ BCAS that President Nihar, who is based in Mumbai, was a Core Group member of the BCAS for many years. On behalf of all of us @ BCAS I wish the newly-elected team a successful and impactful tenure and also assure them of BCAS support in their endeavours to strengthen and enhance the image of the profession of chartered accountancy.
Let me also take this opportunity to congratulate the office-bearers at the WIRC of the ICAI led by Chairman CA Manish Gadia and Vice-Chairperson CA Drushti Desai. Both are BCAS members. I assure them also of BCAS support and co-operation and wish that under their capable leadership the Western Region will continue to retain its prime position amongst the five Regions of the Institute and continue to provide quality service to members and students.
The BCAS organised a special panel discussion on ‘Budget 2021 – 360-Degree View of the Indian Economy’. It was very well received and featured an excellent analysis on the economic, industry and capital market situations, thus affording a 360-degree view of Budget 2021. The panellists, Dr. Ajit Ranade, CA Dr. Niranjan Hiranandani and CA Bhagirath Merchant dealt with their respective domains. They were at their erudite best and offered a lot of insights. They shared their expertise and large experience on several relevant issues and posers raised by the moderator CA Vikas Khemani with his investment research background. The video is available on the BCAS YouTube handle for those who missed it.
March is going to offer us a very busy schedule with lots of events, starting with the International Women’s Day celebration, a lecture meeting on ‘Ethics and Code of Conduct under ICAI Guidelines’, a lecture meeting on ‘Important recent decisions on international taxation’, Workshop on Labour Laws and a few other events.
The reprint version (first edition published in January, 2013) of the BCAS publication ‘CA Firm of the Future’ is now available for subscription. It is a publication that is relevant even today, eight years later. Already, professionals are rushing to grab the fresh edition. The 15th GST RSC of the BCAS is also attracting huge response. Please remain connected with www.bcasonline.org.
We are all aware that BCAS is a voluntary organisation with 72 years of valuable contribution to the profession at large and the public in general. It’s an achievement for a voluntary body to remain relevant so long and also be adaptable and to create benchmarks in all the activities it carries out – be it ethics and governance, events and programmes, or be it publications. The chief guest at our last Founding Day, CA Deepak Parekh, Chairman, HDFC, complimented us for the same.
Becoming a member of such a reputed voluntary organisation is a proud privilege for all CA professionals.
May I remind you that membership for the year 2021-22 for both the BCAS and the BCAJ is now open. And may I request all of you to renew your membership and introduce at least two new members to this august body? You could also consider Life Membership and a new initiative, ‘GIFT A MEMBERSHIP’. This initiative is an apt proclamation of the well-known proverb,
Give a man a fish, and you feed him for a day;
Teach a man to fish, and you feed him for a lifetime.
Last year we could not celebrate the festival of Holi due to the pandemic. With the fear of a second wave of the corona virus, this year, too, it looks like we had better be cautious with our Holi celebrations. We must follow the spirit of the proverbs,
Happy Holi and a smooth financial year closure
Best Regards,
Suhas Paranjpe
President

FROM THE PRESIDENT

Dear BCAS Family,

I commence my journey to communicate with you all as President with this maiden message. I first offer my salutations at the holy feet of Lord ‘Shreeji Bawa’ for bestowing on me the choicest of blessings and making me worthy to be chosen as President of the august professional body BCAS. I take this opportunity to thank all my seniors at BCAS for honing my skills and making me worthy of leading one of the oldest voluntary associations of CAs which is in its 73rd year. If I may consider this role of President as a success, I am conscious of the fact that success should feed one’s sense of responsibility. I commence my journey for the year with a thought in mind which is conveyed to me by my GURU Mahatria Ra:

‘In the journey of success, every finishing line is the new starting line.
In your career, year after year, you have to prove once again.
You have got to challenge yourself once again.
After every accomplishment, the heartbeat of success remains,
“What next? What else? What more? How else?”’

I have accordingly drawn an elaborate plan for the year to be of relevance by addressing the above questions to move forward and make the year a memorable one for BCAS.

The Theme for the year has been devised on the acronym ESG – EMPOWERING, SCALING, GLOBALISING.

Along with the Theme, in consultation with my team of Office-Bearers, we have devised an internal goal-setting exercise for BCAS by the name LEAP:

  •  Leadership for BCAS
  •  Excellence at BCAS
  •  Accountability to BCAS members
  •  Professionalism in BCAS

I am not elaborating on the above, as the same has been dealt with in detail in my incoming speech delivered during the AGM of BCAS, which is also published in this Journal.

I would now like to delve on the professional opportunities, challenges and the coming of age of the Indian economy.

There are exciting times ahead for CA firms, as the government has permitted audit firms to transform themselves into multidisciplinary partnerships (MDPs) by notifying the regulations issued by the ICAI. The CA firms would be able to forge tie-ups with company secretaries, actuaries, cost accountants, advocates, architects and engineers, thereby enabling them in scaling up their portfolio of services. The regulations have come at an apt time when the RBI, too, has come out with common guidelines for the appointment of statutory auditors encompassing all major financial lenders. These two moves are in the direction of empowering Small and Medium-size Partnerships (SMPs) to scale up and offer a variety of services under one roof.

The Finance Ministry launched its new income tax e-filing portal in June, 2021. However, over the last 45 days there has been a deluge of emails received by the Income-tax Department, totalling more than 700, regarding complaints about issues faced on the portal. The taxpayers and professionals are facing various challenges in using the portal and there are issues which remain unaddressed. There have been representations by various stakeholders and professional associations. The Finance Ministry has informed that all the issues would be resolved and the portal would be fully functional by the first week of August. I hope that the hardships of professionals and taxpayers are mitigated and there is ease of using the portal and hopefully the new portal offers many user-friendly features to justify the upgradation.

Another landmark event has taken place in India. The listing of Zomato, the first unicorn tech company to get listed on the exchanges. With its first mover advantage as a tech Startup being listed, it has opened the doors for other tech Startups which are in the pipeline to get listed. This demonstrates that India is on the path towards matured capital markets, which are ready to lap up opportunities in unique business models. I am of the opinion that the valuation metrics will evolve on the lines of such Startups in the US and China. This will also be a great opening for professionals to critically evaluate such business models and advise their clients and become valued business advisers.

We celebrate Guru Purnima every year on Shukla Paksha Ashadha Purnima. The day is celebrated by worshipping GURU, who is an enlightened soul imparting wisdom in both spiritual and academic fields. I dedicate Guru Purnima to all who have influenced my journey as a human being by enlightening me with their knowledge and recite the following shloka:

The six Gurus to remember are the one who inspires, one who informs, one who recites, one who guides, one who teaches and the one who awakens.

We shall be entering the 74th year of Independence on 15th August, 2021. India will be launching a year-long celebration on this day to commemorate 75 years of Independence. As responsible citizens, I would narrate just a simple way to display our patriotism as narrated by my GURU Mahatria Ra:

‘A sensible display of patriotism will be….
To be the BEST in whatever you do, and thus make your country proud.’

I conclude by wishing each one of you a HAPPY INDEPENDENCE DAY.

Best Regards,

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,
The month of October commences with the 2nd day being celebrated as ‘Gandhi Jayanti’ in honour of the birth anniversary of the Father of the Nation, Mahatma Gandhiji. This year it will be his 152nd birth anniversary. He preached two major principles to be followed in life, viz., Ahimsa (non-violence) and Swaraj (freedom). To correlate these principles with our professional life, we have to be conscious of the fact that merely by not involving in physical violence and by taking our own decisions during professional commitments, do not mean that we are following the path of Ahimsa and Swaraj, respectively.

The true spirit of Ahimsa is to be aware during our professional journey of not being part of any deeds which are intended to hurt the well-being of some other person or the State. Similarly, Swaraj is attained by a professional when he advises or takes decisions without the fear of its consequences and in a thoroughly independent manner. To be on the path of these principles one has to make them the standpoints of one’s life and, more importantly, to stand by these standpoints.

For a professional who follows the path of these principles, I am reminded of the quote of my GURU Mahatria Ra:

Your work ethic is a true reflection of your character.
Hold yourself to the highest standards possible.

An eminent person and one of the most respected professionals, Padma Shri CA T.N. Manoharan, Past President of the ICAI, had once stated in an interview that he was transformed the most by reading My Experiments with Truth by Mahatma Gandhi.

Now I turn to the developments on the professional and economic fronts. Let me first discuss the good tidings of the strong rebound during the July-September quarter projected by Standard & Poors (S&P) based on the high frequency indicators after a steep contraction in activities in the previous quarter. It has retained GDP growth at 9.5% for the current fiscal. The capital markets are also exuding confidence in the future earnings of the listed corporates, by taking the Sensex past 60,000 and the Nifty almost touching 18,000. India as a preferred destination for foreign investments is also gathering steam and there is a continuous flow of FDI into the country.

On the professional front, there is the Consultation Paper released by the National Financial Reporting Authority (NFRA) on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs). It has sought the views of all the stakeholders on four issues relating to the auditing areas of MSMCs. Two of the issues I feel may need deliberations, viz., (i) exempting MSMCs meeting certain criteria and thresholds from statutory audit under the Companies Act, 2013, and (ii) the approach for estimating standard cost of audit computed by NFRA.

With due respect to the regulatory body NFRA, it is really disturbing of them to make sweeping remarks in the Consultation Paper while dealing with issues related to audit of MSMCs, such as ‘The inference that is inescapable is that such audit is (sic) being carried out is perhaps only a sham.’ And ‘In any event it is clear that such audit as is being carried out cannot boast of any quality at all.’ I feel such statements, even though in a Consultative Paper, should be avoided by the regulator since it depicts the profession of Chartered Accountancy and its foremost quality as auditors in bad light.

The regulator has also inferred that there may be lack of adequate accounting professionals with the companies which are not filing Annual Financial Statements (AFS) and MGT-7. Only 52.48% of the total number of active companies has filed its AFS and MGT-7 for the F.Y. 2018-19 as on June, 2021. Here I would like to state that another reason may be the inefficiency / unwillingness of the promoters and management of such companies for not complying with the regulatory requirements. To cast the entire onus and responsibility on the professionals without further research into the reasons for such non-compliances would be totally unjust.

Further, I feel the estimation of standard costs to carry out an audit as tabulated by NFRA will also require a lot of inputs from professionals who are into conducting audits. The efficiency of conducting audits has increased substantially with the assistance of the various audit softwares available and adopted by the auditing firms. I urge all the professionals to come forward and share their views on the Consultation Paper. BCAS will shortly send an email to collect comments from members. Further, we will deliberate within a group of professionals and give appropriate response as sought.

BCAS through its philanthropic arm the BCAS Foundation and the HRD Committee, has for several decades been undertaking a ‘Tree Plantation and Eye Camp’ in the remote tribal areas of Dharampur, Gujarat. This year, on 25th and 26th September, an enthusiastic group of 25 volunteers visited Pindval and with the assistance of the Sarvodaya Parivar Trust carried out tree plantation. There was a visit to an NGO ARCH, which is engaged in mother and child care services for the tribals at Nagaria, Dharampur. On the next day, the volunteers visited Sant Ranchhoddas Eye Hospital which along with the Dhanvantari Trust conducts cataract operations for the tribals and needy people at Vansda, Gujarat. The BCAS Foundation donated reasonable amounts to all the three NGOs.

The zeal and dedication of the persons involved at all the three NGOs was to be seen to be believed. Their experiments with social work would seem simple, but the circumstances and conditions under which they carry out the activities make the work exemplary. I can say that if you create anything which is simple but powerful, it will have value in this world. For the efforts of such mortals who have sacrificed the comforts for the larger goal of serving deprived human kind, I would end with a quote from my GURU Mahatria Ra:

The bullet that had left the gun cannot return to the gun. It has to hit the target.
A venture begun should be a venture accomplished.
Whether something is a stepping stone or a stumbling block depends on how you use it.
Go on. Go on. Do not halt. Do not stagnate. Endeavour continuously.
Don’t stop. Rest not. Go on. Keep going on.

Best Regards,
 

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,

I am penning down my message on the auspicious day of Krishna Janmashtami. The birth of Lord Krishna is celebrated with much fanfare for His incarnation on Earth was to ensure the destruction of evil and to save humanity. Today, I also pray to Lord Krishna to eradicate the pains inflicted on humankind through Covid-19.

We have been witness to the resilience of humankind and the adaptability to take on the crisis as an opportunity to rediscover the way we carry out our activities in various spheres of life. I would like to instil confidence in all of us through an inspiring quote of my GURU Mahatria Ra:

Transitions force changes.
Changes cause transformation.
Transformation ignites growth.
The womb of transition always delivers growth.

I would also like to caution that transition is always painful for those who are averse to change. The intensity of change during the last 18 months is such that during normal circumstances such transition would have taken at least a decade. Such times require massive scale of reskilling to remain relevant. A research paper from McKinsey Global Institute, ‘The Future of Work after Covid-19’, published in February, 2021 finds that 107 million workers may need to switch occupations by 2030 – up 12 million from a pre-pandemic estimate. This provides an insight for CA professionals, too, for embracing new areas of professional interest which focus more on management advisory and technology-based consulting. The need to move up the ladder of professional deliverance is all the more necessitated with increased limits of tax audits, discontinuation of GST audits and news about exploring discontinuing corporate audits for Small Companies.

On 20th August, the Tax Profession lost one of the strongest pillars in the sad demise of Adv. Shri V.H. Patil (affectionately called by all as ‘Patilsaheb’). He relentlessly worked as a binding force for all the professional associations and for the advancement of ethical values, professional astuteness and philanthropic activities. He was very actively associated with the BCAS and its cause for about five decades. His loss is an irreparable one and very difficult to fill. We shall always cherish his association and remember his noble deeds carried out over more than six decades.

BCAS is a forward-looking professional association and to equip its members for supporting the business community through valuable services in new domains, it has entered into an MOU with the India affiliate of the Institute of Risk Management (IRM) headquartered in the UK. It is a leading professional body for Enterprise Risk Management. The objective is to arrange webinars on risk-related topics, jointly work on thought leadership articles, provide access to members in IRM online events and to offer scholarships for IRM exams. This will be a golden opportunity to sharpen understanding of Enterprise Risk Management through formal education and offer advisory services in this specialised area.

The agony of tax-paying citizens and direct tax professionals continues due to partial functioning of the new e-filing portal. BCAS made a detailed 17-page representation on the glitches in the portal and also provided suggestions on improving the functionality of the portal. A representation was also made to the GST Council on various legal and procedural issues on the provisions relating to GST registration so as to bring clarity and certainty in the law.

During this month, the 25th International Tax & Finance (ITF) RRC was successfully concluded. It had record participation of around 500 delegates. The case study papers, presentation papers and panel discussions were of the highest quality. The highlight of the Conference was the Keynote Address by Mr. N.R. Narayana Murthy, the proponent of Corporate Governance, and the Opening Address by the President of ICAI, CA Mr. Nihar Jambusaria.

We also witnessed an excellent talk on ‘Mumbai’s Covid Pandemic Management Model’ by Mr. I.S. Chahal, IAS, Municipal Commissioner. He was invited to speak at the Late Shri Narayan Varma Memorial Lecture Series organised jointly by the BCAS Foundation, DBM India and Public Concern for Governance Trust. His talk was very inspiring and he provided great insights on how resources were mobilised and innovative ideas implemented to control the pandemic situation. There was also a felicitation of three awardees for their excellent contribution in the field of social work. The awardees were Adv. Maharshi Dave (SPARSH), Mr. Ravi Singh (Khalsa Aid) and Mr. D.S. Ranga Rao (RTI Activist).

The Tokyo 2020 Paralympics is currently underway. The physically challenged sportspersons participating in it signify what can be achieved with grit and determination. India has put up an excellent performance with the current tally of two gold, four silver and one bronze medal so far. This signifies that there is no easy way to the top. I want to end with a message from my GURU Mahatria Ra which signifies that to achieve something you have to sacrifice something:

It’s stupid to search for a rose bush without the thorns.
Unless you are willing to be chiselled, you cannot become the altar that’s worthy of being worshipped.
There is always a trade-off.

Best Regards,
 

Abhay Mehta
President

From The President

Dear BCAS Family,

It is said that life is such a mystery that nothing significant happens for a year and suddenly a year happens in a month. Perhaps the current times are the harbinger of this truth. There are many exciting events happening and I will be failing in my duty if I overlook their significance and implications.

Goals! Goals! Goals! The World Cup football fever is on! Players have been trained and pumped up to give their best, to excel, to have nothing else in mind but to win against all odds to bring glory to their motherland. This spirit is something which completely overwhelms even the spectator with a motivation to excel. I believe as professionals, we will need to strive in a similar spirit to give our best to the profession and aim to create a world class professional community and firms as envisaged by our Prime Minister.  
 
The recently concluded 21st World Congress of Accountants also achieved several notable goals. In its history stretching over 118 years, it was held for the first time in India and attracted a record 10,000 delegates from over 100 countries, who received priceless insights from 150+ thought leaders over 40 sessions. Delegates had the unique opportunity to explore new industry trends and business ideas, as well as network with global experts. One of the most incredible goals achieved was that this entire event was carbon neutral…in line with its theme of “Building Trust, Enabling Sustainability”. I must add that the BCAS President was received by the President of the ICAI, the host with great warmth and respect he has for the institution.
 
India scored a very tricky goal in Bali, where it got the final declaration of the G20 adopted by consensus. India will have its hands full as it assumes the presidency of the G20 from December 2022. ‘Vasudhaiva Kutumbakam – One Earth, One Family, One Future’, India’s theme for G20 is highly relevant in today’s troubled world that has been fractured by near-sighted political and economic policies. The G20 is a powerful platform of the world’s major developed and developing economies, accounting for 85% of the global GDP, 75% of international trade and 67% of the world’s population.

November has been an eventful month. In the COP27, the UN Climate summit India informed the world that it has proactively undertaken “far-reaching new initiatives in renewable energy, e-mobility, and ethanol blended fuels and green hydrogen as an alternate energy source.” All this, despite the stark reality that India’s contribution to the world’s cumulative emissions is less than 4% and its annual per capita emissions are only one-third the global average.  It also called for the acceleration of development, deployment and dissemination of technologies, transition towards low-emission energy systems, and scaling up deployment of clean power generation. COP27 aggressively pushed for development banks to provide more climate finance without forcing developing countries deeper into debt.

I believe that these initiatives will bring a lot of professional opportunities for us to operate at a global level, and to share the knowledge gained through this experience.

And in the arena of tax collection, it is a clear case of records being broken as goals are achieved. In October, GST collections spiralled 16.6% to Rs. 1,51,718 crore – the second highest collection, since this indirect tax was implemented in 2017. Direct Tax collections up to 10th November have surged 30.69% higher over last year to settle at Rs. 10.54 crore. These are critical benchmarks that aptly reflect the remarkable bounce back and flourishing of the economy. The government is not resting on these milestone tax collections…it has unveiled a draft of a new form for filing income tax returns. It is designed to end confusion about form selection and will ease the process and cut time to file returns. With a burgeoning economy and simplified process, tax collections are poised to climb even higher.

“India has become the shining star in a world embroiled in war and stunted by inflation. India has proven its prowess “From almost negligible numbers a few years back, today we’ve over 77,000 start-ups in India, with 108 having unicorn status. India’s talent pool is like no other country’s as 50% population is below 25 years…In 2009, 17% of people in India had bank accounts; 15% used digital payments; 4% had a unique ID document. Today, around 80% have bank accounts; 80% use digital payments; 99% have unique IDs. All these in a country of 1.4 bn people…” India was a $270 billion economy 25 years ago and closed 2021 at around 3.2 trillion, which translates to 11x growth. Projections are that by 2047 India would be a $ 50 trillion economy. With such spectacular credentials and opportunities ahead, the field is vast and open for all of us, to skyrocket our growth… and exceed our goals!  Clearly, India is soaring higher and higher, and the world is noticing it.

The recent appointment of Hon. Chief Justice Dhananjaya Chandrachud to the Supreme Court of India brings back memories of his visit to the BCAS venue to deliver valedictory address at the conclusion of the first batch of the study course on Arbitration, Conciliation and Mediation in 2004. With great erudition he had then emphasized the importance of the course. Considering the ever increasing volume of the pending cases in the court, his foresight could not be overemphasized. We hope that his great insight and experience helps to bring many awaited judicial reforms for speedy delivery of justice by appointment of judges to the vacant position, improvement in the administration and encouraging parallel judicial machinery by way of Arbitration, Conciliation and Mediation.

BCAS was visited by the UK Director of the Institute of Risk Management (IRM) to explore ways in which the alliance forged to create awareness about emerging opportunities in the field of Risk Management can be fast tracked. He was felicitated by the President along with the members of the Internal Audit committee. Both sides had fruitful discussion to cement the ties for a long term.

Events:

BCAS organized a number of interesting events in the month of November that included a Webinar on the “Recent SC decision laying down the law on charitable trusts’ exemption, LM on Decoding Global Financial Markets and Changes in Regulations – Overseas Direct Investment, Workshop on Income Tax Issues on account of Redevelopment of Immovable Properties, Lecture Meeting on Growth Based Investing’, Seminar on Business Restructuring and Workshop on Macros Recording for GST Compliances apart from regular study circle meetings. These were all well received by the participants.
 
There are equally interesting events happening in December. To name a few, there is a Lecture Meeting on Value in the Metaverse and Why Metaverse is Inevitable,
Workshop on Penalties under Income Tax Act 1961, Enterprise Risk Management ERM 101 Play & Experience ERM with IRM’s Scenario Planning Workshop, 23rd Study Course on DTAA apart from some interesting HRD events which will be announced soon.
Booking for coveted RRC to be held in February at Coimbatore is in full swing and I request you to book your seat as soon as possible to avoid disappointment later.

Before I sign off let me send my warm greetings for the upcoming Christmas festival…Merry Christmas!

Good bye for now, till we meet again.

From The President

As I write this message, rejuvenated after a short break for the Diwali holidays, my mind is looking for some positive feed to look forward to one more festive year to feast on. While I do find some, what completely unsettles me are the two news items that perhaps reflect mindsets of the eco system we live in. Let me share them with you.

First is the Supreme Court landmark judgement explaining General Public Utility vis-a-vis Charitable Institutions. The landmark ruling, in the context of “advancement of general public utility”, holds that anybody involved in “trade or commerce” and charges markedly over and above cost would cease to be a Charitable Institution for the purpose of the Income-tax Act. Apart from Trusts, Cricket Associations and Development Authorities, the Supreme Court has held the same ratio would also apply in the case of educational institutions. The import of section 10(23C) as per the Hon. Supreme Court is that the word “Solely” should be interpreted narrowly to mean only the “Primary” purpose, not allied purposes or activities. The decision would hit various educational institutions, hospitals, trade organisations, maritime boards, sports organisations etc., which are formed to render services in their respective fields to their members for a cess or fee. The Supreme Court decision is mainly in the context of full exemption claimed u/s 10(23C).

With due respect to the Apex Court, I must express my apprehension about the severe consequence and after- effects of this judgement. If this ratio is applied ‘mutatis mutandis’, there is a good probability that it will have a disastrous impact on the institutions in the long run. How? You may ask.

The answer will be obvious to any person with the slightest experience in commerce. If there is an artificial cap on generating revenue that can give adequate surplus, how does one deal with the contingencies? How does one provide for unforeseen challenges?

It is wishful thinking that such contingencies will be taken care of by investment income and further donations. Who determines and justifies the “charges markedly above the costs”? Imagine an educational institution run by a Trust. To maintain a high standard of service, they will have to maintain their infrastructure and continuously upgrade it to keep in tune with the time. They may be compelled to provide for adequate buffer in pricing keeping in mind the uncertainty of membership, related revenue and rising costs. If they are deprived of this freedom, in the long run, they will run bankrupt because they may have the danger of running out of funds paying substantial taxes and spending for contingencies out of reserves. If someone were to interpret the fees they charged as ‘markedly above the costs’, then they would have a danger of losing their exemption u/s 10(23C) of the Income-tax Act. They will most likely also lose exemption u/s 80G, which in turn may impact their ability to receive donations. Consequently, they will be left with little margin for contingencies. They could then completely turn commercial, defeating the very purpose for which they were established.

A more workable option to control the institutions could have been to monitor their spending rather than putting an artificial ceiling on their revenue and pricing. Experience has proved that when one leaves the call of judgement of ‘what is reasonable and what is not’ to the revenue official, the judgement is most likely to be biased. To discuss various ramifications arising from the judgement, BCAS has organised a free webinar on the subject on 7th November, 2022.

The second shocking news I came across is that the MCA has issued an order for a penalty on one company u/s 454, for violation of Section 203 of the Companies Act 2013, for non-appointment of the whole time Company Secretary for 122 days. The penalty amount is a staggering Rs. 11,38,000. It is indeed appalling. Are we heading for a police state where even a technical mistake is punished so severely? Does ‘ease of business’ only remain a fancy term for discussion on television media and conferences? Is it a crime to be in business where the slightest default is feasted by the government with heavy punishment completely disproportionate to the nature of the default? Business and entrepreneurship are crucial pillars of a democratic society and have a great role to play for a healthy society. They need to be encouraged, not punished just because they are a soft target. If the business can be punished for non-appointment of a Company Secretary for a few days, then why should those responsible in the government not be punished with so many crucial appointments of judges, secretaries and chairmen of the public sector companies remaining pending for a long time? Laws cannot have two standards. One for the ruler and the other for the ruled. I hope good sense prevails and the penalty is reconsidered.

The Company Law Committee set up by the MCA published its third report, which has recommended mandatory joint audits for certain classes of companies to strengthen the audit framework. This follows similar guidelines issued by the RBI last year for all banks and NBFCs. While there could be a debate on the concept of joint audits with respect to their utility and benefits, there is no doubt that it has its advantages. The concept is not new in India and internationally and has successfully existed for many years in the case of Public Sector Banks and Companies. One of the greatest advantages of joint audit is that it provides for the coming together of different skill sets, knowledge and pooling of interest, thus improving the quality of service along with the timely completion of audits of large companies having complex operations and structures. It also helps to enhance the independence of the auditor because chances of familiarity threat and complacency due to comfort with the management are higher in the case of a single auditor. It is important to note that a pleasant fallout of this recommendation, if implemented, is that there is a likelihood that many SMP audit firms will have the opportunity to take up audits of large companies, thus increasing their reach and scalability to showcase their capabilities of providing quality services within the timelines. I hope that this recommendation soon becomes a reality and many Indian firms emerge on the global map.

This month, just before Diwali, BCAS lost its past president CA Dilip Lakhani. He was a great leader and multi-faceted person. He led BCAS in the year in which Tax Audit was introduced. He was one of the key persons to help BCAS come out with a comprehensive publication on Tax Audit that became a standard manual for many practitioners. Not only that, but he recognized the opportunity for upcoming Chartered Accountants to get Tax Audit assignments and passionately arranged workshops and seminars to educate the CA fraternity so that they could avail themselves of the new opportunity with profound training. CA Dilip Lakhani was also a national level Table Tennis player and won many trophies. He helped many charitable institutions silently without seeking any publicity. It would not be an exaggeration to state that he was not just a sport person but embodied in him sportsman’s spirit that gave him the zeal and zest to live his life fully and meaningfully. He leaves a great void amongst his colleagues, friends and professional circle. On behalf of all BCAS members, I pray God to rest his soul in peace. I convey our heartfelt condolences to his family members.

Events

There are very interesting events that have been organized by the BCAS in ongoing months.

Lecture meeting on ‘Growth Based Investing’, seminar on ‘Financial Fraud’, half-day workshop on ‘Income Tax Issues on account of the Redevelopment of Immovable Properties’, seminar on ‘Business Restructuring’, workshop on ‘Penalties under the Income Tax Act’ as also a half-day workshop on ‘Recording Macros for complying with GST compliances’ are some of the interesting forthcoming events. I recommend you not to miss them. Request you to please keep an eye on the announcements. Details will also be available on the BCAS website.

The flagship BCAS event, the 56th Residential Refresher Course, will take place at The Residency Tower, Coimbatore, from 23rd February 2023 to 26th February 2023. I urge you all to enroll without any delay to have a unique learning and networking experience.

Before I sign off, let me remind you that this month is a month of Guru Nanak Jayanti. I pray God give us all wisdom and courage of Guru Nanak and imbibe his teachings into our life to face off the evil forces with strong intrinsic strength.
Goodbye for now till we meet next month. Thank You!

From The President

Dear BCAS Family,

When you get this message you would have been heaving a sigh of relief from the battle against the timeline for filing the income tax returns and the tax audit reports. Much needs to be talked about and put forward to the concerned authorities on the procedural issues that we all faced but at the start of this auspicious season of festivals, let us focus on some positives.

“It’s not India’s decade. I actually think it’s India’s century…” Let these words of Bob Sternfels, CEO, McKinsey & Co. reverberate in our minds, hearts and being, and inspire us! I was absolutely enthused when I read it, and I think all Indians should align and work towards building India, the great nation that we are. Bob ardently believes that India is where economic history is going to be written. India, he said is the future talent factory of the world. By 2047, India would have 20 per cent of the world’s working population. Manufacturing would also move to the next level with critical supply chains being reimagined. Digitisation is another pillar; he believes that will play a pivotal role in India’s economy.

While the major economies of the world are staring at stagnant growth, spiralling inflation and looming recession, India is surging ahead. For the first quarter of the F.Y. 2022-23, India’s GDP growth rate was a phenomenal 13.5 per cent – that’s 2.8 times higher than the average GDP growth for the 20 largest economies. To accelerate the pace of development and enable India to keep striding confidently ahead, the government has regularly introduced a spectrum of focussed growth boosters. Make in India, Start-up India, Digital India, the Smart City Mission and the Atal Mission for Rejuvenation and Urban Transformation…are just some of the government’s flagship initiatives to strengthen the nation’s economy.

India is certainly on a good wicket!

The government’s concerted efforts to attract investments both from local and global sources are already paying rich dividends. With more than 100 unicorns valued at US$ 332.7 billion, India has the third-largest unicorn base in the world. India recognises almost 80 start-ups each day, that’s the highest per date rate in the world. This achievement is the result of the government’s foresight and diligence in implementing ‘Ease of Doing Business’ measures. Tax incentives, intellectual property rights and regulatory reforms are some of the key focus areas that have enabled corporate entities to take root and flourish. CMIE data on investments in new projects by the private sector for June 2022 has escalated 117 per cent over the pre-Covid level.

Financial services are another benchmark that clearly defines the growth trajectory of the economy. It has notched a 9.2 per cent increase in credit growth – with disbursal in F.Y. 2023 close to Rs. 6 trillion. Interestingly, MSME, which employs many people and retail loans have been the main drivers of this growth. Another key indicator of a vibrant economy is the growing momentum of cashless payments. The drive to encourage digital payments was initiated to curtail black money and corruption. This endeavour got a further impetus during the pandemic, which pushed many more to adopt digital transaction for personal safety. Unified Payment Interface registered a record 657 crore transactions in August, amounting to Rs. 10.7 lakh crore – reflecting the choice of a digitally empowered generation.

Manufacturing has been picking up momentum…in May 2022, the Index of Industrial Production (IIP) stood at 137.7 driven by mining, manufacturing and electricity sectors. This is fairly commendable when one factors in the devastating impact of the Ukraine war which severely disrupted global supply chains and sent commodity and energy prices steeply upwards.

Spiralling Tax Collections

With the decimating of the pandemic, India’s economy has not merely revived but demonstrated impressive growth. Further ramping up India’s economic surge are the concerted efforts and visionary policies of the proactive government. Business processes have been simplified and clearances streamlined, to encourage investment across all sectors. Technology has been effectively leveraged, to plug tax leakages. And the results have been quite astounding…

The gross collection of Direct Taxes for the F.Y. 2022-23 stands at Rs. 8,36,225 crore compared to Rs. 6,42,287 crore in the preceding financial year, registering a growth of 30 per cent. Advance Tax too has shot up, with collections for the F.Y. 2022-23 at Rs. 2,95,308 crore as on 17th September, 2022 resulting in a growth of 17 per cent.
.
Also remarkable is the huge increase in the speed of processing of income tax returns, with almost 93 per cent of the duly verified ITRs having been processed. Refunds amounting to Rs. 1,35,556 crore have been issued in the F.Y. 2022-23, an increase of over 83 per cent over the previous year.

GST collections have ascended 28 per cent year-on-year to touch Rs. 1.44 lakh crore in August. This is the sixth consecutive month in which GST collections have stayed above the Rs. 1.4 lakh crore mark. The stepped-up collection is a mirror of confidence in the government and the use of technology to nudge many more into contributing to nation-building.

Does this mean all is well in India and this is a story about India shining? Have we reached a point where we do not need to ponder over the areas where we need to better our record both as society and elected government? No way! In my humble opinion in our haste to seizing economic opportunities, we are overlooking social ills and disparities. No government can function effectively without the active contribution by its subjects. Are we participating in the initiatives of disseminating education to underprivileged of almost 50 crore people? Are we helping in any way people to get water and other basic necessities? Our record as citizens is far from encouraging on these issues. Hence, consequential inequality is increasing alarmingly and needs to be addressed urgently.

At the government level there seems to be a perception that for every aberration noticed in the economy, a tightened hold of bureaucracy and further compliances would cure the malaise and resolve the issue. This has resulted in an uncanny situation where on one hand “Ease of Doing Business” is getting priority in government policy; while on the other hand the increasing bureaucratic compliances is becoming an antithesis to the idea. Let us hope that we as nation will overcome these hurdles.

Let me have the pleasure to give you all a little update on some important developments and events.

ICAI announced Audit Quality Maturity Model (AQMM) will become mandatory for certain audit firms to self-assess their audit quality maturity from next financial year. This indeed is a welcome step. At BCAS we had some very interesting events organized. Seminar on Charitable Trusts, Workshop on Process Automation under GST, Felicitation of newly qualified CAs, and Workshop on IA were truly appreciated by the participants. A Workshop on DSC Management is being organized on the 8th October by the Technology Committee. There are many more interesting events being planned in the coming months. May I request you to keep tab on the announcements?

And before I sign off, let me wish You and Your Families a very Happy Navratri and Diwali. Let the light of knowledge kindle our lives with unending bliss and happiness.

FROM THE PRESIDENT

Dear BCAS Family,

This 15th August, India completed 75 years of its independence. Tumultuous, testing, trying or glorious – whichever way you may describe these years, it is possibly the most significant moment for all of us. Watching the Indian tricolour fluttering in the gentle breeze and listening to the enthusiastic and melodious rendering of the National Anthem left me with a lump in my throat. It also brought to my mind an incongruous thought of how – India is five thousand years old and yet seventy-five years young!

“Life can only be understood backwards, but it must be lived forwards” this wisdom expressed by Søren Kierkegaard, set me thinking. When we somersault back in time, we realise that India is a country…a civilisation like none other. We accomplished so much on so many fronts. Our in-depth and invaluable knowledge base enabled us to build, create and surpass other nations. India became the epicentre of culture and trade. Some came to learn and others to plunder and subjugate…and down the millennia and centuries, India still continued to grow.

So, it is not surprising that after being liberated from the manacles of the greed of many colonisers, we continued to excel. In the past 75 years, we have soared to great pinnacles of perfection and achieved multiple marvels of magnificence. From queuing up for foreign aid in the fifties, we have rocketed ahead to become the fifth largest…and the fastest growing economy in the world. India is also a global hub for computer software, small cars, generic drugs, garments, jewellery…Our rockets are launching satellites of the world, while our missiles have a tested range of 8,000 km. India has a very comfortable foreign exchange balance and financial systems that are robust, with credit reaching far-flung villages and a plethora of digital payment options. And these are just the tip of the iceberg of many, many achievements.

As S.S. Lewis once said, “You can’t go back and change the beginning, but you can start where you are and change the ending.” India is not content to rest on its many laurels but spurred on by its ambitions and lifted on the wings of hard work, and it is ready to fly high with the largest youth power in the world, exuding exuberance and confidence! Clearly, India has numerous milestones of success to its credit…but the best is yet to come!

“Faster, Higher, Stronger” used to be the Olympic motto…but no longer! In July 2021, the word ‘together’ was added to emphasise the unifying power of sport and the importance of solidarity. This could have been the guiding light and beacon of inspiration behind Team India’s excellent performance at the Commonwealth Games in Birmingham. The Indian contingent returned home with a rich haul of 61 medals, comprising 22 gold medals, 16 silver medals and 23 bronze medals. Ranked the fourth-best country in terms of medals, India has clearly demonstrated that it has what it takes to win. And as we congratulate every participant and person who put in umpteen hours of painstaking effort, we also wish them all the very best in raising the bar in the years ahead.

ITR filing is an annual activity which can be done in April by millions every year. But it is subject to the timely availability of new forms by the income-tax department. Year after year, the delay in releasing the forms and utilities has resulted in requests for extension of the date for filing returns and upsetting the time schedules. There is a general feeling amongst the taxpayers and professionals that the entire process of the release of forms and utilities needs to be revisited by the department. It could examine how the forms, along with the utilities (that are hard tested on the portal), can be available right on the first day of April. However, this year was definitely better. It is believed that over 4.09 crore ITRs were filed by 28th July, 2022, with more than 36 lakh ITRs filed on 28th July, itself. The tough stand by the Central Board of Direct Taxes not to extend the deadline, coupled with the improved support on the portal, indeed paid dividends. Also, CAs across the country were pleasantly surprised by the positive message they received from the ICAI, declaring that it was not in favour of making any representation for extension of any due date. CAs should not take any pressure but instead work in peace. After all, they were not the ones who were dragging their feet on providing details or procedures. CAs need to develop the courage to tell their clients to furnish the relevant information well in time to avoid unpleasant consequences. As CAs, we should not have to burn the midnight oil to file returns for truant clients – the message is loud and clear!

The multi-directional flow of money of all colours and currencies has always been a cause of concern to governments. With white-collared criminals becoming more adept at evading attention, the government is stepping up its attempts to uncover camouflaged money channels. A few charitable trusts and institutions have for long been a devious route and front to funnel money in and out of the country. The CAG noticed serious lapses in its audit of many such organisations and trusts.

In a serious attempt to crack down on the nefarious activities of these bogus institutions, CBDT has  mandated that all charitable trusts must maintain the records for 10 years from the assessment year for better tax scrutiny. Comprehensive details of incoming and outgoing global funds must be filed, and Aadhaar and PAN numbers of donors and trustees must be recorded. While there is no doubt, this initiative will seriously bottleneck and deter institutions from engaging in money laundering one must also bear in mind that there are more than 3 million charitable trusts in the country, many of them very small run by volunteers with noble purpose. It would be perhaps too cumbersome to subject them to so many compliances that they can become counterproductive to the whole purpose for which the trusts were established. Perhaps some line of demarcation or criteria to segment the trusts for varying degrees of compliance would help.

Audit results should be the barometer of the financial soundness of a company. Sometimes audits fail to red-flag discrepancies and major cracks in a company’s financial system. The Ministry of Corporate Affairs announced that it would soon introduce a set of tough measures to tighten the framework of statutory auditors. These measures are aimed at preventing the recurrence of the abrupt collapse of companies that severely imperils the nation’s financial system. The consultation on audit reforms has been completed, and the drafting of a bill to amend the Companies Act is in the pipeline.

A few questions, though arise in my mind. How many more compliances would the professionals have to live with? Do more compliances, regulations guarantee that there will be no fraud ever in future? Are the auditors always in collusion with the management of the company that goes astray? Is the difference between the audit parameters, environment for a statutory audit and that of a CAG or Fraud investigation clearly comprehended? I believe there is definitely scope for more discussion in an open forum on this subject, or else the expectations will fail, and the audit profession will earn one more blame.

Events
Four-day ITF conference organised by the international tax committee at Udaipur received an excellent response, with 250 participants taking benefit of the panel discussion, lecture and group discussions on relevant topics. Tree plantation visit to the district of Valsad, followed by a visit to Dhanvantari Trust running an eye camp, provided good inspiration for philanthropy to many young professionals who joined this trip organised by BCAS Foundation. A workshop on Tax Audit reporting and a lecture meeting on Unseen Connection between Ukraine War and Digital Taxation received a good response. Another LM on the subject of Unilateral, Bilateral and Multilateral Solutions for Digital Economy also helped members get clarity on the subject.

There are a few very interesting events happening. Long Duration Course on GST has begun with 275 participants virtually attending. There are interesting workshops happening on the subject of Charitable Trust and MSME in early September.  A unique programme on Process Automation under GST as also the flagship programme “5th edition of Internal Audit 101” is being planned. I request you to keep a tab on your emails for the announcement and take the benefit of this knowledge dissemination.

On 5th September, we shall be celebrating Teachers’ Day. One cannot undermine the contribution of a teacher in one’s life. From play school to date, many teachers have come into our life, each teaching us some or the other valuable lessons of life. We owe gratitude and respect to each of them. My salutations to all my Gurus and Teachers, who have made tremendous contributions to my life.

My best wishes for the festive seasons of Parushan and Ganesh Chaturthi!

May I sign off with great hope and enthusiasm in the true spirit of the atmosphere of ‘Azadi ka Amrit Mahotsav’! Let the profession be free from any evils, let it be ruled by the spirit of national interest, let the mindset of service to the stakeholders prevail for ever. Let the dignity of this great profession rise to new heights.

FROM THE PRESIDENT

Dear BCAS Family,

“A journey of a thousand miles begins with a single step.” As I share my first communique with you as President, I thank you all for having reposed your trust in me to assume this responsibility. I am aware of the long journey and the tremendous responsibility of my new role to help take BCAS to greater heights. But with your support, I have ventured to take the first step. And even though the task ahead looks very challenging, I am committed to walking the ‘talk’ as defined in my acceptance speech.

You would have noticed that my plan for the year ahead is, in many ways, a seamless continuation of immediate past President Abhay Mehta’s ESG theme, which aimed to meet the standards of empowerment, scaling and globalizing as expected from an institution like ours.

I have ‘EASE’ as my theme, which stands for Excellence Achieved by Systemic Empowerment. We, as a team, look forward to providing considerable ‘ease’ in enabling all of us to rise to the next level of excellence. During the year ahead, we will focus our energies, talents and investments to ensure ‘ease’ in accessing knowledge, embracing emerging opportunities, networking and reskilling. Through this plan, we hope to provide our members abundant opportunities throughout the year to raise the bar in their professional practices; and make BCAS an even stronger organisation.

BCAS has played a pivotal role in enabling its many members, not just in Mumbai but across India, to grow professionally. To upskill and upscale their practices… To grapple with the challenges of a fast-moving ‘now’… And to leverage technology to their advantage and profit. For many, BCAS has been an accurate compass – showing members the way beyond today’s horizons. For others, BCAS has functioned powerfully as a lighthouse, illuminating the path and helping members to navigate the stormy times. BCAS will soon enter its 75th year in service of its members. 75 is indeed a significant milestone, and BCAS, with its strong nurturing culture, resourceful leaders and many multifarious & enlightening programs, aims to continue its tradition of exploring newer avenues of opportunities. We are forming a mixed group of young and senior members to have road map for the celebrations and activities for the same.

It was Thomas Edison who once remarked that “Good fortune is what happens when opportunity meets with planning.” But we have to know what to plan for, right? To help us take a peek at the unravelling future, we had none other than Mr. N. Chandrasekaran, Chairman of Tata Sons, on the Founding Day to share his insights with us. His vast expertise and experience in successfully steering TCS and now Tata Sons eminently qualify him to present to us the trends that will constantly be re-inventing tomorrow.

He pinpointed that digital adoption is a key priority that is sweeping across the world and in India too. He talked of a digital bridge that will accelerate equality among the people while expanding the consumption of Indians. The opportunity is getting bigger with the Internet of Things (IoT), Artificial Intelligence, Machine Learning… to transform India. Propelling this high-tech wave are thousands of start-ups which are ushering in a tech revolution.

Sustainability and the green economy have become thrust areas for the corporate world. India, he explained, has an advantage as it builds new infrastructure, while the rest of the world has the more complex task of replacing and upgrading existing infrastructure in a green manner. The third trend that is vital to the economy is having a widespread supply chain that packs speed, resilience and efficiency. Geo-politics has disrupted the world and upset the smooth flow of goods within and across national boundaries. India needs to work on building robust supply chains with proven partners.

Managing talent is another critical focus area that is extremely complex and least understood. It is of paramount importance to evolve to a model where workers, the workplace and policies are in harmony. He also rued the declining proportion of women in the country’s workforce, which has sunk to 23% from 27%. He emphasised that talent will be available globally, and with more collaborative tools, productivity can be optimised.

Goods and Services Tax – the One Nation, One Tax system has completed a period of momentous 5 years. Presented as a game-changer, GST has lived up to the expectations for the most part. GST has delivered remarkably well –initiatives such as introducing e-invoicing and linking of inward and outward supply returns, with the main GST returns have paid off handsomely. Revenues of May, 2022 have soared to touch the Rs. 1.41 lakh crore mark; and the tax base has escalated to 1.36 crore active GST registrations as on 31st March, 2022.

But there are several contentious issues too between the centre and the states; and the government and industry. For example, the five-year GST compensation period between the centre and states has ended. This was a decisive measure that enabled the launch of GST and was designed to give assurance to state finances. With tough times ahead and dwindling GST collections expected, states are concerned about their finances and have petitioned the government for an extension.

Companies, too, have their complaints which revolve largely around dispute resolution. Numerous judgements have ended up in litigation, pushing up costs for companies. The dire need for a GST Tribunal has not yet materialised too.

The good news is that CBIC is on the verge of coming out with a Standard Operating Procedure for serving summons and notices to prevent undue harassment. This SOP will provide a clear code of conduct for GST officials and make the process more transparent. Defining the SOP will iron out the current problem companies’ face of getting multiple notices for the same issue or overlapping notices from the state and centre. Hopefully, there will be more timely and proactive measures to help streamline the process of collecting GST and resolving any issues.

Before I sign off I remind myself of this beautiful poem by Robert Frost:

“The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep.”

My good fortune is that I am aware that I am not alone in my journey. I am backed up by the entire BCAS family. Hence, I express my profuse gratitude to all of you for giving me this immense support. I would also like to take this opportunity to invite you all to participate in greater numbers in the activities…and to send in your feedback and suggestions so that we can constantly keep raising the bar. Thank You!

True knowledge is not attained by thinking.
It is what you are; it is what you become.
—  Sri Aurobindo

If I love myself despite my infinite faults,
how can I hate anyone at the glimpse of a few faults.
—  Swami Vivekananda

FROM THE PRESIDENT

Dear BCAS Family,
When I am penning down my last communication with you all as the President of this august and largest voluntary Society of Chartered Accountants there are mixed feelings of joy, satisfaction and hollowness. The joy is for the celebration which has been throughout this journey. The satisfaction is the end of the old beginning (being my term as President) for commencing a new beginning towards a new end (as a Past President). The hollowness will be felt as I shall not be multi-tasking the work as President along with my professional and personal commitments. During the term I can say from my heart that the experience has been overwhelming with the kind of recognition which is showered from various circles of influence just being the torch bearer of such a vibrant and selfless Society. When I started my journey as President, I had one thing always uppermost in my mind, “Do not try to demystify each and everything brought before you. There may be times when you have answers. There may be times you have questions, when you should simply drop the questions and move ahead.” Frankly this approach has brought mental peace to me and I have been able to enjoy the journey and been able to live the moments with zest and energy. I had been totally guided by my GURU Mahatria Ra’s following quote:

There is no ‘there’ to reach,
No end. No beginning.
Life is a perennial flow…
Live every moment, usefully.

I would share that the thought process during the year was to have new beginnings for which newer things will have to be done. Accordingly we embarked on some of the initiatives for the smooth functioning of the Society as well as planned events on topics of professional interest which would meet the objectives set at the start of the year through the theme for the year i.e. ESG – Empowering, Scaling and Globalising. I will leave the critical evaluation of the year gone by to the wisdom of the members of this Society.

On the economic front there has been an increase in the repo rate by 50 basis points to 4.90% by RBI to control the inflationary pressures which is predicted to average 7.5% in the quarter April-June, 2022. This is much beyond the upper tolerance level. However, subsequent to the rate hike, things are brightening a bit with prices of staples and edible oil moderating and accordingly supply side shocks are receding to a certain extent.

According to Christopher Wood, internationally renowned investment strategist, India is the best structural growth story in Asia and emerging market equities for the next 10-15 years. His confidence is based on the fact that there are very few major economies where residential property prices have lagged nominal incomes to the extent experienced by India in the past seven years or more. The residential property price to household income ratio has declined from 6.1x in F.Y. 2013 to 4.4x in F.Y. 2020-F.Y. 2022. Another reason is that the gross NPL ratio of the Indian banking has also declined from 11% in F.Y. 2018 to 7% in F.Y. 2022. I hope that the predicament of such an influential investor which is based on hard facts comes true and India is able to continue its journey of becoming a major economic power at the global level.

This message is being written at the end of a very satisfying week when we were witness to the “Josh” of very young talented CA students who performed at the 14th Jal Eruch Dastur CA Students’ Annual Day “TARANG 2022”. This event enables CA students to show case their hidden talent other than at exceling in studies. The students performed with full enthusiasm and their organizational capabilities too came to the fore. I am really amazed at the latent skills of the students. I am very much convinced that the profession will have many emerging stalwarts with multi-faceted talent. I congratulate the Human Resources and Development Committee for the untiring efforts in making this event a resounding success.

The other event during the week which concluded was the 11th IndAS RSC at Daman which was organized by the Accounting & Auditing Committee. Again it also left the indelible mark of excellence through excellent topics covering not just IndAS but also current reporting requirements and the upcoming non-financial reporting requirements. The faculties were excellent imparting substantial value to the participating delegates.

During the month the other two memorable events were also held physically. One was the Indirect Tax Committee’s 16th GST RSC at Goa. This RSC was rich on technical content, had excellent faculties, very effective group discussions and great networking. Another was by the Internal Audit Committee, Internal Audit Conclave. The Conclave was very well received by the participants with sessions dealing with technology led novel approaches to internal audit as well as other upcoming areas to specialize for professionals.

All these four annual events were held in physical mode after a lapse of two years due to pandemic. The participation and the enthusiasm at all the events proved that participants were eager to meet in person at such events and share their knowledge with a dose of camaraderie to instil confidence that all is back to normal.

There will be change of guard at BCAS on 6th July and I am sure the ensuing year under the leadership of the incoming President, Mr. Mihir Sheth will definitely achieve greater heights for BCAS. I convey my heartiest congratulations to the team of Office Bearers for the year 2022-23.

At the time I am concluding my message, I would like to convey my gratitude to the Chairmen, Co-Chairpersons of the ten committees through which BCAS’ activities are carried out throughout the year. It is their dedication and guidance which enabled us to provide very relevant and critical events and publications throughout the year. Under their able leadership, the conveners of each committee left no stone unturned to leave a mark of excellence and ensure smooth functioning. I would like to thank all the Past Presidents who have been pillars of strength and a source of inspiration throughout the year. The BCAS staff has also dedicatedly performed their duties and co-operated for new initiatives embarked during the year for the effective functioning and serving the members of the Society. The year has been made memorable by my Office Bearer colleagues who spearheaded various goals set at the start of the year. Lastly, the kind of affection which I have received from the members of BCAS as feedback for my messages as well as for the events and lecture meetings held throughout the year has been really humbling.

Frankly, I had commenced the year by setting goals which I was sure would not be achieved fully, but I am of the firm belief that to climb up the ladder and to fulfill your goals there should be strong willingness to pursue the goals. May be all of them will not be achieved, but there will always be a sense of satisfaction of putting in the efforts to the extent of your potential.

Lastly, as has been throughout the year of my communication, I would again end my message with a quote from my GURU Mahatria Ra:

Set goals big enough,
that makes you wonder,
“I don’t know how?”.
Let your beliefs be strong enough,
that makes you say,
“I know I will”.

I bid adieu,

Regards,

 

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,
I want to commence this message with a very sensitive topic which recently is on the mind of each professional. I am referring to the arrest of two chartered accountants by CGST Gurugram, in connection with an alleged INR 15 crores GST refund scam. A group of 60-70 chartered accountants who had gone to the office of CGST at Gurugram to inquire the reasons of arrest of fellow colleagues, were also illegally confined by locking the doors to the exits of the premises for more than 5 hours. They were ill-treated with abusive language as well as physically man handled. Recently, it has been seen around the country that chartered accountant professionals are projected in some of the cases of financial frauds as the main culprits. However, there is lot of leniency with the actual perpetrators, co-conspirators and beneficiaries of such frauds. The professionals are made scape goats and are becoming soft targets for initiating inquiries and making arrests and projecting them as the perpetrators of such crimes even before the same has been proved in the courts of law.

I do not vouch for any professional who is involved in the wrong doings, but to proceed with inquiries and judicial actions only against chartered accountants and leaving the other stakeholders who are also party to such crimes conveys to the world at large that it is our community only which is perpetrating such activities. There is an expectation of the government, media and public at large that the chartered accountants are in the knowledge of all the financial activities of their clients and they ought to ensure 100% compliance. If there are any misdeeds the initial onus lies with the chartered accountants and they have to be immediately blamed though they may not be in any ways directly involved in such acts. There is a big expectation gap between what the professionals are executing and delivering and what the stakeholders and public at large consider the role of such professionals. There is an urgent need to create awareness of the roles and responsibilities of professionals to all the stakeholders and public at large. The ICAI has initiated this process by holding discussions with Hon. Finance Minister Ms. Nirmala Sitharaman and making her aware of various issues along with the incident at CGST.

The immediate action required is to put in public domain what are the deliverables from various attest functions by the chartered accountants and what are the deliverables from their role as consultants. This will enable the stakeholders and public to understand the expectations through various services provided by them. We as professionals have also to gear up and convey our role to our clients in clear terms with an elaborate engagement letter, to have clarity on their expectations and matching of the same with our deliverables.

I am reminded of my GURU Mahatria Ra’s following statement which is on Expectation Management and very apt for us to follow:

“You cannot stand under a mango tree and expect oranges. What is even more foolish is blaming the mango tree for not fulfilling your expectations. So, either change your expectations according to the tree or find a tree that matches your expectations.”

At economy level, during this month RBI has raised the benchmark repo rate by 40 basis points during an unscheduled meeting. This step is to curb inflationary pressures when there is a spike in retail inflation hitting an eight year high of 7.8% in the month of April. Further, the running away of prices of energy and commodities due to Ukraine crisis is further putting pressure on the economic activities. The government of India is also doing its bit to rein in inflation, by restricting exports of wheat and sugar. It has also cut fuel taxes to soften fuel prices.

The month of May was again a very active one at BCAS with many memorable events. There was release of “Law and Practice of Transfer Pricing in India – A Compendium” by the International Taxation Committee, wherein more than 150 subject specialists have contributed articles. The feather in the cap of BCAS was that during the launch, there was sharing of thoughts by Ms. Mayra O. Lucas Mas on “OECD perspective on Global Developments” and by Mr. Michael Lennard and Ms. Ilka Ritter on “UN perspective on Global Developments”. There was also a Panel Discussion on Current and Contentious Issues in Transfer Pricing with eminent panelists Mr. Rajat Bansal and CA T P Ostwal.

Another event which commenced during the month was Direct Tax Home Refresher Course – 3 organised by its Direct Tax Committee. This year more professional associations have joined hands with BCAS and there are seven Pan India associations along with BCAS who have organized this course and there is attendance of more than 550 participants from across India. This is truly an achievement and brings satisfaction that BCAS is able to disseminate knowledge to the professionals across India.

During these times of paradigm shifts in the profession, there is guidance required for scaling up services and networking with like-minded professionals to provide cutting edge services and be of relevance. BCAS’ HRD Committee successfully orgainsed a full day Power Summit 2022 with the theme “Thriving in a Transformed Hybrid World” with eminent faculties who have gone through the transformational journeys within their organisations. It was appreciated by all the participants and was again a value accretive.

Another event which was organized by youth of BCAS for the young CAs was 9th YRRC. This again was a huge success with two international speakers, an entrepreneur & inventor and an author of best selling book – Corporate Chanakya addressing the participants.

The current month is equally action packed with two Residential Courses. One is 16th GST RSC commencing from 2nd June and another is 11th IndAS RSC commencing from 24th June. Another event worth attending by internal audit professionals is two days Internal Audit Conclave scheduled on 15th and 16th June.

For the students to perform and show their skill sets beyond academics, the 14th Jal Eruch Dastur CA Students Annual Day – Tarang 2022 is organized with Grand Finale on 25th June, 2022 at K C College Auditorium. I would request all the members to send their article students to participate as well as attend the Annual Day in large numbers. This is the platform for youngsters to show case their talent.

I always feel that technology should be an enabler for us to perform better and not to make us slaves of technology. Through the seminars and conferences we have been offering to the members, we have been conscious of the role to enable professionals to be made aware of the latest technologies that can be imbibed for better services. However, at the same time the finer skill sets are also to be nurtured to make us aware that we have to perform much higher role with the use of technology and not surrender to it. I am ending my penultimate message with a quote from my GURU Mahatria Ra which deals with this aspect:

The tragedy of the modern era
is not that computers have started working like men,
but men have started thinking like computers.
Let the human in us not be replaced by a thinking computer.

Best Regards,
 

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,

I am writing this message on the last day and during the last hour of April after attending the release function of the 60th Diamond Jubilee Edition of BCAS Referencer. The release was an event that we all wanted to celebrate for the foresight of all passionate Past Presidents, Editors and Contributors who contributed towards ensuring the Referencer to be of relevance over six decades where there have been continuous changes in the regulatory landscape. It is the passion for offering all possible areas of professional influence to the readers of the Referencer which has ensured it a coveted place on professionals’ table. The event was memorable, and all who were present will definitely cherish for life.

BCAS has been the pioneer of Referencer, and still, it continues to be the leader with the rich and most relevant content being offered through its six topical booklets. How a leader is perceived is what comes to my mind through the quote of my GURU Mahatria Ra:

Leadership is not a position,

Leadership is not a designation;

Leadership is in your ability to use yourself,

To be useful to others.

It is that time of the year when everybody wants to travel to cool destinations to escape the summer heat. Professionals except in the assurance area and those involved in finalizing listed entities’ accounts are having a relaxed time and want to spend time with their families. When you all are enjoying your time with your family, remember that there is always a mystifying freshness to life. Even if you are visiting the same destination for a vacation, enjoy each moment by remembering that life never repeats. Not only life is always new, but you are also always new in your current maturity. This is how you shall be able to have quality time and feel rejuvenated when you resume your busy schedule.

On the Indian economic front, the much-awaited LIC IPO will open on 4th May, 2022 – the largest by any Indian company. It will be an OFS of R21,000 crores valuing LIC at a whopping R7 trillion. However, still, its valuation is cheaper than the other listed peers. Understanding how international investors perceive its valuation will be of interest, as this is a test case for disinvestment in PSUs for the Indian Government.

A disturbing trend which is hampering the economic revival is the rising crude oil prices on account of the Russia-Ukraine war and soaring edible oil prices due to a sweeping ban on palm oil exports by the top vegetable oil supplying country – Indonesia. These twin factors are contributing to rising inflation, thereby affecting the growth of the economy.

BCAS, at the turn of the new fiscal on 1st April, organised its first hybrid event – A Seminar on LLP under its Taxation Committee. It has set the ball rolling for local participants’ physical participation and an advantage for outstation participants to enroll virtually. To ensure state of the art hybrid events facilities, BCAS has revamped its conference room set-up to provide a much better experience for both physical and virtual participants.

Learning initiatives from BCAS continued its journey relentlessly. A unique M&A Masterclass was organised spread over three days. It was very well received. It provided valuable insights into all aspects of the overall M&A cycle, like valuation, negotiation skills, due diligence, deal structuring, post-deal integration, special situation M&As and industry-specific M&As. The unique feature of the Masterclass was that it was addressed by 21 experienced professionals and ably moderated by five moderators.

Another annual event of the FEMA Study Course has also commenced with the blessings of and Key Note address by CA Shri. Dilipbhai Thakkar. The Study Course in hybrid mode has provided benefits to outstation participants who miss the benefit of such courses if conducted only in physical mode. Again this course is being addressed by 15 professionals specializing in FEMA and International Tax.

The real backbone of BCAS activities is its Study Circles, where each participant is in a learning mode. The Group Leader initiates the discussion to disseminate the understanding of the topic – this enables each one to critically evaluate the subject and gain expertise through valuable insights by sharing knowledge. The Suburban Study Circle resumed its physical meeting, which was well attended, and there is a resumption of the group learning exercise.

The process of imparting learning by successful professionals and sharing their experiences through the BCAS platform proves that there are responsible successful professionals. BCAS is an incubator where professionals for whom success does not go to their head and who have feeling of gratitude find a platform for sharing their knowledge. I would conclude by narrating my GURU Mahatria Ra, who feels success and responsibility should go hand in hand:

When success feeds your sense of status,

It makes you even more egoistic.

When success feeds your gratitude,

It makes you even more responsible.

Be successful. Become responsible.

Best Regards,

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,
I am penning this communication while I am attending the 55th Residential Refresher Course (RRC) of the Society at the holy city of Nashik, and we are on the verge of concluding the RRC. The unique feature of RRCs organized by BCAS is the immaculate planning, time management, extensive networking amongst participants from around the country and excellent learning imparted by leading professionals in the traditional areas as well as emerging areas of professional interest. The most satisfying aspect of the RRC has been to see the glow on the faces of each delegate for meeting personally at a physical conference after a gap of two years. I hope this is the beginning of normalcy and relegation of pandemic fear into oblivion.

RRCs are in the DNA of BCAS. From one RRC in a year, BCAS has come a long way and now organizes 4 RRCs every year. One is the General RRC which I am currently attending, which encompasses various areas of practice and other professional interest topics. The second is International Tax & Finance RRC, which caters to international taxation professionals and aspirants. Third is the Residential Study Course (RSC) on GST, which is eagerly awaited by GST practitioners. This year it is scheduled from 2nd June, 2022 to 5th June, 2022 at Hotel The Westin, Goa. Fourth is the IndAS RSC, which is well received by IndAS/IFRS fraternity.

The event which has rocked the world is the full-scale invasion of Ukraine by Russia. During this invasion, Russia has recognized the independence of two Russia backed regions in Eastern Ukraine, namely Donetsk and Luhansk. This has led to sanctions announced by the US, Britain, EU, Japan and other countries. The sanctions are travel bans, freezing of assets held by Russian banks and restricting access to western finances. Russia has retaliated against the sanctions by cutting gas exports to Europe by almost 30% which in turn has flared up the gas prices worldwide.

I feel that humankind is moving towards less tolerance and less empathy. The unending competition to have an upper hand and dominate creates frictions which in turn converts to greed and hatred. We all are becoming less forgiving by nature. However, we all must bear in mind that the best quality to bring solace to one’s life, and in turn to the whole of humankind is Forgiveness. I would like to quote my Guru Mahatria Ra on Forgiveness:

Forgiveness is giving up your right to hurt the other for hurting you.
The purpose of forgiveness is not to liberate the other,
But to liberate you from the clutches of disturbances.
Learn to tranquilise hurt and hatred with forgiveness….
Feel liberated…. Forgive….

The development of this invasion does not augur well for the economies of the world, which were just limping back to normalcy. India is also facing the brunt with rising crude oil prices, which have touched USD 105 per barrel. It is the highest in 7 years. This will add to the inflationary pressures currently faced by the Indian economy.

Amidst the crisis, there is a landmark IPO of LIC of India, which is planned in March, 2022. It will be the biggest IPO in the Indian stock market history. It proposes to raise INR 63,000 crores through an Offer for Sale by the Government of India by diluting its stake by 5%. We will have to wait and watch with bated breath whether the geo-political situation affects LIC of India’s plans of listing in March, 2022.

Dealing with the developments at BCAS, I am happy to inform you that this year we were provided with an opportunity by the Honorable Chairman of CBDT, Mr. J B Mohapatraji, to present before him post-budget representation in person. It was an honour and a matter of pride for BCAS. I and four other members from BCAS made a representation on proposed amendments which according to us required further deliberations and consideration. Honorable Chairman gave a patient hearing to our representation. The detailed Post Budget Representation is available for download from the BCAS website.

We also had an interesting Panel Discussion on Budget 2022, which was not restricted to taxation but also included its impact on the economy and capital markets. This discussion was well received and attended virtually in large numbers. The panellists were Mr. Soumya Kanti Ghosh, an eminent economist, CA Shariq Contractor, an eminent tax professional and Past President of BCAS and Mr. Deven Choksey, a reputed financial consultant and analyst. The discussion was very ably moderated by CA Sonal Bhutra an anchor at CNBC TV18.

TAXCON 2022, which was organized by six Mumbai based professional associations during the month was successfully concluded. It was appreciated by the participants for its content and the learned faculties who made presentations and participated in the panel discussions.

Our journey of imparting knowledge is not restricted to the routine areas of professional excellence. We continuously bring to the members and public at large upcoming opportunities to be exploited. One such opportunity is setting up base at GIFT CIty IFSC at Gandhinagar. To create awareness of the same, we had a Lecture Meeting wherein three speakers provided insights into the infrastructure available, its ecosystem, legal and regulatory framework and taxation related benefits from operating out of GIFT City.

From the activities being highlighted through my communications, it would be appreciated that BCAS is trying to bring new ideas to its members and become an enabler of creating a vision to take on challenges in the areas emerging and untried. This same can be summarized through an interesting quote of my Guru Mahatria Ra:

The crux of creativity is seeing things from a new perspective.
The greatest block to creativity is old judgements.
It is time to reprogram your minds.
So, try the untried.

Best Regards,
 

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,
I am communicating with you when the Finance Ministry will be giving final touches to the Union Budget, 2022, which shall be presented on 1st February, 2022. As always, there is euphoria all around for a progressive budget. Expectations are that the impact of COVID will gradually recede, and with it, the pressure for allocation of funds to mitigate the impact of the pandemic will recede. It is expected that funds allocation will move to sectors that would enable the creation of employment, easing of logistics issues, creation of world class eco system for smooth functioning of manufacturing sector, digitized businesses as well as state of the art banking and financial set up. There is clamor for allocation of substantial funds towards agriculture to improve rural spending. This will in turn have a spiral effect on spending and demand creation. On the taxation front, there are expectations for tax breaks for salaried class, rationalization of tax rates to bring parity amongst all taxpayers, and ease of compliances.

We all are waiting with bated breath to know how far expectations are met when the Finance Bill, 2022 is tabled by the Hon. Finance Minister Ms. Nirmala Sitharaman. However, being an optimist, I am confident that we shall not be disappointed.

We all have passed through sufferings during the past two years, and there were adversities that had to be faced. However, we are coming out with resilience, and due to facing such adversities, we know what happiness means. Here I would share a thought-provoking quote:

Adversity is another side of the same coin of happiness,
And our life is an interplay of both in order to have meaning in life.

In our professional career too we have passed through such adversities which may have been faced due to natural calamities like the one we encountered in the past two years as well as due to fast changing professional landscape. During such times to win over adversity, we should follow an ABCD process. Initially, accept that adversity is part and parcel of our professional life, and we shall not be able to attain success without experiencing it. After accepting this fact, one should behold (embrace) adversity. Then let us challenge the adversity. This will enable one to face the situation and follow the path to success. This is achieved through devotion and perseverance towards the goal, and one will be detached from adversity.

Now I turn my discussion to the two current trending topics in the financial and capital markets. First is the cryptocurrencies. The world’s largest cryptocurrency, Bitcoin has seen its value eroding to the extent of 20% since the start of 2022 and has almost halved from its all-time high in November of USD 69,000. There may be great potential in cryptocurrencies as a digital asset, but currently, there are many grey areas that have to be addressed, and investors should be aware of the pitfalls while dealing with cryptos.  Worldwide, central bankers are also evaluating issuing central bank digital currency (CBDC). Reserve Bank of India is contemplating ways to implement a CBDC in phases. In its recent report ‘Trend and Progress of Banking in India 2020-21’, it has elaborated on its thought process on a CBDC. Its initial recommendation is to “adopt basic models initially, and test comprehensively so that they have minimal impact on monetary policy and the banking system”. We have to comprehend its implications and be ready for the dynamic changes which will take place in the way business transactions are settled going forward.  

Second is the thrust towards the growing relevance of sustainability, measured through the Environmental, Social and Governance (ESG) parameters.Its significance in the financial markets cannot be overlooked. ESG investing has become one of the most rapidly expanding sustainable investing methods. International investors with global investment portfolios are increasingly calling for high quality, transparent, reliable and comparable reporting by companies on ESG matters. As professionals, we have to be conversant with the trends that will open up newer vistas of professional offerings.

BCAS constantly evaluates the opportunities which can be brought to the professionals to make them aware and curious to explore further. Regarding cryptocurrencies, BCAS made a compilation of articles published in the BCA Journal, distributed them to its members, and made them available on Social Media platforms to disseminate knowledge to the public. These articles covered legal and accounting aspects.

BCAS organised a lecture meeting to provide insights into the developments on ESG Reporting at global and local levels. A young Chartered Accountant, CA Spandan Shah, addressed the meeting from London.

During January, a case studies based two days’ Workshop on Valuations, addressed by five valuation experts, was also conducted successfully. The workshop dealt with valuations during mergers, demergers, slump sales, cross border transactions, issue of ESOPs/Convertible instruments, as well as for intangibles and startups.

A new area of professional opportunities which is in demand was also deliberated on the BCAS platform through an Expert Chat on ‘How to develop Forensic Accounting and Investigation Practice’. This was attended in large numbers, and great insights were provided by veterans of forensic practice CA Chetan Dalal and  Mr. Kanwal Mookhey.

Further, one more practice area opening up for CAs is risk consulting practice. An awareness session ‘Build your own risk consulting practice’, jointly with the Institute of Risk Management (IRM) India Affiliate, is scheduled on 11th February to be addressed by two eminent risk consulting professionals, Mr. Rama Warrier and CA Hersh Shah. I urge you all to take advantage to understand the opportunities in the risk consulting space.

As I commenced my message by discussing Budget 2022, I am happy to inform you that BCAS had an opportunity to convey its viewpoints on expectations on taxation proposals through a budget special interaction for ETNow Swadesh channel. By the time this message reaches you all, the session will have been aired on 31st January, 2022. I hope our views would have been addressed in the upcoming Budget. You all may view the same on their YouTube channel.

The annual Public Lecture Meeting on ‘Direct Tax Law Provisions of the Finance Bill, 2022’ is scheduled on 5th February at 5.30 PM on Virtual Platform. It will be addressed by CA Shri Pinakin Desai. I am sure you all will take benefit of expert analysis by the speaker.

I am happy to share that TAXCON, an annual taxation event that was jointly organized by Mumbai based professional associations, has been revived after more than a decade. TAXCON-2022 – Triveni Sangam – Tax, Tech & Accounting is organized in Hybrid Mode on 18th and 19th February by six professional associations. The topics selected and the speakers to address them will enrich your knowledge base. I appeal to all to register for this event at the earliest.

Today, I have discussed the changes which are taking place at a breakneck speed and the professional opportunities that are unfolding before us in new areas where we have to deep dive and prosper. To sum up the pace of change, I leave you all with a thought narrated by my GURU Mahatria Ra.

The world is growing so fast…..
Even before you say “It is not possible”,
You are interrupted by someone who is already doing it.

Best Regards,
 

Abhay Mehta
President

FROM THE PRESIDENT

Dear BCAS Family,
I wish you all a VERY HAPPY AND PROSPEROUS NEW YEAR. Let us ring in 2022 with the resolve to organise ourselves thereby climbing up the higher branches of maturity. With the passing of each year in one’s life, a person should ensure to attain higher maturity. We have to assess whether we are doing an assigned job in the same way we used to do the year before? If it is so, then we have not scaled the higher branches of maturity. We have the capabilities to evolve continuously. I narrate the quote of my GURU Mahatria Ra, which exemplifies life led with heightened awareness:

You are given life, to add something to life.
When you live your life with heightened awareness,
you help humanity to gain a few years of maturity without them having to live those years.
In effect, you fast forward humanity by a few years.

In our profession, too, we can achieve this when we identify and involve ourselves in activity which provides inner motivation to excel. This in turn will make us happy. Once you are carrying on an activity with happiness and with deep belief in your ability to excel, it will lead to success. During the Covid times since 2020, we all have passed through turbulent times. However, it is professionals with self-belief and with knowledge that life always intrudes to disturb the flow, who have come out of such crisis and excelled. At this juncture, when we have entered the third wave of the pandemic, it is all the more important for all of us to lead a fearless life and face the situation with determination and with adequate Covid protocols to overcome the same. There is obvious fear in the minds of all of us due to the contagious nature of the virus and its fast-spreading qualities. However, we should face the fear with confidence, because it is with belief that we shall make it through in spite of our fear.

Our Chartered Accountancy profession at large is passing through times of major changes. The Government of India had introduced a bill to amend the law governing chartered accountants. One of the amendments was the proposed appointment of a Non-Chartered Accountant as the Presiding Officer of the Disciplinary Committee (DC) of the ICAI as well as to have three Non-Chartered Accountants and two Chartered Accountants on the DC. The DC has to deal with the complaints relating to the contentious accounting, auditing and ethical standards related issues. The Presiding Officer who heads the DC as well as Non-Chartered Accountants on the DC should have sound knowledge on all the three aspects. If such members are without adequate exposure during their career to the standards dealing with these three aspects, there is scepticism amongst professionals that the issues may not be addressed in the right perspective by the DC. However, after effective representation, the Bill has been referred to a Parliamentary Standing Committee (PSC). A detailed representation with proper justification has to be made before the PSC over the provisions relating to the disciplinary mechanism of the proposed legislation.

On the economic front, as per the RBI’s annual Trends & Progress Report, the declining trend in bad loans continued in the pandemic year when the gross NPAs of scheduled commercial banks have reduced to 6.9% as of September, 2021 which had reduced to 7.3% in March, 2021 from 8.2% in March, 2020. As per the work place visits tracked by search engine Google, there is an increase of 7.6% over a baseline period before Covid-19 as on 23rd December, 2021, despite rising cases of the Omicron variant. Weekly power generation was also at its highest since mid-October with generation of 3,797 million units of average electricity per day during the week ended 26th December, 2021, which is 3.4% higher than the previous week, 4% and 8.8% higher than the corresponding week of 2020 and 2019, respectively. These are encouraging signals of an economy unshackling the effects of the pandemic and moving ahead to be one of the fastest growing economies of the world.

At BCAS we had two events which were attended in large numbers. One was a Fireside chat on ‘Crypto currencies and their challenge to rupee and all Fiat currencies’. The panellists were Mr. Rajnish Kumar and Ms Shikha Mehra. The session provided really very deep insights on the functioning of cryptocurrencies and the regulatory challenges which have to be addressed before digital currency becomes part of our daily life. Another event was the Webinar on Annual Information System, wherein speakers CA Ameet Patel and CA Sonalee Godbole equipped members with the information which is captured by the Income-tax Department of the assessees and collated for them to verify and the manner in which to communicate with the Department for the discrepancies.

BCAS Taxation Committee representatives along with Tax Committee representatives of IMC and CTC had a fruitful interaction with Hon. CCIT (TDS), Mumbai along with his team from the TDS Department on 17th December, 2021. Various common and pertinent issues faced by the tax deductors / deductees as well as professionals while complying with the various provisions of TDS as well as through the tax portal were conveyed and discussed. Such interactions will go a long way in confidence-building measures between the Tax Department, taxpayers and tax professionals.

A pre-Budget Memorandum on Direct Taxes was also submitted by BCAS to the Hon. Finance Minister with a request to consider the suggestions while framing proposals in the Finance Bill, 2022 for amendments to the Income Tax Act, 1961.

BCAS’s prized Diary and Calendar have also been released and the theme for this year is ‘Independent India’s Achievements @75’. If you have not yet ordered them, kindly ensure to have them ordered at the earliest as there is very limited stock available after pre-booking dispatches.

Let us all welcome 2022 by dreaming that the best period of our life is ahead of us. I would remind you that the great dreamers dreamt great dreams, not necessarily during the best of times but during the toughest of times. So let us DREAM BIG during such trying times and make it BIG. I conclude my message with an advice by my GURU Mahatria Ra.

Winning creates bonding.
Losing creates blaming.
So, set up a winnable game.
Together
Everybody
Achieves
More

Welcome to 2022,

Best Regards,
 

Abhay Mehta
President

From The President

Dear BCAS Family,

In my previous month’s communication, I had promised that I will delve deeper into the subject of ‘Capitalism’ this month. The trigger of this thought was the recent failure of a few prominent banks in the USA. Any financial collapse results in a loss to the common man the most. Also, in most cases, it is true that such collapses have their root in the unbridled greed of the few privileged people who take the wrong advantage of the eco-system provided by capitalism. If we look at the history of major failures of the enterprises or financial system we will find that somewhere human greed has subverted the purported benefits of capitalism.

The reason of examining here whether capitalism is good or bad for the society is not academic. The reason is that India today is on the cusp of a major turnaround. Socialism practised for many decades in India started to give way in the early nineties and after many years of calibrated policies and a slow change of mindset, we now sing praise for the spirit of the free enterprise promised by capitalism. Is it going to be a game changer to alleviate poverty? Is it going to reduce inequality and make India an economic superpower as is the intent? Or will it put too many at the total mercy of too few to be their potential victims? Expose the large population to the risk of economic collapse?

Let us examine the concept and explore how we could leverage the maximum benefit of capitalism and reduce the risk of exploitation of common people.

Capitalism is essentially an economic system in which the operations are privately owned; and governed by the demand of a free market. It has been the stepping stone of the industrial, technological and green revolution. It has redefined the world order and rendered the role of the state perfunctory in relation to governance. Most significantly, capitalism has enabled millions to escape the clutches of poverty, increased the standard of living and paved the way for innumerable innovations, over the past two centuries by being one of the constituents in the system of capitalism as ‘owner’ or labour or investor. One cannot but agree that capitalism has played a pivotal role in making the world a better place, though not completely!

On the flip side, capitalism has many shortcomings that have severely impacted the world. Capitalism has resulted in enormous and irreversible devastation of delicate ecological systems and the environment. It has three dysfunctions that have severely negated much of the good it has done. It has ushered in unstable and unreliable growth. Driven solely by profit, capital follows where there is an opportunity and flees when there’s a shake-up. The abrupt stifling of capital leads to a recession which results in multiple ripples of misery.

Another volcano of dissent that capitalism earns is its market-driven growth that is blinkered in its compulsive pursuit of profitability. Look at the financial sector and the numerous scandals, scams and frauds will all find their roots there. There is no consideration for the slew of side effects that are detrimental to the holistic and wholesome growth of society. Humans are reduced to a commodity to be used for the benefit of a few. Technology is introduced that eliminates jobs and increases profitability. The environment is contaminated on many fronts with toxic discharges. Look at the history of industries like pharma, automobile, and chemical just to name a few and we realize how a business enterprise started with a noble intent to provide solutions for the common good shifted its gear in blind pursuit of money.

The third prong of capitalism that punctures any possibility of a well-balanced society is the audacious inequity of the distribution of capitalist wealth. There is a very pronounced disparity in income among the many layers of the population. Those at the lower end receive almost a pittance, compared to the oversized compensations paid to the upper levels. Even the concentration of assets is skewed heavily in favour of a very small proportion of people who wield enormous control.

So… is the growing enthusiasm to shift the gear to total capitalism in India will reap dividends without the possible evils discussed above? Certainly not. Regulated economy for many years since post- independence did stifle the innovation, ideation and spirit to excel. Tightened hold of control- freak bureaucracy prevented the enterprise to be competitive and efficient. From that point of view, gradually unshackling the economy was a great move forward. But we will have to learn our lessons from the experience the world’s major economies have gone through. India will have to create a support system to sound the advance warning bell for potential collapse and also create a broad regulatory framework to minimize the impact. It is definitely laudatory that some of the regulatory agencies like SEBI, Competition Commission of India, and RBI are constantly keeping vigil and taking corrective steps. The introduction of IBC is a welcome step too.

“History shows that where ethics and economics come in conflict, victory is always with economics. Vested interests have never been known to have willingly divested themselves unless there was sufficient force to compel them.” These words of Dr. Bhimrao Ambedkar explain why capitalism has flourished unencumbered for so long. It is a different matter that this holds equally true even in the state-controlled economies where a privileged few control all the resources holding millions at ransom. Looking at the history of socialism and communism that failed heavily on their promise to bring equality there is not much of an option but to encourage free enterprise. It is only the free enterprise that can give the human being the will to excel. As Nani Palkhiwala said “Distributive justice can never get off to a start when there is nothing to distribute. Socialism is like prohibition. It is a good idea but does not work. While it is possible to have economic growth in India without a social justice, it is impossible to have social justice without economic growth”. India will need to create an eco-system where it is not a shame to fail in the business, but it is shameful to be dishonest. It is a tightrope but the day it is able to inculcate this ethos it will have great future to look at with the calibrated risks emanating from capitalism.

Developments:

It has been observed that of late many Taxpayers have been receiving notices for outstanding demands relating to various years which are as old as 15-20 years.
The said demands are shown as outstandingly on the portal which have been uploaded by the Assessing Officers.

In most cases, AO would have reduced the demand or issued refunds after carrying out rectification, appeal effect etc. physically. In such cases, though, physically demand may have been deleted but no corresponding effect is given in the case of uploaded demands.

In many cases rectifications, appeal effect etc. are pending for many years in spite of correspondence which remain unattended unless there is follow-up by the taxpayer.

This results in fruitless work and a waste of time in follow-up to save taxpayers from action to adjust the wrong demand against the legitimate refunds due for subsequent year(s). We will have to renew our efforts more vigorously to have this issue resolved.

Events at BCAS:

The International Taxation Committee of the BCAS concluded the 27th International Tax & Finance Conference at the Leela, Gandhinagar, on April 09, 2023. More than 240 professionals across India attended the conference. The keynote address delivered by Mr Injeti Srinivas, Chairperson of the International Financial Services Centres Authority (IFSCA) was indeed very enlightening and gave ideas about the opportunities for professional growth through the facilities in the GIFT city.

A hybrid study circle meeting on Graphology-Handwriting Analysis” (Know yourself through your handwriting was organised on April 11, 2023, where Shri Bhupesh Singh Dhundele (Graphologist) explained the analysis of handwriting to more than 150 participants. The meeting was received well by all the participants.

On April 18, 2023, BCAS through its Human Resource & Development Committee jointly with the BCAS Foundation organised a lecture meeting on “Bringing hope when there is None left” addressed by Mrs. Mittal Maulik Patel. She highlighted the work being done by her organization for the nomads who have been abandoned by civil society and appealed to the members to help them by contributing in any way they can. The program was well received by the participants.

There are interesting events lined up for the month of May and June. Please keep a tab on the announcements. The 17th Residential Course ON GST is going to be held in June and the response to this is overwhelming. I request you to grab your seat before the registration closes.

May is a holiday time with family. I wish you all happy holidays.

Goodbye till we meet again next month!

Thank You!

From The President

Dear BCAS Family,

While you may be in the mood for relaxing after the financial year-end pressures of March, I thought let me lighten it further with some hilarious piece of ‘knowledgeable’ writing.

“The profession of Chartered Accountancy is represented by the accountants who have passed the examination conducted by the Institute of Chartered Accountants. This body was established under the Statute by the Parliament in 1949 and regulates the profession of accountancy with policies and guidelines for the Chartered Accountants. It will enter its 75th year in 2023-24. Bombay Chartered Accountants’ Society is a separate voluntary body of Chartered Accountants whose main objective is to disseminate knowledge and impart quality education to its members, students and accounting community at large” It will also be entering its 75 the year”.

If you are wondering why have I written these obvious facts known to everyone, let me clarify that this is the piece of writing you may end up with if you query ChatGpt about ‘75 years of ICAI and the BCAS’. What seems obvious and may be hilarious today has become a challenge to many professions and is causing a lot of heartburn due to insecurity about the future of their profession. Because what seems a possibility may soon become a reality. ChatGpt is continuously refining itself and has the capability of taking over a lot of tasks which are currently handled by skilled human beings.

The challenge posed by the technology to any existing norms, methodology and value system is not new. It has been happening since the dawn of civilization. This is how mankind has progressed. Every innovation has posed existential threats to a certain section of society, which then has been forced to adapt and evolve to more efficient ways to stay relevant. History will testify that every innovation or technology in its initial avatar only attempted to resolve a single challenge. The one which the innovator was obsessed with. However, the thinking faculty of human beings adapted it to various other uses over a period. A classic example is an airplane. What started the fascination for flying was just to feel like a bird, to view the world from the ground above. It was never thought to be for the transportation of passengers and cargo across the globe. Look at the scenario today. How it has changed its role and context. If we look back, we will realize that similar things have happened in the case of most technologies… be it the telephone, car, computer or even the mobile. It is the supremacy of the human mind which has shaped and improved the technology to put them to varied use because humans have a gift of this unique ability viz. thinking.

Unfortunately, the advent of new technology in the form of Artificial Intelligence (AI) embedded in the ChatGpt poses a threat to this very innate ability of the human being. The way it has been configured is that it quickly assimilates entire related data on the web and reproduces it in a summarized manner. So it becomes ready to cook and eat meal with some scope for dressing and seasoning. No thinking skills are required to be put to use and we may start living on a borrowed intelligence from the existing domain without stretching thinking beyond the limits, which is necessary to invent newer ways. And now a newer version has been launched viz. ChatGPT-4 – a more powerful version with advanced reasoning capabilities that enables it to crack difficult problems with greater accuracy. Responses are now more factual as it has access to greater data and training. Is the threat real? I think it is.

In an interview with ABC, Sam Altman, CEO of OpenAI and creator of ChatGPT, recently admitted that the AI chatbot could eliminate many jobs. He also mentioned this technology itself was incredibly potent and potentially hazardous and expressed support for regulating it. One of the top concerns is that ChatGPT could be extensively used by cybercriminals to further their game. It has been able to expertly generate phishing emails to implant malicious code to steal online data. ChatGPT is also well-equipped to build scam websites, create spam content and spread fake news. Scary? I think so.

While ChatGPT has proven to be a great boon in the sphere of education – becoming a powerful tool for both educators and students, its capabilities are already a nightmare as students are using it to do their assignments. Fortunately, the software is already available to detect AI-written text. ChatGPT’s responses are influenced and ‘taught’ by the numerous interactions with its users, which has resulted in pronounced racial and gender biases. And though the chatbot has access to humungous amounts of data, it still has accuracy issues that colour the truth. So, let us pledge to use ChatGPT as a good ‘servant’ without making it a ‘master’! Let us not sacrifice our ability to ‘think’. Let us not forget the famous saying of Rene Descartes “I think therefore I am”.

Mid-March witnessed the collapse of Silicon Valley Bank – America’s 16th largest commercial bank. The dizzying speed with which it got wiped out, spooked the banking world and the markets which feared a broader meltdown. The government stepped in and guaranteed customer deposits, but the repercussions had spread far and wide and lingered on. In a move to boost confidence, the government shut down Signature Bank, a regional bank that was already teetering on the verge of collapse, and guaranteed its deposits, too.

March also saw the much-revered, but crisis-hit Credit Suisse Bank falter and get swallowed by UBS – Switzerland’s largest banking group. In a swift government-brokered deal, UBS paid $2 billion to acquire its rival in an all-share deal that priced Credit Suisse at around one-fourth of its closing value of $8 billion. The 167-year-old Credit Suisse is the biggest name that was caught in the devastating wake unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank. The rapid action of the US and Swiss banking authorities have contained the situation and the fallout is not expected to adversely impact India.

However, these collapses occurring at regular interval poses a fundamental question. Is the concept of capitalism a failure? I believe this is a larger issue and I will perhaps discuss this in my next communique.

Events:

Ind AS RSC held at scenic valley view hotel at Khandala was successfully concluded with the active participation of BCAS members as well as non-members. Power Summit held by the Internal Audit committee got an overwhelming response prompting the need to shift the venue to a bigger hall to accommodate a larger number of participants. Much awaited ITF will be held in April at Gandhinagar for which the response has been very encouraging. There are interesting events on the anvil. Please keep a tab on the events announcements.

April is the month of examination of children. It is also a month of bank audits and a deadline for audit reports. It is the month to celebrate Baisakhi and remember the teachings of Mahavir Swami on the occasion of Mahavir Jayanti. I wish you all success in whichever pursuit you will be busy with in this important month.

Goodbye till we meet again next month!

Thank You!

Best Regards,

CA Mihir Sheth

President

From The President

Dear BCAS Family,

As I write this message, a big suspense on what would budget have in store for us has been unravelled. Shimmering with its pro-people and pro-market initiatives, it is poised to propel India’s growth to greater heights. It has the distinct stamp and finesse of the Finance Minister, Nirmala Sitharaman who has pulled off a remarkable feat in putting together a budget that has something for everyone. The budget focuses on boosting technology, infrastructure and green energy while easing tax across various citizen classes. It dexterously manages macro-economic stability, while providing a strong impetus to job creation and harnessing youth power. The budget also has initiatives to add a fillip to agriculture, rural development, women empowerment, entrepreneurship, healthcare and education. What is laudable is that the budget has laid clear direction for the nation in its Amrit Kaal to what its goal posts are for India @100 in 2047. Care has also been taken to pave the way for revitalizing the economy and ensuring its steady growth and development. That said the Finance Bill 2023 still leaves out required reforms at the administrative level that would have helped honest tax-paying businesses. I am hopeful that with representations from the BCAS and other institutions, wisdom will prevail to bring about those reforms.

While there are many positive developments in a country which is on the cusp of exponential growth, there is one distressing fact about the manner in which the MCA portal has opted for migration of its software platform. Considering the strategic importance of its operation, it was expected that there would be adequate trial runs of its Beta version and an open forum for the users to give their feedback. Unfortunately, in its zeal and zest of claiming credit for the “Ease of Business Initiative,” its effect has been counterproductive. The performance of the portal has been far from satisfactory. Result- there is complete chaos and confusion- with no statutory forms being able to get filed, Incorporation of new companies being on hold resulting in uncertainty for those wanting to invest in India under a JV. I hope the government takes up this with utmost priority to resolve it.

It is heartening to note that National Financial Reporting Authority (NFRA) has extended the date of submission of views/comments in relation to Annual Transparency Reports by Auditors/Audit Firms after representation by the BCAS.

ICAI has mandated an Audit Quality Maturity Model (AQMM) for a certain category of audit firms. This is a welcome initiative considering the fact that the entire Model has been developed with the volunteering team at the ICAI with the required help of seniors in the profession. It is expected that initially there could be a few teething problems and implementation challenges till the time it gradually attains maturity. But it is a laudable initiative and would help Indian firms to compete globally and raise their level.

I am also very happy to inform you that BCAS has been successfully audited and found compliant with the ISO 9001 Quality Standards. This will help BCAS further increase its administration and reputation.

It is said, “The brightest stars shine in the darkest nights!” I am sure you will agree with me when we look at the situation across the world today. Wars and proxy wars are spreading suffering, while a powerful earthquake has wiped out thousands and added to the misery in the world. Stunted economies, looming recession, battered supply chains and spiralling inflation are also adding to the prevailing ‘darkness’. So, are there any stars to be seen?

India! By day or by night, India has emerged as a shining star! With a policy of “reimagine, reinvent every single element of governance” by the government there is a determined transition from ‘Government-First to a People-First approach and the results have been nothing short of astounding.

The number of taxpayers escalated drastically, and the gross tax revenue has grown more than three-fold; from Rs.11 lakh crore in 2013-14 and is expected to be more than Rs. 33 lakh crores in 2023-24. What’s remarkable is that the growth has happened even after reducing the tax rates. The government has been working at the grassroot level – transforming the lives of the marginalised with a variety of welfare schemes which were innovatively delivered. Jan Dhan bank accounts, Mudra Loans, low-cost housing, construction of toilets, availability of electricity and clean cooking fuel were some of the key initiatives that have been systematically unrolled across the country.

With one-third of the world wrestling with recession and 75 countries facing a global debt crisis, India is looking at the economic growth of 6.9%. To further accelerate the economy the government is aggressively investing in a variety of infrastructures that will not only provide jobs but attract both global and private finance. The immense confidence and optimism around India have not gone unnoticed – numerous corporate heads have hailed India’s dynamism and are announcing plans to invest and step-up employment in India. Bob Moritz, Global Chairman of PwC said, “You should not be thinking about India as an emerging market, India is the leading market.” Undoubtedly, India’s Amrit Kaal is now!

Events:

As usual last quarter of the financial year is throbbing with events and activities. The meeting was organized on the provisions of the Finance Bill 2023 where the speaker CA Pinakin Desai lucidly explained the nuances and finer points of the Finance Bill. The 56th RRC held at Coimbatore got an overwhelming response and active participation. The interactive platform provided to the participants was appreciated by one and all and provided an excellent networking opportunity. There were interesting lecture meetings on the subject of Chat GPT and AQMM which were received very well. On behalf of the BCAS Foundation, I along with some trustees got an opportunity to inaugurate the digital classroom at the school in the tribal area. BCAS Foundation has donated 23 digital screens with preloaded education software to various schools in the tribal area of Talasari, near Umbergaon. These will be used by 12 schools with the advantage of being able to conduct classes with few teachers.

The month of March also brings exciting opportunities. There is a workshop on M&A, Ind AS RSC and Power Summit. There are also several other Lecture Meetings that may be of interest to you. I request you to keep a tab on the announcements not to miss out.

Before I sign off let me wish that the colours of Holi make our life spectacular. Happy Holi to you all!

Thank You!

Best Regards,
CA Mihir Sheth,
President

From the President

Dear BCAS Family,

The best way to find yourself is to lose yourself in the service of others. – Mahatma Gandhi

This quarter’s theme is Chartered Accountants for Change. It’s time for Chartered Accountants (CAs) to be one of the catalysts to save the world. CAs should understand their unique role as an enabler of transforming the world towards a sustainable future.

CAs play a critical role in society by ensuring financial transparency, accountability, and ethical practices in the business and financial world. They are not only responsible for auditing financial statements and ensuring compliance with laws and regulations but also have the potential to drive positive change in society.

The various ways in which we, as Chartered Accountants, can contribute to society are:

a. Ethical Financial Practices: CAs can promote ethical financial practices within organisations. By ensuring that financial transactions are conducted with integrity, CAs can help prevent fraud and unethical behaviour.

b. Mentor a young person in your community to build their character. If you’re an adult, you’ve probably accumulated decades of practical knowledge and worldly experience that many young people could benefit from. Mentorship programs exist for this purpose and allow adults to pass on personal or professional knowledge to young people who are struggling for guidance and a roadmap for professional excellence in their lives.

AadaanPradaan – a unique program by our Society – is organised every year by the Membership, Public Relations, and Seminar Committee. It is a program where young CAs from the Society register by mentioning the specific areas where they need guidance. Mentors who are seniors from the profession are assigned to each mentee, and a one-on-one online session is organised. The mentees immensely benefit from this program.

c. Volunteer at community organisations to help others in society. Volunteering is a great way to interact with your local community and help out people who are less fortunate than yourself. Volunteering will take only a small amount of your time on a weekly basis but can make a huge difference in the lives of people in the society around you.

Operating as a not-for-profit organisation, BCAS also relies on the dedicated efforts of hundreds of volunteers who selflessly contribute their time and expertise while upholding shared values and professional ethics.

d. Teach people useful skills in your community to benefit their lives: Giving other people practical knowledge and day-to-day skills is a great way to contribute to your local community and enhance the overall progress of society.

e. Share your specialised knowledge to give back to your local community: Regardless of how much formal education you’ve had, you probably have some knowledge and skills that would be useful to people in your community.

f. Reduce, reuse and recycle goods whenever possible: We all live in natural ecosystems, and protecting your local environment is an integral part of contributing to society. Recycle plastics and other polluting substances as well as strive to use less plastic in general and use more eco-friendly products.

g. Plant trees. Not only will planting a tree enhance the beauty of your neighbourhood, but it will also make the environment a little healthier.

BCAS VAN (बीसीएएसवन)

As we are celebrating our 75th anniversary, BCAS as a green initiative has created an entire forest by planting 7,500 trees at Banaskantha, Gujarat. It is called the BCAS VAN. The trees shall be monitored by an NGO in Banaskantha. Your contribution towards such an initiative of the Society is always welcome.

h. Pro Bono Work: Many CAs volunteer their services to non-profit organisations, charitable causes, and underserved communities, providing much-needed financial expertise. At BCAS, we are also in the process of reviving our charitable trust clinic to provide pro bono advice to many trustees, employees and auditors of charitable trusts.

Even as the world faced the enormous challenge of COVID-19 in the last few years, and with challenges such as sustainability, diversity and inclusion, and profit with purpose still lying ahead for businesses, it’s time for CAs to step forward, take leadership positions and affect change within their organisations and society at large.

“Throughout the pandemic, the role of Chartered Accountants has been to talk to their businesses. They didn’t save lives, but they saved livelihoods,” said Michael Izza, Chairman of Chartered Accountants Worldwide.

CAs can be catalysts for positive change in society by upholding financial integrity, promoting ethical business practices and actively contributing to the well-being of their communities. Their role extends beyond financial statements and audits; it encompasses a commitment to societal welfare and sustainable development.

Chartered Accountants are partners in nation-building.

FELICITATION OF ICAI TORCH BEARERS

On 7th October, 2023, our Society felicitated the ICAI President CA AniketTalati, Vice President CA Ranjeet Kumar Agarwal at the BCAS office, Mumbai, in the presence of Central council members of the western region of ICAI, past presidents, Managing Committee and core group members of our Society. The discussion was around student activities, image building of CA in India and globally, supporting practising CAs, the technology initiative of ICAI and much more. The interactive session was very insightful, and both the President and Vice President addressed the concerns of various CAs present.

REIMAGINE

On 4th, 5th, and 6th January, 2024, BCAS will organise a mega-conference, ReImagining the Profession in the Changing Technological Environment. The event shall cover many thought-provoking ideas for the future of the finance, consulting, assurance and taxation profession.

– 3 days, power-packed 15+ sessions, 35+ Indian and Global Thought leaders

– Various Themes: Startups; New Age Professional Firms; One World One Tax; Capital Markets; the Impact of Technology on Tax, Audit, and other service areas; Changing Corporate Landscape; New Age Economic Wars; Interchanging roles of a CA and many more sessions

– Networking opportunities with participants from various countries and 75+ cities in India

– Open for CAs, Lawyers, CSs, MBA Finance, and other Finance Professionals

– Networking between participants from Industry and Practice

– CFO roundtable and CFO dinner

– Cultural evening with Bollywood singers, celebrating 75 years of BCAS

– Discussing professional opportunities in India and abroad

And much more.

To know more about the conference and our Thought Leaders, visit: reimagine.bcasonline.org.

I have dealt with sustainability and ways in which we as professionals contribute towards the same. I would like to conclude with this Sanskrit shloka of Ishopnishad dealing with sustainability through the preservation of nature:

ईशावास्यमिदंसर्वंयत्किञ्चजगत्यांजगत्।

तेनत्यक्तेनभुञ्जीथामागृधःकस्यस्विद्धनम् ॥

Its meaning is:

“The entire Universe is pervaded by God. Enjoy all nature as gifts from God but with a spirit of renunciation. Do not be attached to them, and do not covet the wealth of others.
Control Greed!”

बीसीएएसपरिवारकोआनंदमयदिवालीऔरसफलताएवं

खुशियोंसेभरेसमृद्धनववर्षकीशुभकामनाएं।

From The President

Dear BCAS Family,

It is that time of the year when we all are busy completing the fiscal year-end tasks to ensure a smooth transition to the ensuing fiscal year. There is a need to introspect on the moments that made the year memorable and those which may have been difficult but would always have some learnings that improve our perspective for the future.The year had begun with a venomous second wave of the pandemic, which had sent many states into lockdown mode when there were green shoots of recovery after the first wave. However, during such times one should remember Newton’s first law of motion “An object at rest stays at rest, and an object in motion stays in motion with the same speed and the same direction unless acted upon by an unbalanced force”. For all of us, the pandemic acted as an unbalanced force. Such unbalanced force disrupts the status quo or the speed – and direction of life and changes the course of action. The unbalanced force of the pandemic was taken head-on by most of us, and accordingly, we have moved out of its inertia and are reasonably successful in channelizing the energy created through grit and passion for growth and progress. During these trying times, there have been new learnings, which has given us the impetus to adopt technology and do things in a way not done before. We all have followed the wisdom of the following statement by my GURU Mahatria Ra:

The crux of creativity is seeing things from a new perspective.
The greatest block to creativity is old judgements.
It is time to reprogram your minds.
So, try the untried.
We commence this month with the traditional New Year of Marathi Hindus – Gudi Padwa, the New Year for Sindhi Hindus – Cheti Chand and the New Year for Kannada, Telugu & Malayalee communities – Ugadi & Vishu. I take this opportunity to wish a very happy new year to all fellow professionals and pray for the well-being and progress of all.

Now turning to our profession, you all would be aware of the ongoing discussion on the ‘The Chartered Accountants, The Cost and Works Accountants and The Company Secretaries (Amendment) Bill, 2021’ in the Lok Sabha. The Bill was introduced 0n 17th December, 2021, and after representation from ICAI, the Bill was referred to the Standing Committee on Finance for examination and report thereon. Subsequently, after hearing the views of the three Institutes and other stakeholders, the Standing Committee finalized their Report on 21st March, 2022.

I would like to delve only into one aspect of the Report titled ‘Increasing Competition’. Here, the Committee has received views from the Ministry of Corporate Affairs and an independent witness. Based on their views and findings, the Committee has made the following observations:

•    Qualification and licensing of accountants in advanced countries like the US, UK and Canada are done by multiple bodies unlike in India where one institute has a statutory monopoly over the whole profession.

•    Scope for improving the quality and competency of the profession remains limited.

•    It is felt that multiple bodies on the lines of advanced countries is required to promote healthy competition, raise the standard and quality of auditing and accounting and improve the credibility of financial reporting.

•    The Committee has requested the Government to consider setting up Institutes of Accounting (IIA) akin to IITs and IIMs for further development of the accounting and finance profession in the country.

In my humble view, the mandate of the Standing Committee on Finance was to take views of the stakeholders impacted by the Bill, critically evaluate the Bill as well as the views of the stakeholders and then form their opinion. The section of ‘Increasing Competition’ dealt by the Report, is going beyond the scope delegated to the Committee. Further, the Committee has come out with far-reaching recommendations based on only two views put forth by the Committee. If there has to be any such recommendations which has the bearing on the genesis of the whole accounting and finance profession, there should be an elaborate exercise to call for views from all the stakeholders and institutions having interest in the efficient functioning of the profession.

Being part of the accountancy profession for three decades, I am of the firm belief that the Indian accounting diaspora is on an equal footing with other developed nations in terms of the quality of auditing and financial reporting. In fact, the quantum of auditing and accounting that is outsourced to India itself is testimony to the effectiveness and competency of the professionals who have been groomed under the three leading Institutes of the profession.

Let me now update you all on the initiatives at BCAS. We had the privilege and honour of Hon. CBDT Chairman Mr. J B Mohapatraji, delivering a talk from BCAS platform on the topic ‘Direction of Tax Policy in India’.  This is for the first time that the Hon. CBDT Chairman has addressed our members. I thank Respected Mohapatraji for this gesture and sharing his views on tax policies.

BCAS, as a service to its members and young aspiring CAs, organized through its Seminar, Public Relations & Membership Development Committee, a first-ever Job Fair jointly with Monster.com. This is an initiative to assist SMPs in participating and selecting suitable professionals who have qualified as CAs during the past four exams. This also provided an opportunity for young CAs to evaluate options at one place and understand the offerings of various employers. Response to the Job Fair was fairly good, with 13 employers participating and 142 candidates registering. There were in all more than 250 interviews conducted physically and virtually. There were more than 25 offers from employers to the candidates. The Job Fair was planned along with felicitation of recently qualified CAs with a talk on ‘Future Ready – What Next?’ by two eminent faculties CA Robin Banerjee and CA Chirag Doshi. They shared their perspective on the approach and opportunities in industry and practice. This year’s event was physical, and the response was very encouraging, where we felicitated 160 professionals, of which 5 were rank holders. The event was very well received and appreciated by the participants for the guidance provided by the speakers for the approach during their professional journey. I am sure this is the beginning of BCAS acting as a bridge between the SMPs and young budding CAs, thereby serving its objectives.

I have just discussed about felicitation of young recently qualified CAs and hence would end with a message for young professionals, to be consistent to be of relevance, which is narrated by my GURU Mahatria Ra:

You will not be remembered for what you do
or did once in a way,
but for what you do and did all the time.
Consistency is the hallmark of greatness

From The President

India is witnessing a telecom and IT revolution, and it is gaining prominence in its contribution to the world economy by providing state-of-the-art products and services to the world.

As per the NASSCOM report, the IT industry has a noticeable impact on improving the efficiency of almost every other segment of the economy.

The rollout of fifth-generation (5G) communication technology and the increasing adoption of artificial intelligence, cloud computing, Big Data analytics, and the Internet of Things (IoT) will further enlarge the size of the IT industry of India at the global level. India, with approximately 55 per cent of the world’s service-sourcing market, is poised to take a big leap in technology transformation in years to come.

However, certain myths about technology often arise from misconceptions, fears, or misunderstandings about how technology works and its impact on society. As technology is impacting our daily lives, it is time to clear certain myths about the use of technology. This myth-busting exercise is to provide insights to the readers on the ease of using technology and coming out of the fear syndrome while using technology in their daily lives.

TECHNOLOGY AND SOME OF ITS MYTHS

1. Myth: “incognito” and “private” keep everything secret
Fact: Incognito simply means the browser won’t keep track of your history, import your bookmarks or automatically log into any of your accounts. Basically, it’s good for keeping other people who use your computer from accessing links to what you’ve been doing. However, it won’t keep your identity hidden from the sites you visit or your ISP.

2. Myth: Leaving your phone unplugged the whole night destroys your battery
Fact: There’s no proof that this damages your phone’s battery in any way. Modern smartphones run on lithium-ion batteries, which are smart enough to stop charging when they’ve reached capacity.

3. Myth: More Megapixel means a better camera
Fact: The quality of an image is determined in large part by how much light the sensor is able to take in. Bigger sensors may come with larger pixels, and the larger the pixel, the more light it can absorb. So, it’s really the size of the pixels that matter as much or more than the sheer number of pixels.

4. Myth: You Shouldn’t shut down your computer every day
Fact: The truth is it’s actually good to turn off your computer regularly.

5. Myth: More Signal bar means more network
Fact: The bars just indicate how close you are to the nearest cell tower. But other factors impact how fast the internet on your phone performs.

6. Myth: Technology Always Makes Life Easier
Fact: While technology can simplify many tasks and improve convenience, it can also make life more complex and demanding. Constant connectivity, for example, can lead to information overload and stress.

7. Myth: Technology will solve all Education Problems
Fact: The belief that technology can completely revolutionise education and replace traditional teaching methods is a common myth. While technology can enhance learning, effective education also relies on skilled teachers and pedagogical strategies.

8. Myth: Technology may replace Chartered Accountants
Fact: Technology may not replace Chartered Accountants, but a technology-driven firm may, in the near future, replace a non-technology-driven firm.

The role of IT in India’s economic development is crucial. The Indian experts are most sought after across the world, and the future belongs to India with a great share of work from different parts of the world. Future education would also include courses being developed based on the latest technological advancements, knowledge, and skills. Our next generation will not just be job seekers but will be job creators.

BCAS AND ITS MYTH
As I kept meeting several chartered accountants in the last few months, a common query I hear from potential members is that the Bombay Chartered Accountants’ Society is for Chartered Accountants from Mumbai (formerly Bombay). To break this myth, I would like to share some data about the geographical coverage of our membership. We have approx. 5400+ members from Mumbai and 3200+ members from outside of Mumbai i.e. 60% from Mumbai and 40% from outside Mumbai.

BCAS has a presence in more than 350+ cities and towns of Bharat. This helps in breaking the myth that BCAS is only a Mumbai-based association. It is the largest voluntary body of professional Chartered Accountants in Bharat, and therefore, in essence, it is a “Bharatiya Chartered Accountants’ Society.”

REIMAGINE AND ITS MYTH
On the 4th, 5th, and 6th of January, 2024, BCAS is organising a mega-conference, ReImagining the Profession in the Changing Technological Environment. The event shall cover many thought-provoking ideas for the future of the finance, consulting, assurance, and taxation profession.

A myth regarding this event is that it is only for BCAS members. I would like to break the myth that this event is conceptualised keeping in mind, all kinds of finance professionals, whether Chartered Accountants or others, whether in Industry or in Practice, whether in Mumbai or outside, whether experienced or young, as this event talks about ReImagining the profession as a whole.

G20 SUMMIT 2023
Successful completion of the G20 Summit with a recommendation by India and acceptance of all members of G20 for inclusion of the African Union into the Group of nations, making the count G21 has established India’s prominence in driving the agenda of inclusive growth at the world level.

EVENTS AT BCAS
The theme for the July to September quarter was the impact of technology, and BCAS was at the forefront in organising a few workshops and Twitter Space Sessions related to the impact of technology on the profession.
A. Bombay Chartered Accountants’ Society organised a workshop on the use of technology in GST compliance through a demonstration of various automation tools. Automation and use of software in compliance processes can help Chartered Accountants increase the efficiency of their team and improve compliance.

B. The Tech I Committee took the initiative to organise the Twitter Space Session on filing ITR for A.Y. 2023-24 from the BCAS Twitter handle.

This Twitter Space Session was conducted with the objective of sharing the crucial precautions and best practices for filing ITRs that professionals need to observe.

C. BCAS has always been at the forefront of arranging programs and seminars when any new provisions or standards are issued. A full-day seminar on Forensic Accounting and Investigation Standards (FAIS) was held in physical mode at the Hotel Parle International to introduce the participants to the framework governing these standards, the basic concepts covered in the standards, the legal framework, and report writing.

D. In a dynamic financial landscape, the event “Investing in Amrit Kaal” organised by BCAS shed light on the shifting paradigms of investment. The speakers meticulously navigated through the evolving asset classes, emphasising how Alternative Investment Funds (AIFs), Commodities, Portfolio Management Services (PMS), and even Sovereign Gold Bonds are carving distinctive realms within the investment spectrum.

September month was the month of festivals, and I, on behalf of the entire BCAS, seek forgiveness and also forgive everyone from the heart, Michami Dukkadam. I also wish everyone a very happy Ganesh Chaturthi.

As we move into the October to December 2023 quarter, the theme will be “Charter for Change.”