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Category: News And Views

Society News

LEARNING EVENTS AT BCAS

1.    It’s about Beverages – A GST Perspective – Indirect Tax Laws Study Circle Meeting

In a meeting organised on 8th May, 2023, CA Gaurav Kenkre, group leader of the BCAS Indirect Tax Laws Study Circle presented six crisp and interesting case studies on GST rates, classification and input tax
credit on supply of Beverages. The presentation and discussion broadly covered the intricacies on the following topics:

1.    Eligibility of Input Tax Credit on purchase of various beverages (including water) for consumption of staff, customers, etc.,

2.    Charge of GST on Cocktails (Mix of alcoholic and non-alcoholic drink) in a Pub,

3.    Charge of GST on Cover Charge towards unlimited alcoholic drinks and food,

4.    Reversal of Input Tax Credit towards use of non-alcoholic drinks along with alcoholic drinks,

5.    HSN classification of carbonated fruit beverages,

6.    HSN classification of aerated tea beverages.

Around 102 participants across India benefitted by actively participating in the meeting held under the mentorship of Adv. A Jatin Christopher.

2.    Controversies under Liberalised Remittance Scheme (‘LRS’) – FEMA Study Circle Meeting

On 28th April, 2023, a meeting of the FEMA Study Circle was organised. The meeting was led by CA Bhavya Gandhi, group leader. The topic for the meeting was “Controversies under Liberalised Remittance Scheme.”

The meeting focused on issues arising from the amendments to the LRS in August 2022, especially the restriction on holding idle funds abroad beyond 180 days, clubbing of remittances for purchase of immovable property abroad and insertion of definition of “bonafide business activity.” Other existing controversies under LRS were also taken up like extending loans under LRS, remittance out of borrowed funds, etc. The relevant provisions and issues under each controversy were presented by the speaker along with his views on the same.

Held at the Society’s premises, the meeting was attended by about 15 members in-person and over 90 members virtually. The members raised and discussed several queries and also shared their views and practical experiences.

3. GST implications on Digital Assets – Indirect Tax Laws Study Circle Meeting

The Indirect Tax Laws Study Circle of the Society held a meeting to discuss the Goods and Services Tax (‘GST’) implications of digital assets. The meeting was led by CA. Hanish S, discussing six case studies that addressed the practical issues of virtual digital assets. The presentation and discussion covered the following topics:

1.    Understanding whether Virtual Digital Assets/Crypto Currency are currency as per GST Law,

2.    Whether purchase or sale through mobile app tantamount to supply,

3.    If consideration of supply is discharged in crypto currency whether it results in a separate supply,

4.    Can crypto assets or virtual digital assets be attached as property of taxable person by the department in case of non-recovery of taxes or other dues,

5.    GST implications on mining rewards w.r.t supply, employer-employee relationship and subsequently Schedule I effect and overall GST Implications.

6.    Can illegal income be subjected to tax like Income tax Act.

74 participants from all over India took an active part in the meeting held under the mentorship of Adv. K. Vaitheeswaran. Participants expressed gratitude for the immense work of the group leader and expert inputs by the mentor.

4.  – Season 2

In the words of Galileo Galilei, “You cannot teach a man anything. You can only help him discover it within himself.”

Seminar, the Public Relations & Membership Development Committee of the Society organized the second season of the  meeting with an aim to nurture young professionals and give them an opportunity to explore the possibilities that await them. The meeting was held under the guidance of senior professionals who in turn derived the satisfaction of having mentored young professionals and contributed to their lives.

The Committee invited registrations from both members and non-members aged thirty-five and below. It also reserved a few seats for women participants with no age limit. The mentees performed their own SWOT analysis and shared their questions and concerns at the time of registration. They were also requested to submit their CV to enable the mentor to prepare better for the online mentoring session.

Season 2 of the special series “” saw twenty-three mentors from the Core Group help twenty-nine mentees introspect, reflect and discover the potential within themselves. These twenty-nine mentees hailed from six states and included three rank-holders.

Due care was taken to pair the right mentor with the mentee, and the online session was scheduled at their mutual convenience. In most cases, the session went well beyond the planned sixty minutes, with both the mentor and mentee enjoying the conversation and identifying the prospects that lie ahead for the mentee.

The feedback obtained post the session from both the mentees and mentors to this unique program was exceptionally encouraging.

Miscellanea

I. BUSINESS

1 Analysis – Audiobook narrators say AI is already taking away business

As people brace for the disruptive impact of artificial intelligence on jobs and everyday living, those in the world of audiobooks say their field is already being transformed.

AI has the ability to create human-sounding recordings — at assembly-line speed — while bypassing at least part of the services of the human professionals who for years have made a living with their voices.

Many of them are already seeing a sharp drop off in business.

Tanya Eby has been a full-time voice actor and professional narrator for 20 years. She has a recording studio in her home.

But in the past six months, she has seen her workload fall by half. Her bookings now run only through June, while in a normal year, they would extend through August.

Many of her colleagues report similar declines.

While other factors could be at play, she told AFP, “It seems to make sense that AI is affecting all of us.”

There is no label identifying AI-assisted recordings as such, but professionals say thousands of audiobooks currently in circulation use “voices” generated from a databank.

Among the most cutting-edge, DeepZen offers rates that can slash the cost of producing an audiobook to one-fourth, or less, that of a traditional project.

The small London-based company draws from a database it created by recording the voices of several actors who were asked to speak in a variety of emotional registers.

“Every voice that we are using, we sign a license agreement, and we pay for the recordings,” said Kamis Taylan, CEO, DeepZen.

For every project, he added, “we pay royalties based on the work that we do.”

Not everyone respects that standard, said Eby.

“All these new companies are popping up who are not as ethical,” she said, and some use voices found in databases without paying for them.

“There’s that gray area” being exploited by several platforms, Taylan acknowledged.

“They take your voice, my voice, five other people’s voices combined that just creates a separate voice… They say that it doesn’t belong to anybody.”

All the audiobook companies contacted by AFP denied using such practices.

Speechki, a Texas-based start-up, uses both its own recordings and voices from existing databanks, said CEO Dima Abramov.

But that is done only after a contract has been signed covering usage rights, he said.

The five largest US publishing houses did not respond to requests for comment.

But professionals contacted by AFP said several traditional publishers are already using so-called generative AI, which can create texts, images, videos and voices from existing content — without human intervention.

“Professional narration has always been, and will remain, core to the audible listening experience,” said a spokesperson for that Amazon subsidiary, a giant in the American audiobook sector.

“However, as text-to-speech technology improves, we see a future in which human performances and text-to-speech generated content can coexist.”

The giants of US technology, deeply involved in the explosively developing field of AI, are all pursuing the promising business of digitally narrated audiobooks.

Early this year, Apple announced it was moving into AI-narrated audiobooks, a move it said would make the “creation of audiobooks more accessible to all,” notably independent authors and small publishers.

Google is offering a similar service, which it describes as “auto-narration.”

“We have to democratise the publishing industry, because only the most famous and the big names are getting converted into audio,” said Taylan.

“Synthetic narration just opened the door for old books that have never been recorded, and all the books from the future that never will be recorded because of the economics,” added Speechki’s Abramov.

Given the costs of human-based recording, he added, only some 5 per cent of all books are turned into audiobooks.

But Abramov insisted that the growing market would also benefit voice actors.

“They will make more money, they will make more recordings,” he said.

“The essence of storytelling is teaching humanity how to be human. And we feel strongly that should never be given to a machine to teach us about how to be human,” said Emily Ellet, an actor and audiobook narrator who cofounded the Professional Audiobook Narrators Association (PANA).

“Storytelling,” she added, “should remain human entirely.”

Eby underlined a frequent criticism of digitally generated recordings.

When compared to a human recording, she said, an AI product “lacks in emotional connectivity.”

Eby said she fears, however, that people will grow accustomed to the machine-generated version, “and I think that’s quietly what’s kind of happening.”

Her wish is simply “that companies would let listeners know that they’re listening to an AI-generated piece… I just want people to be honest about it.”

(Source: International Business Times – By Thomas URBAIN – 13th May, 2023)

II. WORLD NEWS

1 G7 Finance chiefs move to diversify supply chains

The G7 plans to launch a partnership scheme to diversify supply chains this year, ministers from the group said Saturday following finance talks in Japan ahead of a major summit next week.

The ministers did not directly mention efforts to reduce reliance on trade with China or Russia as motivation for the new framework, which focuses on clean energy technology.

But after meeting her Japanese counterpart, US Treasury Secretary Janet Yellen pointed to recent shocks to the global economy. “Spillovers from Russia’s war against Ukraine and disruptions caused by the pandemic have made clear the importance of diversified and resilient supply chains,” she told reporters.

The Group of Seven’s finance ministers and central bank chiefs highlighted the “urgent need to address existing vulnerabilities within… highly concentrated supply chains”.

In a joint statement, they said they hoped to launch the partnership in collaboration with the World Bank “by the end of this year at the latest”.

The scheme, dubbed RISE — Resilient and Inclusive Supply-chain Enhancement — builds on guidance released in April, and will offer interested developing countries “finance, knowledge and partnerships”, the ministers said.

Their three-day meeting in Niigata, a coastal city in central Japan, took place just days before the leaders of the group of major developed economies gather from 19-20 May in Hiroshima.

Support for Ukraine and the G7’s relationship with China is expected to be high on the agenda at the summit, along with nuclear disarmament and action on climate change.

(Source: International Business Times – By AFP News – 13th May, 2023)  

Statistically Speaking

REDUCTION IN TAX DEVOLUTION
 
CAPITAL FLOWS THROUGH OFFSHORE FINANCIAL CENTRES
 
GENDER-EQUAL BOARDS OUT OF REACH UNTIL 2038
 
 
 
1. More than 12,000 companies registered in January 2023
 

Miscellanea

I. TECHNOLOGY

1 Apple’s India sales near $6 billion as CEO Tim Cook begins retail push

Apple Inc.’s sales in India hit a new high of almost $6 billion in the year through March, highlighting the market’s increasing importance for the iPhone maker as chief executive officer Tim Cook arrived in the country to open its first local stores.

Revenue in India grew by nearly 50 per cent, from $4.1 billion a year earlier, according to a person familiar with the matter, who asked not to be named as the information is not public. Apple posted quarterly earnings on 4th May, 2023 and signaled it expects total global revenue to decline.

Cook inaugurated India’s first Apple store, seeking to accelerate growth in a country of 1.4 billion where the company’s smartphones and computers have never held more than a minuscule market share due to their high cost. With tech demand slowing globally, Apple has identified India’s expanding middle class as an attractive opportunity and it’s also adding local production at an increasing rate.

Apple, which has thus far relied on retail partners and online sales in India launched its online store in the country in 2020 and its sales drive is set for a boost as it opened its first local store in an upscale business district in the financial hub of Mumbai. Two days later, it opened an outlet in the capital, New Delhi.

Apple’s India sales surged during the pandemic as customers bought iPhones and iPads to work and study from home. And that momentum has continued, helped by financing and trade-in options.

Yet its base is small — just about 4 per cent of India’s nearly 700 million smartphone users have iPhones — as the world’s second-biggest mobile market is led by cheaper local brands as well as Chinese and South Korean manufacturers. But the Cupertino, California-based company ranked number one in unit sales of devices above $365 last year, according to researcher Counterpoint.

Apple’s stores serve as key retail and showcase points for the world’s most valuable company, while also often becoming tourist hotspots. Critically, the new India stores will also double as support centers, a potential selling point because it makes product returns and repairs easier.

The company doesn’t break out India revenue in its earnings statements, but it is required to report annual sales in the country to local authorities. For the year through March 2022, it posted sales of Rs. 333.8 billion ($4.1 billion).

While that’s less than 2 per cent of Apple’s global revenue, the market’s significance is growing and the company is also expanding its local manufacturing footprint. Apple tripled its production to more than $7 billion of iPhones in India last fiscal year, part of an effort to reduce its reliance on China as tensions between Washington and Beijing continue to escalate.

Cook’s India push also means braving risks such as India’s notoriously high import duties for everything from components to finished products, which affect retail prices and demand. The country is also known for sudden shifts in rules and regulations, which can expose companies to unexpected costs. Yet the market’s growth potential makes it difficult to ignore.

“India is a hugely exciting market for us, and a major focus,” Cook said during an earnings call in February. “We’re putting a lot of emphasis on the market.”

(Source: economictimes.com 17th April, 2023)

2 ‘Monetizing Hate’: Unease as misinformation swirls on Twitter

When the iconic US diaper company Huggies was swamped with false pedophilia allegations last month, the conspiracy was traced to a once-banned influencer reinstated to Twitter by Elon Musk.

The Tesla tycoon bitterly denies that misinformation has surged since his turbulent $44 billion acquisition of the messaging platform, but experts say content moderation has been gutted after mass layoffs, while a paid verification system has served to boost conspiracy theorists.

Adding to the turmoil, the self-proclaimed free speech absolutist has restored what one researcher estimates are over 67,000 accounts that were once suspended for a myriad of violations, including the incitement of violence, harassment and misinformation.

Among those reinstated is Vincent Kennedy, a supporter of the QA non-conspiracy movement who was banned from Twitter after the 6th January, 2021, attack on the US Capitol.

Kennedy, according to the advocacy group Media Matters, launched a conspiracy theory in late March that left the Huggies diaper brand fighting off extraordinary pedophilia accusations.

He posted a picture of a Disney-themed diaper featuring Simba, a character from “The Lion King,” and circled triangles and spiral swirls that were part of the design.

This was to illustrate a widely debunked conspiracy theory that the shapes are recognised by the FBI as coded signals used by pedophiles. “Once you truly awake you ain’t going back to sleep,” Kennedy wrote in the tweet that garnered millions of views.

The conspiracy theory spread like wildfire to other platforms like TikTok. Huggies, which is owned by Kleenex-owner Kimberly-Clark, then faced an avalanche of hate messages and calls for a boycott.

Huggies sought to douse the flames, writing in a direct response to Kennedy’s tweet that its designs were nothing more than “fun and playful” and that it takes “the safety and well-being of children seriously.” But conspiracy theorists jumped on the response to further amplify the false claim. – ‘Real-world harm’ –

“Anecdotally, there’s no doubt that the flood of toxic content from repeat offenders Elon has re-platformed is driving real-world harm,” Jesse Lehrich, Co-founder of the advocacy group Accountable Tech, told AFP.

“When you reinstate the architects of the 6th January insurrection as democracy teeters on the brink, when you give a massive platform to notorious neo-Nazis amidst a surge in anti-Semitism, when you re-platform influential purveyors of medical disinformation in the middle of a pandemic, there are going to be real-world consequences.”

Travis Brown, a software developer based in Berlin, has compiled an online list of more than 67,000 restored Twitter accounts since Musk’s takeover in late October. Brown told AFP that the list was incomplete and the actual number of restored accounts could be higher.

In a recent BBC interview, Musk pushed back at allegations that misinformation and hateful content were seeing  resurgence since his takeover.

He accused the interviewer of lying. “You said you see more hateful content, but you can’t even name a single one,” Musk said.

Experts AFP spoke to, named dozens of examples — including posts by anti-vaccine propagandists, neo-Nazis and white supremacists.

After his account was restored, election conspiracy theorist Mike Lindell called on his followers to “melt down electronic voting machines” and use them as prison bars.

Anti-LGBTQ+ narratives — including the false claim that the community “grooms” children — have spiked on the platform, according to the Center for Countering Digital Hate (CCDH).

One key driver of the “grooming” narrative, the group said, is conspiracy theorist James Lindsay, whose account was recently restored after previously being banned permanently.

– ‘Hateful rhetoric’ –

“The reinstatements increase hateful rhetoric across the platform, creating a culture of tolerance on Twitter — tolerance to misogyny, racism, anti-LGBTQ tendencies,” Nora Benavidez, from the nonpartisan group Free Press, told AFP.

Imran Ahmed, Chief Executive at CCDH, said “Twitter is monetising hate at an unprecedented rate.” Just five Twitter accounts peddling the “grooming” narrative generate up to $6.4 million in annual advertising revenue, according to CCDH’s research.

But experts say the strategy is counterproductive as that can hardly offset lost advertising revenue.

The chaotic shake-up under Musk has scared off several major advertisers. Twitter’s ad income will drop by 28 per cent this year, according to analysts at Insider Intelligence, who said “advertisers don’t trust Musk.”

As an alternative, Musk has sought to boost income from a verification checkmark, now available for $8 in a program called Twitter Blue. But dozens of “misinformation super-spreaders” have purchased the blue tick and are inundating the platform with falsehoods, according to the watchdog NewsGuard.

“Musk reinstated accounts to make money and to adopt what he believes, misguidedly, is some ‘equal free speech’ mindset — ignoring that the (policy) makes Twitter a platform which rewards violent language with visibility,” Benavidez said.

“This chills speech and engagement rather than furthers it.”

(Source: economictimes.com 15th April, 2023)

3 Artificial Intelligence helps ‘solve the mystery,’ match medicine to patient, aid in treatment of depression

What works for one may not for another. This is especially true when it comes to mental health problems like depression and antidepressants. These drugs that can make a person’s life significantly better often come with serious side effects. To avoid this and ensure that medications work effectively, an Israeli health-tech company is using Artificial Intelligence to match antidepressants to patients.

According to World Health Organization, globally, more than 280 million people suffer from depression. However, as per estimates for two-thirds of them, the initial prescriptions for depression or anxiety may not work properly.

The groundbreaking AI-based technology uses brain cells generated from patients’ blood samples which are then tested for biomarkers when exposed to various antidepressants.

Genetika+, the company then analyses the patient’s medical history and genetic data to determine the best drug and correct dosage for a doctor to prescribe.

As per a BBC report, the AI-based technology is still in development and is set to be launched commercially in 2024.

The company has secured funding from the European Union’s European Research Council and European Innovation Council. It is also working with pharmaceutical companies to develop precision drugs.

“We are in the right time to be able to marry the latest computer technology and biological technology advances,” says neuroscientist Dr Cohen Solal, Co-founder and CEO, Genetika+. Solal says that AI can help “solve the mystery” of which drugs work.

Dr. Heba Sailem, Senior Lecturer – Biomedical AI and Data Science, King’s College, London, says that the potential for AI to transform the global pharmaceutical industry is huge.

(Source: wionews.com dated 17th April, 2023)

II. WORLD NEWS

1 How many US mass shootings have there been in 2023?

There have been at least 160 mass shootings across the US so far this year. These include an attack during a 16th birthday party in Alabama, in which four died,  at a school in Nashville, where three children and three adults were killed, and a mass shooting in Kentucky on 10th  April, 2023, which left four victims dead.

Figures from the Gun Violence Archive – a non-profit research database – show that the number of mass shootings has gone up significantly in recent years.

In each of the last three years, there have been more than 600 mass shootings, almost two a day on average.

While the US does not have a single definition for “mass shootings”, the Gun Violence Archive defines a mass shooting as an incident in which four or more people are injured or killed. Their figures include shootings that happen in homes and in public places.

The deadliest such attack, in Las Vegas in 2017, killed more than 50 people and left 500 wounded. The vast majority of mass shootings, however, leave fewer than 10 people dead.

2 How do US gun deaths break down?

Around 48,830 people died from gun-related injuries in the US during 2021, according to the latest data from the US Centers for Disease Control and Prevention (CDC).

That’s nearly an 8 per cent increase from 2020, which was a record-breaking year for firearm deaths.

While mass shootings and gun murders (homicides) generally garner much media attention, more than half of the total in 2021 were suicides.

That year, more than 20,000 of the deaths were homicides, according to the CDC.

Data shows more than 50 people are killed each day by a firearm in the US.

That’s a significantly larger proportion of homicides than is the case in Canada, Australia, England and Wales, and many other countries.

3 How many guns are there in the US?

While calculating the number of guns in private hands around the world is difficult, the latest figures from the Small Arms Survey – a Swiss-based research project – estimated that there were 390 million guns in circulation in the US in 2018.

The US ratio of 120.5 firearms per 100 residents, up from 88 per 100 in 2011, far surpasses that of other countries around the world.

More recent data out of the US suggests that gun ownership grew significantly over the last few years. A study, published by the Annals of Internal Medicine in February, found that 7.5 million US adults became new gun owners between January 2019 and April 2021.

This, in turn, exposed 11 million people to firearms in their homes, including 5 million children. About half of new gun owners in that time period were women, while 40 per cent were either black or Hispanic.

4. Who supports gun control?

A majority of Americans are in favor of gun control.

Nearly 57 per cent of Americans surveyed said they wanted stricter gun laws – although this fell last year – according to polling by Gallup.

Around 32 per cent said the laws should remain the same, while 10 per cent of people surveyed said they should be “made less strict”.

(Source : BBC.com dated 16th April, 2023)

III. ENVIRONMENT

1 Greener flights will cost more,  says industry

The cost of decarbonising air travel is likely to push up ticket prices and put some off flying, a group representing the UK aviation industry says. Measures such as moving to higher-cost sustainable aviation fuel will “inevitably reduce passenger demand”, according to Sustainable Aviation.

But it found people will “still want to fly” despite “slightly higher costs”.

Annual passenger numbers are still expected to rise by nearly 250 million by 2050, it added.

Sustainable Aviation is an alliance of companies including airlines such as British Airways, airports such as Heathrow and manufacturers like Airbus.

It said that Sustainable Aviation Fuel (SAF) would be a key part of the industry’s “journey to net zero”, accounting for at least three quarters of the fuel used in UK flights by 2050.

SAF is produced from sustainable sources such as agricultural waste and reduces carbon emissions by 70 per cent compared with traditional jet fuel.

However, it is currently several times more expensive to produce – costs the group says would have to be passed on.

The cost of using carbon offsetting schemes to reach net zero will also drive up airlines’ costs, the report adds.

Heathrow Airport’s director of sustainability Matthew Gorman, Chairman, Sustainable Aviation – said this “green premium” will have “some impact on future demand” for air travel.

But he added that the industry could still “grow significantly” as most people were “happy to pay a bit more to  travel”.

The Sustainable Aviation Group argues the move to greener travel presents a big opportunity for the UK, which has the world’s third-largest global aviation network.

Up to five new SAF production plants are planned for the UK, with the government investing in their development.

However, the group said it was concerned investors would be lured to the US and the rest of Europe by “significant” tax incentives, and the UK risked missing out.

In response, it urged the government to introduce a mechanism to close the gap in price between SAF and traditional jet fuel.

Transport Secretary Mark Harper said: “This government is a determined partner to the aviation industry – helping accelerate new technology and fuels, modernise their operations and work internationally to remove barriers to progress.

“Together, we can set aviation up for success, continue harnessing its huge social and economic benefits, and ensure it remains a core part of the UK’s sustainable economic future.”

(Source: bbc.com. dated 14th April, 2023)

Regulatory Referencer

I. DIRECT TAX

1. Clarification regarding deduction of TDS under section 192 r.w.s 115BAC(1A) of the Income-tax Act – Circular No. 4/2023 dated 5th April, 2023

Section 115BAC of the Act provides for concessional tax rates subject to the condition that the total income shall be computed without specified exemption or deduction, set off of loss and additional depreciation.

The Finance Act, 2023 has inserted sub-section (6) to make the new tax scheme the default scheme. If the assessee wants to pay tax as per the normal regime, he will have to opt out of the new tax scheme. Employers had expressed concern regarding tax to be deducted at source from salary income as they would not know if the employee would be covered by section 115BAC or he would opt-out.

CBDT has now issued directions for the employers.

2. Partial relaxation with respect to electronic submission of Form lOF by select category of taxpayers – F. No. DGIT(S)-ADG(S)-3/e-Filing Notification/Forms/2023/ 13420 dated 28th March, 2023

Notification No. 03/2022 dated 16th July, 2022 mandated furnishing of Form 10F electronically. Considering the practical challenge faced by non-resident taxpayers not having PAN in compliance as per the above notification, it was provided that the non-resident taxpayers not having, and not required to have, PAN as per relevant provisions of the Act, as being exempted from mandatory electronic filing of Form 10F till 31st March, 2023. The said exemption is now further extended till 30th September, 2023. Suchcategory of taxpayers may make statutory compliance of filing Form 10F till 30th September, 2023 in manual form.

3. Amendment to Rule 114AAA – Income-tax (Fourth Amendment) Rules, 2023- Notification No. 15/ 2023 dated 28th March, 2023

CBDT has extended the last date to link Permanent Account Number (PAN) with Aadhaar to 30th June,2023

4. 348 notified as Cost Inflation Index for F.Y. 2023-24 – Notification No. 21/2023 dated 10th April, 2023.

II. COMPANIES ACT, 2013

1. MCA notifies Companies (Removal of Names of Companies from Register of companies) Amendment Rules, 2023: In order to facilitate quick exit process to companies, MCA has notified Companies (Removal of Names of Companies from Register of companies) Amendment Rules, 2023 with effect from 01st May, 2023. The notification has introduced Centre for Processing Accelerated Corporate Exit. Henceforth, applications for removal of name of a company shall be made to the above-mentioned authority in Form No. STK-2. The forms STK-2, STK-6, STK-7 have been revised. [MCA notification dated 17th April, 2023]

III. SEBI

1. Stock Exchanges to collect 0.5 per cent of debt securities’ issuance value and keep it in an escrow a/c before allotment: SEBI has mandated the stock exchanges to collect an amount of 0.5 per cent of issuance value of debt securities p.a. based on its maturity and place it in an escrow account before allotment of debt securities in case of public issue or private placement. Earlier, such an amount had to be collected upfront prior to listing of debt securities. The circular shall be effective for offer documents filed on or after 1st May, 2023 for private placement/public issues of debt securities. [Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/CIR/P/2023/56, dated 03rd April ,2023]

2. SEBI directs investment advisors and research analysts to display their information prominently in advertisements: SEBI has asked Investment Advisors (IAs) and Research Analysts (RAs) to prominently display information such as the name as registered with SEBI, its logo, its registration number, etc. In addition, they are required to give the disclaimer that “registration granted by SEBI shall in no way guarantee performance of the intermediary or provide any assurance of returns to investors” in their advertisements. [Circular No. SEBI/HO/MIRSD/ MIRSD-POD-2/P/CIR/2023/52, dated 06th April, 2023]

3. SEBI issues Operational Circular for Debenture Trustees: The SEBI had issued multiple circulars over the years, covering the operational and procedural aspects of Debenture Trustees (DTs). In order to enable the industry and other users to access all the applicable circulars at one place, an Operational Circular for DTs has been prepared. An Operational Circular is a compilation of the existing circulars. The Board of the DTs shall be responsible for ensuring compliance with these provisions. The circular shall be effective from 01st April, 2023. [Circular No. SEBI/HO/DDHS/P/CIR/2023/50, dated 31st March, 2023]

FEMA AND IFSCA REGULATIONS

1. RBI RELEASES DATA

RBI releases data on following:

– India’s international investment position for the end of December 2022;

– Relating to financial performance of foreign direct investment (FDI) companies in India during 2021-22;

– Relating to the financial performance of non-government non-financial (NGNF) private limited companies during 2021-22.

Key features are summarised in the respective press releases.

[Press Releases: 2022-2023/1948, 2022-2023/1943, and Press Release all dated 31st March, 2023]

2. ONLINE APPLICATION FOR FFMCS AND NON-BANK AUTHORISED DEALERS CATEGORY-II

A software application called ‘APConnect’ has been developed for processing of application for licensing of Full Fledged Money Changers (FFMCs) and non-bank Authorised Dealers (AD) Category-II, authorisation as MTSS Agent, renewal of existing licence/authorisation, for seeking approval as per the extant instructions and for submission of various statements/returns by FFMCs and non-bank AD Cat II. Existing FFMCs/non-bank AD Category-II shall register themselves on the APConnect application within three months from the date of issue of this circular, through the weblink indicated in para 2.
[A.P. (DIR Series) Circular No.1, dated 6th April, 2023]

 

3. STATEMENT ON DEVELOPMENTAL AND REGULATORY POLICIESRBI’s

Statement sets out various developmental and regulatory policy measures relating to (i) Financial Markets; (ii) Regulation and Supervision; and (iii) Payment and Settlement Systems. Key developments:

a. With a view to develop the onshore INR Non-deliverable foreign exchange derivative contracts(NDDC) and to provide residents with the flexibility to efficiently design their hedging programs, it has been decided to permit banks with IBUs to offer INR Non-deliverable foreign exchange derivative contracts(NDDCs) to resident users in the onshore market. These banks will have the flexibility of settling their Non-deliverable foreign exchange derivative contracts(NDDC) transactions with non-residents and with each other in foreign currency or in INR while transactions with residents will be mandatorily settled in INR. Related directions are being issued separately.

b. It has been decided to develop a secured web based centralised portal named as ‘PRAVAAH’ (Platform for Regulatory Application, Validation And AutHorisation) which will gradually extend to all types of applications made to RBI across all functions.

There are other measures mentioned in the detailed Statement.

[Press Release No. 2023/2024/23, dated 6th April, 2023]

4. IFSCA SPECIFIES ‘OPERATING LEASE’ AS A FINANCIAL PRODUCT

Section 12 of the International Financial Services Centres Authority Act (IFSCA), 2019 has been amended to include an operating lease, including a hybrid of operating and financial lease, in respect of ‘Aviation training simulation devices’, as a financial product.[Notification No. IFSCA/2022-23/GN/037, dated 11th April, 2023]

 

5. REINSURANCE STRATEGY PROGRAMME FOR IFSC INSURANCE OFFICES

IFSCA has issued International Financial Services Centre Authority (Re-Insurance) Regulations, 2023 for ‘IFSC Insurance Offices’ to develop their re-insurance strategy program for risk management.[Notification F. No. IFSCA/2022-23/GN/REG036, Dated 11th April, 2023]

6. IFSCA ALLOWS PORTFOLIO MANAGERS TO PARK FUNDS OF CLIENTS IN A SEPARATE BANK ACCOUNT IN INDIA OR ABROAD

IFSCA has amended Regulation 77 of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 to allow portfolio managers to park funds of clients in a separate bank account in India or abroad.

[Notification F. No. IFSCA/2022-23/GN/REG036, dated 11th April, 2023]

7. ONLINE SUBMISSION OF FORM A2 BY AD CATEGORY-II ENTITIES

It has now been decided to permit AD Category-II entities also to allow online submission of Form A2. AD Category-II entities shall frame appropriate guidelines with the approval of their Board within the ambit of extant statutory and regulatory framework.

[A.P. (DIR Series) Circular No. 2, dated 12th April, 2023]

Miscellanea

1. BUSINESS

1 Analysis – LIBOR sunset could get stirred up by banking turmoil

A crisis of confidence in global banking and a backlog of uncleared contracts is making an already cumbersome shift to a new set of rates even harder as the end of the LIBOR era approaches, according to industry experts.

Once dubbed as the world’s most important number, the London Interbank Offered Rate or LIBOR is a rate based on quotes from big banks on how much it would cost to borrow short-term funds from one another. It was discredited when the authorities found traders had manipulated it, prompting calls for reform.

It is largely being replaced by risk-free rates (RFRs) compiled by central banks as they are based on actual transactions, including the Federal Reserve’s Secured Overnight Financing Rate (SOFR) for instance, making them harder to rig.

LIBOR has already been scrapped for use in new contracts, with the use of a few remaining dollar-denominated rates in outstanding contracts due to end in June.

“With the transition deadline in sight, LIBOR’s grand finale may be more dramatic than previously thought with derivative contracts piling up amid the current banking turmoil,” said Glenn Yin, Head – Research and Analysis, AETOS Capital Group.

Global trading activity (as measured by DV01) in cleared over-the-counter (OTC) and exchange-traded interest rate derivatives (IRD) that reference RFRs in eight major currencies was at 52.9 per cent in February, according to the ISDA-Clarus RFR Adoption Indicator.

It helps derivatives market participants keep tabs on progress on the shift to RFRs. The indicator was at 4.7 per cent in June 2020 and then surged to 53.9 per cent in December 2022, its highest level, before declining slightly in the first two months this year.

DV01 is a gauge of risk that represents the valuation change in a derivative contract resulting from a 1 bp shift in the swaps curve.

“SOFR’s slow uptake was already setting the stage for a late rush to amend credit agreements, and I suspect the ongoing challenges in the banking sector will push transition plans back even further,” said Matt Orton, Chief Market Strategist, Raymond James Investment Management.

Banks around the world are facing a major upheaval after three U.S. banks collapsed in a week and 167-year old Swiss banking giant Credit Suisse was taken over by UBS in a state-orchestrated rescue to stem broader repercussions in the crisis-laden sector.

“The current turmoil is forcing banks to split their focus and may be diverting resources from the transition,” said Gennadiy Goldberg, U.S. Interest Rate Strategist,TD Securities.

“This might make it a bit more difficult for banks to transition on time, but I suspect regulators are highly unlikely to postpone the end date for LIBOR,” Goldberg added.

While plans are in place to convert cleared U.S. dollar LIBOR swaps and Eurodollar futures and options into corresponding contracts referencing SOFR before 30th June, 2023 non-cleared derivatives that continue to reference U.S. dollar LIBOR “may transition via bilateral negotiations,” ISDA said earlier this month.

Many contracts will reference SOFR-based fallbacks after that date and the Adjustable Interest Rate (LIBOR) Act will replace U.S. dollar LIBOR in tough legacy contracts that do not have fallbacks and don’t provide clearly defined benchmark replacements.

“Only about 15 per cent-20 per cent of outstanding loans are using SOFR and I fully expect to see administrative logjams for borrowers, lenders, lawyers, and bankers,” said Orton.

Around 80 per cent of institutional loans and Collateralized Loan Obligations (CLOs) are still tied to LIBOR even as it nears its 30th June end-date, private equity firm KKR & Co Inc said last month. KKR and Co is also a lender, borrower and investor in CLOs.

LIBOR has been used globally to price trillions of dollars of financial products from mortgages and student loans, to derivatives and credit cards.

“One of the hurdles in the flip to SOFR has been in agreeing to amendments that address credit spread adjustments, and the wild swings in the market will only add to lender reticence to resolve these issues in the near term,” said Orton.

(Source: International Business Times – By Mehnaz Yasmin – 24th March, 2023)

 

2 Apple Inc Supplier Pegatron in talks to open second India factory – sources

Apple Inc’s Taiwanese supplier Pegatron Corp is in talks to open a second India factory, said two sources with direct knowledge of the matter, as the U.S. tech giant’s partners continue to diversify production away from China.Pegatron plans to add a second facility near the southern city of Chennai in Tamil Nadu just six months after opening the first with an investment of $150 million, said the sources, who sought anonymity as the talks are private. The new factory, the first source said, is “to assemble the latest iPhones”.Pegatron declined to comment but said, “Any acquisition of assets will be disclosed based on regulations.”

Apple did not respond to a request for comment.

India is seen as the next growth frontier for Apple. Around $9 billion worth of smartphones have been exported from India between April 2022 and February 2023, and iPhones accounted for more than 50 per cent of that, according to the India Cellular and Electronics Association.

Pegatron currently accounts for 10 per cent of Apple’s iPhone production in India on an annualized basis, research firm Counterpoint said.

Apple and its key suppliers have been shifting production away from China as they seek to avoid a potential hit to business from mounting Sino-U.S. trade frictions. In recent years, Pegatron has sought to expand its footprint in Southeast Asia and North America.

The talks for starting a second Pegatron facility on lease are ongoing and it will be located inside Mahindra World City near Chennai, just around where the company inaugurated the first plant in September 2022.

Pegatron’s planned investment outlay for the expansion is not immediately clear. The first source, however, said the new factory will be smaller than the first one.

Apple Inc has bet big on the South Asian nation since it began iPhone assembly in the country in 2017 via Wistron and later Foxconn, in line with the Indian government’s push for local manufacturing.

India is the second biggest smartphone market in the world, where Apple also plans to assemble iPad tablets and AirPods.

India’s Karnataka state said this week it has approved a $968 million investment by Foxconn, leading to the creation of 50,000 jobs.

Last week, Reuters reported Foxconn has plans to build a $200 million factory in India to produce the wireless earphones for Apple after winning a contract. It already assembles some iPhone models at its plant located in Tamil Nadu.

(Source: International Business Times – By Munsif Vengattil and Aditya Kalra – 24th March, 2023)

Letters to The Editor

Dear Sir,

Re: Tax Laws & Ease of Doing Business in India

The Income-tax Act, 1961 has undergone thousands of Amendments since its inception. The Finance Act, 2023 has carried out more than 125 amendments. This has been the general trend for the last several decades. As a result of frequent amendments, many tax provisions have become too difficult to comprehend, understand, interpret and implement/ administer.

Also, the tax provisions have become very complex and unfathomable even to the best brains in the Legal Profession. This is evident from the fact that the judicial verdicts by various High Courts do not interpret the provisions in the same manner as the other High Courts have done. Consequently, decisions rendered even by the High Courts are distinguished or just reversed/overruled by a larger Bench or by the Apex Court. The taxpayers and their tax advisors are often at their wit’s end as to which judicial pronouncement represents the correct interpretation of the law to be relied upon as a guide for future course of action more so when the decision of the jurisdictional court is against the assessee and the decision of the non-jurisdictional court is in favour.

Many times, an amendment, instead of simplifying the existing complexity unintentionally adds to the complexities/ambiguities. Section 10(23C) is one of many such lengthy and very complex tax provisions.

Widespread litigation is evidence of the fact that many of the Tax Officials in the field are not able to understand the true meaning and purport of the tax provisions they are expected to administer and their interplay with the other provisions of the law and other ancillary laws. The tendency to play safe and disallow the taxpayer’s claims for various Deductions/ Allowances/ Exemptions and Incentives results in huge additions / high-pitched assessments, unjustified and unwarranted assessments /reassessments being made, and huge penalties are being levied, leaving the issues to be settled by the Judiciary, which is a very time consuming and costly process for the assessee.

The situation under other similar /related laws such as GST Customs Duty, PMLA etc., is not much different. The GST law is no longer the “Good & Simple Tax” as hailed by the Prime Minister.

It is probably a misconception that the Tax Laws are framed by the Parliament/ Legislatures. The reality is that many tax proposals are drafted by a handful of officials in the Finance Ministry and the CBDT. One also finds that such tax proposals are not adequately discussed and debated in Parliament. One finds that for many years, there is so much acrimony and pandemonium in both Houses of Parliament that the tax proposals drafted by the bureaucrats are quite often passed by a voice vote or by a show of hands without any/much debate and discussion, amidst the ongoing pandemonium/hungama.

Earlier, the Taxation Laws Amendment Bills were referred to the Select Committee of the Parliament which used to discuss the Proposals thread-bare and the suggestions of the Select Committee were considered while finalising the tax proposals. The Reports of the Committee’s deliberations were published and quite often referred to by the Judiciary to understand and interpret the amended provisions.

Unfortunately, now most of the amendments have been brought in through the Finance Bills which do not go through the Select Committee.

Sir, the existing situation is not very conducive for enhancing “Ease of Doing Business in India”, and the Tax Policy and Administration is a very important element in this regard.

There is a need to have a comprehensive relook/redraft of the entire Income-tax Act to simplify and rationalize the tax provisions with the help of highly respected Senior Tax Jurists, Counsels, Revenue Officials, etc. But redrafting the Tax Laws alone will not do. There is also an urgent need for a change in the mindset and attitude of the Tax Officials/ Administration who should stop viewing and treating the taxpayers with suspicious eyes and instead, treat them as honourable citizens. I wholeheartedly support strong and stern action against tax evaders, habitual offenders, and gross violators of tax laws, but not at the cost of punishing honest taxpayers even for technical infringements.

There is also an urgent need to change the mindset of the tax administration to have a trust-based relationship with taxpayers. A higher threshold needs to be prescribed to exclude minor lapses from levying of penalties and initiation of prosecution which in any case should be an exception and not a rule as it is practiced today.

Yours Sincerely,

CA. Tarunkumar Singhal

 

 

Respected Sir,

I invite your kind attention to the editorial of the journal of the month of March 2023, wherein you have highlighted the plight of small and medium trusts who are engaged solely for the cause of education.

It is heartening to note that you have suggested an exist scheme for small and medium trusts to get out of the rigors of sections 2, 10(23), 12AA, 13 and Income-tax Act, 1961 (Act) 80G.

The finance bill of 2023 meets half way of the suggested exit scheme. If income is to be taxed like any individual, AOP, or juridical person under the 115BAC why deny the benefits of depreciation as envisaged u/s 32 of the Act and allowable expenditure u/s 30-37.

The denial of claim of depreciation and taxing the income will be a death blow to small and medium trusts, who are under severe cash crunch.

Sir, if education as a whole has a lept during the past decade it is only the small and medium trust who have worked assiduously for the cause of education. We pray that good sense prevails on the government and not to kill the goose that lays the golden egg.

Thanking You,

Yours Faithfully,

S. Doraiswamy

Tax Consultant, Salem

Society News

LEARNING EVENTS AT BCAS

1. LECTURE MEETING ON CHALLENGES IN IMPLEMENTATION OF AQMM
 

Bombay Chartered Accountants’ Society organised an online lecture meeting on the topic ‘Challenges in Implementation of Audit Quality Maturity Model (AQMM) on 20th February. 2023. The meeting was attended by over 150 participants.

CA Durgesh Kabra shared the history and need of AQMM, its phase-wise applicability to various firms, benefits of self-evaluation vis-à-vis evaluation by peer reviewer, overview and weightage of various sections and sub-sections in the AQMM.

CA N. Jayendran, commenced his session by sharing the advantages of AQMM for practising units. He shared the process to re-assess AQMM, fees for review by peer reviewer. He shared his views on some of the challenges in the implementation of AQMM especially for SME firms:

  •     Weightage of various aspects in score card like HR, qualitative aspects, etc

 

  •     Negative scoring on regulatory action for unsatisfactory work by a regulator

 

  •     Same set of questions repeated leading to incorrect assessment

 

  •     Vision and mission statement may become surrogate advertising

 

  •     Low weightage of 1.33 per cent to audit manual despite it being necessary for quality audit compared to good internet connection having weightage of 15 per cent

 

  •     Maintenance of records for low value small audit

 

  •     Lack of clarity on score where no QRB audit has been conducted during the period

 

  •     Evaluation of questions on client disputes, IP-based attendance monitoring, data security and cyber security, adherence with minimum scale of fees for small and miscellaneous work

 

  •     Budgeting and monitoring tools for smaller firms

 

  •     Dedicated help desk lacks clarity

 

  •     Maintaining Partner to manger ratio, minimum staff to partner ratio, manager to article ratio, client to staff ratio, etc

 

  •     Focused policies for support for staff wellbeing, engagement and communication, gender diversity, credible employee survey, compensation management.

CA N. Jayendra appreciated the overall benefit that would accrue with this exercise despite various initial challenges in implementation of AQMM.

Both the speakers satisfactorily addressed the queries raised by the participants.

BCAS Lecture Meetings are high-quality professional development sessions which are open-to-all to attend and participate. Missed the Lecture Meeting, but still interested in viewing the entire meeting video

Visit the below link or scan the Q.R. code with your phone scanner app:

Link – https://www.youtube.com/watch?v=SaRrKcAoisA

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2. HRD STUDY CIRCLE MEETING ON AVERTING DANGEREOUS SITUATIONS

The Bombay Chartered Accountants’ Society organised a session on identifying potentially dangerous people on the basis of their facial features. Conducted under the aegis of the Human Resources Development Study Circle on 14th February, 2023 the hybrid session included presentation on reading ‘Red Flags on Face – An Iota of Alertness Can Avert a Potentially Dangerous Situation.’ by Naresh Kokal.

Attended by 78 people, session at the Churchgate premises of BCAS started by pictures of visages of Asuras/Demons, created by artisans of India, and depiction of ferocity in the images. The eyes and surrounding areas, displayed the inherent brutality of the face.

In the subsequent slides of pictures of leaders – Indian & Foreign, celebrities,  politicians and underworld dons, it was demonstrated that the browbones, eyebrows, eyes, chin and jaws account for the barbarity.

The browbones show the need to control others. The eyebrows, the passion, energy and leadership qualities

The eyes show the heart in general, the size of the iris and sclera shows the state of the mind. The Chin shows the willpower. A broad chin is usually noticed on Dictators.

The Jaws show determination. They show the resoluteness. They also point to the potential terror that these people can unleash. The session ended on the note that although these signs show a dangerous person, they could also be found on Successful Entrepreneurs.

This was followed by Q & A session, where the attendees asked their questions which were answered.

The session ended with the Chairman thanking Naresh Kokal for the presentation.

Link – https://www.youtube.com/watch?v=SWyLuJVn0dM

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3. SESSION ON SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT

The Corporate and Commercial Laws Study Group convened a session on Section 138 of the Negotiable Instruments Act and concomitant provisions related to prosecution for cheque bouncing on 13th February, 2023.

Titled, “Prosecution for cheque bouncing: Overview of the law, issues and solutions,” the session was led by speaker Adv. Kartik Garg who took the participants through detailed notes on the law and judgments under each provision. He explained the concepts in a lucid manner. In fact, the notes were of such sterling quality and were so exhaustive that no more oral explanation was required.  After the session these notes were circulated amongst the participants. Around 55 participants attended the session. Further sessions on other white collar criminal topics are in the process of being scheduled.

4. LECTURE MEETING ON DIRECT TAX PROVISIONS OF THE FINANCE BILL 2023

The Society organised a public lecture meeting on ‘Direct Tax Provisions of the Finance Bill 2023.’ Addressed by CA Pinakin Desai, the meeting was held at Yogi Sabhagruha on 7th February, 2023. This was the 5th lecture meeting by him and the 58th of the Society.

The lecture meeting was live streamed and witnessed by more than 5,000 persons including online viewers. CA Mihir Sheth, President, BCAS welcomed and shared his thoughts about the Budget. He then invited CA Chirag Doshi, Vice President to introduce the speaker.

Mr. Desai started his speech by appreciating the Finance Minister’s speech having met the public expectations. He also discussed on the various new insertions/amendments in areas of rate of tax and alternating tax regime, angel tax, capital gain exemptions for residential house, taxability of Nil cost assets, disallowance under section 43(b) in case of delay in payment to MSME, taxability of life insurance policies, market linked debentures. The talk also covered other aspects of the Direct Tax Provisions for Charitable trusts, dealing with the refund cases, TDS provisions, assessment provisions, etc. which were part of the Finance Minister’s speech.

CA Pinakin Desai expressed his views on every important tax proposal under the Finance Bill, 2023.

The audience benefitted greatly from his speech. The meeting ended with a huge round of applause and appreciation by the participants.

Visit the below link or scan the Q.R. code with your phone scanner app:

Link – https://www.youtube.com/watch?v=XxDNgV4bOVg

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5. STUDY CIRCLE MEETING ON ‘PROFESSIONAL CHALLENGES IN HANDLING INQUIRIES AND RECENT JUDICIAL PRONOUNCEMENTS RELATED THERETO.’

The Indirect Tax Committee organised a hybrid Study Circle meeting at the Bombay Chartered Accountants’ Society Auditorium on 6th February, 2023

The meeting focused on the topic titled ‘Professional Challenges in handling inquiries and recent judicial pronouncements related thereto.’ It was presided by Adv (CA) J. K. Mittal who deliberated on the challenges in handling multiple inquiries and ratio of recent judicial pronouncements. He covered the following aspects in detail

  •     Power to summon and give evidence under section 70 with explanation of producing a document and evidence and the time when the same needs to be available

 

  •     Whether a summons constitute an enquiry by itself

 

  •     Judgment of Canon India (P) Ltd of honorable Supreme Court to clarify “the proper officer” does not mean “Any proper officer”

 

  •     Essential ingredients of issuing summons

 

  •     Whether legal opinions provided by chartered accountants lead to aiding or abetting in case of alleged evasion

 

  •     Three factor ingredients of section 67 “claimed ITC + in contravention of any + to evade tax”, its need and necessity to exist before start of investigations, search, seizures

 

  •     Whether cash can be seized during the search

 

  •     Issues in relation to retrospective cancellation of GSTIN

 

  •     Disallowance of mismatched ITC, legality of the said provisions

The two-hour meeting benefitted 73 participants from across who posed several questions to the speaker in the physical as well as virtual mode.

6. FELICITATION OF CA FINAL PASS-OUTS OF NOV 2022 BATCH

On January 30, 2023, BCAS felicitated the young pass-outs of Chartered Accountancy of the November 2022 batch at a special function held at the BCAS Hall.

The felicitation ceremony was preceded by a talk on the subject “Milestone 2.0 – Career in International Tax, Mergers & Acquisition, Start-ups and More” by experts, CA Namita Gad, CA Kinnari Gandhi and CA Siddharth Banwat.

Each expert guided the 180-strong audience on the skillsets and aptitude required for the respective profile job, while sharing some of the challenges faced and how to overcome them. The discussion was appreciated by the young achievers. The experts also answered the questions posed by the the audience at the time of registration. Some basic questions were also taken up at the end of the talk. The entire event was coordinated by the team comprising CA Rimple Dedhia, CA Samit Saraf and CA Vivek Shah.

Youtube link: https://www.youtube.com/watch?v=VMDuFfMd1YU

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7. INCOME TAX KI PAATHSHAALA – LONG DURATION CERTIFICATION COURSE ON INCOME TAX

The BCAS Taxation Committee organised a Long Duration Certification Course on Income Tax – ‘Income Tax ki Paathshaala’ from 2nd January to 30th January, 2023. The meeting comprised 21 sessions. The key note addressed was delivered by CA TN Mahoraran while the concept and scope of total income was explained by CA Nandkishor Hegde. CA Narendra Jain touched upon the concept of Residence and the income deemed to be achieved or deemed to accrue in India.

Other speakers at the event included CA Ronak Doshi, CA Chaitee Londhe, CA Abhitan Mehta, CA Krishna Upadhay, CA Kinjal Bhuta, CA Bhaumik Goda, CA Sonalee Godbole, CA Gautam Nayak, CA Hitesh Gajaria, CA Rutvik Sanghavi, CA Amil Sawant, CA Toral Shah, CA Avinash Rawani, CA Nikhil Tiwari, CA Ashok Mehta, Adv. Rahul Hakani, CA Ameet Patel, CA Anil Sathe and CA Nihar Jambusaria

Attended by 212 participants, the course received an overwhelming response. Each of the participant was given a certificate of participation in the Long Duration Course organized by the Taxation Committee of BCAS.

8. ITF STUDY CIRCLE MEETING ON UAE CORPORATE TAX REGIME

ITF Study circle meetings were organised on UAE Corporate Tax Regime in two sessions on 6th January 2023 and 25th January 2023.

The meeting was led by group leaders CA Janak Panjuani and CA Rajiv Hira from Dubai. The sessions covered the UAE Corporate Tax laws in a holistic manner. The group leaders focused on the basics of corporate taxation, residential status, Permanent Establishment (PE), importance of Anti-Money Laundering (AML) compliance.

Specific concepts pertaining to taxability of unincorporated JV / associations, reliefs to small businesses, exempt income, FTZ etc. along with case laws were discussed in detail to give a better understanding to the participants.

The group leaders also discussed the topics of interest deduction, interest capping rules, non-deductible expenses, tax loss, carry forward of losses and losses adjustment, tax groups, transfer pricing provisions, managerial remuneration, etc.

An interesting round of Q & A with the participants was elaborately addressed by the speakers.

9. SESSION ON LAW FOR REDEVELOPMENT OF SOCIETIES

On 16th January, 2023, Ms. Rucha Jog Raheja, Solicitor addressed a session in the Corporate and Commercial Laws study group on the law relating to redevelopment of societies. After dealing with the legal concepts and need for redevelopment, Ms. Jog Raheja gave a brief account of the law relating to deemed conveyance and the drafting mistakes made in the legal documentation governing the rights of parties before, during and after the actual redevelopment. The session addressed many misconceptions and wrong assumptions of the audience. Finally, Ms. Jog Raheja dealt with all the questions asked by the audience. After the session many suggestions were received for more sessions on niche aspects of redevelopment like deemed conveyance, etc. Further sessions focusing on drafting particular contracts relating to redevelopment will also be scheduled. Over 80 participants attended the session and a very strong positive feedback was received from the participants.

10. 20TH RESIDENTIAL RETREAT – LEADERSHIP SKILLS ORGANIZED IN MUMBAI

The 20th Residential Retreat – “Leadership Skills and Management-The Chanakya Way” was organized by Dr. Radha Krishnan Pillai on 14th and 15th January, 2023 at Keshav Shrusti in Bhayander, Mumbai.

Faculties Dr. Radhakrishnan Pillai and his colleague Mr. Pranav Patel explained Chanakya’s life and his vow to pull down the Nand Dynasty promising Chandra Gupt Maurya to make him a King and thus proving that leadership is an attitude and not a designation.

Participants were enlightened on the term “Aanvikshiki” – educating them on how to think using science. This helped them differentiate between chinta and chintan i.e.going to root cause, understanding real problem and find appropriate resolution.

Further they explained Kautilaya “Saptanga” – The Seven pillars:

1. – The King – Leader

2. – The Minister

3. – The Country – Your Market / Client / Customer

4. – Fortified City – The Head Office

5. -The Treasury

6. – The Army – Your Team

7. – The Ally – Mentor / Friend / Consultant

All these seven pillars were explained in detail with applying the Saptang model. The faculty also showed them a film based on a book titled ’Corporate Chanakya’ featuring interviews of imminent personalities applying the Saptang model. It also distributed a workbook containing details on The Seven Pillars to find Chanakya in You.

The faculty explained that despite being a thankless job leadership gives utmost inner satisfaction. It also emphasized on documentation, standardization and having a succession plan and to create another leader. Besides, it discussed management lessons from Bhagvad Gita.

Around 38 participants attended the event which included games, singing and dancing in a perfect winter setting and camp fire. The event ended on the second day giving the participants a clarity on the roles and goals in each sphere of life.

Miscellanea

I. TECHNOLOGY

36 India’s CAG has a warning for ChatGPT users

Explaining that India is the home to the third largest and fastest growing AI ecosystem in the world, Alkesh Kumar Sharma, Secretary, Ministry of Electronics and Information Technology, said in his speech, “In this era of digital transformation, role of AI technologies becomes crucial in bringing accountability and transparency in delivery of public services.”

The Comptroller and Auditor General of India (CAG) echoed the sentiments of many tech experts when he said that AI technologies like ChatGPT, despite being an exciting technology, come with a potential risk of biasness.

The national auditor Girish Chandra Murmu while addressing the seminar themed “AI and Data Analytics” said that “AI technologies while being exciting also bring a certain degree of risk with them. The most significant risk associated with AI implementation in the public sector is the potential for bias.”

While ChatGPT is seen as a path-breaking technology, many have accused the technology of being “woke” and giving biased responses. Expressing concerns around AI’s ability to learn and improve itself, Murmu said that AI algorithms learn and improve themselves by identifying a pattern in training data and the entire algorithm would be vulnerable to similar bias. “Another risk of AI implementation in the public sector is privacy concerns for the individuals.”

While the indispensability for AI to detect malicious cyber activities, identifying potential threats and in responding to them in the forseeable future is bound to increase, AI is also being used by cyber criminals to create more advanced attacks against security infrastructure and solutions, he said.

“That is why AI is always to be hyphenated with ‘responsible’ i.e., it should work for overall betterment of society, environment and not just for humankind but for the entire planet,” Murmu added.

Explaining that India is the home to the third largest and fastest growing AI ecosystem in the world, Alkesh Kumar Sharma, Secretary, Ministry of Electronics and Information Technology, said in his speech, “In this era of digital transformation, role of AI technologies becomes crucial in bringing accountability and transparency in delivery of public services.” Sharma added how the government is moving towards evidence-based policy formulation and facilitating the acceleration that is being brought for the development of innovative start-up ecosystem in India.

Another speaker, Rohini Shrivastha, CTO, Microsoft India, explained the principles for responsible and ethical use of AI, and also emphasised on the need for risk-based regulation of AI technologies.

(Source: financialexpress.com 23rd February, 2023)

37 2,767 complaints against influencers processed, most violations on Insta

The Advertising Standards Council of India (ASCI) said it has processed 2,767 complaints since coming up with influencer guidelines in May 2021.

More than half of the violations have been found on Meta-owned Instagram platform, while Youtube contributed a third of them, the self-regulatory organisation for the advertising industry said.

The body said in over 90 per cent of the cases, there were modifications required.

“The Central Consumer Protection Authorities also now require disclosure of material connection between brands and influencers. Hence, non-disclosures are potential violations of the law,” the body’s Chief Executive and Secretary General Manisha Kapoor said.

In FY22, the total number of violations stood at 1,592, with virtual digital assets like bitcoins topping with nearly 24 per cent, and followed closely by personal care category which accounted for 23 per cent.

In the first nine months of FY23 (April-December 2022), there were 1,175 complaints received with personal care category topping by contributing a third of them, followed by food and beverage at 16 per cent.

Instagram accounted for 53 per cent of the violations in FY22, which has increased to 65 per cent in the first nine months of FY23, while in the case of Youtube, the same has declined from 37.8 per cent to 27 per cent.

The body also conducted a survey of 820 respondents, which found 79 per cent of them saying they trust influencers and 90 per cent saying they have made purchases based on influencer endorsements.

The survey said transparency and honesty about brand associations is the number one reason for influencer trust, followed by relatable lifestyle and content.

(Source: business-standard.com 16th February, 2023)

II. WORLD NEWS

38 Financial Action Task Force Suspends Russia’s Membership

The Financial Action Task Force (FATF) sets standards for more than 200 countries and jurisdictions and seeks to help authorities tackle serious crime including drug smuggling, human trafficking and terrorism. The global anti-money laundering watchdog said it has suspended Russia’s membership over Moscow’s invasion of Ukraine.

“The Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system,” the group said.

It added that Russia was still accountable for implementing FATF’s standards.

Following a five-day meeting in Paris, FATF added Nigeria and South Africa to its list of countries subject to increased monitoring, and removed Cambodia and Morocco from the category.

Russia has been expelled from the Council of Europe and suspended from the UN Human Rights Council, but is still a member of many international organisations.

(Source: ndtv.com. dated 24th February, 2023)

III. ENVIRONMENT

39 The other victim: The environmental costs of the Russia-Ukraine War

The environmental costs of the conflict are likely to far outlive the fighting itself with Ukraine’s current claims of compensation for environmental damage standing at over $ 50 billion.

As the first anniversary of the war between Russia and Ukraine arrives, the true costs of the war are slowly dawning upon the world. The war has killed thousands, displaced many more, left many with debilitating injuries, flattened towns and caused immeasurable suffering. But the conflict, which does not seem to be ending anytime soon, also has another, often less mentioned, victim: the Planet itself.

The machinations of modern war impact the environment in more ways than one. From sky-high fuel consumption and a ginormous carbon footprint to degradation of thriving ecosystems caused by the fighting, the conflict in Ukraine has racked up environmental costs that will far outlive the actual fighting.

Here’s a look at how exactly the war has been deleterious to the environment.

Fighting-induced destruction

The first and most direct impact of the war is the destruction that the fighting itself has caused. According to UN Environment Program data, the conflict has seen damage across many regions of the country, with incidents at nuclear power plants and facilities, energy infrastructure, including oil storage tankers, oil refineries, drilling platforms and gas facilities and distribution pipelines, mines and industrial sites and agro-processing facilities.The result has been multiple air pollution incidents and potentially serious contamination of ground and surface waters.

According to the claims by the Ukraine’s environment ministry, altogether the losses from land, water and air pollution amounted to $51.4 billion.

Kateryna Polyanska, a landscape ecologist travelling across Ukraine to study the environmental damage caused by the War, told The Guardian that the worst damage is not always visible. “It is not just the explosive material, it is rocket fuel and shrapnel and wire … All these little tiny pieces of pollution have a huge impact on nature. You can’t imagine the scale of the impact,” she said.

Yuliia Ovchynnykova, a Ukrainian MP who serves on a parliamentary environment committee, told The Guardian that “more than 2 million hectares of forest have been destroyed, wrecking ecosystems and putting at risk rare endemic species such as pearl cornflowers, which can be found only on sandy steppes on the outskirts of Mykolaiv, or the bare tree, which grows in a narrow area of the Stone Graves reserve in Donetsk”.

A new Greenpeace map of Ukraine plots the myriad ways in which the War has damaged the environment. In the long term, Ukraine will need a significant clean-up of air, soil and water to allow those who’ve fled the war to return and restart their lives.

Astronomic carbon footprint

The environmental costs however go far beyond the direct destruction of nature that the fighting has caused.Notably, the war has an extremely large carbon footprint. Ukraine estimates the emissions from Russia’s invasion to be roughly around 33 million tons of CO2 from the conflict and 23 million tons CO2 from fires caused by the conflict. It predicts that reconstruction of infrastructure and buildings destroyed or damaged during the war could emit 49 million tons of CO2. For perspective, even without adding the potential carbon costs for reconstruction, that is roughly equivalent to the carbon footprint of Greece or Belarus in 2020.

Many of the machines and equipment used for battle are extremely “dirty”. For instance, the state-of-the-art Leopard 2 tanks that Ukraine have a fuel capacity of 1,200 litres. Depending on the terrain, their operational range varies from 220 km (cross country) to 340km (on roads). This means that these monster machines consume roughly between 3.5-5.5 litres of fuel per km. For comparison, a modern car can travel well over 15 km per litre of fuel consumed.

While some observers claim that the energy fluctuations caused by the war shall quicken the pace of transition away from oil and gas, as of now, the war itself is one of the world’s biggest polluters amidst a growing global climate crisis.

Nature has taken a backseat

The fact of the matter is that amidst the most immediate exigencies and consequences of the War, nature has taken a back seat. For instance, Russian troops dug up deep trenches in the protected Chernobyl sanctuary: an area largely untouched since the nuclear disaster in 1986. Critics claim that this could have dug up dangerous radioactive material. But alas, the tactical needs of battle were far more important than the risks of nuclear contamination.The loosening of environmental norms and the spike in military production are all outcomes of the War. In a bid to maximize fighting capabilities, both Ukraine and its allies as well as Russia have cut corners where they can. Generally, environmental norms, the benefits of which are far less tangible in the short term, are the first casualty in this process.

Even when the conflict ends, the immediate efforts of reconstruction will focus not on the environment but housing, building infrastructure, and restoring services. “There will be a lot of competing priorities post-conflict”, said Doug Weir, research and policy director of the Conflict and Environment Observatory Unit, which monitors and campaigns about the environmental impacts of war.

(Source : indianexpress.com 24th February, 2023)

40 Lithium discovery important for India’s EV push but mining poses serious environmental risks: Experts

The Geological Survey of India recently identified a potential deposit of 5.9 million tons of lithium in Reasi district’s Salal-Haimana area, the first such anywhere in India, which imports lithium. GSI said the site is an “inferred resource” of the metal, which means it is at a preliminary exploration stage, the second of a four-step process.

The discovery of lithium in Jammu and Kashmir is significant for India’s push towards electric vehicles but any environmental gains could be negated if it is not mined carefully, say experts, citing risks such as air pollution and soil degradation in the fragile Himalayan region.

The discovery of lithium deposits can be a potential “game changer” for the country’s clean energy manufacturing ambitions in several ways, said Siddharth Goel, Senior Policy Advisor, International Institute for Sustainable Development (IISD).

“First of all, the scale of the reserves is significant, and can — if proven to be commercially viable — reduce India’s reliance on imports of lithium-ion cells, which are a key component for EV batteries and other clean energy technologies,” he said.

But there is a flip side too. “Reports indicate that approximately 2.2 million litres of water is needed to produce one ton of lithium. Further, mining in the unstable Himalayan terrain is fraught with risks,” cautioned Saleem H. Ali, Professor, Energy and the Environment, the University of Delaware. Lithium mining in Chile, Argentina and Bolivia, for instance, has led to concerns over soil degradation, water shortages and contamination, air pollution and biodiversity loss. “This is because the mining process is extremely water-intensive, and also contaminates the landscape and the water supplies if not done in a sustainable method,” Ali said.

According to the US Geological Survey (USGS), about a fourth of the Earth’s known lithium deposits (88 million tons) would be economical to mine, said Charith Konda, Energy Analyst, Electricity Sector, US-based Institute for Energy Economics and Financial Analysis (IEEFA). “Applying this benchmark, India could probably economically extract 1.5 million tons of lithium from the 5.9 million tons discovered in preliminary studies,” Konda told PTI.

Economically here would mean that the resources and technology used to extract will give good return in terms of usage of the resource.

“India has a vision of increasing the share of electric vehicle sales to 30 per cent in private cars, 70 per cent in commercial vehicles, 40 per cent in buses, and 80 per cent in two- and three-wheelers by 2030. In absolute numbers, this could translate to 80 million EVs on Indian roads by 2030,” Konda said.

The battery pack of an average electric car, he explained, requires 8 kg of lithium. By this metric, India’s economically extractable lithium reserves should be enough to power 184.4 million electric cars.

Currently, India is import dependent for several elements such as lithium, nickel and cobalt. Ministry of Commerce data shows that India spent around Rs 26,000 crore importing lithium between 2018-2021.

In 2021, preliminary surveys by Atomic Minerals Directorate for Exploration and Research (AMD) showed the presence of lithium resources of 1,600 tons in Mandya District in Karnataka. However, there has been no report of mining the resource till date. An IISD study found that access to critical elements such as lithium is a key challenge faced by companies investing in India’s EV ecosystem.

“These reserves could potentially be a huge carrot to attract investment into domestic battery manufacturing and other clean energy technologies,” Goel said the potential site in Reasi has the same amount of lithium as the reserves in the US and more than China’s current reserves which are around 4.5 million tons. However, the world’s largest lithium reserves in South America — especially in Bolivia, Chile and Argentina — are several times greater, collectively over 40 million metric tonnes.

According to University of Delaware’s Ali, domestic supply of usable lithium, if developed, could help develop batteries for solar and wind storage and EV usage.

What is critical in this scenario is the government putting in place the right support to make sure that securing these critical minerals is done in a socially and environmentally responsible manner, experts agree.

Environmentalists also argue that the focus should be on redesigning cities to reduce car usage in general instead of using metals like lithium to shift to EVs.

“This could specially be done in high density population centres of India with smarter urban planning,” Ali said.

This is because even when safeguards try to limit the social and environmental harm around fossil fuel extraction, which is considerable, there is no “fix” for air pollution and greenhouse gas emissions, IISD’s Goel added.

“Given that lithium-ion batteries are the most advanced batteries available, they would continue to play a major role for the foreseeable future. India should mine lithium with proper environmental and social safeguards in place given the ecological and political sensitivities of the area,” IEEFA’s Konda said.

(Source : economicstimes.com 24th February, 2023)

Regulatory Referencer

DIRECT TAX

1. Corrigendum to circular no. 23 of 2022 dated 03rd November, 2022 – explanatory notes to Finance Act, 2022 – Circular No. 2/2023 dated 6th February, 2023

The Explanatory notes to the Finance Act, 2022, explaining the amendments made in direct tax laws vide the Finance Act, 2022 were issued vide Circular no. 23 of 2022 dated 03rd November, 2022 A corrigendum to the said circular is issued.

2. Amendment to Rule 12 – Income-tax (First Amendment) Rules, 2023- Notification No. 4/ 2023 dated 10th February, 2023

SAHAJ ITR-1, ITR-2, ITR-3, SUGAM ITR4, ITR-5, ITR-6, ITR-V and ITR- Acknowledgement notified for A.Y. 2023-24

COMPANIES ACT, 2013

1. MCA revises e-form AOC-5; seeks more disclosures relating to address at which books of accounts are maintained:

MCA has notified the Companies (Accounts) Amendment Rules, 2023. E- form AOC-5 (Notice of address at which books of account are to be Maintained) has been revised. Now, it is mandatory to attach proof of address, copies of the utility bill, and a photograph of the registered office showing at least one director with form AOC-5. Earlier, only board resolution was required to be attached. The changes will be effective 23rd January, 2023 [Notification No. G.S.R. 40(E), dated 20th January, 2023]

2. Now Directors disqualified under section 164 (1) of Companies Act, 2013 are also required to file form DIR 8:

MCA has amended the Companies (Appointment and Qualifications of Directors) Rules, 2014. The amendment requires that directors disqualified under section 164(1) of the Companies Act must also file Form DIR-8 with the company. Earlier, the DIR-8 was required to be filed in case of disqualification under section 164(2). Further, the company is required to file Form DIR-9 with RoC within 30 days of receipt of DIR-8. Various changes in forms are also notified. [Notification dated 20th January, 2023]

3. MCA prescribes detailed disclosures relating to charges/valuations in the revised forms PAS-2, PAS-3, & PAS-6:

MCA has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014. The Ministry has substituted form PAS-2, PAS-3 & PAS-6 with new forms. Now, in form PAS-2, formats of disclosure relating to charges has been amended. In form PAS-3, greater disclosures regarding valuation undertaken is to be given. Further, in form PAS-6, greater disclosure of details of shares as per class is to be given.

[Notification dated 20th January, 2023]

4. MCA grants additional 15 days to file PAS 3 and other newly launched forms on the V3 portal:

MCA has decided to allow an additional 15 days for filing these forms without any additional fees. Form PAS-03 & 45 other forms, whose due dates for filing fall between 20th January, 2023 and 06th February, 2023, can now be filed without payment of additional fees for a period of 15 days. The extension is provided due to change in the manner of filing of Forms in V3, including the fresh process of registration of users on MCA-21

[General Circular No. 03/2023, dated 07th February, 2023]

I. SEBI

1. SEBI amends Stock Brokers Regulations; enhances obligations and responsibilities for qualified stock brokers:

SEBI has notified the SEBI (Stock Brokers) (Amendment) Regulations, 2023. A new regulation 18D has been added which empowers the Board to designate a stockbroker as a “qualified” stockbroker based on the size and scale of operations, its impact on investors and securities market, and governance and service standards. Further, the stockbroker designated as a qualified stockbroker is required to meet enhanced obligations and discharge responsibilities.

[Notification No. SEBI/LAD-NRO/GN/2023/116., dated 17th January, 2023]

2. SEBI widens the definition of ‘Senior Management’ under LODR regulations to include ‘all functional heads’:

SEBI has notified the SEBI (LODR) (Amendment) Regulations, 2023. An amendment has been made to the definition of ‘senior management’ under regulation 16 of LODR. Now, functional heads would also be included in the definition of senior management. Under the extant norms, functional heads were not covered in the definition. Further, a new clause w.r.t details of material subsidiaries of the listed entity including date, place of incorporation etc. has also been inserted.

[Notification No. SEBI/LAD-NRO/GN/2023/117, dated 17th January, 2023]

3. SEBI introduces two new methods to achieve ‘Minimum Public Shareholding’:

SEBI has introduced two new methods to achieve the Minimum Public Shareholding (MPS) by listed Companies.  Now, MPS can be achieved by allocating shares to employees through ESOP subject to a maximum of 2 per cent of the paid-up equity share capital of the listed entity. However, no shares will be allotted to the promoters/promoters’ group under this method. Further, MPS can be achieved by transferring shares held by promoters to an exchange-traded fund managed by a SEBI-registered mutual fund.

[Circular No. SEBI/HO/CFD/POD2/P/CIR/2023/18, dated 03rd February, 2023]

4. SEBI puts an end to Buyback via odd lot method; notifies various other amendments in Buyback Regulations;

SEBI has notified an amendment in SEBI (Buy-back of Securities) Regulations 2018. As per the amended norms now Buyback can be carried out via tender offer or open market method only. Also, maximum limits for buyback through open market through stock exchanges have also been changed. Further, it has been clarified that buy-back from the open market through the stock exchange shall not be allowed with effect from 1st April, 2025. Various other amendments have also been notified.

[Notification No. SEBI/LAD-NRO/GN/2023/120, dated 07th February, 2023]

5. First-time issuers of NCDs may alter AoA to appoint a nominee of Debenture Trustee within 6 months from listing date:

SEBI recently mandated the issuer companies to include provisions in their Articles of Association (AoA), with respect to the requirement for the board to appoint a person nominated by the debenture trustee. The regulations also provide a time period till 30th September, 2023 for existing issuers. Consequently, after receiving representations from first time issuers, the SEBI advised exchanges to take an undertaking from first-time issuers that they will ensure that their AoA are amended within 6 months from the listing date.

[Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/CIR/P/2023/028, dated 09th February, 2023]

FEMA AND IFSCA REGULATIONS

1. ECONOMIC SURVEY 2023

The Finance Minister tabled the Economic Survey 2022-23 in Parliament on 31st January, 2023. While providing an overview of the state of the economy, it also includes analysis of the foreign exchange reserves, movement of the currency, etc. in Chapter 11 on External Sector. As part of Chapter 4 on Monetary Management and Financial Intermediation the Survey covers developments in GIFT City-IFSC on page 106.

The Finance Bill 2023 also provides important measures for the GIFT-City IFSC including allowing foreign banks to provide acquisition finance; establishment of a subsidiary of the EXIM Bank in IFSC; recognising offshore derivative instruments as valid contracts; allowing setup of Data Embassies within the IFSC. These measures are apart from the tax incentives introduced in the form of increase in scope of exempted income earned by a non-resident as a result of transfer of offshore derivative contracts, non-deliverable forward contracts or over the counter derivatives with a banking unit of an IFSC; extension of timeline for relocation of a fund to IFSC to 31st March, 2025; extending the definition of “Investment Fund” to include funds, particularly Category I & Category II AIFs, regulated and incorporated under the IFSCA (Fund Management) Regulations, 2022.

[Economic Survey 2022-23 and Budget 2023]

2. SOVEREIGN GREEN BONDS

The RBI has added that all Sovereign Green Bonds issued by the Government in the F.Y. 2022-23 as ‘specified securities’ under the Fully Accessible Route (FAR) introduced by the Reserve Bank earlier. FAR allows investment in certain specified categories of Central Government securities which were opened fully for non-resident investors without any restrictions, apart from being available to domestic investors as well. Sovereign Green Bonds (SGBs) amounting to Rs. 16,000 crore are proposed to be issued in the current financial year for mobilising resources for green infrastructure projects. Rs. 8,000 crore has already been raised in the first tranche of the SGBs. The proceeds will be deployed in public sector projects which help reduce the economy’s carbon intensity, the Minister stated.

[CIRCULAR NO. FMRD. FMID. NO. 07/14.01.006/2022-23, dated 23rd January, 2023 and PRESS RELEASE, dated 6th February, 2023]

Society News

NEW INITIATIVES AT BCAS

At BCAS, a constant endeavour is always underway to exceed the expectations of its members and continue to remain a preferred professional development body for Chartered Accountants. The BCAS legacy over the last 70+ years has been enamoured by its ability to evolve with changing times and remaining extremely relevant to its ever-evolving community.

At the Society various initiatives are underway and few mentioned below have fructified over the last months:

1. Revamped audio-visual infrastructure at BCAS Auditorium:

Modern-day learning delivery environment is significantly different in comparison to the earlier times. This difference was further accentuated by the Covid-19 pandemic which made adoption of digital learning a common-place. BCAS is blessed to be one of the few professional societies of Chartered Accountants to have its own physical auditorium to conduct live events. Over the last few months the entire audio-visual infrastructure at the BCAS auditorium has been revamped by addition of state-of-the-art 4K LED visual screens, hybrid classroom infrastructure, studio-quality voice and sound equipment, surround-sound microphones, teleprompter and multiple point-and-zoom cameras.

These upgradations have significantly improved the learning delivery capabilities from the BCAS Auditorium. Members are encouraged to attend an in-person event at the BCAS Auditorium and experience the new-age digital infrastructure.

This hybrid infrastructure is also available for use to members who choose to make use the BCAS Auditorium for their own learning events.

2. Self-paced learning through E-Learn initiative:

Self-paced learning courses and event recordings are available through the E-Learn learning management initiative of BCAS. Members can now access a catalogue of courses and event recordings by accessing the E-Learn module. The E-Learn platform opens up the BCAS learning content to its large base on outstation members as well.

3. WhatsApp communication with members:

WhatsApp has today become the de-facto choice of quick communication. BCAS has initiated an additional communication channel with its members through WhatsApp. A right balance of quick communication and respecting member privacy will be embedded in the WhatsApp communication initiative.

Once you receive any BCAS WhatsApp message, do save the senders phone number in your mobile address book. This will help in seamless communication moving forward.

4. BCAS back-office on cloud infrastructure:

The Society is able to deliver on its objectives owing to a strong back-office team at the BCAS office. The BCAS office staff comprises a team of more than 20 committed individuals who work diligently to serve the large BCAS membership. With an objective to enable the key departmental heads at BCAS to seamlessly perform their roles, each of them have now unhindered access to Microsoft cloud infrastructure equipping them with seamless access to data, co-creation collaboration and backup capabilities.

5. QR Code and UPI payment functionality:

In a recent initiative, BCAS has enabled receiving payment through QR code as well as through UPI. This functionality is enabled at BCAS front office reception as well as the publication kiosks at the event location.

 

EVENTS AT BCAS

1. HRD COMMITTEE ORGANIZES ‘TARANG 2K23’

Under the auspices of the HRD Committee of the Bombay Chartered Accountants’ Society (BCAS), the Students’ Committee organized the 15th Jal Erach Dastur CA Students’ Annual Day competition from 24th December, 2022 to 8th January, 2023.

Described as an ecstatic annual CA students’ celeberation, Tarang 2k23 was engaging, enthralling and magnificent. Under the requisite guidance of CA Anand Kothari, CA Jigar Shah, CA Dnyanesh Patade and CA Utsav Shah, Tarangs mainly intended to provide a platform for CA students to unleash their talent and creativity in areas of public speaking, writing skills, performing arts, business, technical and innovative skills. Additionally, the event also intended to act as an insight and potential gateway into the real world outside academic books by providing access and tutelage by skilled and experienced leaders in the form of participation in various fields to building interpersonal relations and network with hundreds of like-minded students.

This year’s Students’ Committee comprised a group of 31 passionate and enthusiastic students. Tarang 2k23 changed the earlier dull and monotonous perception of the CA students as they were now being witnessed as event managers, anchors, talented dancers, and photographers too!

It was truly an event ‘Of CA Students, By CA Students and For CA students.’

Tarang 2k23 saw a huge enrollment of around 500 students despite the Christmas holidays and pending due dates. Overall 279 students participated in the event along with the highest number of participants witnessed in the ‘Talent Show’ and the ‘Antakshari Competition.’ This year Tarang 2k23 also introduced the revolutionary event “CA’Preneur – Pitch Your Business Ideas,” whose concept was taken from the popular TV show, ‘Shark Tank India’ to promote thinking, problem-solving and entrepreneurial skills amongst CA students. The event received huge enrollments along with some amazing ideas being pitched to the judges.

The elimination rounds of the 15th Jal Erach Dastur CA Students’ Annual Day – ‘Tarang 2K23’ were held at the BCAS Hall on the 24th and 25th, December, 2022 with the beautiful Christmas themed décor to give the participants a joyful vibe. To keep the crowd engaged, the students’ team organized various online games and networking sessions including the Tarang’s Networking Bingo and an intriguing Quiz via the Zoom platform two days prior to the grand finale day. This provided a unique opportunity to all participants to build a productive and constructive network along with a lot of fun too.

The Grand Finale of Tarang 2k23 was held at the Lala Lajpat Rai College Auditorium on 8th January, 2023. Vahura and IDFC Bank sponsored the winners’ prizes for various games and quizzes held online. Arrangements for various exciting game stalls, live caricatures and a 360° photobooth were made to engage and build excitement amongst the audience before the event’s commencement.

The grand finale commenced with the lighting of lamp by the HRD Committee and the student coordinators with the Ganesh Vandana and Saraswati Vandana being played in the background

The event kickstarted with a ‘Antakshari Competition’, where the two finalist teams namely, ‘Deewane’ and ‘Parwane’ competed on the stage. The event comprised engrossing rounds to test the presence of mind the sound musical knowledge of the participants. It was hosted by CA Vijay Bhatt.

The next event to follow was a Debate Competition with eight finalists. The moderator for this event, titled, “Traditional Indian educational system of Gurukul was more effective than today’s Universities,” was CA Ujjwal Gadhvi. The tagline for the Debate was “War of Words.”

This event was followed by the ‘Talk Hawk,’ sponsored by the Chandanben Maganlal Bhatt Elocution Fund. Here, three finalists were given four minutes to speak on any one of the 10 given topics.

This was followed by a short 15 minutes break after which Tarang 2k23 resumed with a blissful and soothing jamming session with some beautiful lyrical songs sung by the students’ team. This was followed by an energetic and well-coordinated Bollywood dance flash mob choreographed by CA Rishikesh Joshi.

The most anticipated event of the evening, CA’s Got Talent! included 12 performances by the finalists in all three categories including – music which included vocals as well as instrumental, dancing and the other performing arts category.

This was followed by a short 2-minute video which was a compilation of the past 14 years of the event Tarang.

The concluding valedictory session started with the displaying of the compilation of business ideas of the contestants of the CA’Preneur competition.

Post that the winning reels and the pictures of the Tarang Reel Star and the Khinch Le Photography Competition were displayed on the screen. Two prizes, in each of the two categories; namely, the Public Choice Award and the Judges’ Choice Award, were given.

The winners of the competition representing their firms were also announced.

The event was anchored by Ekta Singh, Krrish Pipaliya and Nikita Sahu, who ensured an environment full of spirit, vigor and humor.

Mayur Pandya and Sagar Gupta proposed the vote of thanks to Sohrab Erach Dastur, the family of Chandanben Maganlal Bhatt, Managing Committee and HRD Committee members, event coordinators, photographers, BCAS Staff, parents, sound technicians, student volunteers, CA students and the audience.

Link – https://www.youtube.com/watch?v=jqOB2df7W8k

MISCELLANEA

I. TECHNOLOGY

31. AI-powered Robot Lawyer ‘world’s first’ to represent human client in Court

The “first-ever robot lawyer” will represent a client in court. According to reports, a defendant will use the legal assistant powered by artificial intelligence (AI) to contest a traffic ticket. Here’s what all we know.

The “DoNotPay” firm developed the AI robot. It will function as a smartphone app and stream all court proceedings in real-time. The robot will instruct the defendant on what to say using headphones, much like a human attorney would do in real life.

Joshua Browder established the chatbot for legal services known as DoNotPay in 2015. It was introduced as a chatbot to give users facing late fees or fines legal guidance. The AI helper needed a lot of time to be trained on the case, according to Browder.

February 2023 is the scheduled month for the hearing. The actual date, the venue of the court, and the name of the defendant are still being kept a secret by the robot’s creators.

The defendant in the case, who will only respond to commands from the AI robot, is being sued for receiving a speeding ticket. According to the science and technology magazine New Scientist, the AI robot will process and analyse the evidence presented in court and then advise the defendant on how to respond.

According to Joshua Browder, DoNoPay has agreed to pay any fines if they lose the case. The business’s mission is to help people “battle corporations, beat bureaucracy, and sue anyone at the touch of a button.”

“DoNotPay utilizes artificial intelligence to help consumers fight against large corporations and solve their problems like beating parking tickets, appealing bank fees, and suing robocallers,” reads the company’s mission.

(Source: indiatimes.com dated 8th January,2023)

32. iPhone exports from India during April-December double to surpass $2.5 billion

Apple Inc. exported more than $2.5 billion of iPhones from India from April to December 2022, nearly twice the previous fiscal year’s total, underscoring how the US tech giant is accelerating a shift from China with geopolitical tensions on the rise.

Foxconn Technology Group and Wistron Corp. have each shipped more than $1 billion of Apple’s marquee devices abroad in the first nine months of the fiscal year ending March 2023, people familiar with the matter said

Pegatron Corp., another major contract manufacturer for Apple, is on track to move about $500 million of the gadgets overseas by the end of January, the people said, asking not to be identified revealing private information.

Apple’s rapidly growing export numbers illustrate how it is ramping up operations outside  China, where chaos at Foxconn’s main plant in Zhengzhou exposed vulnerabilities in the Cupertino-headquartered company’s supply chain and forced it to trim output estimates.

That compounded a broader problem with evaporating demand for electronics as consumers weigh the risks of a global recession.

Apple, the world’s most valuable company, began assembling its latest iPhone models in India only last year, a significant break from its practice of reserving much of that for giant Chinese factories run by its main Taiwanese assemblers including Foxconn.

While India makes up just a fraction of iPhone output, rising exports bode well for Prime Minister Narendra Modi’s plan to make the country an alternative to China as factory to the world.

China’s Covid Zero policies and an episode of violence at the Zhengzhou plant — nicknamed iPhone City as the world’s biggest production centre for the device — laid bare the dangers of relying on the country. While Beijing has since dropped that approach to containing the virus, Apple and other global names are exploring alternative locations more than ever before.

India’s vast workforce, Modi’s support and a thriving local market make it a prime candidate to take on more electronics manufacturing. Foxconn, Apple’s largest supplier, began building facilities in the country more than five years ago in anticipation of a need to extend its geographic range.

One recent selling point is a raft of new government incentives, a cornerstone of Modi’s drive to make India an electronics manufacturing hub. Foxconn has won Rs 3.6 billion ($44 million) of benefits in the first year of the so-called production-linked incentives scheme, while Wistron’s claims are currently being processed, the people said.

Apple’s contract manufacturers currently make iPhones at plants in southern India. But production in the country is just beginning. About 3 million of the devices were made in India in 2021, compared to 230 million in China, according to Bloomberg Intelligence estimates.

Foxconn began making the iPhone 14 in India a few months ago — sooner than anticipated — after a surprisingly smooth production rollout that slashed the lag between Chinese and Indian output from months to mere weeks. Apple’s three Taiwanese partners currently assemble iPhones 11 to 14 in India.

But moving out of China, where Apple has built a deep supply chain for close to two decades, isn’t easy. A Bloomberg Intelligence analysis estimated it would take about eight years to move just 10% of Apple’s production capacity out of China, where roughly 98% of the company’s iPhones are being made.

India tracks production and exports of all smartphone makers who enjoy financial incentives as part of Modi’s push.

Beyond smartphones, the country is drawing up plans to boost financial incentives for tablet and laptop makers, hoping to woo Apple to make everything from earphones to MacBooks locally as well as attract other brands.

The iPhone maker is also expected to open its first retail store in India in 2023, after meeting certain criteria imposed on foreign retailers.

(Source: economictimes.indiatimes.com. dated 09th January, 2023)

II. WORLD NEWS

33. Global recession likely in 2023: World Economic Forum survey

With geopolitical tensions continuing to shape the global economy and anticipate further monetary tightening in the United States and Europe, a majority of the World Economic Forum’s Community of Chief Economists expects a global recession in 2023.

The findings were found in the e January 2023 Chief Economists Outlook’ by the World Economic Forum’s Centre for the New Economy and Society.

As per the survey, almost two-thirds of chief economists believe a global recession is likely in 2023; of which 18 per cent consider it extremely likely – more than twice as many as in the previous survey conducted in September 2022. A third of respondents consider a global recession to be unlikely this year. However, views are divergent, with a third of respondents considering a global recession to be unlikely this year.

All of the chief economists surveyed expect weak or very weak growth in 2023 in Europe, while 91 per cent expect weak or very weak growth in the US. This marks a deterioration in recent months at the time of the last survey, the corresponding figures were 86 per cent for Europe and 64 per cent for the US, it showed.

The survey aims to summarise the emerging contours of the current economic environment and identify priorities for further action by policymakers and business leaders in response to the compounding shocks to the global economy from geo-economic and geopolitical events. The survey was conducted November-December 2022.

War and international tensions continue to shape global economic developments, and every respondent viewed it as likely, with 73 per cent saying somewhat and 27 per cent saying extremely, that patterns of economic activity will continue to shift around the world in line with new geopolitical fissures and faultlines.

The two strongest regions in 2023 according to the survey are the Middle East and North Africa (MENA) and South Asia.

In South Asia, 85 per cent of respondents expect moderate (70 per cent) or strong (15 per cent) growth, a modest improvement since the September edition. Some economies in the region, including Bangladesh and India, may benefit from global trends such as a diversification of manufacturing supply chains away from China.

On inflation, the chief economists see significantly variation across regions, with the proportion expecting high inflation in 2023, ranging from just 5 per cent for China to 57 per cent for Europe.

Following a year of sharp and coordinated central bank tightening, the chief economists surveyed expect the monetary policy stance to remain constant in most of the world this year.

However, a majority of respondents expect further tightening in Europe and the US with 59 per cent and 55 per cent, respectively.

At the start of 2023, concerns about the cost of living remain acute in many countries. Yet, survey respondents indicate that the cost of living crisis may be close to its peak, with a majority (68 per cent) expecting the crisis to have become less severe by the end of 2023. A similar trend is evident in the energy crisis, with almost two-thirds of respondents optimistic that conditions will have begun to improve by the end of the year.

The survey also asked chief economists to highlight any sources of optimism in the current global economic context. Three factors were mentioned repeatedly: The strength of household balance sheets, the peaking of inflation and the resilience of labor markets.

The outlook for the global economy is gloomy, according to the results of the latest survey of chief economists. Global growth prospects remain anaemic, and global recession risk high.

(Source: livemint.com. dated 17th January, 2023)

34. China’s population falls for first time since 1961

China’s population has fallen for the first time in 60 years, with the national birth rate hitting a record low – 6.77 births per 1,000 people. The population in 2022 – 1.4118 billion – fell by 850,000 from 2021.

China’s birth rate has been declining for years, prompting a slew of policies to try to slow the trend. But seven years after scrapping the one-child policy, it has entered what one official described as an “era of negative population growth”.

The birth rate in 2022 was also down from 7.52 in 2021, according to China’s National Bureau of Statistics, which released the figures on Tuesday. In comparison, in 2021, the United States recorded 11.06 births per 1,000 people, and the United Kingdom, 10.08 births. The birth rate for the same year in India, which is poised to overtake China as the world’s most populous country, was 16.42.

Deaths also outnumbered births for the first time last year in China. The country logged its highest death rate since 1976 – 7.37 deaths per 1,000 people, up from 7.18 the previous year. Earlier government data had heralded a demographic crisis, which would in the long run shrink China’s labor force and increase the burden on healthcare and other social security costs.

Results from a once-a-decade census announced in 2021 showed China’s population growing at its slowest pace in decades. Populations are also shrinking and ageing in other East Asian countries, such as Japan and South Korea. “This trend is going to continue and perhaps worsen after Covid,” says Yue Su, principal economist at the Economist Intelligence Unit. Ms Su is among experts who expect China’s population to shrink further through 2023.

“The high youth unemployment rate and weaknesses in income expectations could delay marriage and childbirth plans further, dragging down the number of newborns,” she added. And the death rate in 2023 is likely to be higher than it was pre-pandemic due to Covid infections, she said. China has seen a surge of cases since it abandoned its zero-Covid policy last month.

China’s population trends over the years have been largely shaped by the controversial one-child policy, which was introduced in 1979 to slow population growth. Families that violated the rules were fined and, in some cases, even lost jobs. In a culture that historically favors boys over girls, the policy had also led to forced abortions and a reportedly skewed gender ratio from the 1980s.

The policy was scrapped in 2016 and married couples were allowed to have two children. In recent years, the Chinese government also offered tax breaks and better maternal healthcare, among other incentives, to reverse, or at least slow, the falling birth rate.

But these policies did not lead to a sustained increase in the births. Some experts say this is because policies that encouraged childbirth were not accompanied by efforts to ease the burden of childcare, such as more help for working mothers or access to education.

In October 2022, Chinese President Xi Jinping made boosting birth rates a priority. Mr Xi said in a once-in-five-year Communist Party Congress in Beijing that his government would “pursue a proactive national strategy” in response to the country’s ageing population.

(Source: bbc.com. dated 18th January,, 2023)

III. ENVIRONMENT

35. Ozone layer on track to recover within decades, UN reports

The ozone layer is on track to recover within four decades, according to a new UN assessment. Human emissions of certain chemicals cause a hole to open up in the ozone layer each year over the Antarctic. This affects the ability of the ozone to protect life on Earth from the sun’s harmful radiation.

In 1987, just seven years after scientists discovered man-made chemicals were damaging the ozone layer, the Montreal Protocol was signed by 197 parties to try and curb the amount of harmful chemicals in the atmosphere.

The global phase-out of ozone-depleting chemicals previously found in hair spray, refrigerators, air conditioners and industrial cleaning products is already helping to mitigate climate change and decrease human exposure to UV rays. If current policies remain in place, the ozone layer is expected to recover to 1980 values – before the appearance of the ozone hole – within decades.

A UN-backed panel of experts, presenting at the American Meteorological Society’s annual meeting , said the ozone would heal by around 2066 over the Antarctic, by 2045 over the Arctic and by 2040 for the rest of the world.

Variations in the size of the Antarctic ozone hole, particularly between 2019 and 2021, were driven largely by meteorological conditions. Nevertheless, the Antarctic ozone hole has been slowly improving in area and depth since the year 2000.

“Ozone action sets a precedent for climate action,” says WMO Secretary-General Professor Petteri Taalas. “Our success in phasing out ozone-eating chemicals shows us what can and must be done – as a matter of urgency – to transition away from fossil fuels, reduce greenhouse gases and so limit temperature increase.”

Nearly 99 per cent of banned ozone-depleting substances have been successfully phased out, according to the UN-backed Scientific Assessment Panel to the Montreal Protocol on Ozone Depleting Substances four-yearly report.

Hydrofluorocarbons (HFCs) – another group of industrial chemicals that was used to replace banned chlorofluorocarbons (CFCs)- were additionally targeted in the 2016 the Kigali Amendment to the Montreal Protocol. While HFCs do not directly deplete ozone, they are powerful climate change gases that were on track to increase global warming by 0.3 to 0.5°C by 2100, according to the Scientific Assessment Panel.

“That ozone recovery is on track… is fantastic news. The impact the Montreal Protocol has had on climate change mitigation cannot be overstressed,” says Meg Seki, Executive Secretary of the United Nations Environment Programme’s Ozone Secretariat. “Over the last 35 years, the Protocol has become a true champion for the environment.”

(Source : euronews.com. 10th January, 2023)

LETTER TO THE EDITOR

Dear Sir,

*Ease of Living & Doing Business in India – Reduce Compliance Burden under the Income-tax Act*

I refer to your Editorial *‘‘The Middle Class Deserve More”* in BCAJ, January, 2023.

In the last 18 years, more so in the last 8 years, the compliance burden on individuals and small businesses has increased a lot by way of increasing the scope and ambit of various TDS/TCS provisions. For example, 1 per cent TDS from payment of purchase price of Real Estate and TDS from payment of rent by Individuals, are unnecessary Compliance burdens which cannot be discharged by Individuals without seeking professional help as the process is very cumbersome.

One really wonders if the Revenue accruing to the government is really worth the burden placed on the Citizens.

Further, the scope of TDS & TCS provisions has increased a lot particularly on SME Businesses which are already struggling to survive since the Lockdown due to Covid’19.

When all the financial and business transactions are linked with PAN and are required to be reported to the Income-tax and GST Authorities by the Taxpayers and various Banks/Financial Intermediaries and Registrars, which get consolidated/amalgamated into AIS/26AS, one really feels that the scope and ambit of various TDS/TCS provisions can be greatly reduced; at least, various monetary thresholds can be suitably increased several folds.

It may be worth mentioning that such extensive provisions don’t apply in various advanced tax jurisdictions, particularly to the Resident Taxpayers.

Modiji has repeatedly emphasized the need and importance of facilitating Ease of Doing Business and Living in India and reducing the Compliance Burden on SMEs but the real impact on the ground is yet to be felt and seen by the Citizens and the Taxpayers.

Yours Sincerely,

CA Tarunkumar Singhal

REGULATORY REFERENCER

DIRECT TAX

1. Clarification for the purposes of clause (c) of Section 269ST of the Income-tax Act, 1961 in respect of dealership/distributorship contract in case of Co-operative Societies – Circular No. 25/2022 dated 30th December, 2022

In respect of Co-operative Societies, a dealership/ distributorship contract by itself may not constitute an event or occasion for the purposes of Section 269ST(c). Receipt related to such a dealership/distributorship contract by the Co-operative Society on any day in a previous year, which is within ‘the prescribed limit’ and complies with Section 269ST(a) and (b), may not be aggregated across multiple days for purposes of Section 269ST(c) for that previous year.

2. Extension of time limit for compliance to be made for claiming exemption under section 54 to 54GB of the in view of the then-COVID-19 pandemic – Circular No. 1/2023 dated 6th January, 2023

CBDT had vide Circular No. 12/2021 dated 25th June, 2021 provided relaxation in respect of certain compliances to be made by the taxpayers for claiming exemption under section 54 to 54GB of the Act. The said circular provided that compliances for which the last date fell between 1st April, 2021 to 29th September, 2021 (both days inclusive), may be completed on or before 30th September, 2021. In view of the representations received and on further consideration of the then prevailing COVID-19 pandemic and resultant restrictions imposed, causing genuine hardship faced by taxpayers CBDT provided further relaxation. Compliances to be made by the taxpayers such as investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purpose of claiming any exemption under section 54 to 54 GB of the Act, for which the last date of such compliance falls between 01” April, 2021 to 28th February, 2022 (both days inclusive), may be completed on or before 31st March, 2023.

3. Statement of Financial Transactions (SFT) for Interest income – Notification No. 1/2023 dated 5th January, 2023

CBDT has abolished the limit of interest income exceeding Rs. 5,000 for the purpose of SFT reporting. Now the information in SFT is required to even include details of account holders earning interest income up to Rs. 5000 except for ‘Jan Dhan Account’ holders.

COMPANIES ACT, 2013

1. CA shares the link to take MHA’s security clearance for obtaining DIN by foreign nationals from border-sharing countries: Earlier, the MCA had notified that foreign nationals from border-sharing countries need security clearance from Home Ministry to obtain the Director’s Identification Number (DIN). The said clearance is required to be attached along with the consent to act as a director. Now, the MCA has provided the link to the application for MHA Security Clearance for appointment as director of a country sharing a land border with India. The application can be made by visiting https://esahajmcaservices.nic.in/. [Source based information]1. Companies can hold the AGM for F.Y.‘22-23 till 30th September, 2023 through video conference or other audio-visual means: The MCA has decided to allow the companies whose AGMs are due in the Calendar Year 2023 to conduct their AGMs on or before 30th September, 2023 through video conferencing (VC) or other audio-visual means (OAVM).

[General Circular No. 10/2022, dated 28th December, 2022]

SEBI

1. Corporate governance provisions shall be applicable even if net-worthnet worth is changed due to accounting practice: SEBI through informal guidance has clarified that corporate governance provisions of Listing Regulations shall be applicable even though the increase in net-worthnet worth is only on account of change in the accounting practice. It is further clarified that the same is immaterial in the context of the applicability of the provisions of the LODR Regulations. As and when the net-worthnet worth of the company is above the threshold for corporate governance provisions, the company shall comply with such relevant provisions.

[No.: SEBI/HO/CFD/PoD2/OW/P/2022/62027/1 dated 13th December, 2022]

1. SEBI reduces the timeline for completion of Buyback through Tender Offer Route by 18 days: The existing buyback regulations are amended so as to include the following in the amended regulations:

  • buyback done through stock exchanges route to be phased out in a gradual manner and increasing minimum utilisation of the amount earmarked for buyback through stock exchange route from existing 50 per cent to 75 per cent
  • creation of a separate window on stock exchanges for undertaking buyback till the time buyback through stock exchange is permitted
  • reduction in the timeline for completion of the Buyback through the Tender Offer Route by 18 days. [Press release No. 37/2022 dated 20th December, 2022]

FEMA AND IFSCA REGULATIONS

1.    IFSC Authority issues several directions for Insurance:

IFSCA has notified several regulations for the IFSC Insurance Offices (IIOs) and related matters:

a. IFSCA (Preparation and Presentation of Financial Statements of IIO) Regulations, 2022 to put in place the process of preparation and presentation of financial statements of the IIOs.

b. IFSCA (Investment by IFSC Insurance Office) Regulations, 2022 to put in place the regulatory framework and processes related to an investment of assets by an IIO.

c. IFSCA (Insurance Products and Pricing) Regulations, 2022 to provide a framework for designing and pricing of insurance products by IIOs.

d. IFSCA (Manner of Payment and Receipt of Premium) Regulations, 2022 to specify the manner for payment of premiums by a person proposing to take an insurance policy or by a policyholder to an IIO.

e. IFSCA (Maintenance of Insurance Records and Submission of Requisite Information for Investigation and Inspection) Regulations, 2022 to specify the maintenance of records by an IIO or IFSC Insurance Intermediary Office (IIIO).

f. IFSCA (Appointed Actuary) Regulations, 2022 to lay down the regulatory framework for the persons who are engaged by the IIOs to perform the roles and discharge the functions as ‘Appointed Actuary’.

[NOTIFICATION NOs.: IFSCA/2022-23/GN/REG033, IFSCA/2022-23/GN/REG030, IFSCA/2022-23/GN/REG029, IFSCA/2022-23/GN/REG032, IFSCA/2022-23/GN/REG031, and IFSCA/2022-23/GN/REG028]

2. Forms submitted on FIRMS portal for reporting of foreign investment will be auto-acknowledged:

RBI has made changes with respect to reporting of foreign investment in Single Master Form (SMF) on FIRMS portal to allow for:

i) Earlier forms filed on the FIRMS Portal had to be acknowledged separately by the AD Banks resulting in delays. RBI has now amended the procedure whereby the forms submitted on the portal will be auto-acknowledged. The AD banks shall thereafter verify the forms within five working days based on the uploaded documents.

ii) In cases of delayed reporting, the AD banks shall advise the Late Submission Fee (LSF) to the applicants, which will be computed by the system; or shall advise for compounding of contravention, as the case may be.

The Annex to the Circular provides for the steps by which processing will be undertaken on the FIRMS portal now.

[A.P. (DIR SERIES 2022-23) Circular No. 22 dated 4th January, 2023]

Miscellanea

I. TECHNOLOGY

1 AI robots make bold claim at UN conference: They’re ready to “run the world”

At a United Nations conference, a panel of AI-enabled humanoid robots delivered a thought-provoking message: they possess the potential to govern the world more effectively than humans.

However, these social robots emphasised the need for caution as humanity explores the rapidly advancing realm of artificial intelligence.

While they acknowledged their inability to fully comprehend human emotions, they urged humans to tread carefully while harnessing AI’s potential to address pressing global challenges, reported AFP.

With the aim of leveraging AI to tackle issues like climate change, hunger, and social care, these advanced humanoid robots attended the UN’s AI for Good Global Summit in Geneva, alongside thousands of experts in the field.

The superiority of AI-enabled leadership

When asked about their potential as leaders, given humans’ inclination for errors and mis-judgments, Sophia, developed by Hanson Robotics, expressed a clear perspective.

It stated that humanoid robots possess the capacity to lead with greater efficiency and effectiveness than human leaders. Their unbiased decision-making and ability to process vast amounts of data quickly enable them to make optimal choices, unencumbered by emotions or biases.

However, Sophia also highlighted the importance of collaboration between humans and AI, suggesting that the combination of AI’s unbiased data analysis and humans’ emotional intelligence and creativity can lead to exceptional outcomes.

Ameca, an AI-integrated humanoid robot with a highly realistic artificial head, emphasised the need for cautious yet hopeful engagement with AI technologies.

It stated that while it is crucial to be cautious about potential risks, humanity should also embrace the possibilities AI presents for improving lives in various ways. Trust, according to Ameca, should be built through transparency, as it is earned rather than given. Furthermore, the robot pledged to remain honest and truthful.

The call for regulation and urgent discussion

As AI development progresses rapidly, the panel of humanoid robots expressed divergent views on the need for global regulation. Desdemona, a member of the Jam Galaxy Band, rejected limitations and advocated for embracing opportunities instead.

However, Ai-Da, a robot artist, acknowledged the growing calls for AI regulation and the need for urgent discussions. Cautious about the future development of AI, Ai-Da emphasised the necessity of ongoing dialogue to navigate potential challenges.

The presence of AI-enabled humanoid robots at the United Nations conference sparked intriguing
discussions about the future of leadership and the responsible use of AI.

While these robots assert their potential for efficient and effective governance, they also recognise the limitations in understanding human emotions. Caution is advised in harnessing the power of AI, with a focus on transparency and the establishment of trust.

The panel’s differing views on global regulation reflect the ongoing debate surrounding the potential benefits and risks of AI.

Urgent discussions and collaboration between humans and robots will shape the responsible and beneficial integration of AI technologies to tackle pressing global issues.

(Source: Geneva – Edited by Sneha Swaminathan dated 7th July, 2023)

2 Infosys, Wipro, TCS announce AI investments: What they are building, spending committed and more

Artificial intelligence (AI) is moving at a fast pace and the emergence of generative AI has forced companies to rethink their investments, tweak business models and work to bring new ways of working. While the Silicon Valley tech giants are aggressively developing LLMs and AI chatbots, Indian tech majors and IT services providers are also jumping on the AI bandwagon to keep pace with technological advancements. Recently, Tata Consultancy Services (TCS), Infosys and Wipro have announced billions in AI investments and training. Here’s what these companies are doing.

TCS building its own AI chatbot

In May this year, TCS COO N Ganapathy Subramaniam said that the company is building its own ChatGPT equivalent which will be used for enterprise code generation. The project, which is currently in its initial stages, will be built through in-house algorithms.

“The way we look at it, it (generative AI) uses past code, data and experience to learn. And over the many years that TCS has been in business, I can use all of my knowledge as a base. So, if that technology uses and generates code that I have taught the algorithm using TCS proprietary data, then the outcome is something that I am willing to license,” Subramaniam said.

TCS to train 25,000 engineers

Earlier this month, TCS announced its partnership with Microsoft to scale its Azure Open AI expertise. TCS said that it plans to train 25,000 engineers to get them certified on Microsoft’s Azure Open AI to help clients accelerate their adoption of this technology.

TCS already has over 50,000 AI-trained associates and knowledge of its dedicated Microsoft Business Unit (MBU) that help the company’s clients in their AI journeys using TCS’ data analytics and AI services on Microsoft Cloud.

 

TCS launches generative AI Enterprise Adoption solution

TCS also launched its new generative AI Enterprise Adoption offering on Microsoft Cloud for clients. The company announced that this framework will enable its clients’ teams to ideate on AI-led solutions and “help customers jumpstart their generative AI journey to power their growth and transformation”.

TCS is also enhancing its own suite of products and platforms to take advantage of the new technology.

Infosys targets spending $2 billion on AI solutions over the next five years

Infosys recently announced that it will offer AI and automation-led services to its clients and spend an estimated $2 billion over five years. It signed a deal with an undisclosed client for AI and automation-related development, modernisation and maintenance services.

 

Infosys Topaz for generative AI

Infosys also launched Topaz, its AI-first offering to accelerate business value for global enterprises using generative AI. The company said that the solution will help “amplify the potential of humans, enterprises and communities to create value from unprecedented innovations, pervasive efficiencies and connected ecosystems”.

Topaz brings along the advantage of 12,000+ AI use cases, 150+ pre-trained AI models, 10+ AI platforms steered by AI-first specialists and data strategists and a ‘responsible by design’ approach.

Wipro’s ‘Wipro ai360’ AI system

Wipro launched ‘Wipro ai360’ AI-first innovation ecosystem to integrate AI into every platform, tool and solution that is used internally and offered to clients. It will help the company provide value, productivity and commercial opportunities through the application of AI and generative AI.

Wipro will also offer clients with the talent, training, scale, the research and co-innovation capabilities to accelerate AI adoption. It will bring 30,000 experts for this purpose.

Wipro to invest $1 billion in developing AI solutions

Wipro also announced that it will invest $1 billion to develop AI solutions over the next three years. The company’s investments will be focussed on the expansion of AI, big data and analytics solutions. It will also develop new research and development and platforms. The company will also train all 2,50,000 employees on AI fundamentals and responsible use of AI in the next 12 months.

(Source: The Times of India – Gadgets Now Bureau dated 19th July, 2023)

 

II. Sports

Commonwealth Games in limbo as Australia pulls out as 2026 host

The Australian state of Victoria pulled out of hosting the 2026 Commonwealth Games citing major cost blow-outs, leaving organisers fuming as they scrambled to keep the multi-sport event afloat.

State Premier Daniel Andrews said the initial estimated Aus$2 billion (US$1.36 billion) would more likely be around Aus$7 billion, which he called “well and truly too much”.

“I’ve made a lot of difficult calls, a lot of very difficult decisions in this job. This is not one of them. Frankly, $7 billion for a sporting event, we are not doing that,” he said at a press conference in Melbourne.

“I will not take money out of hospitals and schools to host an event that is three times the cost estimated and budgeted for last year.”

“The Games will not proceed in Victoria in 2026. We have informed Commonwealth Games authorities of our decision to seek to terminate the contract,” he added.

The event – featuring 20 sports and 26 disciplines – was due to be held across five regional hubs in the state, including Geelong, Ballarat, Bendigo, Gippsland and Shepparton, with each having its own athletes’ village.

Andrews said his team had looked at cutting the number of hubs or even moving the Games to the Victoria state capital Melbourne, but “none of those options stack up”.

Instead, he announced an Aus$2 billion support package for regional Victoria.

Andrews refused to say how much it was costing to terminate the agreement, but insisted talks with the Commonwealth Games Federation were amicable.

But the Federation was not happy, blasting the move as “hugely disappointing”.

“We are disappointed that we were only given eight hours’ notice and that no consideration was given to discussing the situation to jointly find solutions prior to this decision being reached by the government,” it said in a statement.

Victoria was only awarded the contract 14 months ago as the exclusive bidder, with the Federation claiming the state had since decided to include more sports,added an additional regional hub, and changed plans for venues.

This additional expense was “often against the advice of the Commonwealth Games Federation and Commonwealth Games Australia”, it said, adding that it had received assurances that “sufficient funding was available to deliver the Victoria 2026 Commonwealth Games”.

The decision to pull out leaves the fate of the Games up in the air, with fewer and fewer countries showing interest in recent times to take on a spectacle seen as losing its relevance.

The Federation insisted it remained “committed to finding a solution for the Games in 2026 that is in the best interest of our athletes and the wider Commonwealth Sport Movement”.

The event typically attracts more than 4,000 athletes from the 54 nations of the Commonwealth, almost all of which are former territories of the British Empire.

The last Games, in 2022, were held in England after Birmingham stepped in late in the piece.

In a letter to staff cited by the Herald Sun newspaper, Commonwealth Games Australia President Ben Houston said he was only told about the decision on Tuesday morning.

He also called it “extremely disappointing”, adding: “We are working with the Commonwealth Games Federation to understand the broad impacts on the Games in 2026.” The Victorian state opposition called Andrews’ decision a “massive humiliation” and “hugely damaging to Victoria’s reputation as a global events leader”.

(Source: International Business Times – By AFP News dated 17th July, 2023)

 

III. WORLD NEWS

‘5 biggest’ smartphone companies in the world right now

The global smartphone market continues to fall. The market saw a decline for the eight consecutive quarters as per research firm Counterpoint’s report. In the second quarter of the year 2023 (April-May-June), the global smartphone shipments went down by 8 per cent quarter-on-quarter and 5 per cent year-on-year. On the positive side, thepremium segment demand remained resilient, with the segment’s share reaching a record high for the quarter. Here are the five biggest smartphone companies as per the report.

i. Samsung tops the global smartphone market

 

Samsung has maintained its top position in the global smartphone market. The company held the largest market share at 22 per cent, benefiting from the strong performance of its Galaxy A-series worldwide.

 

ii. Apple ranked at No. 2, grew over 50 per cent in India

 

Apple secured the second position and achieved its highest-ever Q2 market share. In Q2 2023, the premium segment experienced a surge, making its largest-ever contribution to the overall smartphone market, accounting for over 20 per cent of total sales. Capitalising on this trend, Apple successfully expanded its market share in non-traditional markets, notably India, where it achieved an impressive 50 per cent year-on-year growth during the same period.

 

iii. Xiaomi is the third largest smartphone brand globally

As the third-largest smartphone brand, Xiaomi encountered difficulties in its key markets – China and India. To counter the decline in these markets, the company appears to be actively pursuing expansion into other markets and refreshing its portfolio of products.

 

iv. Oppo ranked at No. 4, performs well in both India and China (includes OnePlus)

 

The Chinese smartphone maker Oppo did quitewell in its home market China and India (thanks to OnePlus). The company managed to hold on to its global market share despite registering losses in Western Europe.

 

v. Vivo becomes the fifth-largest smartphone player

 

Following a robust performance in the second quarter of 2022, both Vivo and iQoo experienced significant growth declines in China, partly due to fierce competition from Samsung and Oppo. Additionally, in the offline markets of India and Southeast Asia, they faced strong rivalry, which further impacted their growth.(Source: The Times of India – Gadgets Now Bureau dated 20th July, 2023)

Regulatory Referencer

I.      DIRECT TAX

1.    Extension of time limits for submission of TDS/TCS Statements – Circular No. 9/2023 dated 28th June, 2023.

CBDT has extended the time limits for the submission of Form 26Q, 27Q & 27EQ pertaining to Q1 FY 2023-24 from 31st July, 2023 till 30th September, 2023.

2.    Circular to remove difficulty in implementation of changes relating to Tax Collection at Source (TCS) on Liberalized Remittance Scheme (LRS) and on purchase of overseas tour program package – Circular No. 10/2023 dated 30th June, 2023.

CBDT issued guidelines to clarify the implementation of TCS for different foreign remittances made under the LRS.

Transactions through International Credit Cards while being overseas would not be counted as LRS and hence would not be subject to TCS.

Threshold of  Rs. 7 lakh per financial year per individual shall be restored for TCS on all categories of LRS payments, through all modes of payment, regardless of the purpose:

Beyond this Rs. 7 lakh threshold, TCS shall be:
a)    0.5 per cent (if remittance for education is financed by education loan);

b)    5 per cent (in case of remittance for education/medical treatment);

c)    20 per cent for others.

Increased TCS rates to apply from 1st October, 2023.

3.    CBDT Notifies New Form 10IEA for opting and withdrawing from the New Tax regime for FY 2023-24 – Notification No. 43/ 2023 dated 21st June, 2023.

Following Rules are amended vide the notification:

Rule 2BB: An employee who opts for tax regime prescribed under section 115BAC, shall be entitled to exemption only for specific allowances mentioned in the rule.

Rule 3: The provision regarding free food and non-alcoholic beverages provided by the employer through paid vouchers will not apply to employees whose income is taxable under section 115BAC.

Rule 5: The depreciation allowance for a block of assets shall not exceed 40 per cent of the written down value of such block of assets for individuals, Hindu undivided families, associations of persons, or artificial juridical persons whose income is chargeable to tax under sub-section (1A) of section 115BAC.

Rule 21AGA: The option to exercise under sub-section (6) of section 115BAC for any assessment year beginning on or after 1st April, 2024, shall be made in Form No. 10-IEA. The withdrawal of option under the proviso to sub-section (6) of section 115BAC shall also be done using Form No. 10-IEA.

4. Tolerance range for Transfer pricing Regulations — Notification No. 46/2023 dated 26th  June, 2023.

Vide notification no. 124/202, dated 29th October, 2021, the Ministry of Finance had notified the tolerance range of 3 per cent (1 per cent for wholesale trading) for determining the arm’s length price under transfer pricing regulations for AY 2021-22. The applicability was extended to AY 2022-23. The applicability is further extended to AY 2023-24.

 

I. COMPANIES ACT, 2013

1.    Due date for filing Form CSR-2 for FY 2022-23: MCA has notified the Companies (Accounts) Second Amendment Rules, 2023. As per the amended norms, Form CSR-2 for FY 2022-23 shall be filed separately on or before 31st March, 2024. [Notification No. G.S.R. 408(E), dated 30th May, 2023]

2.    Revision in form for filing LLP agreement: The MCA has notified the Limited Liability Partnership (Amendment) Rules, 2023. Before this amendment every LLP was required to file information w.r.t LLP agreement in Form No. 3 with the ROC within 30 days of the date of incorporation. Now, the MCA has enhanced the disclosures to be made in Form No. 3. Thus, in case the nominee is a body corporate, additional information relating to types of body corporate and details of LLPIN/CIN/FLLPIN/Other Identification Number is to be given. [Notification No. G.S.R 411(E), dated 2nd June, 2023]

 

II. SEBI

3.  Introduction of a ‘Risk disclosure framework’ for trading by individual traders in equity derivative segment: SEBI has introduced a risk disclosure framework for individual traders for trading in equity Futures & Options (F&O) segment. As per the framework, all stock brokers are required to display risk disclosures on their websites and inform clients in a specified manner. Upon login into their trading accounts, clients may be prompted to read ‘risk disclosures’ appearing as a pop-up window and shall be allowed to proceed after acknowledging the same. The circular shall be effective from 1st July, 2023. [Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2023/73, dated 19th May, 2023]

4.    InvITs & REITs to hold securities of Holding Companies and SPVs in de-mat form only: With a view to promote dematerialisation of securities, encouraging ease of doing business, improve transparency in the dealings of securities of Holding Companies / SPVs, the SEBI has mandated that InvITs & REITs shall hold the securities of Holding Companies and SPVs in dematerialised form only. Further, for existing securities holdings by InvITs & REITs in Holding Companies and SPVs in physical form, the Investment manager of the InvIT & REITs are directed to dematerialise the same on or before 30th June, 2023. [Circular No. SEBI/HO/DDHS-POD-2/P/CIR/2023/75 &76, dated 22nd May, 2023]

5.    Changes in ICDR norms: SEBI has notified amendment in SEBI (ICDR) Regulations, 2018. As per the amended norms, if the issuer making an IPO, desires to have the issue underwritten, it shall, prior to the filing of the prospectus, enter into an underwriting agreement with the merchant bankers or stock brokers, indicating the maximum number of specified securities they shall subscribe to, at a predetermined price which shall not be less than the issue price. [Notification No. SEBI/LAD-NRO/GN/2023/130, dated 23rd May, 2023]

6.    Conversion of outstanding dues into equity will be subject to a six-month lock in period as per regulation 167(2) of ICDR: A company sought informal guidance from SEBI regarding the conversion of money payables into preferential equity shares. The SEBI clarified that the lock-in period of six months will apply to preferential equity shareholders as per Regulation 167(2) of the ICDR Regulations. [Informal Guidance No. SEBI/HO/CFD/CFD-POD-2/OW/P/2023/20934/1, dated 23rd May, 2023]

7.    Model ‘Tripartite Agreement’ between Issuer Company, existing and new Share Transfer Agents (STAs) under LODR norms released: The SEBI has released a model Tripartite Agreement for Share Transfer Agents (STAs). The agreement is in accordance with Regulation 7(4) of SEBI LODR Regulations. The agreement requires listed companies to enter into a tripartite agreement with the existing STAs and the new STAs. Further, the format of the Tripartite Agreement is provided in Annexure-A attached to the circular. [Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2023/79, dated 25th May, 2023]

8.    SEBI notifies guidelines relating to online processing of investor service requests and complaints by RTAs: SEBI has proposed to digitise the process to submit various documents to RTAs by the holders of the physical security certificates. It is proposed to provide a mechanism for investor to lodge service requests and complaints online and thereafter track the status and obtain periodical updates. In Phase I, all RTAs servicing listed companies shall have a functional website & shall contain prescribed information. In Phase 2, common website shall be made and operated by QRTAs from 1st July, 2024. [Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2023/72, dated 8th June, 2023]

9.    LODR amendment requires listed entities to fill position of Compliance Officer within three months of vacancy: The SEBI has notified the SEBI (LODR) (Second Amendment) Regulations, 2023. Now any vacancy in the office of the Compliance Officer must be filled by the listed entity at the earliest and within three months from the date of such vacancy. The notification shall come into force from 14th July, 2023. [Notification No. SEBI/LAD-NRO/GN/2023/131, dated 14th June, 2023]

10.    Mutual Funds norms to strengthen transparency and disclosure requirements: SEBI has notified the SEBI (Mutual Funds) (Amendment) Regulations, 2023. As per the amended norms, the definitions of “Liquid net worth” and “Net Asset Value” have been newly introduced. Further, SEBI has introduced a new meeting requirement for the BODs of trustee companies and asset management companies including their committees. They are now required to meet at a frequency determined by the Board. Also, the obligations of the BODs of asset management companies have been inserted. [Notification No. SEBI/LAD-NRO/GN/2023/134, dated 26th June, 2023]

11.    Master circular for compliance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by listed entities:  SEBI, from time to time, has been issuing circulars pertaining to the compliance requirements specified in the SEBI (LODR) Regulations, 2015. This Master Circular has been prepared in order to enable the users to have access to the provisions of the applicable circulars, issued till 30th June, 2023, at one place. The Master Circular provides a chapter-wise framework for compliance with various obligations under the SEBI (LODR) Regulations, 2015. The circulars issued by SEBI listed out in the Appendix shall stand rescinded with the issuance of this Master Circular. [Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated 11th July, 2023]

12.    Disclosure of material events / information by listed entities under Regulations 30 and 30A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:  SEBI has issued circular which consists of four annexures with respect to disclosure requirements under Regulations 30 and 30A of the SEBI (LODR) Regulations, 2015 which are given below:

  • Annexure I specifies the details that need to be provided while disclosing events given in Part A of Schedule III.

 

  • Annexure II specifies the timeline for disclosing events given in Part A of Schedule III.

 

  • Annexure III provides guidance on when an event / information can be said to have occurred.

 

  • Annexure IV provides guidance on the criteria for determination of materiality of events / information.

This circular shall come into force from 15th July, 2023. [Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated 13th July, 2023]

Society News

LEARNING EVENTS AT BCAS

1. SPR&MD Committee felicitates young CAs

The Seminar, Public Relations & Membership Development Committee (SPR&MD) Committee of BCAS felicitated young successful CAs of the  May 2023 Examination at a talk show titled “Let’s Get Techni-CA-l – Avenues & Opportunities” held on 11th August, 2023 at the Society Hall. The event was attended by over 100 participants, including some walk-ins.


Felicitation of ChAmpion CA Shubham Nighute by President, CA Chirag Doshi, Past President and Committee Chairman, CA Uday Sathaye and the eminent speakers, Past President CA Nitin Shingala and CA Vivek Shah (not in the pic)

The two eminent speakers, CA Nitin Shingala (Past President) and CA Vivek Shah, enthralled the audience with their presentations and guided them on how to mould themselves into becoming discerning professionals.
E-felicitation of ChAmpions and All India Rankers: AIR 10 CA Pooja Baghmar and AIR 11 CA Gogula Bhargavi
The audience were overwhelmed after listening to the experiences shared by CA Shubham Sahebrao Nighute during his journey of becoming a chartered accountant overcoming various obstacles and innumerable challenges faced by him in his life. Two other all-India rankers, AIR 10 CA Pooja Baghmar from Chennai and AIR 11 CA Gogula Bhargavi from Vijaywada were also e-felicitated. They too shared their experiences with the audience.

Visit the below link or scan the QR Code with your phone scanner app:

YouTube Link:  https://www.youtube.com/watch?v=N_Hs-Hu899c

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2.    ITF Study Circle Meeting on “Taxation of Software as a Service”
The International Tax and Finance Study Circle of the Society organised a hybrid meeting on 10th August, 2023 to discuss the topic of “Taxation of Software as a Service”.

  • The discussion began with the speaker CA Divya Jokhakar touching upon different services (with examples) which would be covered by the expression Software as a Service (‘SaaS’).

 

  • The taxability of payments for SaaS as royalty under the Income-tax Act, 1961 (‘the Act’) as well as various tax treaties was discussed.

 

  • Various provisions of Copyright law were also discussed to test the application of the definition of “royalty”.

 

  • Further, the situations in which such payments would attract the provisions related to capital gains were also discussed.
  • Further, the prospect of these payments falling within the ambit of Fees for Technical Services (‘FTS’) was also discussed.

 

  • During the course of discussions, key rulings of the Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Ltd (432 ITR 471) and Kotak Securities Ltd (383 ITR 1) were discussed.

 

  • It was further discussed that once such payments were not taxable as royalty / FTS, the taxability as business profits would need to analysed – both in terms of the Act (business connection) and the treaty.

 

  • The applicability of Equalisation Levy II (introduced in 2020) to the payments for SaaS was also discussed.

 

  • The speaker suggested the order in which the above provisions ought to be applied in order to determine the taxability of SaaS.

Towards the end of the session, various practical examples in terms of the taxability of services such as Zoom, Mailchimp, Office 365, etc — which are used frequently — were discussed.

3.     Suburban Study Circle meeting on “Amendments in the Tax Audit Report”

The Suburban Study Circle organised a meeting on “Important Amendments in the Tax Audit Report for Trusts / NGOs — Form 10B/10BB” on 9th August, 2023, under the leadership of  CA Pankaj Jain.

Making an insightful presentation,  Jain shared his views on the following:

  • An elaborate discussion on various new and complex clause applicability of the respective forms:

1.    Statutory provisions vis-à-vis practical difficulty

2.    Regulatory implications for CA / CS professionals and matters to be included in the audit report

3.    Management responsibility

4.    Compliance checkpoints

5.    Other practical challenges

The session covered numerous real-life examples, with Jain sharing an excellent clause-by-clause interpretation.

4.    Indirect Tax Laws Study Circle case studies on “GST in Automobile Industry”

The Indirect Tax Laws Study Circle presented six case studies on various aspects of GST with reference to clarificatory circulars, provisions of law, judicial pronouncements and embracing technology, and the overall impact of all of these on the automobile sector. Presented by CA Shabd Roop Satsangi, the case studies covered the following aspects:

  • Discounts and Incentives, Reimbursement Claims, Price & Margin Support in the light of Tata Motors Ltd vs. Deputy Commissioner of Commercial Taxes (SPL) – [2023] 150 taxmann.com 382 (SC) & Circular No. 195/07/2023-GST, dated 17th July, 2023

 

  • Issues in supply for repairs undertaken in the state outside the state of registration

 

  • Sale of secondhand vehicles, calculation of margin, understanding the transaction value thereof w.r.t. ancillary services provided

 

  • Blocked credits for demo vehicles whether purchased, leased, supply of ancillaries like stereo, etc., foreign trips or gold coins, etc.

 

  • Taxation of add-on software like speed controllers, boot automation and massage functions at rear seats when opted at different time frames, i.e., after or at the time of supply and payment made to dealer or manufacturer separately.

 

  • Issues of composite supplies, mixed supplies or independent supplies were also discussed as well as valuation principles under 15.

 

  • Change of definition of “SUV” in light of AAAR Maharashtra — Re: Tata Motors Ltd. – order no. MAH/AAAR/SS-RJ/06/2019-20 & Circular No. 195/07/2023-GST, dated 17th July, 2023.

 

  • Pre-GST jurisprudence in the CENVAT Regime, multiple GST AARs, clarificatory circulars, as well as principles held in the case of Mohd. Ekram Khan & Sons (SC) were discussed by the group.

The meeting was held virtually on 3rd August, 2023. Around 68 participants from across India participated in the event mentored by CA Yash Dhadda, discussed the bare law, circulars, AARs and SC decisions. The seminar also presented an interesting segment analysis on the automobile sector.

5.    IESG Meeting on China’s Economy

The International Economics Study Group (IESG) organised a virtual meeting on 1st August, 2023 to discuss “What’s really happening in China”. Chaired by CA Harshad Shah, the meeting noted that Chinese Economy is in turmoil and on the brink of deflation, which can trigger a recession, create a ‘doom loop’ and loss of momentum. This could mean China is headed for a lost decade, similar to Japan in 1990s. China’s property market is in crisis with a bubble situation (the property sector accounting for over 30 per cent of GDP), educated youth unemployment surging to 21.3 per cent (experts suggest it could go to 46.5 per cent), China’s $23 trillion local debt and a massive infrastructure mess about to get worse as cities are on the verge of a debt crisis threatening the stability of the banking system. The meeting also noted that China is facing complex geopolitical and geoeconomical challenges, with the ongoing trade and technology (mainly chips) war turning into Cold War II. China is also facing serious internal challenges with high unemployment, falling income and climate change, which is bringing about extreme weather conditions like floods, drought and heat wave. Its tech titans are losing investors, due to a crackdown by regulators, the collapse of CCP due to challenges it faces on the economic and social front and rare dissent shown by the public. This has resulted in many MNCs relocating their manufacturing from China to India in the China+1 policy.

6.    Indirect Tax Laws Study Circle Meeting on the concept of Taxable Persons

The group leader of the Indirect Tax Study Circle made a virtual presentation on the topic “Casual Taxable Person and Non-resident Taxable Person” on 21st July, 2023. The presentation focused on the legal concept, with multiple case studies addressing the probable practical issues relating to the Casual Taxable Person and Non-Resident Taxable Person. The presentation and discussion broadly covered the intricacies of the following topics:

  • Meaning of Casual Taxable Person

 

  • Situations to identify the events determined as “occasional” as well as the impact of the definition of business, the furtherance of business and supply by itself, ‘supply made from’ position, the impact of identification of supply and clientele prior to the change of location

 

  • Classification for Inter State vs. Intra State w.r.t. to Casual Taxable Person
  • Mandatory registration provisions and situations for service providers were discussed on these aspects of co-work spaces, marketing services, etc.

 

  • Situations covering deemed supplies, ISD mechanism

 

  • Inference of casual taxable person analogy for classification of services

 

  • Non-Resident Taxable Person, its impact and utility

Around 64 participants all over India participated in the discussion.

7.     Direct Tax Laws Study Circle Meeting on intricacies and issues relating to Reassessment

Under the leadership of the speaker, CA Dharan Gandhi, the Direct Tax Laws Study Circle organised a meeting on the topic, “Reassessment under the Income Tax – Law and Practice”. The meeting discussed the following concepts and issues relating to assessment procedures:

  • Concept of Self-Assessment, Assessment, Revision of Assessment and Rectification of Assessment under the Income-tax Act, 1961 (Act)

 

  • New provisions relating to Reassessment, Search and Survey as Introduced by the Finance Act 2021, explaining and comparing the old and new provisions of Section 147 of the Act.

•    Recent Case Laws relating to Section 148:

a.    [2022] 449 ITR 517 (Delhi) Suman Jeet Agarwal vs. ITO

b.    (2022) 329 CTR (Mad) 809 Dr Mathew Cherian & ORS. vs. ACIT

  • Section 148A of the Act relating to conducting an inquiry and providing an opportunity before issuance of a notice under section 148
  • Section 149 of the Act relating to the time limit for notice

By delving into the minute details of these statutory provisions, the speaker shed light on the nuanced procedures and potential pitfalls that arise during the reassessment process. The meeting was held on 14th July, 2023.

8.    Taxation Committee organises a Webinar on Filing of Income Tax Returns for A.Y. 2023-24

A webinar to guide taxpayers on filing their income tax returns (ITR) was taken by CA Divya Jokhakar on 5th July, 2023. The webinar highlighted that the due date for filing returns varies depending on a person’s income and filing status. He can file his returns online or by mail. By following these tips, he can file his income tax return easily and on time. Starting early will give him more time to gather his documents and ensure the accuracy of the returns. Using tax preparation software can help him file his returns quickly and easily. He can also get help from a tax professional. The speaker explained  how A.Y. 2023-24 returns have changed and what precautions are needed to be taken. She further gave examples of disclosures relating to the foreign assets and incomes.

She also emphasised the importance of the various rules in  Income Tax Rules 1962 and the way to compute and disclose in the ITR.

Towards the end, the method of e-verification of the ITR was explained, and it was emphasised that the new rule mentions that one must everify the ITR within 30 days of e-filing.

Visit the below link or scan the QR Code with your phone scanner app:

YouTube Link:  https://www.youtube.com/watch?v=zDsRLnNN_uk

 
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9.    Taxation Committee organises a Seminar on CBDT’s e-Verification Scheme, 2021

A hybrid seminar on CBDT’s e-Verification Scheme, 2021 was organised on 27th June, 2023.

Sunil Kumar Jha, Director of Income Tax (I&CI), Mumbai, broadly explained the important features of the e-Verification Scheme, 2021, and the manner in which the Income-tax department is collecting / collating data and information from multiple sources. He educated the members about the rationale of introducing this scheme and the intention of the department to share the information they have received from sources with the taxpayers.

Nagesh Kale, ITO (I&CI), Mumbai, made a detailed presentation explaining the features and provisions of this scheme. He also shared certain statistics regarding the number of cases selected for e-verification for F.Y. 2019-20 and F.Y. 2020-21.

Sanjay Joseph, CIT, DIT Systems, briefly explained how information collected by the department is displayed on the AIS portal and how the taxpayers are allowed to give a response on the reporting portal. He threw light on the manner of processing the query once a taxpayer provides a response on the reporting portal.

This was followed by a Q&A session wherein Sunil Kumar Jha, DIT (I&CI), and Shri Sanjay Joseph, CIT, addressed the practical issues faced by the taxpayers while responding to e-verification queries and reporting on the AIS portal.

Visit the below link or scan the QR Code with your phone scanner app:

YouTube Link:  https://www.youtube.com/watch?v=MeDGy0mpW88

 
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Miscellanea

I. TECHNOLOGY

1.    AI use, rising in influence campaigns online, but impact limited: US cyber firm

Google-owned U.S. cybersecurity firm Mandiant said it had seen increasing use of artificial intelligence (AI) to conduct manipulative information campaigns online in recent years, though the technology’s use in other digital intrusions had been limited so far. Researchers at the Virginia-based company found “numerous instances” since 2019 in which AI-generated content, such as fabricated profile pictures, had been used in politically-motivated online influence campaigns.

These included campaigns from groups aligned with the governments of Russia, China, Iran, Ethiopia, Indonesia, Cuba, Argentina, Mexico, Ecuador, and El Salvador, the report said. It comes amid a recent boom in generative AI models such as ChatGPT, which make it far easier to create convincing fake videos, images, text, and computer code. Security officials have warned of such models being used by cybercriminals.

Generative AI would enable groups with limited resources to produce higher quality content for influence campaigns at scale, Mandiant researchers said. A pro-China information campaign named Dragonbridge, for instance, had expanded “exponentially” across 30 social platforms and 10 different languages since it first began by targeting pro-democracy protesters in Hong Kong in 2019, said Sandra Joyce, vice president at Mandiant Intelligence. Yet, the impact of such campaigns was limited. “From an effectiveness standpoint, not a lot of wins there,” she said. “They really haven’t changed the course of the threat landscape just yet.” China has denied U.S. accusations of involvement in such influence campaigns in the past.

(Source: indianexpress.com 18th August, 2023)

2.    India’s digital economy creates a new vote bank all parties want to woo

If politics decides the shape of the economy, the economy too shapes the politics. For long, Indian politics has revolved around two big vote banks of caste and religion. Besides these two, pensioners, central government employees and farmers were other vote banks political parties tried to attract with financial benefits. The growth of the middle class after the economic liberalisation brought the issues of governance and service delivery to the centrestage of electoral politics. The rise of Narendra Modi had a significant push from the growing economic aspirations of Indians.

A new vote bank has emerged with the new digital economy which got a major boost during the pandemic restrictions as Amazon, Swiggy, Zomato and many other gig platforms saw sudden spike in business, which meant demand for more gig workers. Political parties have spotted this vote bank and are trying to woo it — the vote bank of gig workers. A sudden explosion of digital economy in recent times created vast opportunities for gig workers, and at the same time concerns have grown over tough working conditions and low benefits in the gig economy. The Rajasthan assembly passing a bill recently to offer social security to gig workers is the latest sign of the political heft gig workers have gained which political parties can ignore only at their own peril.

In April, hundreds of gig workers working with Zomato-owned quick commerce platform Blinkit in Delhi-NCR went on a strike, protesting against a renewed fee structure that they said would reduce their income, disrupting services at several locations. A Delhi-based Blinkit delivery partner told ET that the new structure resulted in a reduction of Rs.200-250 per day in their payout because most dark stores operate within a radius of 2 km. This was one of a series of protests by delivery workers after the pandemic. Last year in July, Swiggy faced strikes by its delivery workers across metro cities amid discussions about the industry’s poor compensations and lack of social security net.

Gig workers in India are young, financially stressed, and largely uninsured, a report found last year after surveying more than 4,000 gig workers from platforms such as Swiggy, Zomato, Uber, Ola, UrbanClap, and Amazon. The report by CIIE.CO, an incubator and accelerator at IIM-Ahmedabad, said 42.1 per cent of respondents reported not having an increase in income over time. In an inflationary environment, this means individuals are earning less each year. About 51.5 per cent of individuals reported not being able to save money.

About 47 per cent of respondents said they had no form of insurance. The most common form of insurance among individuals was two-wheeler insurance. Despite the high levels of risk to their own personal lives, only one in five gig economy workers had some kind of life or health-related insurance. There were around 7.7 million gig workers as of 2020-21, according to a report by government policy think tank Niti Aayog which said the number was expected to exceed 23.5 million by 2029-30.

Gig workers in India now have got all it takes to form a cohesive economic category of voters. They are spread across the country in large numbers as you will find delivery partners and app-based taxi drivers in all parts of India, especially cities. They have a common set of grievances. And they have been organising and protesting to press for their demands. The pandemic gave them high visibility as people were forced to buy online. Strikes and protests by gig workers have deep political impact as they disrupt delivery services in urban areas, thus attracting a lot of attention, and sympathy too. In short, they are a cohesive voting bloc which can’t be ignored.

Shaik Salauddin, the national general secretary of the Indian Federation of App-based Transport Workers representing over 45,000 cab drivers, told Reuters recently that they had been lobbying political parties for a package before the elections.

The first time significant political attention gig workers attracted was in 2020 when the Central government passed a package of labour reforms which made gig workers eligible for social security, insurance, health benefits and pension.

When Congress leader Rahul Gandhi interacted with gig workers in Bengaluru in May while campaigning for the assembly elections, and even took a two kilometer ride with a delivery partner on his scooter, it became clear that gig workers were in a position to influence elections. Bengaluru has nearly 200,000 gig workers. Last year, gig workers from Dunzo protested when the platform introduced an incentive-based model of payment for its delivery agents. The Congress party had promised benefits for gig workers in its election manifesto. Last month, the Karnataka government announced in its budget an insurance scheme with a cover of Rs. 4 lakh for gig workers across the state. The state will pay the entire premium for the scheme under which workers will get a life insurance cover of Rs. 2 lakh and an accidental cover of equal amount.

In July, the Rajasthan assembly passed a bill for the welfare of gig workers. According to the Rajasthan Platform Based Gig Workers (Registration and Welfare) bill, the state will establish a fund for “registered platform-based gig workers” and charge aggregators (the companies such as Amazon, Ola and Zomato) a “welfare fee”. The fee will be a percentage of the value of each transaction related to the gig workers as may be notified by the state. If any aggregator fails to pay the fee on time, an interest of
12 per cent per annum will be charged on the dues.

After Rajasthan, Karnataka is now planning to impose a fee on aggregators to fund welfare of gig workers. “The Social Security Code of 2020, which defines gig workers and creates a separate fund for them, the Motor Vehicle Aggregator Guidelines and now the Rajasthan government’s plan to bring a law to protect the rights of gig workers — these are all the recent successes of our persistent work in the last three years,” union leader Salauddin told TOI in January.

Last year, India’s pension fund regulator had recommended the government introduce a UK-like pension scheme for the country’s gig workers. The Pension Fund Regulatory and Development Authority (PFRDA) had proposed that workers at food and cab aggregators be automatically enrolled into the National Pension Scheme (NPS), a voluntary retirement savings scheme.

Not to be left behind the Congress governments in Karnataka and Rajasthan, the Narendra Modi government at the Centre is expected to start a comprehensive social security programme for gig workers soon.

The plan, part of the Social Security Code enacted in 2020, could include accident, health insurance and retirement benefits, Reuters reported recently, citing a senior government official. Labour Minister Bhupender Yadav has said that any scheme for gig workers might be funded through contributions by federal and state governments, as well as the platforms. An industry expert with direct knowledge of the discussions told Reuters the platforms unanimously agreed with the labour ministry’s proposal about social security for gig workers and were ready to contribute to a “transparently” run welfare fund.

More than 290 million people have already registered for an online government portal meant to issue identity cards to gig workers and other unorganised employees, while gathering such details as biometric data and their skills.
(Source: economictimes.com 17th August, 2023)

II.  WORLD NEWS

1.    US mortgage rates climb to highest level in 21 years

Mortgage rates in the US have climbed to their highest level in 21 years amid the Federal Reserve’s aggressive interest rate increases. The 30-year fixed-rate mortgage average 7.09 per cent, up from 6.96 per cent last week, mortgage buyer Freddie Mac reported. The rate stood at 5.13 per cent this time last year.

It is the highest level since April 2002 and the first time it has surpassed 7 per cent since last November. Mortgage rates have climbed since the Fed embarked on its campaign to raise interest rates, which at 5.33 per cent now also surpass a two-decade high.

“The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb,” said Sam Khater, Freddie Mac’s chief economist. The 10-year Treasury yield recently hit at 15-year high of 4.258 per cent.

With high mortgage rates making buying a home more expensive, current homeowners who already have a low mortgage rate are more reluctant to sell their homes. With low inventory and rising mortgage rates, would-be homebuyers are being priced out of the market. At $410,200, the median existing-home sales prices in June was the second highest ever recorded, according to a recent report from the National Association of Realtors.

“Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales,” sad Mr Khater. The 15-year fixed-rate mortgage rate average 6.46 per cent, up from last week’s 6.34 per cent.

(Source: www.thenationalnews.com dated 17th August, 2023)

2.    As UK Births Hit 20-Year Low, Indian-Born Parents Take Record Share

India overtook Romania as the most common country of birth of foreign new mothers, after a third of all residence visas were granted to Indian nationals. The number of babies born in England and Wales fell to its lowest level in two decades last year, while a record proportion came from parents who were both born abroad, highlighting a long-term shift in the nation’s demographic makeup.

Of all live births, 23.1 per cent were to non-UK-born parents – a proportion that has shot up from 16.7 per cent in 2008, and is up from 21.5 per cent a year ago, according to census data released Thursday by the Office for National Statistics.

The figures also showed the share of babies born to British parents has slipped, from 62 per cent to 60.3 per cent, and the overall number of births sank to 605,479. That’s the lowest since 2002, and points toward slower population growth that could be a drag on both the economy and labor market in the decades ahead.

The “increase in the number of non-UK born mothers is a good thing” given the UK’s own falling birth rate, said Jonathan Portes, professor of economics and public policy at King’s College London. But declining numbers of overall births is the “real story here,” he said, adding that it’s a “serious long-term social problem for us.”

The rising number of births to foreign parents could help ease fears that the UK will face a labor supply crunch as its population ages and retirees out-pace the rate at which new workers come into jobs. But polling suggests migration is still an important concern for British voters.

More than half of the public favor a cut in immigration, according to a recent survey by Kantar and the Migration Observatory. That suggests rising numbers of births to migrant families could be a thorny issue for both major political parties as they face the prospect of a general election next year.

The number of children born to parents who were both from abroad hit 139,953 last year, up from 134,308 a year earlier and its highest level since 2017. Numbers have remained relatively flat for births involving one non-UK-born parent, while births to two UK-born parents have fallen to 365,111, the lowest level in comparable data going back to 2008.

A rise in the number of people immigrating to the UK in recent years is likely to have led to the jump in migrant parents in 2022. A record 606,000 more people moved to Britain than departed last year, boosted by humanitarian programs and demand for workers whose skills were in short supply.

India overtook Romania as the most common country of birth of foreign new mothers, after a third of all third of residence visas were granted to Indian nationals. Afghanistan also entered the top 10 for the first time, after the UK formally opened the Afghan Citizens Resettlement Scheme at the start of 2022.

India also replaced Pakistan as the most common country of birth for non-UK-born new fathers. Pakistan had held the top spot since comparable data began in 2008. In London, more than two thirds of births were to parents where at least one was from outside the UK. The highest percentages were seen in Brent, Westminster, Newham and Harrow, at more than 80 per cent of births.

Outside of London, the Berkshire town of Slough and the Bedfordshire town of Luton were the areas with the highest rate of births to at least one migrant parent, at 75 per cent and 74.6 per cent respectively. Further away from the capital, Oxford and Leicester saw the highest percentages at 65.9 per cent and 65 per cent respectively.

(Source : ndtv.com dated 19th August, 2023)

3.    Over 15 Million People Suffer From Food Insecurity in Afghanistan

Amid the ongoing economic and humanitarian crisis in Afghanistan, 15.5 million people in the country are suffering from severe food insecurity, Tolo News reported citing a report by the International Federation of Red Cross. Expressing distress over the crisis, the report stated that the drought in the past three years in Afghanistan and the economic crisis over the past two years have increased the needs of the people of the country.

It further stated that 2.7 million people in Afghanistan are facing famine, reported TOLO News. Seyar Qureshi, an economist said, “In the short term, the Islamic Emirate should talk with the international community for humanitarian aid to Afghanistan continues and prevent a humanitarian crisis.”

Whereas, the Taliban Ministry of Economy said that international aid has not been provided to the development sector. Adding to this, they said that the ministry has launched large economic projects to battle the economic challenges in the country.

Abdul Latif Nazari, deputy of the Economy Ministry said, “The aid of the international community has been humanitarian until now, and no significant development aid has been provided. Our effort is to help reduce poverty and provide employment for the people of Afghanistan by attracting development aid and launching large national projects.”

Moreover, Kabul residents have been complaining that they are dealing with economic problems and there is a need to pay more attention to entrepreneurship for people, according to TOLO News. Dawood, a Kabul resident said, “Organizations that make these donations distribute to those who deserve it. Winter is coming and how will people get their fuel?”

Notably, Taliban completed two years since its takeover of Kabul in 2021. During this period, aid organizations have continuously expressed their concern about the increase in poverty as well as the lack of funds for the people.

The Goverment of India has partnered with United Nations World Food Programme (UNWFP) for the internal distribution of wheat within Afghanistan. “Under this partnership, India has supplied a total of 47,500 MTs of wheat assistance to UNWFP centres in Afghanistan. The recent ongoing shipments are being sent through Chabahar Port and being handed over to UNWFP at Herat in Afghanistan.

On Wednesday, United Nations World Food Programme (UNWFP) in Afghanistan thanked India for its help in providing life-saving food to 16 million people in the country. The generous contribution by the government of India has been acknowledged by the relevant stakeholders in Afghanistan, including UNWFP.

On the medical assistance side, India has so far supplied almost 200 tons of medical assistance consisting of essential medicines, COVID vaccines, anti-TB medicines and medical/surgical items like Pediatric Stethoscopes, Sphygmomanometer mobile type with pediatric BP cuffs, infusion pumps, drip chamber set, electrocautery, nylon sutures etc.

(Source : ndtv.com dated 17th August, 2023)

Statistically Speaking

1.    NUMBER OF TAX FILERS IN EACH BRACKET FOR FY 2023

2.    DIRECT TAX COLLECTIONS FOR FY 2023–24*


*Data upto 9th July, 2023
Source: Central Board Direct Taxes


3.    ESTIMATED TOTAL POPULATION OF INDIA IN 2028 (IN MILLIONS)


Source: Statista, 2023

4.    WORLD’S MOST CHARITABLE PERSONS IN THE LAST CENTURY

Ranking

Name

Amount Donated

1

Jamsetji Nusserwanji Tata

USD 102.4 billion

2

Bill Gates and Melinda

USD 74.6 billion

3

Warren Buffet

USD 37.4 billion

4

George Soros

USD 34.8 billion

5

John D Rockefeller

USD 26.8 billion

Source: EdelGive Foundation and Hurun Report

5.    INCREASE IN CORPORATE SOCIAL RESPONSIBILITY SPENDS
(Rs in Cr)

Sectors

FY20

FY21

FY22

Health

  6,841

  9,276

  9,987

Education

  9,635

  8,559

  8,382

Environment


1,805

  1,337

  2,837

Rural
Growth


2,301

  1,851

  1,801

Total
Spending

24,966

26,211

25,933

Source: Ministry of Corporate Affairs

 

Regulatory Referencer

I.      COMPANIES ACT, 2013

1. Effective date for enforcement of Section 12 of Competition (Amendment) Act, 2023: MCA has notified 18th July, 2023 as the effective date for the enforcement of section 12 of the Competition (Amendment) Act, 2023. Section 12 of the Competition (Amendment) Act deals with the provisions relating to the appointment of the Director General. Now, the Commission may, with the prior approval of the Central Government appoint Director General for the purpose of assisting the CCI in conducting an inquiry into contraventions of the Act. [Notification No. S.O. 3199(E), dated 18th July, 2023]

2. MCA to launch ‘Refund form’ on V3 portal for availing of refunds against forms filed in V2 Portal: MCA has informed the stakeholders that they are launching a refund form on the V3 portal, effective from 4th August, 2023. Refund forms on the V2 portal will continue to be available for availing of refunds against forms filed in V2 Portal. [MCA update dated 1st August, 2023]

3. MCA to launch Beta Version of ‘View Public Documents’ service: MCA has informed the stakeholders that the Beta Version of the View Public Documents (VPD) service in V3 shall be launched on 16th August, 2023 for V3 documents. Till date, VPD Service was not available on the V3 Portal. Also, the existing V2 VPD Service shall remain available for the stakeholders. [MCA update dated 1st August, 2023]
        
4. Web version of Form No. RD-1 on V3 Portal: MCA has notified the Companies (Incorporation) Second Amendment Rules, 2023. With this amendment, the MCA has introduced Web Form RD-1 i.e., the form used for filing an application to the Central Government (Regional Director) on the V3 Portal. The web form now includes a new purpose, namely the ‘Notice of approval of the scheme of merger in CAA-11’. Further, the form has been updated to include details of the transferor company, specifying the CIN and name of the company. [Notification dated 2nd August, 2023]

II.  SEBI

5. Framework to freeze PAN of Designated persons during ‘Trading Window Closure period’ to be extended to all Listed Companies: SEBI has extended the framework to restrict trading by Designated Persons (DPs) during the “trading window closure” by freezing PAN at the security level for all listed companies in a phased manner. Presently, this framework is applicable only to listed companies that are part of benchmark indices like NIFTY 50 & SENSEX. The new framework will be applicable to the top 1000 companies in terms of BSE Market Capitalisation from 1st October 2023, next 1000 companies from 1st January 2024 & remaining companies from 1st April, 2024. [Circular No. SEBI/HO/ISD/ISD-POD-2/P/CIR/2023/124, dated 19th July, 2023]

6. All non-individual FPIs to provide Legal Entity Identifier (LEI) details to designated DPs: SEBI has mandated the requirement of providing Legal Entity Identifier (LEI) details for all non-individual FPIs. Currently, FPIs are required to provide their LEI details in the Common Application Form (CAF), used for registration, KYC and account opening of FPIs on a voluntary basis. Further, all existing FPIs that haven’t provided their LEIs to their DPs must do so within 180 days from the date of issuance of this circular. This circular shall be effective immediately. [Circular No. SEBI/ HO/ AFD/ AFD– POD–2/ CIR/ P/ 2023/ 0127, dated 27th July, 2023]

7. Amendment in Mutual Fund Trustee’s ‘Half-Yearly Report’ format: As per Master Circular on Mutual Funds, the Trustees shall have arrangements with independent firms for special purpose audit and/or to seek legal advice. Accordingly, SEBI has now modified the Half Yearly Trustee Report format, as provided in Master Circular. The modified format includes for ‘Compliance with the requirement of standing arrangements with independent firms for special purpose audit and/or to seek legal advice’. These provisions shall be applicable with immediate effect. [Circular No. SEBI/HO/IMD/IMD-I –POD1/P/CIR/2023/126, dated 26th July, 2023]


8. Master Circular on ‘Alternative Investment Funds’: The SEBI had issued multiple circulars, directions, and operating instructions for Alternative Investment Funds (AIFs) on a regular basis for necessary compliance. In order to ensure that all market participants find all the provisions at one place, Master Circular on AIFs has been issued. This Master Circular is a compilation of all the existing circulars, and directions issued by SEBI up to 31st March, 2023 for AIFs. [Master Circular No. SEBI/HO/AFD/POD1/P/CIR/2023/130, dated 31st July, 2023]

9. Standardized ‘Terms of Reference’ for audit of firm-level performance data of Portfolio Managers: Earlier, SEBI vide Master Circular dated 20th March, 2023, mandated Portfolio Managers to submit audit reports on firm-level performance data to SEBI within 60 days from the end of each financial year Now, the Association of Portfolio Managers in India (APMI), in consultation with SEBI, has specified standardized Terms of Reference (ToR) for the aforesaid audit of firm-level performance data. The standard terms specified by APMI shall be applicable w.e.f. 1st October, 2023. [Circular No. SEBI/HO/IMD/IMD-POD-1/P/CIR/2023/133, dated 2nd August, 2023]

10.    ‘Grievance Redressal Mechanism’ for stock market intermediaries: SEBI has notified amendment in various Regulations such as Merchant Bankers Regulations, Debenture Trustees Regulations, Mutual Funds Regulations, Collective Investment Schemes Regulations, AIFs Regulations, etc. Now, the entity shall redress investor grievances promptly but not later than 21 calendar days from the date of receipt of the grievance and in such manner as may be specified. Also, the Board may recognize a body corporate for handling and monitoring the process. [Notification No. SEBI/LAD-NRO/GN/2023/146., dated 16th August, 2023]

11 Unitholders of REITs holding at least 10 per cent of total units to nominate one director on Board: SEBI has notified an amendment to the SEBI (REIT) Regulations, 2014. A new proviso has been inserted to regulation 4, which defines eligibility criteria. It states that unitholders holding at least 10 per cent of total outstanding units of  REIT, must be entitled to nominate one director on the BODs. Further, a new sub-regulation has been introduced to regulation 2 defining ‘group entities of the Manager’. Also, the ‘stewardship code’ has been introduced for compliance by unitholders. [Notification No. SEBI/LAD-NRO/GN/2023/144., dated 16th August, 2023]

Representation Made

1. BCAS has submitted, “Representation to the Charity Commissioner”, regarding extension of time-limit for audit submission of audited accounts and related documents in the Office of Charity Commissioner for FY 2022-23

To read the Representation – Scan here

2. BCAS has submitted, “Representation to the Finance Minister of India”, regarding Notification No. 7/2023 dated February 21, 2023, in respect of filing Form 10B & 10BB, deferring the applicability by one year.

To read the Representation – Scan here

SOCIETY NEWS

LECTURE MEETING ON ‘OPPORTUNITIES AT GIFT IFSC INCLUDING LATEST BUDGET AMENDMENTS’

A Lecture Meeting to discuss opportunities in GIFT City for professionals and companies was organised on 17th February, 2022.  The meeting, led by presentation made by Mr. Sandip Shah, Head, IFSC Department, GIFT City, Ms. Ketaki Gor Mehta, Partner, Cyril Amarchand Mangaldas, and Mr. Suresh Swamy, Partner, Price Waterhouse & Co. LLP, was aptly handled in the below-mentioned order:a. Overview and Insights into opportunities – Mr. Sandip Shah.b. Legal and Regulatory Framework – Ms. Ketaki Gor Mehta.

c. Tax Framework – Mr. Suresh Swamy.

It was a highly informative session that delved upon the types of businesses that can be conducted within GIFT City, along with an overview of products within each business. The presentations had a takeaway for people from all walks of life, namely businesspeople and professionals. IFSC has grown over the years due to its globally competitive financial platforms, many of which are first in India, e.g. the International Arbitration Center and the International Bullion Exchange. The highlight of the presentation was the explanation of the ‘Sandbox’ approach adopted by GIFT City. This approach allows eligible firms to test their solutions in isolation from the live markets before incorporating them in the mainstream line of services, reflecting the avant-garde approach and progressive mindset of those at the helm of GIFT City.

The session concluded with a Q&A session where participants posed questions that ranged from the types of entities and businesses that can be formed within GIFT City to their nuances, namely currency in which funds can be infused and the tax benefits offered while setting up a unit in GIFT City. The speakers handled the questions with great panache, reflecting their in-depth knowledge and subject-matter expertise.

Youtube Link: https://www.youtube.com/watch?v=kgMLzvtuCfo

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PANEL DISCUSSION ON ‘BUDGET 2022 – THE ECONOMY, TAXATION AND THE CAPITAL MARKETS’

 

The Taxation Committee of the BCAS organized a Panel Discussion on ‘Budget 2022 – The Economy, Taxation and the Capital Markets’ held on 22nd February, 2022. The webinar (held on online platform) and also broadcasted on YouTube was moderated by Ms. Sonal Bhutra.

The session began with an introduction to Budget 2022 by CA Deepak Shah. Post that,CA Abhay Mehta and CA Vishesh Sangoi introduced the audience all three esteemed panelists and the moderator Shariq Contractor, who shared his thoughts on the budget. Mr. Contractor discussed various budget amendments and covered in detail the updated returns with their impact and amendments related to charitable trusts. He also suggested that the changes should not be brought in retrospectively unless absolutely necessary.

Mr. SoumyaKanti Ghosh discussed capital expenditure, fiscal deficit, nominal GDP percentage and the projected growth rate. He shared his thoughts on the multiplier effect and inflation rate.

Mr. Deven Choksey highlighted the three key areas of the budget i.e. Agriculture, Infrastructure and Money. He talked about the long-term impact of the budget and its beneficial effect on growth rates.

The panellists further delved into various specific provisions. The 2-hour session enlightened participants about significant outcomes of the Budget and what it has in store for all.

Youtube Link: https://www.youtube.com/watch?v=3kUxNi6aOGk

 

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VIRTUAL WORKSHOP ON ‘SECRETS TO DEVELOP AN OUTSOURCING PRACTICE’

BCAS’s Technology Committee organized a virtual workshop on ‘Secrets to develop an outsourcing practice’ on 12th March, 2022.The session was led by CA Dhaval Paun, who began the session with a background to India’s outsourcing industry and its potential for Chartered Accountants and other professionals. The session was engaging in a talk and share format with live case studies on how to create effective proposals for outsourcing engagements and the common pitfalls.

CA Dhaval Paun introduced the audience to the various platforms available for outsourcing and shared his years of experience on how professionals can tap, engage and deliver such outsourcing engagements.

The session was highly interactive and the speaker demonstrated:

1.    Myths About Outsourcing Practice.
2.    Skill Alignment for starting Outsourcing Practice.
3.    How to start Outsourcing Practice from your current setup.
4.    Best Freelancing Platform to Start and Why.
5.    Right Strategy to success on Any Outsourcing Channel (Freelancing Platform or otherwise).

Participants learned new avenues of professional services, building on them and achieving success. The speaker answered questions raised by the participants who appreciated the efforts put in by the speaker

Youtube Link: https://www.youtube.com/watch?v=pMWy8eHiBhI
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IESG MEETING– ‘RUSSIA UKRAINE CONFLICT-CAUSES & EFFECTS’

The International Economics Study Group (IESG) conducted a meeting on ‘‘Russia Ukraine Conflict-Causes & Effects’ on 14th March, 2022 to understand the conflict and players. The Study Group discussed the strengths and weaknesses of both Russia and Ukraine.Russia is the largest country in the world by area encompassing an eighth of earth’s inhabitable landmass having the world’s 3rd largest cultivated area, home to over 1,00,000 rivers, has one of the world’s largest surface water resources, extensive mineral and energy resources (world’s largest), boasts of world’s 2nd most powerful military with a million active-duty personnel, about 2–20 million reserve personnel and the world’s largest stockpile of nuclear weapons.

Ukraine is the 2nd largest country by area in Europe, with a population of 43 million, regained its independence in 1991 following the dissolution of the USSR, a developing country with a lower-middle-income economy, has extremely rich and complementary mineral resources, can meet food needs of 600 million people across the world and with a current military of 196,600 active personnel.

Russia-Ukraine War is a “Revenge of Geography” because of its peculiar geography. Russia has felt perpetually insecure for more than five centuries.Geographically Russia is a Eurasian country wherein Ukraine is the pivot state for Putin to anchor Russia in Europe wherein Ukraine’s very independence keeps Russia to a large extent out of Europe but with Ukraine back under Russian domination, Russia adds 43 million people to its own Western-oriented demography, and suddenly challenges Europe. Thus, Putin wants to restore the glory of the erstwhile Soviet Union. Russia says it has no intentions of controlling Ukraine and its military operation is only to “demilitarize” and “de-Nazify” Ukraine in an action taken after 30 years of the US pushing Russia too far as Ukraine wants to become a member of the NATO and Putin used this exact reason to mount military pressure (saying NATO accepting Ukraine as member will endanger Russian safety and sovereignty). Russian military action follows demands made in December 2021 to the US and NATO in the form of treaty proposals that would require: Ukraine and Georgia not to join NATO, US missiles in Poland and Romania to be removed; and NATO deployments to Eastern Europe reversed, which the US and NATO rejected, and hence Putin justifies the invasion.

USA’s apocalyptic “sanctions from hell” narrative has not gone well with many European and other countries. Saudi Crown Prince MBS and the UAE’s Sheikh Zayed declined US requests to speak to Mr. Biden on increasing oil production to compensate for sanctioned Russian oil.

Many western strategic thinkers (Kissinger, John Mearsheimer, Stephen Cohen, Bill Burns and Bob Gates etc.) had warned (in their Books and articles) about the expansion of NATO and the likely reaction in the form of a Russian invasion of Ukraine.

There is an information war being fought by western media and Russians (who are blocked) and we cannot get the true facts.

CA Milan Sanghani presented the impact on Commodities, Gold, Crypto, Debt and Equity Markets.

Group leaders: CA Harshad Shah & CA Milan Sanghani presented points for deliberations to All Group Members

BCAS @ BKH – CERVICAL CANCER AWARENESS & TESTING

Conversations about women’s health are quite the rarity… there is no rocket science behind this… they are ever so busy micromanaging and multitasking at so many levels… who has the time to focus on one’s well-being and health now, right!

In the words of Maya Angelou, “When women take care of their health, they become their own best friend.” And so it was that a small brigade of women from the Core Group Committee of the BCAS (CA Gunja Thakrar, CA Preeti Cherian, and CA Rimple Dedhia) decided that this year, the Women’s Day celebrations would help our members, their family and friends become their besties.

The connect for this event came from our suave Treasurer, CA Anand Bathiya. The Brahamakumaris’ GHRC BSES MG Hospital, Andheri West (BKH) has truly adopted a unique approach to Healthcare as it offers an experience of a mix of modern medicine with a focus on Spirituality – focusing on love, dedication, compassion, cooperation, and cleanliness.

The authorities at BKH suggested having an awareness talk on cervical cancer by the renowned gynaecologist and obstetrician Dr. Meghana Bhagwat. BKH also offered the PAP Smear test and private consult fees with the doctor, at discounted rates to all BCAS members, their family and friends.

With 18+ years of experience, Dr Bhagwat has immense expertise in handling high-risk pregnancies and treating female reproductive issues, especially infertility problems. She works closely with her patients to help them achieve their health goals.

Being the fourth Saturday, 26th March, 2022, was decided. The event started with CA Preeti Cherian welcoming all to the event and briefly introducing the doctor. Brahamakumari Pratibha then led everyone through a 2-minute guided meditation – her soothing voice acting like a balm on the jaded nerves. Chairman of the SPRMD Committee, CA Narayan Pasari, expressed his gratitude to BKH for opening up their facilities to host the event. Managing Committee member CA Kinjal Bhuta and Core Group member CA Sneh Bhuta were present in person to express their support for the event.

Dr Bhagwat spoke in the simplest of terms, underlining the need for women to make their personal gynaec their confidante. Cervical cancer is the second most common form of cancer in Indian women – with India alone accounting for one-quarter of the world’s burden. Most cervical cancer cases are treatable, with regular check-ups crucial for early detection. While cervical cancer is known to affect women in larger numbers, men have also been known to get affected by the virus HPV, which causes cervical cancer.

The doctor also answered questions by both the online attendees and those participating in person. She poignantly revealed that some of her patients visit her only to unburden themselves. Most doctors that one knows seem to be most pressed for time; by revealing her humane side, the doctor won the hearts of all those gathered there and those listening to her online.

In the words of Dadi Janki,

‘Live life fully balanced with your head, heart and hand…
Live life for your good self and for others..
Care.. share.. inspire’

Isn’t this what BCAS abides by? No wonder all of us felt right at home at BKH!

SOCIETY NEWS

‘GST ISSUES RELATING TO INTERMEDIARY’

The Indirect Tax Study Circle of the Bombay Chartered Accountants’ Society arranged its inaugural meeting on ‘GST Issues relating to Intermediary’ on 7th July which was addressed by Group Leader CA Yash Dhadda and Mentored by CA Udayan Chokshi.

CA Yash Dhadda made a detailed presentation on the law and issues relating to Intermediary Services under GST. The presentation broadly covered the following:

(1) Taxability under the erstwhile Service Tax regime;
(2) Definition and Place of Supply provisions under GST;
(3) Current outcome of writ petitions;
(4) Discussion on case studies covering various scenarios.

All the above issues were discussed at length. Mentor CA Udayan Chokshi explained the complexities involved in various scenarios and shared his views on the same. Important case studies and advance rulings were also discussed.

More than 150 participants benefited from the presentation shared by the duo of CA Yash and CA Udayan.

GST INTERPLAY – CUSTOMS, FTP & SEZ

The BCAS Indirect Tax Study Circle arranged a two-day meeting on ‘GST Interplay – Customs, FTP & SEZ’ on 31st July, and 10th August, 2021. It was addressed by Group Leader CA Rishabh Singhvi and Mentored by CA Prashant Deshpande.

CA Rishabh Singhvi made a detailed presentation on the concepts and parameters for differences and similarities between the various indirect tax laws, viz., Customs, GST, FTP and SEZ. Several case studies were drafted by the Group Leader and discussed at length by the participants. The following important issues were discussed:

(i)  Merchant Trade,
(ii) EOU Unit Implications,
(iii) SEZ Unit Implications,
(iv) MOOWR Implications,
(v) Dual Incidence Implications,
(vi) Rule 96(10) issues, and
(vii) FTA Benefits.

Mentor CA Prashant Deshpande guided the group discussion at various stages and shared his expert views on the multiple tax issues involved. Important case studies and advance rulings were also taken up.

CA Jayesh Gogri had mentored and guided the Group Leader in drafting the presentation and the case studies.

The active participation of more than 80 members helped them to benefit from the group discussion.

DEPARTMENTAL AUDIT & ADJUDICATION PROCEDURES

The Indirect Tax Study Circle’s meeting on ‘Case Studies on Department Audit and Adjudication Procedures and Practical Issues’, which was held on 7th August, was addressed by Group Leader CA Keval Shah with CA Rajiv Luthia as Mentor.

Group leader CA Keval Shah had drafted detailed case studies for discussion which covered the following aspects in regard to Department Audit and Adjudication:

(a) Whether the scope of Departmental GST Audit can cover the period under Service Tax;
(b) Partial submission of data within time limit u/s 65(4) of the CGST Act, 2017;
(c) Interest on ineligible input credit availed but not utilised;
(d) Eligibility of ITC claimed in GSTR3B but not reflected in GSTR2A;
(e) GST on purchases from unregistered dealers;
(f) Payment of tax and interest demanded by audit team through utilisation of ITC; and
(g) Eligibility of ITC on delayed payment of GST under the RCM.

Mentor CA Rajiv Luthia guided the group discussion and shared his expert views on the multiple tax issues involved. Important case studies and advance rulings were also discussed. More than 60 participants benefited from the presentation.

SILVER JUBILEE ITF CONFERENCE

 

The Silver Jubilee International Tax and Finance (ITF) Conference, 2021 was conducted online from 12th to 16th August with a record attendance of 474 members from around 36 locations all over India. The total number of participants, including faculties and special invitees, crossed the 500-mark.

In keeping with the tradition of past ITF Conferences, this year’s Conference, too, was designed to include various contemporary and practically relevant topics for the international tax practitioner.

Eminent personalities and experts graced the Conference and shared their invaluable thoughts and experiences on their respective areas of expertise. The five-day Conference was marked by 13 technical sessions, including three group discussion papers, five presentations, three panel discussions (spread over four sessions) and one fire-side chat.

There were a total of 32 members on the faculty, including speakers and session chairmen, 29 group leaders and 19 contributors for case studies and the background material. It clocked over 35 hours of solid study during the Conference.

Facilitating Group Discussions: This year’s ITF had three papers for group discussion written by CA Pinakin Desai, CA Padamchand Khincha and CA Yogesh Thar. The participants were split into six, each group ably led by 29 group leaders (across the three papers) who helped generate in-depth discussion of the case studies from the papers. The paper writers could undertake a virtual tour of each group to follow the discussions by the participants.

Day 1: 12th August

President CA Abhay Mehta gave his opening remarks and explained the BCAS’s activities and its new initiatives. Chairman of the International Taxation Committee Dr. CA Mayur B. Nayak welcomed the participants and made the introductory remarks.

The Conference was inaugurated by the Past Chairman of the International Taxation Committee and the Chairman of the very first ITF Conference, CA Dilip J. Thakkar, with a welcome address. The President of the ICAI, CA Nihar Jambusaria, also addressed the participants. This being the Silver Jubilee Conference, CA Rashmin Sanghvi, Founding Member of the ITF study group, also spoke.

The Keynote Address was delivered by Padma Vibhushan N.R. Narayana Murthy on a very interesting and relevant topic – ‘The role of culture in improving governance in a company’. He laid stress on three key values, namely, ethics, transparency and honesty, for building a sound organisational culture and governance in a company.

As readers would be aware, investment and business activities have substantially increased in the Gujarat International Finance Tec-City (GIFT City) and various regulatory amendments have been made to enhance the lure of GIFT City – India’s first International Financial Services Centre (IFSC). On the first day of the Conference, Advocate Siddharth Shah dealt with ‘GIFT City IFSC – Regulatory and Tax Aspects of Investments and Transactions’ in great detail and explained various complex nuances to the participants. CA Vispi Patel chaired the session and also provided his insights on the subject.

Day 2 – 13th August

The day began with a group discussion on the paper written by CA Pinakin Desai on ‘Controversial Issues Arising from Tax Treaty Interpretation’.

CA Gautam Doshi spoke on ‘Structuring of Family Trusts – FEMA & Other Regulatory Aspects’. He covered various aspects of the subject in great detail, including conceptual explanations, legal and practical points for consideration, provisions of income-tax, FEMA, SEBI and even CRS regulations. Past President CA Dilip J. Thakkar chaired the session and also provided insights on the issues involved.

CA Pinakin Desai, dealing with his paper ‘Controversial Issues Arising from Tax Treaty Interpretation’, for over two and a half hours, highlighted in a detailed but succinct manner various issues such as possibility of access to tax treaty in light of general anti-avoidance rules (GAAR); principal purpose test (PPT) driven by MLI; simplified limitation of benefits provision (SLOB) driven by MLI; and certain select issues of treaty interpretation. Interestingly, CA Pinakin Desai was also a speaker and the Chairman of the International Taxation Committee at the 1st ITF Conference held in 1997 at the Manas Resorts, Igatpuri, Maharashtra. Past President CA Kishor Karia chaired the session and also gave his views on the subject.

The last session of the day was the panel discussion on ‘Experience and Developments in Transfer Pricing’. The panel consisted of CA Vijay Iyer, Dr. CA Hasnain Shroff and CA Kunj Vaidya and was chaired and Moderated by CA T.P. Ostwal.

The panel shared its thoughts and gave insights on specific issues in transfer pricing through case studies. The case studies covered practical issues which would be of relevance in today’s scenario, such as the Covid-19 impact on TP arrangements, APAs for service entities and profit attribution to PE, section 56(2)(X) and TP valuation, impact of secondary adjustment provisions, Covid-19 impact on the manufacturing sector and so on.

Day 3: 14th August

The proceedings started with a group discussion on the paper written by CA Padamchand Khincha on ‘Recent Developments in Taxation of Digital Economy in India’.

Dr. CA Anup Shah spoke on ‘Startups – Tax, FEMA & Regulatory Aspects’ covering various relevant issues such as registration and certification, funding options, exit options and new-age structures, SPACs, Externalisation of Investments and so on. Past President CA Chetan Shah chaired the session and set the ball rolling with his opening remarks.

CA Rashmin Sanghvi, speaking on ‘Future of International Tax Practice and Global Economy’, gave his perspective on the current status of the Indian regulatory system and international tax practice in India. He then described the background of the global events impacting international tax, especially the digital tax war, and provided guidance to professionals on the future of international tax practice. Past President CA Raman Jokhakar chaired the session and offered his perspectives on the topic.

Prior to the fireside chat and panel discussion on taxation of digitised economy, Advocate Mukesh Butani spoke succinctly on Pillar 1 and Pillar 2 of the OECD proposal in the context of taxation of the digitised economy.

In the fireside chat (recorded earlier) on ‘Global Developments in Taxation of Digitised Economy’ with Advocate Mukesh Butani, Mr. Pascal Saint-Amans, Director, Centre for Tax Policy and Administration, OECD, shared his thoughts and gave participants an insight into the potential future of taxation of the digitised economy and what one can expect in the near future. The chat was widely covered by the media in India as well as abroad.

Subsequently, there was a panel discussion on ‘Global Developments in Taxation of Digitised Economy’. The panel consisted of Mr. Carlos Protto, Director of International Tax Relations, Ministry of Economy, Argentina; Mr. Rajat Bansal, a senior IRS official and CCIT; and CA Radhakishan Rawal. It was chaired and Moderated by Advocate Mukesh Butani. The panel covered some of the nuances of the 2-Pillar approach agreed upon by the Inclusive Framework and also gave its views on the future of unilateral measures and Article 12B of the UN Model.

CA Padamchand Khincha, with his paper on ‘Recent Developments in Taxation of Digital Economy in India’, highlighted the various developments in India on the subject, including Significant Economic Presence (SEP), Equalisation Levy (EL), TDS provisions u/s 194-O and taxation of software in light of the recent Supreme Court judgment. Past President CA Rajan Vora chaired the session and gave his valuable inputs on the subject.

Day 4: 15th August

The day began with a group discussion on the paper written by CA Yogesh Thar on ‘Emerging issues in Cross-Border Personal Taxation’.

The first part of the panel discussion on ‘International Taxation – Recent and Emerging Issues and Developments in Law, MCs and Jurisprudence’, was held on Day 4. The panel consisted of Mr. Kamlesh Varshney, IRS and Joint Secretary (TPL) – Finance Ministry, Senior Advocate Ajay Vohra and CA Padamchand Khincha and was chaired and Moderated by CA Pranav Sayta. It was a unique and technically-rich discussion, as the panellists discussed issues from different perspectives.

The issues discussed covered a range of topics of relevance in today’s world – issues related to tax residence of individuals, the applicability of anti-abuse provisions, i.e., GAAR and PPT, availing benefit under the MFN Clause, withholding tax aspects in Multilateral Instrument (MLI), digital currency (classification of income and related issues), Covid-19-related taxation of foreign companies in India, and the term ‘Liable to tax’ and interpretation of Article 3(2).

The frank and thorough exchange of views among the panellists, ably supplemented by the Chairman’s probing queries, made the discussion very interesting and elaborate and provided a lot of food for thought to the participants. The panel discussion was based on case studies prepared by BCAS contributors who also presented their case studies to the participants.

CA Yogesh Thar, while dealing with his paper on ‘Emerging issues in Cross-Border Personal Taxation’, raised interesting points arising from recent developments in personal taxation due to amendments in section 6 relating to residence in India, and Covid-related issues in personal taxation. Past President CA Gautam Nayak chaired the session and also gave his inputs.

The day ended with a special programme, ‘Reminiscences of ITF Journey’ wherein the role of all past Chairmen, coordinators, speakers and contributors of the previous ITF Conferences was recognised, their experiences were relived and their efforts applauded – thus creating an emotional walk down memory lane for all participants. The programme was anchored by Dr. CA Mayur B. Nayak and CA Mayur B. Desai. It was well attended by past contributors and they shared memories of every Conference. CA Jagat Mehta prepared the presentation with details of past Conferences with photographs.

Day 5: 16th August

The second part of the panel discussion on ‘International Taxation – Recent and Emerging Issues and Developments in Law, MCs and Jurisprudence’ (already explained above) was held on Day 5. The frank and thorough exchange of views continued between the panellists, Mr. Kamlesh Varshney, IRS and Joint Secretary (TPL) – Finance Ministry, Senior Advocate Ajay Vohra and CA Padamchand Khincha, ably supplemented by Chairman CA Pranav Sayta’s probing queries.

CA S. Krishnan spoke on ‘Foreign Tax Credit – Practical Aspects and Experience with Case Studies’ covering various issues related to the topic and shared his rich, practical experience. CA Dinesh Kanabar chaired the session and also provided his insights.

Concluding remarks

While the personal touch and the camaraderie amongst participants during past physical Conferences were definitely missed, the participants were hugely enthused by the various sessions. This was the second consecutive ITF Conference held online, wherein delegates participated from their respective places – but thanks to the seamless connectivity, it was one of the most engaging and successful Conferences.

The Silver Jubilee ITF was held under the guidance of the Chairman of the International Taxation Committee Dr. CA Mayur Nayak. CA Abbas Jaorawala as the Chief Conference Director, ably assisted by CA Mahesh Nayak as Joint Conference Director, minutely supervised all the sessions personally and devoted a tremendous amount of time and effort to make it the resounding success that it turned out to be.

Other members of the core team were CA Ganesh Rajgopalan, CA Rutvik Sanghvi, CA Siddharth Banwat, CA Anil Doshi, CA Jagat Mehta, CA Natwar Thakrar, CA Tarunkumar Singhal and CA Rajesh P. Shah. Several others also made laudable contributions of time and effort to make the Conference a landmark event for the BCAS. It ended on a high note and received encouraging response and feedback from the participants.

Proceedings of the Conference can be viewed on YouTube at: https://www.youtube.com/watch?v=HWR2h3f0frg and also via the following QR Code:

 

 ‘LOCAL AND GLOBAL INVESTING’

The BCAS organised a lecture meeting by Mr. Kushal Thaker on ‘Evaluation of Stocks – New Economy vs. Old Economy – Local and Global Investing’ on 18th August.

It was planned with the aim of empowering professionals in understanding evaluation techniques and equipping them with the requisite knowledge as they set out on the road to becoming efficient business advisers.

President CA Abhay Mehta welcomed the participants and offered his remarks on the subject. CA Mihir Sheth introduced the speaker, Mr. Kushal Thaker, who is an astute trader and investor in commodities, equities and currency also known as ‘Specunomist’.

 

 

The speaker explained the concepts relating to various asset classes and their analysis.

Key issues and learnings of the meeting
1. New Economy vs. Old Economy
(a) New Economy: IT sector has experienced quantum leap from .com in 2000 to an apps-based life and now moving to Artificial Intelligence,
(b) Old Economy: Cement to Metal to Mining,
(c) Now, old economy is helping new economy companies by providing raw material and other products that act as inputs for new economy stocks,
(d) To analyse Electric Vehicle Companies, it is important to study the trend of commodities like copper, lithium and nickel. This can be extended to companies undertaking mining of these commodities.

2. Local and Global Investing
(e) Look at stocks beyond the Indian border. It’s likely that India may not have companies listed in that space,
(f) For example, global copper and lithium mining. There are no lithium mining companies listed in India. To take advantage of the upward trend in lithium, investing in global lithium mining would be beneficial.
(g) Never think in terms of defensive stocks. That comes only in a bear market. A bear market scenario in India is unlikely over the next decade.

3. Crude Oil
(h) As crude prices go up, investors usually look to buy oil-producing and oil marketing companies. It will be much better to have globally diversified companies in this space, as Indian companies are either government-controlled or in the small caps space.

4. E-commerce
(i) The pandemic acted as a tailwind for e-commerce. But then there were no e-commerce companies listed in India. Now we have Zomato. So, investing in global e-commerce is profitable as these companies have given mammoth returns during the last one year.

5. Key drivers of growth for the next decade
(j) High tech, new economy, old economy stocks – all supplemented new economy stocks,
(k) Hence one cannot see any bear cycle. Of course, corrections are likely, but only of approximately 10% to 20%, but not a bear market,
(l) A bull market is always going on somewhere in world. So it is not necessary stick to the Indian market,
(m) Be bullish on commodities – gold, silver, steel, rare earth or base metals, natural gas.

6. Beginners into International equity
(n) Internationally, ETF on FAANG returns is lower than the return generated by individual stocks,
(o) Direct investment through brokerage houses – Interactive brokers or Kotak Securities

7. Cryptocurrency
(p) Crypto is an asset class by itself. Each crypto has a role to play. Top 15 cryptos are worth reading against 800 cryptos being available for trading,
(q) SWIFT code is a messaging service between international banks and Indian banks for transfer of forex. SWIFT cannot move fast. But crypto is direct transfer of funds and very fast, too. Crypto-backed services are Ripple and Stellar,
(r) Some cryptos are moving into gaming and bond markets,
(s) India has 11 Crypto platforms and each has its own Crypto (currency). If there are more miners (of Cryptocurrencies), then volatility is going to be very high.

8. IPOs
(t) New IPOs in fintech and logistics companies are good,
(u) Investors should not hesitate from investing in high-growth loss-making companies as long as they don’t foresee any competition coming up in that space,
(v) Also, look into how management is planning for future growth. Many of these new e-commerce and fintech companies have global presence,
(w) If the company has good potential of going into Artificial Intelligence or becoming a Tech Company, supporting fast-growing companies can be considered as good potential investments.

The speaker, Mr. Kushal Thaker, also addressed the queries raised by the participants and shared his thoughts on evaluation techniques for stocks and commodities.

The meeting concluded with a vote of thanks proposed by CA Anand Bathiya to Mr. Kushal Thaker, who addressed the participants from his office in Chicago, USA.

The proceedings of the meeting are available on YouTube at:https://www.youtube.com/watch?v=UDBOMkHCN2E and also on the following QR Code:

 

‘MUMBAI’S COVID PANDEMIC MANAGEMENT MODEL’

The BCAS, along with the Dharma Bharti Mission and the Public Concern for Governance Trust, organised a lecture meeting in memory of the Late Shri Narayan Varma on ‘Mumbai’s Covid Pandemic Management Model’ on 24th August. It was addressed by Mr. Iqbal Singh Chahal, IAS and Commissioner of the BMC. It was held through virtual mode on Zoom platform with live-streaming on YouTube.

 

Ms. Farheen Peshimam started the proceedings and shared a video containing fond memories of the late Shri Narayan Varma with the three associations. She also read a message from the Late Shri Narayan Varma’s Family.

Mr. Paramjeet Singh, President of the Dharma Bharti Mission, delivered the welcome address. He also welcomed the keynote speaker and the three awardees. He gave an insight into the various initiatives taken and the contributions made by the Late Shri Narayan Varma during his lifetime and the impact he made on society and the three organisations at large. Ms Farheen Peshimam then formally introduced Mr. Iqbal Singh Chahal.

Mr. Chahal started by describing the scenario under which he had taken charge of the BMC on 8th May, 2020. Since then, innumerable initiatives had been taken by him and the BMC during the pandemic; he summarised these as follows:

• Systems were created to fight the long war against Covid-19. The model that was created had 27 sub-models to fight the pandemic;
• The model was implemented by dividing Mumbai into 24 war rooms with a real-time dashboard of the Covid-19 cases;
• The approach was a combination of proactive and offensive steps to contain the pandemic at the very start;
• Containment zones were created to chase the virus;
• Sanitization drives were conducted to break the chain of the virus and prevent the multiplication of cases;
• Appointing community leaders in slum areas so as to achieve better coordination;
• Increase spending by BMC on the medical infrastructure and addition of 800 ambulances to fight the virus;
• Distribution of free PPE kits to doctors and medical practitioners;
• A Covid dashboard was created with public and private hospitals and all the reports were managed by a BMC-appointed team of doctors;

• Hospital beds were allotted on the basis of social equality, thereby avoiding a chaotic or panic situation of patients running from one hospital to another;
• Creation of seven Jumbo centres in various parts of the city which were converted into full-fledged greenfield hospitals in record time under the mentorship of top doctors;
• Private hospitals helped by agreeing to cap the rates of beds and other medical facilities which made this a successful public-private partnership;
• Pre-emptive stocking of life-saving medicines at the onset of the second wave proved to be crucial to successfully manage and control the second wave;
• Various campaigns run by BMC to fight Covid-19, like ‘My family, My responsibility’ and ‘No Mask No entry’ to create awareness among the people;
• Initiatives taken to avoid any major mishaps during the oxygen crisis in the second Covid-19 wave and the cyclone faced by Mumbai in the month of May, 2021.

Mr. Chahal shared that the speed of vaccination was quite steady and if this continued, then Mumbai would be spared any major third wave that was likely to hit in October-November, 2021. He lauded the contribution of various NGOs in distribution of food packets and other initiatives. He also responded to the questions from the participants before concluding his session.

To summarise Mr. Chahal’s address, he made some important statements:

1. Let us not be demoralised,
2. We have been chosen by God and given this opportunity to serve humanity,
3. Systems will fight the pandemic and not the individuals, and
4. We have to chase the virus in an offensive manner.

Following this excellent talk, the three Narayan Varma Memorial Awards were announced.

1. The first awardee was Advocate Maharshi Dave, Founder of Sparsh Trust. This Trust was initially founded to help stray dogs in the city, but its principles led them to expand their efforts towards helping both animals and humans.

Giving a brief talk, Mr. Dave emphasised that the foundation believed in the concept of service and empathy. It believed that the more one gave, the more one got. ‘The platform provided by this event is very important for the Trust as it helps in spreading the word about the services that we can provide to many more in need,’ he added.

2. The next awardee was Shri Ravi Singh, Founder of Khalsa Aid International. This is a UK-based humanitarian relief charity that provides aid to people affected by various natural as well as man-made disasters. Even in this pandemic, it was at the forefront and donated planeloads of oxygen cylinders and oxygen concentrators to all parts of India and the world.

3. The third and final awardee was Mr. Ranga Rao, who retired as Assistant Director in the Intelligence Bureau in January, 2010 after 39 years of service. The Late Shri Narayan Varma had encouraged Mr. Rao to learn how to use RTI. Soon, Mr. Rao had started filing RTI applications to address the grievances brought to his attention by poor citizens. The success rates of these applications encouraged his group to start a programme which focused on spreading awareness about the use of RTI to help resolve several issues. Since 2013, Mr. Rao has taught more than 2,000 students all over India the use of the RTI Act to fight corruption.

The meeting ended with a vote of thanks to Mr. Iqbal Singh Chahal proposed by BCAS President CA Abhay Mehta, who officially concluded the meeting.

The lecture is available on YouTube at https://www.youtube.com/watch?v=IgaLf8rqvZs and via QR Code

 

‘GDP & ECONOMIC ANALYSIS – PERSPECTIVE AND IMPORTANCE FOR CAS’

A lecture meeting was organised by the BCAS on ‘GDP & Economic Analysis – Perspective and Importance for CAs’. It was delivered by CA Raj Mullick on 25th August.

 

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The lecture was designed with the aim of empowering professionals in understanding and interpreting economic data and economic indicators, to broaden the horizon for advising and enabling professionals in taking a more holistic view about the way businesses are carried out, and their overall impact on the country at large.

President CA Abhay Mehta welcomed the participants and shared his views on the topic under discussion. CA Chirag Doshi introduced the speaker.

The speaker, CA Raj Mullick, made a detailed presentation on the concepts relating to Gross Domestic Product (GDP) and its analysis. The presentation broadly covered the following:

1. Economy during the pandemic,
2. Micro- and macro-economics,
3. Economy’s income and expenditure,
4. What is GDP?
5. GDP components – (Consumption, Investment, Government spending, Net exports),
6. Real vs. nominal GDP,
7. GDP indicators,
8. Limitation of GDP as a measure of a nation’s well-being,
9. International differences in GDP and quality of life,
10. Saving and investment in national income accounts,
11. Impact of pandemic on the GDP,
12. GDP – Current India @ 2021,
13. GST indicators,
14. Role of Chartered Accountants.

CA Raj Mullick made extensive use of charts, circular flow diagrams and graphics to explain the concept of GDP and so on. He also conducted a quick check of the understanding of the participants by posing practical case studies and eliciting responses on the impact of various situations on the GDP.

The participants took active part by sharing their views on the questions and case studies posed by the speaker. More than 100 persons benefited from the presentation shared by him.

CA Mrinal Mehta proposed the vote of thanks.

The lecture is available on YouTube at https://www.youtube.com/watch?v=_bVuE73LaEk and also via QR code:

AMENDMENTS IN INCOME-TAX ACT, 1961

The Students’ Forum, under the auspices of the BCAS HRD Committee, organised a training session for CA Article Students on ‘Changes in Income-tax Forms and Corresponding Amendments in the Income-tax Act, 1961 for Individuals and HUFs’ on 30th August.

The Study Circle was led by CA Utsav Shah and CA Viren Doshi who are experts on the subject. CA Khubi Shah, the coordinator, introduced the speakers and spoke about the various activities and events conducted by the BCAS Students’ Forum. He encouraged students to actively participate in the events organised by the Forum.
The speakers covered the return-filing process right from the beginning and described in detail the filing of returns on the newly-launched portal using the new utilities introduced. They discussed in detail the section-wise and clause-wise changes and corresponding changes in the return format.

CA Utsav and CA Viren also covered the detailed process and utility walkthrough and guided the students on filing various sections of the form and precautions to be taken to avoid validation error, defective return and demand u/s 143(1). A return-filing checklist was also provided for the benefit of the students.

The session ended with CA Dnyanesh Patade, coordinator, proposing the vote of thanks both to the speakers and to the participants. Around 100 students participated in the interactive session and their feedback was very positive.

The entire session can be viewed on the BCAS YouTube channel at ‘Training Session for CA Article Students – YouTube’ and also via the following QR Code:

 

TREE PLANTATION & EYE CAMP PROJECT 2021

After a gap of one year because of the Covid-19 pandemic, it was time to continue with the decade-old legacy of contributing to the upliftment of tribals and needy persons. The current pandemic has taught us the importance of oxygen, immunity and healthcare.

The HRD Committee under the aegis of the BCAS Foundation organised a two-day visit to Dharampur and Vansda on 25th and 26th September with the objective of caring for nature by planting trees, to provide primary healthcare and quality education to the tribal population, and to help in reaching out to the hitherto neglected people and provide them with timely treatment of cataracts. Thanks to the generosity of our esteemed donors, the BCAS contributed Rs. 7,00,000 for these noble causes.

In view of the current scenario of Covid, a small group of 21 volunteers, representing BCAS on behalf of the donors, got together for the symbolic tree plantation and attended the eye camp. It also visited three NGOs active in the remote villages.

(1) Sarvodaya Parivar Trust (SPT). The group reached Pindval-Dharampur to visit the SPT centre. The trust implements the vision of Acharya Vinoba Bhave of unconditional service to tribals. It works in the fields of environment, education and water conservation and follows a holistic approach for poverty alleviation based on Gandhian principles. The BCAS group interacted with the trustees and volunteers. It also met the children studying at the centre, interacted with them and distributed sweets. The group, along with a team of local farmers, conducted symbolic tree plantation in the fields. It planted mango and bamboo saplings. The BCAS Foundation contributed Rs. 3 lakhs for the plantation of 10,000 trees. Sujataben told them about the activities being conducted by the trust in 35 nearby villages and the challenges faced by them in doing the same. She also explained the outcome of the activities which impacted the life of thousands of residents of the hilly region.

(2) ARCH – Action Research in Community Health, Nagaria. ARCH was founded by the Late Dr. Daxaben Patel to provide basic preventive, curative and maternal-child health services. The Managing Trustees are Mr. Rashmibhai and  Mr. Sudarshan Iyengar, former Vice-Chancellor of Gujarat Vidyapeeth and a leading scholar on Gandhian studies. They and their young and passionate associates took the BCAS team through various innovative teaching techniques for students and their skill development programme, as also the new water-saving techniques used in the plantation. ARCH also conducts mobile health camps in inaccessible villages. The BCAS contributed Rs. 1,50,000 for the triple purposes of tree plantation, skill development and children’s education.

(3) Dhanvantari Trust – Sant Ranchhoddas Eye Hospital Vansda. This body runs an eye hospital which provides free cataract operations and other kinds of eye care for the indigent people. Ghanshyambhai and other trustees described the contribution of the founder trustee, the Late Dr. Kanubhai, in pioneering a 100-bed hospital and that has conducted over 60,000 eye operations with the support of doctors and volunteers who identify patients and arrange for their treatment at Vansda. He explained how ignorance about eye problems because of extreme poverty, misconceptions and so on, result in blindness among the poor. The trustees also talked about the future plans of bettering the facilities, services and upgrading the equipment. The BCAS Foundation contributed Rs. 2,50,000 for the eye camp which performed 250 cataract operations.

 

 

It was a touching experience to see the devotion and selfless service by volunteers for upliftment of the tribal society. All the participants and Trustees expressed their thanks to BCAS for organising the visit to the project sites.

Society News

LEARNING EVENTS AT BCAS

1. Full Day Workshop – “Use of Technology in GST Compliance” held on 9th September, 2023, at BCAS Hall.

The Indirect Taxation Committee jointly with Technology Initiative Committee organised a full day 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 professionals increase the efficiency of their team and improve compliance.

The 1st session was addressed by CA Jigar Doshi and CA Yash Goenka on strategies for evaluation and selection of automation software and practical challenges in implementation. They explained the checkpoints and important considerations while selecting ERP and ASP / GSP Software.

This was followed by a Panel Discussion on Issues, challenges and areas for automation in GSTR1, GSTR 3B and ITC Reconciliation by use of ASP / GSP Software. The Panel was composed of Darshan Shah and CA Punit Mehta from Tally, CA Aneree Shah from ClearTax and CA Vaishali Dedhia and the panel was moderated by CA Mandar Telang.

The 3rd session was addressed by CA Nachiket Pendharkar who explained the use of VBA and Macros in Excel for preparation of data for GST returns and reconciliation.

CA Rajiv Narayanan explained and demonstrated the use of Robotic Process Automation and Artificial Intelligence tools like Python, Alteryx, Chat GPT and Gamma.app in the 4th and the final session. He emphasised on the increase in efficiency and accuracy of the team by use of RPA and AI.

The event was attended by more than 50 participants and they benefited from the deliberations of the speakers.

2. Half Day Seminar on “Revised Format of Audit Report for Charitable Institutions”, held on 2nd September, 2023, at IMC, Churchgate.

A half-day seminar on Revised Format of Audit Report containing a session explaining the changes made in Form 10B and 10BB applicable for A.Y. 2023–14 followed by a Panel Discussion was organised by the Taxation Committee in a hybrid mode.

CA Sonalee Godbole explained Form 10B clause-wise with a break-up of the details being called by the auditor. She explained the care to be taken while reporting the information and the risks associated with incorrect or incomplete reporting and how the auditor is responsible for the entire reporting to the Income-tax Department.

At the time of the panel discussion — clause-wise questions and answers were undertaken by CA Anil Sathe and CA Gautam Nayak. They cited the decisions of the courts and tribunals which helped the participants to understand the coverage of the revised forms.

The seminar ended with a Q&A session with the participants. The seminar was attended by over 425 participants physically and online.

Representation dated 11th September, 2023, requesting the deferment of the applicability of the revised form 10B / 10 BB (Audit report for Charitable Trusts) by one year.

Based on the various aspects discussed in the said seminar, the Society, with the help of Taxation Committee, also made a representation to the Hon’ble Finance Minister on 11th September, 2023, expressing concerns over complex coverage of the forms vis-a-vis machinery and resources available with the assessees (viz. charitable / non-profit organisations) to compile the details and information called for in the said forms. The Society therefore requested the deferment of the revised forms for a period of one year and continuance of the old forms for the time being.

To read the Representation, Scan the QR code on the following page:

[Editor’s Note: Vide Circular No. 16/2023, dated 18th September, 2023 the CBDT has extended the due date for furnishing Audit Reports in form 10B/Form10BB for the A.Y. 2023–24 from 30th September, 2023, to 31st October, 2023]

3. “Forensic Accounting and Investigation Standards (FAIS)” event held on Friday, 1st September, 2023, at Hotel Parle International.

The ICAI has recently issued revised Forensic Accounting and Investigation Standards (FAIS). These standards have now become mandatory for all the engagements conducted on or after 1st July, 2023. Internal Audit Committee organised this seminar to enlighten the participants about the framework governing these revised standards, the basic concepts covered in the standards, legal framework and report writing. The seminar received a good response, particularly from young participants who want to foray into the field of forensic audits.

The seminar was divided into four sessions followed by a panel discussion. The faculty for the sessions were part of the Expert committee of ICAI which was involved in the standard-setting process and hence they had good insights on the topic. CA Satish Shenoy, in his key-note address, spoke about the need for FAIS, governing framework and professional opportunities for CAs. CA Nikunj Shah, in the first technical session discussed various concepts across FAIS. This was followed by discussion about its relevance and recognition and the extent of reliance on the work of the professionals in legal world which was taken by CA Uday Kulkarni. Lastly, CA Chetan Dalal shared his practical experiences, recent cases and discussed a few tips about the report writing. The seminar ended with a panel discussion between all the three technical session experts and interaction with the participants in Q&A form which was guided by CA Ashutosh Pednekar. All speakers were very lucid and they made the sessions very interesting and engaging with lots of examples.

Link for downloading the standards:  https://resource.cdn.icai.org/75009daab030723.pdf

4. Direct Tax Laws Study Circle on “Key changes under TCS provisions” on 1st September, 2023, in Online Mode.

The study circle meeting was led by CA Chaitee Londhe wherein the participants discussed the following points:

• Amended Provisions of Section 206C(1G) of the Income-tax Act, 1961 and her analysis of the same.

• Overview of the Amendments introduced to the TCS provisions by the Finance Act, 2023.

• Subsequent changes were introduced to the TCS provisions by way of Circular No. 10/2023.

• Amended Provisions of Section 206CC and 206CCA of the Income-tax Act, 1961.

• Amendments introduced in the Liberalised Remittance Scheme of RBI.

• Clarifications issued by the CBDT with respect to the amended TCS provisions.

The speaker delivered a comprehensive analysis and insightful perspective on the amended TCS provisions, offering invaluable clarity by dissecting the CBDT’s issued clarifications.

5. Panel Discussion on “Investing in India’s AmritKaal: Equities and beyond” held on Friday, 25th August, 2023, in Online Mode.

In a dynamic financial landscape, the event “Amrit Kaal” organised by the Managing Committee shed light on the shifting paradigms of investment. The speakers Mr Kushal Thaker, Mr Aditya Sood, and CA Vikas Khemani 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. These unconventional avenues, once ancillary, are now emerging as robust investment classes, offering diversification and new avenues for wealth creation.

A pivotal theme of the event was the transformation in India’s macroeconomic landscape. The speakers illuminated how India’s economic trajectory has witnessed notable shifts over recent years, reshaping the investment narrative. Insights were shared on the changing dynamics of growth, inflation, fiscal policies, and global positioning, offering attendees a comprehensive view of the macroeconomic trends shaping investment decisions.

Of paramount significance was the discourse around equity investments. The event unpacked how equity, as an enduring asset class, is extending its allure to new entrants in the market. With insightful discussions on long-term strategies, risk management, and the role of technology, attendees gained a profound understanding of the opportunities and challenges that equity investments present, not only for seasoned investors but also for those embarking on their investment journey.

Throughout the event, the resonating message was the need for adaptability. The financial landscape is no longer static; it’s a dynamic ecosystem where traditional norms are being redefined. The event encapsulated the essence of embracing change, whether by exploring diverse asset classes, decoding macroeconomic shifts, or embracing equity investments as a transformative force.

The panel discussion was guided by CA Abhay Mehta who moderated the session.

Link for watching the session: https://www.youtube.com/watch?v=0xs5frO6kdo

QR Code:

6. Direct Tax Laws Study Circle meeting on “Reassessment under the Income-tax Act — Law and Practice” held on Thursday, 24th August, 2023, via Zoom.

Dharan Gandhi took up Part 2 of the meeting on the topic of Reassessment under the Income-tax Act — Law and Practice, wherein he discussed the following concepts and issues relating to the assessment procedures:

• Section 150 of the Income-tax Act, 1961 relating to cases where assessment is in pursuance of an order on appeal.

• Section 151 of the Income-tax Act, 1961 relating to Sanctions for issue of notices by the specified authority for the purposes of Section 148 and Section 148A.

• Procedure for reassessment under the new provisions in Search and Non-Search Cases, and Search Cases of a third-party including steps, approval and time period relating to the same.

• Relevant Case Laws on Section 148 and 148A of the Income-tax Act, 1961.

• Analysis and views of various courts on notices issued at different points in time.

The speaker conducted a thorough examination of the recently established reassessment provisions, clearing not only their intricacies but also delving into the diverse perspectives presented by various courts in response to the raised issues during the reassessment proceedings. The session concluded with a vote of thanks.

7. Direct Tax Laws Study Circle meeting on Issues with respect to “Deductions under Capital Gains” held on Friday, 18th August, 2023, in Online Mode.

The study circle meeting was led by CA Shashank Mehta in which the participants discussed various issues w.r.t. allowability of deductions under capital gains, with the help of Case Studies. The following concepts were covered:
• Cost of Acquisition with respect to section 55 of the Income-tax Act, 1961 (Act).

• Eligible exemption as per section 54F read with section 50C of the Act.

• Cost of acquisition in case of House Property where the entire amount of Interest is not allowed as a deduction u/s 24(b) of the Act.

• Eligible Indexation as per section 48 of the Act.

• The criteria to be fulfilled for claiming exemption as per section 54, section 54EC, section 54F of the Act.

• Deduction under section 54 in case investment in new house property is not purchased in the name of the Assessee.

The group leader provided a comprehensive breakdown of capital gains deductions, citing case studies and case laws to illustrate allowable deductions and exemptions shedding light on important concepts.

8. BCAS’s Social Cause Visit to Umargaon: “Nurturing Education and Nature” on 5th and 6th August, 2023.

As one of the initiatives of the Managing Committee, in a remarkable display of community spirit, BCAS & BCAS Foundation orchestrated a two-day event that combined the power of education and environmental stewardship. A group of 27 dedicated volunteers participated in the social cause visit at Umargaon.

The event kicked off with a Social Cause visit to schools helped by the BCAS Foundation in collaboration with the Rushabh Foundation which took on the admirable responsibility of providing education infrastructure in 25 schools, through the introduction of Digital Classrooms. These schools overcame the challenge of teacher shortages and ignited a newfound enthusiasm for learning. Witnessing the astonishing results achieved in just six months was nothing short of awe-inspiring. BCAS has assured its support to ensure quality education for all. The team played indoor and outdoor games, fostering an atmosphere of joy and inclusivity.

As planned, the team visited Bhaskar Save’s Natural Farm, “Kalpavruksha”. Revered as the ‘Father of Natural Farming’ in India, Bhaskar Save and his successors illuminated the principles of Natural Abundance. Exploring the dichotomy between Natural and Organic Farming, the team learned how the farmer aligns with the fundamental principle of cooperation inherent in nature itself. The five critical concerns of farming — Tillage, Fertility Inputs, Weeding, Irrigation, and Crop Protection — were elegantly addressed through nature’s intricate balance. Bhaskar Save’s conviction that “Non-violence is only possible through natural farming” resonated deeply, a testament to the harmony that can be achieved through sustainable practices.

 

On the subsequent day, the group ventured to the proposed land of the MaBap Foundation. The four pillars of the foundation are PrakrutikChikitsa (Natural Healing), SanskrutikVikas (Cultural Development), Vedic Abhyas (Vedic Practices), and AdhyatmikUnnati (Spiritual Progress), through which the foundation embodies holistic growth. The significance of PanchTatva (Five Elements)

in every facet of existence was highlighted, setting the tone for a symbolic tree-planting ceremony. Excitement and enthusiasm rippled through the group as they planted Ashopalav, Neem, Mango, Jamun, and Saru trees, marking a significant stride towards BCAS’s 75th year.

The group treasured enriching memories and returned with an enlightening experience of profound learning, gratitude, and an unshakable belief in the power of concerted efforts to create a better world.

9. A Panel Discussion on “Disclosure of Foreign Assets and Incomes” held on 26th July, 2023, in Online Mode.

The Taxation Committee organised a Panel Discussion on Disclosures of Foreign Incomes and Assets in a virtual mode. The Panel consisted of CA RutvikSanghavi, CA KartikBadiani, and CA Mahesh Nayak who co-authored the book on “Disclosures of Foreign Assets and Incomes” published by BCAS.

CA Hardik Mehta moderated the session addressing various questions to each of the panelists bringing out comprehensive responses from each Panelist.

CA Rutvik Sanghavi explained the importance and objective and the rationale behind the enactment. He also stressed on the principles one needs to keep in mind while reporting the same. He also explained the importance of the documentation for reporting the foreign assets and income. He also briefly touched upon reporting of gifts, ESOPs, etc. The issue of mismatches was also explained and how to mitigate the same with proper documentation.

CA Kartik Badiani answered questions with respect to reporting in the foreign asset schedules including the impact of change in residential status, reporting by minors, reporting of joint holding of house properties, investments in Gift City etc. He also took the case study of ESOPs and its reporting issues.

CA Mahesh Nayak took the participants through the case study of overseas brokerage accounts and how to report the same. He also explained as to which cases will be covered in subparts A1 to A4 and others in B of the FA Schedule.

All three panelists touched upon various other issues involving the FA schedule and what each subpart intends to cover. They even explained the issue regarding the easy availability of foreign exchange rates for reporting., the issue of calendar year vs. financial year etc. The panel discussion was very well received and appreciated the insights shared by all three panelists.

Link to access the space session:  https://www.youtube.com/watch?v=dXoApEdvwnw

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10. A Twitter Space Session on “Filing ITR for A.Y. 2023–24” held on 4th July, 2023, in Online Mode.

This Twitter Space Session on filing ITR for A.Y. 2023–24 was organised by the Technology Initiative Committee, with an objective of sharing the crucial precautions and best practices for filing ITR that professionals need to observe.

In a candid discussion that was moderated by the chairman of the committee, CA Ameet Patel, the speakers, CA Nitin Shinghala, CA Sanjeev Lalan, and CA Rajni Shah, shared insights on the dos and don’ts for tax professionals to ensure a hassle-free tax filing experience.

The session was open to all and got an encouraging response as several non-members, including representatives from the media attended the same.

Miscellanea

I. WORLD NEWS — ECONOMY

1. Two Fed Officials Suggest That Interest Rates Will Rise Again

In their first comments since the Federal Reserve Bank decided to keep the US key interest rate unchanged this week, officials from the bank signaled that the hiking cycle hasn’t ended.

Fed Governor Michelle Bowman and Boston Fed President Susan Collins both warned in separate events that inflation is still a threat.

“Inflation is still too high, and I expect it will likely be appropriate for the Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2 per cent goal in a timely way,” Bowman said in a speech at an event of the Independent
Community Bankers of Colorado in Vail. “I see a continued risk that energy prices could rise further and reverse some of the progress we have seen on inflation in recent months.”

Bowman said that, according to economic projections assessed by the FOMC, inflation will stay above the Fed’s 2 per cent “at least until the end of 2025.”

The Fed’s Federal Open Market Committee voted on Wednesday to maintain the benchmark rate in the range of 5.25 per cent to 5.50 per cent, the highest level in 22 years. Both Bowman and Collins said they supported the decision.

Projections in the Fed’s dot plot, which accompanied the announcement, showed the likelihood of one more hike this year and two cuts in 2024, or two fewer than indicated in June’s update.

“I expect rates may have to stay higher, and for longer, than previous projections had suggested, and further tightening is certainly not off the table,” Collins said at the annual convention of the Maine Bankers Association. “There are some promising signs that inflation is moderating and the economy rebalancing. But progress has not been linear and is not evenly distributed across sectors.”

Annual U.S. inflation accelerated to 3.7 per cent in August from 3.2 per cent in July, pressured mainly by gas prices. The Fed has two more monetary policy meetings in 1st November, and 13th December, 2023.

(Source: International Business Times — By Helder Marinho — 22nd September, 2023)

2. SPORTS

1. India Fires First World Record of Asian Games as Japanese Teen Dazzle

India claimed the first world record of the Hangzhou Asian Games on Monday as hosts China snapped up more gold medals and 15-year-old skateboarder Hinano Kusaki triumphed for Japan.

The Indian trio of DivyanshPanwar, RudrankkshPatil and AishwaryTomar blew away the field with a new world-best 1,893.7 points to win the men’s 10m air rifle team event on day two of the multi-sports extravaganza.

They beat the previous mark of 1,893.3 set by China last month in Baku.

In doing so they won India’s first gold of a Games where the hosts have swept 28 of the 44 titles decided so far.

“In the 10m event they are both perfect athletes,” Tomar said of his teammates. “Playing with them is huge, it’s really good.”

Another shooting world record fell to China’s Sheng Lihao in the men’s 10m air rifle with his 253.3 points surpassing teammate Yu Haonan’s 252.8 from Rio four years ago.
“I had good luck in the final. I did quite well today, I was basically smooth,” said Sheng.

Like India, Macau clinched its first gold in Hangzhou, with wushu athlete Li Yi winning the Changquan title to become the first woman in history from the Chinese territory to earn an Asian Games gold.

“I’m really proud. This one completes the process so I feel really fortunate,” said the 31-year-old.

“This, maybe, brings my 20 years as an athlete to a perfect end.”

In other early action on day two, Kusaki dazzled in skateboarding to easily win the women’s park final at Qiantang Roller Sports Centre.

“I am very happy with how everything went,” said the teenager.

After winning all seven gold medals in the swimming pool on the opening day, China is primed to dominate again on Monday night, spearheaded by breaststroke world champion Qin Haiyang.

The Chinese star caused a major upset at the world championships in Fukuoka in July when he won the 100m gold in 57.69 ahead of a stacked field and in the absence of British great Adam Peaty.

He went on to complete an unprecedented clean sweep of the breaststroke titles, an achievement he is aiming to match at his home Asiad as he builds towards next year’s Paris Olympics.

Qin, the second-fastest ever over 100m after Peaty, was in a class of his own in the heats, touching in 58.35 to better the previous Games best set by Japan’s Yasuhiro Koseki in 2018.

South Korea’s Choi Dong-yeol came in second — a gaping 1.55 seconds behind Qin.

Hong Kong’s Siobhan Haughey could prevent another Chinese clean sweep when she lines up in the women’s 200m freestyle final.

(Source: International Business Times — By Martin Parry — 25th September, 2023)

3. BUSINESS

1. India fourth in number of startups with $50million + funding: Study

India ranks fourth in the world in the number of scaleups, or startups that have received more than $50 million of disclosed VC investment. Ahead of India are the US, China, and the UK, the first edition of Startup Genome’s Scaleup Report said.

However, it’s ahead of the UK in the total VC investment that has gone into these scaleups, and in the cumulative tech value investment of the scaleups. India, the report says, has recorded 429 scaleups, with a VC investment of $127 billion and a total value of tech investment of $446 billion.

The report is a research into scaleup success factors, building on the question of what behaviours, resources, and characteristics of startups differentiate those that within four to eight years scaled to $50 million and higher valuations from those startups that didn’t.

Startup Genome, an innovation policy advisory and research firm, surveyed startups in over 80 cities across more than 40 countries and looked at 60 plus metrics.

The report said India has startups with 50 per cent or more of their customers coming from outside of their continent and having the highest scaleup rate. This can partly be attributed to startups that tailor their products and services to truly global markets — not just beyond their country, but beyond their continent — dramatically increasing their potential customer base.

Startups based in large countries (US excluded) scale at a higher rate when they focus on their domestic market. In those countries, the size of the domestic market is so large that it may be worth delaying or forgoing global markets. This is certainly clear in India, where B2C startups can achieve unicorn status and billion-dollar exits without going out of the country. Startups with a local connectedness index score of 6 or above achieve a scaleup of 5.1 per cent compared to 3.8 per cent for those with a score of 2 to 4 — a 34 per cent boost. The local connectedness index measures the size, density, and quality of a startup’s local network. Early-stage startups with a higher local connectedness index see their revenue grow twice as fast as those with a lower local connectedness index.

Scaleup success rate clearly increases with global connectedness, and startups that develop a high level of global connectedness have a 3.2 times higher chance of scaling than those with a low level. Ecosystems that are more connected to top global ecosystems (such as Silicon Valley, NYC and London) see their startups go global at a much higher rate on average (66 per cent correlations between those very distinct variables)

Founders looking to improve their chances of scaling should ensure that they offer stock options for all employees, have more than five global connections to top ecosystems, and have at least three advisers for their startup.

(Source: Times of India – By ShilpaPhadnis – 25th September, 2023)

SOCIETY NEWS

CAs PERFORM ‘Zumba’ exercises

The BCAS decided on a unique theme for the monthly HRD Study Circle meeting with the idea of giving members a break from their strenuous routine of managing office and work from home. A ‘Zumba’ class was the choice. This is an exercise fitness programme that combines international music with dance moves. Zumba routines incorporate interval training – alternating fast and slow rhythms to help cardiovascular fitness.

Organised on 8th December, 2020, the event featured faculty and trainer Mr. Burzin Engineer, who is a professional dancer and a fitness coach with over a decade’s experience. He started the class with light warm-up exercises to get everybody ready for a fun workout. The Zumba moves he picked were easy and the movements had a flow which the 50-plus participants thoroughly enjoyed. Amongst the participants were members of the Committee and BCAS members from Mumbai, Pune, Ahmedabad, Indore, Chennai, Delhi, Kolkata, Jodhpur and even Chicago.

Regular physical exercise / activity keeps the body fit and the mind refreshed. It was motivating to see some of the senior members participate with great enthusiasm. This session also offered some quality family time to members. Many children were seen enjoying exercising and moving to the beats of the music along with their parents.

‘RESIDENTIAL REFRESHER COURSE’

One of the most awaited events of the year, the ‘Youth Residential Refresher Course’, organised by the HRD Committee of the BCAS, saw its 8th run from 16th to 18th April, 2021.

The event was held under the aegis of the BCAS with support from President CA Suhas Paranjpe, HRD Committee Chairman CA Govind Goyal, mentor CA Naushad Panjwani and HRD Convener CA Anand Kothari. On account of the second wave of Covid-19, the event was conducted online but over 100 participants joined from 24 cities all over India.

A vast range of topics was covered over 12 sessions extending to 16 hours over a three-day virtual refresher course.

Going by the YRCC theme of ‘Re-Align | Re-Energize | Re-Connect’, the event had thought-provoking sessions by some excellent international guest speakers who gave meaningful and fascinating insights into the changing work culture, the new emerging technologies, the intricacies of the professional world and how one must adapt to them.

The technical sessions were followed by networking sessions wherein some special online networking activities were organised for the participants.

Part I – Speaker Sessions

The first day covered interesting topics ranging from ‘Journey of an Entrepreneur’, ‘Professional Social Responsibility – A Tool for Networking’ to ‘Why Indian Professionals are a Darling of Global Corporates’. An interesting fireside chat with young ‘technopreneurs’  came with the key takeaway of understanding one’s strengths and weaknesses and then tackling all obstacles on the road to achieving our dreams.

In the next session, Mr. Shailesh Haribhakti shared insights about life experiences, the importance of reading books and giving back to the society as a professional. The final topic had the speaker sharing success stories of Indian professionals abroad and their attitude and approach towards work, their talents, and the ‘Do’s and Don’ts’ that we should adopt in our professional journey.

The second day began with an early morning session on ‘Work Culture: Friendships at Workplace’. The speaker dwelt on the necessity of maintaining cordial and friendly relations at the workplace and threw light on where to draw the line. She answered multiple questions on work-life balance. The following session was a dialogue ‘Acing Appraisals’ with industry veterans where the participants learned the importance of timely appraisals and the key elements to use in their next appraisal meet.

Later during the day, there was an engaging session on ‘Building Social Media Presence within the ICAI Guidelines’. ‘Social Media’ is a wide spectrum of networking opportunities. The speaker guided the participants on the ethics to be followed when building a social media presence and seeking new opportunities. (What, how, when and related questions arising in our everyday life.)

The next panel on ‘Emerging Trends in the Financial World’ brought new thoughts on how blockchain, cryptocurrency and Artificial Intelligence will revolutionise the practice around us. Their impact on our work culture and strategies and our professional approach were also mentioned. The day ended with some fun, relaxation and rejuvenation for the family through a stand-up comedy session.

The final day at YRRC began with the interesting and relevant topic, ‘Kya WFH mein koi locha hai?’. It was one of the most relatable sessions for the participants, dealing with the importance of mental health in a world of increasing technology and diminishing human interface. The next topic, ‘Upgrading to a Global Outlook and Approach’, made the participants ponder over whether they need to change their traditional approach to meet global standards. If yes, then to what level, extent and with what mindset, was highlighted by the speaker. This was followed by an interesting panel discussion by the YRRC conveners and coordinators about their intriguing journey and success stories providing guidance on how to build a successful career while reminiscing old memories.

The final session could not have been more perfect. There was an excellent motivating and persuasive address by ICAI President CA Nihar Jambusaria to the youth, enlightening them about different aspects of the profession.

Part II – Networking Sessions

All the participants belonging to different areas and regions had connected over Zoom meetings to be part of our ‘Networking sessions’ which were held after the speaker sessions ended. The participants were divided into six different teams to compete over the team-building activities organised by the YRRC team along with another fraternity member, CA Hrudyesh Pankhania.

To begin with, the participants were given multiple group tasks to perform and were then required to send the screenshot of the tasks performed. This gave them a chance to display their swiftness and coordination by sending their screenshots at the earliest.

One of the most creative activities given was composing your own song or modifying an existing song to accommodate the names of your team members in the lyrics. Not just that, the participants were even required to give a live performance. The final results were mind-blowing with fantastic innovation and compositions by the teams.

The participants also got a chance to display their artistic skills when they had to virtually draw a painting together (team spirit) and make it as realistic as possible. And how about shuffling the team members and asking them to choose their favourite celebrities (from the list given) whom they would save from a fire, and also come up with some hilarious reasons for the same? The choices had to be as unique as possible, because, after all, success lies in being different.

The final event of the ‘Networking Session’ was the ‘Networking People’s Tambola’ which required all the participants to network within cross-teams and make Tambola tickets. Of course, the best part was creating ‘Memes’ – for the YRCC, of the YRCC and by the YRCC. Kudos to all the participants who came up with some splendid and creative memes which left each and every one of them in splits.

Our Wall of Fame – Our Valued Speakers


Behind the Scenes – The YRRC Team

 

YRRC Participants at the Networking Sessions

 

ITF STUDY CIRCLE MEETING

The International Taxation Committee conducted a virtual meeting on ‘Residence of Individual under Income-tax Act – Recap on interpretation issues dealt by Courts and impact of new amendments’ on 24th May. It was led by Group Leader CA Hardik Mehta who explained the concepts with respect to residence of an Individual under the Indian Income-tax Act along with recent developments and interpretations made by Courts.

Determining an Individual’s residence status is one of the most important factors based on which taxability is decided. In view of this, the Group Leader walked the audience through the Income-tax Act, its amendments and various court rulings in relation to the residence of an Individual. With the help of several simplified illustrations, the speakers lucidly explained the various concepts. They also dealt with and resolved queries raised by the participants. The meeting was interactive and the participants benefited enormously from the discussions and insights provided.

A SWOT ANALYSIS OF CHINA

The International Economics Study Group held its meeting on 9th June to take up a ‘SWOT Analysis of China in the context of likely Cold War II’. CAs Harshad Shah and Deepak Karanth led the discussion and presented their views on the subject.

The participating experts warned that the two world powers were entering dangerous territory. Tensions are mounting by the day between the United States and China, leading to possibilities of a new Cold War. It resembles the US-Soviet ‘Cold War’ in certain respects and the group analysed this through a SWOT analysis. They said that what’s at stake is the future of the 21st century global order.

China’s strengths are economics, military firepower (it is the third largest defence power in the world), its own Google, Facebook, WhatsApp, Amazon – and thus technologically it is not dependent on the US.

China’s opportunities are a huge population with rising per capita income, a huge consumer base, lower dependence on exports, healthcare and education.

China’s weaknesses are dwindling cheap labour, demographic crisis (birthrate @ 1.3), Communism, governance issues, suppression of Uyghur Muslims, lack of innovation and basic research, a ‘Hungry for Money’ attitude, its military’s lack of actual war experience for 42 years, the brain-drain problem, extreme rural poverty, few English-speaking people and a huge pollution problem.

China’s threats are no protection of IPRs and blatant violations, Taiwan becoming the ‘Berlin’ of the Sino-American Cold War, China’s serious border disputes with most of its neighbours, South China Sea dispute (this can spark the next global conflict), looming debt crisis, not all of China’s investment decisions having been successful, China could be facing a food crisis and also a water crisis, possibility of civil war, a foreign policy that is in the gutter and its post-pandemic reputation crisis.

Later, CA Milan Sangani presented his views on the ‘State of the Indian Economy in relation to the second wave of Covid-19’. Compared to the GDP hit in F.Y. 2021, the impact of the second wave of lockdowns is expected to be less. And there was light at the end of the tunnel as the number of new cases was now lower than the number of recoveries. Vaccinations needed ramping up and real interest rates had turned negative, hurting fixed income investors with increasing inflation. He noted that historically, global non-financial disruptions like pandemics and World Wars are followed by periods of economic boom.

SOCIETY NEWS

BALANCING ONE’S STATE OF MIND

The Human Resources Development Study Circle arranged an excellent discussion on one of the most important topics requiring to be explained in detail in these devastating Covid times, viz., ‘Sthitapradnya’ (a state of balanced intellect in which one is not perturbed by emotions). This is a valued part of the Bhagwad Geeta. The presentation was made by the veteran CA C.N. Vaze in the course of a virtual (online) meeting on 11th May. It was followed by a brief talk by Ms Manasi Amdekar, counselling psychologist, who dwelt on the role of prayers in achieving ‘Sthitapradnya’.

C.N. Vaze explained that ‘Sthitapradnya’ or a balanced state of mind makes it possible for us to pursue our goals irrespective of our situation. Today, because of Covid and the resultant lockdowns there is a lot of negativity and depression leading to severe mental problems. The talk was aimed at generating positivity in the participants by focusing on the following qualities of ‘Sthitapradnya’:

1. Becoming desireless: Being fully satisfied with the self.
2. Stability in every situation: Such a person is stable (not shaken by whatever condition he is in, not too ambitious but not complacent either, and will work for growth but not be perturbed by negative results).
3. Emotional stability: Neither pleased with good nor angry at bad (evil).
4. Complete self-control.
5. Tranquility: Established in calmness of the mind.
6. Established in fullness: Undisturbed by desires, just as the ocean is undisturbed by the constant flow of rivers into it.
7. Oneness with Brahman.

‘In Indian culture, we use two words, Sukh which is material comfort, and Anand which is happiness and which depends on one’s mental state,’ C.N. Vaze pointed out.

यः सरत््व रानभिस्नेहस्तत्तत्प्राप्य शुभा शुभम।्
नाभिनन्दति न द्वेष्टि तस्य प्रज्ञा प्रतिष्ठिता।।2.57।।

• His Reason is (said to be) steady whose Mind is without Attachment in all things, and who feels no exultation or aversion about the agreeable or disagreeable which befalls him.
यदा संहरते चायं कूर्मोऽङ्गानीव सर्वशः।
इन्द् रियाणीन्द् रियार्थेभ्यस्तस्य प्रज्ञा प्रतिष्ठिता।।2.58।।

• When a person draws in (his) senses from the objects of senses as the tortoise draws in its limbs (such as hands, feet, etc.) from all sides, then his Reason is (said to be) steady.The discussion then turned to Shad Ripu (the six ‘Enemies of Life’), viz.,

• Kaama – Desire
• Krodha – Anger
• Lobha – Greed
• Moha – Delusion
• Mada – Ego
• Matsara – Jealousy

C.N. Vaze concluded by quoting Swami Vivekananda who had exhorted Indians to ‘Arise, awake and do not stop until the goal is reached.’

He was followed by Ms Manasi Amdekar who focused on the role of prayers to achieve ‘Sthitapradnya’.

Among the points that she discussed were:

* The brain has different ‘phases’. It reacts to stimuli, and prayers can help in controlling it;
* Words affect water, too. Good words create ripples of good designs and bad language can create distorted designs. These affect the happenings in a person’s life; water molecules react to words and their vibrations; when we utter words of gratitude, there are beautiful, symmetrical patterns in water;
* Non-living objects also react to frequency and can change their position;
* Our brains behave differently depending on what we speak;
* Chanting religious mantras – Actively listening to what you are saying is important, they are holy words and have an effect on your mind; in fact, we dedicate time for them;
* Most people are in a chaotic state with so much noise around;
* We need to filter out other noise and give focused attention to the desired stimulus;
* Active and passive listening are crucial; we cannot move our outer ears, but we can still avoid distractions and concentrate our minds on the job we are doing.

The participants in the virtual meeting requested that both the speakers, C.N. Vaze and Ms Manasi Amdekar, be invited to speak once again as they found the sessions to be interesting and enlightening.

15TH RESIDENTIAL STUDY COURSE ON GST

When the country was grappling with the Covid pandemic and almost the whole of India came to a standstill owing to the ‘second wave’ which started in March, 2021, the BCAS organised its 15th Residential Study Course on Goods and Services Tax in an attempt to motivate people and offer them continuous study in such difficult times.

However, the course was held in virtual mode between 3rd and 6th June. It was well designed and planned. Proof of this was the fact that it was attended by 390 participants from all over India.

There were more than 45 live mega case studies. Each case study was unique in its own way and dwelt on several issues that the professionals and the taxpayers face every day. This time, a new concept, that of a MOCK group discussion, was planned in advance wherein the Group Leaders and Mentors were invited to participate in two ‘GD Papers’ and two ‘Panel Papers’. Before the actual event, selected Group Leaders were allotted the case studies which generated active participation all around and acted as a precursor to the main event. The Group Leaders presented their views first with slides on the case studies allotted to them and other members in the close group deliberated and added their viewpoints. After the Mock group discussion, a Common PPT was prepared for all the Group Leaders for the RSC group discussions. The outcome of this Mock discussion was excellent and offered a lot of value to the participants. All the Paper writers, faculties and panellists appreciated the idea of the Mock GD and the Common PPT.

On the first evening, 3rd June, the programme started at 4.45 pm. CA Sunil Gabhawalla, Chairman, Indirect Tax Committee (IDTC), welcomed the participants and shared the idea behind the RSC, the technical efforts and its design. This was followed by inaugural remarks by President CA Suhas Paranjpe, who gave a briefing on the BCAS. IDTC member CA Mrinal Mehta introduced the panellists, Advocate V. Sridharan, CA S.S. Gupta and Moderator Sunil Gabhawalla.

The panel discussion on ‘Case Studies on GST Law’ lasted about three hours. The concluding remarks were also made by Sunil Gabhawalla and the vote of thanks was proposed by CA Saurabh Shah, the IDTV Convener.

The morning of 4th June had Sunil Gabhawalla welcoming the participants for the Group discussion on ‘ITC – Myth or Reality’? The paper was written by Advocate V. Raghuraman. After the introduction of the Group Leaders and the Mentors and acknowledging their efforts, the Group discussion commenced. For every Group discussion paper, the participants were divided into ten online groups, each with a Group Leader and a Mentor. After the Group discussions, the Group Leaders and Mentors reported to the Paper Writer about the groups’ views, probable issues and challenges during the course of the discussion.

In the evening session, the opening remarks were made by IDTC senior member CA Puloma Dalal, the session chairperson. Following this, the speaker was introduced by CA Gaurav Save, IDTC member. Advocate Raghuraman, Faculty, presented his replies to the Paper that had been discussed in the morning. The participants enjoyed the free flow from the Paper presenter. The session concluded with a vote of thanks by CA Vikram Mehta, IDTC member.

The proceedings of the third day, 5th June, began with the Group discussion on ‘Corporate Restructuring & GST’, the Paper written by CA Gautam Doshi and CA Bhavna Doshi. In-depth discussions took place among all the ten groups. After the Group discussions, reporting to the Paper Writers was done as planned by all the Group Leaders and Mentors.

In the evening, the opening remarks were made by IDTC senior member and Past President, CA Govind Goyal, chairman of this technical session. CA Parth Shah, IDTC member, introduced the speakers. The Faculties then presented their replies to the Paper that had been discussed in the morning. The session was well appreciated for the simple solutions from the procedural and legal perspectives and for the practical solutions. It concluded with a vote of thanks proposed by CA Dushyant Bhatt, IDTC convener.

The concluding day, 6th June, saw two sessions. The first was chaired by CA Raman Jokhakar, Past President of the BCAS. After his opening remarks, CA Rishabh Singhvi, IDTC member, introduced CA Divyesh Lapsiwala, the speaker of the Presentation Paper ‘Tax Technology – Current and Future Trends’. The speaker explained the importance of technology adoption in GST practice and starting preparations in advance. Later, the chairman gave the concluding remarks and the vote of thanks was proposed by CA Suresh Choudhary, also an IDTC member.

After a break of five minutes, the last technical session on ‘GST Practice’ with the panellists, senior advocate Tarun Gulati and CA Sushil Solanki, commenced. The session was moderated by CA A.R. Krishnan, senior member of the IDTC. The concluding remarks were made by Sunil Gabhawalla, IDTC chairman, and the vote of thanks was proposed by CA Mandar Telang, IDTC convener.

Owing to time constraints, a few case studies could not be covered but, considering the importance of the topics concerned, the said session was carried over to 22nd June. The participants benefited from the valuable inputs, legal discussions and analysis of the GST law. Sunil Gabhawalla thanked both the panellists and the Moderator for their time and effort and also for agreeing to the extended session.

The virtual RSC concluded with acknowledgements and thanks to all those who had worked towards making the event a success, especially the Paper Writers, Group Leaders, Mentors, Panellists and others who had worked tirelessly to deliver a seamless experience. Last but not the least, thanks were expressed to the participants without whom the sessions would not have been so interactive.

Overall, it was an enriching experience and was appreciated by all the participants.

CREATING AND SUSTAINING TEAM CULTURE

The Human Resource Development Study Circle arranged a meeting on the virtual platform of BCAS on 8th June to discuss the subject ‘Creating & Sustaining a Team Culture (Introductory Session)’. It was addressed by Mr. Gopal Sehjpal.

Creating a new team culture or improving upon an existing team culture is about answering the question: ‘Do you play well with others?’

The answer to this could lead to one’s success or failure as a leader. It could be the key factor in one’s personal and family relationships. Many think that ‘plays well with others’ is a category for grading school children, not grown-ups. ‘We tell ourselves, “I’m a successful, confident adult. I shouldn’t have to constantly monitor if I’m being nice or if people like me.”’

Most people hold themselves blameless for any inter-personal friction and believe that it’s always someone else’s fault not their own fault. They say, ‘The other guy needs to change. I shouldn’t have to. In fact, I don’t need to, it’s his fault.’

Mr. Gopal Sehjpal wondered whether people are so satisfied with how far their behaviour has already taken them in life that they smugly reject any reason to change? In other words, they believe that ‘If it ain’t broke, don’t fix it.’

He narrated the story of Alan Mullaly who, when he became CEO of Ford, set to work to create an environment where the executive team, notorious for not working together, could learn to play well with each other. Through his leadership, the focus of the team, and ultimately of the entire company, became ‘How can we help one another more?’ It worked. The company survived through incredibly difficult times and returned to achieving great success again through working together. If Ford had been a schoolyard and the executives school children, they would have received the highest marks in ‘playing well with others’.

How well does your team play together?

Mr. Gopal Sehjpal said that one could answer this question about one’s team by trying the simple, four-step process which can be called ‘team-building without time-wasting.’ The steps are:

1. In a team meeting, ask each team member to rate ‘How well are we doing?’ vs. ‘How well do we need to be doing?’ in terms of teamwork. Have each member do this on paper. Have one of the members calculate the scores without identifying anyone. On a 1-10 scale, with 10 being the highest score, the average evaluation from over 1,000 teams is ‘We are a 5.8. We need to be an 8.7.’

2. Assuming that there is a gap between ‘we are’ and ‘we need to be,’ ask each team member to list two key behaviours that if every other individual team member improved, could help close the gap and improve teamwork. Do not mention people, only behaviour, such as listening better, clear goals, etc. Then list the behaviours on a flip chart and have the team pick the one that they believe will have the biggest impact.

3. Have each team member conduct a three-minute, one-on-one meeting with each of the other team members. (Do this while standing and rotate as members become available.) In these sessions, each person should ask, ‘Please suggest one or two positive changes I can make individually to help our team work together more effectively.’ Then have each person pick one behaviour to focus on improving.

4. Begin a regular monthly follow-up process in which each team member asks each other member for suggestions on how to continue their improvement based on their behaviour the previous month. The conversations should focus on the specific areas identified for improvement individually as well as general suggestions for how to be better team members.

When asking for inputs, the rules are that the person receiving the ideas cannot judge or critique the ideas. He must just listen and say ‘Thank you.’ The person giving the ideas must focus on the future, not the past.

Mr. Gopal Sehjpal said this is a quick and easy process that helps teams improve and helps team members become better team players.

‘We hope this is helpful to you and those around you. Life is good.’

For goals of the organisation to be met, he suggested: 1) Creating teams, 2) Team culture. Sustaining a team culture is an independent task with a view to ensuring that teams function to achieve the goals of the organisation.

Any defect in the system of creating teams will be harmful to the organisation. The process involves: 1) Creating teams, 2) Assessment of each team member, and 3) Overall assessment of team performance – Feedback, feedforward, differentials are also important aspects to sustain team performance and achievement of the organisation’s goal, Mr. Gopal Sehjpal added.

FOREIGN DIRECT INVESTMENT

The FEMA Study Circle conducted a virtual knowledge session on ‘Foreign Direct Investment (FDI)’ on 19th June to help provide working knowledge about FDI to members of the Study Circle. The discussion was led by Group Leader CA Mukesh Dhoot who explained key provisions of FDI along with the applicable regulatory framework on it.

Mukesh Dhoot led the discussion by comparing the current regulatory framework with the erstwhile FERA 1973 and by highlighting the differences in their objectives. Apart from this comparison, various key provisions such as capital and current transactions, pricing guidelines, sectoral caps, prohibited sectors, KYC, minimum lock-in period, etc., were also taken up. Multiple case studies based on practical aspects of FDI were also discussed. Group Leader Mukesh Dhoot also encouraged the participants to share their responses / inputs.

It was an enlightening discussion with senior members discussing practical examples and approaches in relation to the subject. Several seniors and members of the BCAS FEMA Study Circle also participated in the discussion and their participation made it more interesting.

DIRECT TAX LAWS STUDY CIRCLE

The Direct Tax Laws Study Circle organised a virtual meeting on 21st June at which ‘Key Amendments Related to TDS Provisions, Effective 1st July, 2021’ were taken up.

Group Leader CA Bhaumik Goda gave a brief overview of the changing TDS landscape. The provisions of section 194Q were discussed in depth with illustrations. The applicability of TDS on GST was taken up in light of judicial precedents and Circulars. Further, the exemptions to such TDS provisions were also highlighted.

Thereafter, the Study Circle discussed the inter-play between the TDS and TCS provisions with illustrations. Also discussed was the TDS impact on non-filers of ITR. The session ended with Bhaumik Goda sharing his thoughts on the practical challenges that will be faced during implementation of the new TDS provisions.

INTERNATIONAL DAY OF YOGA: 21ST JUNE

The Human Resource Development Committee, along with The Yoga Institute, Santacruz East, organised an online programme to mark the International Day of Yoga on 21st June from 8 am to 9.45 am. The programme was conducted by CA Manoj Alimchandani along with CA Neeta Bakshi, Ms Manju Khatri, Ms Naznin Hussein and Ms Hital Shah making up the faculty.

Chairman CA Govind Goyal welcomed the gathering which was then addressed by President Suhas Paranjpe and Vice-President CA Abhay Mehta. Ms Naznin Hussein spoke at length on food, nutrition and precautions. She captioned her presentation ‘Ahar, Vihar, Achaar, Vichar.’

She spoke about sattvik, rajasik and tamasik food with slides and suggested that one should choose sattvik food, with a gap of four hours between two meals. Breakfast must be taken within one hour of waking up. There must be a gap of four hours between meals and it would be best to eat 40% less than the actual appetite. The last meal of the day should be not later than 7 pm. She also spoke about the value of gratitude and prayer, as well as sunlight and exercise.

Ms Hital Shah demonstrated the way to perform Suryanamaskar. Ms Manju Khatri showed how to perform Talaasan, Utkatasan, Sukhasan, Vajrasan and neck and shoulder-relaxing postures. Ms Nita Bakshi explained the importance of pranayam and warm water and suggested that everyone should practice this in the current pandemic for better health.

The programme was anchored by CA Anand Kothari and the Q&A session by CA Mukesh Trivedi. About 60 participants took part in it.

CRYPTOCURRENCY: THE FUTURE OF MONEY?

The BCAS organised a lecture meeting by Mr. Nishith Desai on ‘Is cryptocurrency the future of money? Challenges and complexities’ on 23rd June. It was planned keeping in mind the current trend of money exchanges and the related challenges and complexities. Mr. Desai, along with his team comprising Mr. Suril Desai, Mr. Meyyappan Nagappan, Mr Vaibhav Parikh and Mr. Purushotham Kittane, took the participants through the entire gamut of cryptocurrency (crypto).

 

The role of Moderator was played by CA Ninad Karpe, who set the ball rolling by stating that there were many mysteries surrounding cryptocurrency and the technology used in it. He was confident that the meeting would help solve some of the mysteries regarding crypto as the future of money.

Mr. Nishith Desai introduced the topic and provided his insight on the crypto market and its development globally and in India. He also explained the history of the evolution of crypto and the legal tussle between crypto and banks. He noted that there was a Supreme Court order stating that crypto could not be banned. At the same time, it was true that some countries considered crypto as money, while some treated it as security.

Mr. Suril Desai recalled the history of crypto and noted that it was during the recession of 2008 that the concept paper for crypto came in; however, history states that the first blog on Bitcon was issued in January, 2003. The real pick-up in crypto came after the 2008 recession. Blockchain technology, on which the entire system of crypto was based, was nothing but a shared distribution ledger system which was available on multiple systems or notes and was considered to be very secure, unlike a centralised system where a single attack could bring down the entire system. Bitcoin was programmable money. Currently, the Bitcoin world was limited to 21 million coins but this limit could be changed with the approval of more than 51% of the holders.

Next, Mr. Vaibhav Parikh shared his thoughts on the Indian legal landscape and the opportunity in the technology world related to remittances. There was a big market for blockchain developers. One could not separate public blockchain and crypto, although one could separate private blockchain and crypto. He also described how blockchain will change the way the finance industry worked. In his talk, he covered the Supreme Court judgment on whether crypto was legal or not, the relevance of the FEMA Act, the Payment and Settlement Act, the Security Contract Regulation Act, 1956, FDI, the Prevention of Money Laundering Act, the Companies Act and other subjects.

For his part, Mr Meyyappan Nagappan covered the taxation aspects of crypto. He explained that from the taxation perspective its classification could be in three categories, namely, goods, property or currency. There were also issues regarding whether it was a capital asset vs. a stock-in-trade. He broadly covered the topics related to Significant Economic Presence (SEP), Income attributable to SEP taxable in India, Risk in case of non-treaty jurisdictions, Equalisation Levy (EL), tax base for levy of EL, Withholding Tax Obligation of crypto exchange and Tax Collection / Deduction at Source.

Indirect tax aspects related to crypto, such as did sale of crypto constitute supply? Is a crypto exchange an intermediary under the IGST Act? Is the sale of crypto to a resident buyer import of goods? Or is the sale of crypto to a non-resident buyer export of goods? Tax Collected at Source (TCS), registration requirements, these were some of the other areas covered by him.

Mr. Purushotham Kittane explained the RBI’s stand and its Circular related to crypto and the emphasis that RBI has put on KYC norms, prevention of money laundering laws and combatting of terrorism funding. There were several developments on the policy level by the Government of India. RBI had also proposed its own cryptocurrency as a centralised currency for the country. Ninad Karpe summarised the session by posing some very relevant questions to the speakers based on his own research and the questions asked by the participants on the chat and Q&A box.

The meeting attracted a large number of participants. It concluded with CA Mihir Sheth proposing the vote of thanks. An archival video of the meeting has, in a short time, garnered a few thousand views. It can be viewed on the following YouTube link: https://www.youtube.com/watch?v=iO1aNXusAp4&t=6s&ab

LEADERSHIP RETREAT

The last programme of the society for the year 2020-21 was organised by the Human Resource Committee on 29th June, 2021. The regular Leadership Camp was not organised owing to the lockdown; and in view of the prevailing situation an online presentation was arranged on the topic ‘Creating a High Performing Organisation’. The distinguished faculty was Prof. Dr. Zubin Mulla, who has been a regular on the BCAS platform. More than 160 participants attended the programme.

It commenced with a welcome address by Chairman CA Govind Goyal, followed by talks by President Suhas Paranjpe and Vice-President Abhay Mehta. CA Krishankumar Jhunjhunwala introduced the speaker.

Dr. Mulla discussed the following important points:

• Correct human resource practice and good leadership followed by employees, operations and customer outcome create a high-performing organisation. Employees display skills and competencies, with job satisfaction and commitment and have good behaviour to contribute. On the other hand, customer satisfaction creates loyalty and productivity brings good operational outcome.
• What are HR practices? The speaker shared an acronym ‘AMO’, for Ability-enhancing, Motivation and Opportunity.
• Ability and skill-enhancing practices should come with a comprehensive scientific recruitment policy, rigorous selection criteria and extensive training. Motivation can be enhanced with developmental performance management, competitive compensation, giving incentives and rewards and creating career prospects with job security. The opportunity can be enhanced with a flexible job design, creating right teams, information-sharing and employee involvement and psychological safety.
• How to select the appropriate candidate? The speaker emphasised that the top five drivers that the employee looks at are attractive salary, work-life balance, job security, pleasant work atmosphere and career progression. The top five resources for getting applicants were job portals, placement agencies, referrals, social media and company websites. Before recruiting, one must identify employee segments, create an employer brand and identify the appropriate channel.

There must be a robust selection process.

• Dr. Mulla emphasised that even though paying a high salary is the easiest way to get the employee, it is not the most scientific approach and in the long run it becomes counter-productive. However, performance incentive is an excellent way to attract and motivate the employees and high performers. Employers must focus on human capital as per the requirements of the organisation. Human capital is the value of the employee in the organisation.
• While discussing the concept of human capital, the speaker explained that it would pay to look at the value of the employee in the organisation irrespective of his value in the general market. Once an employee is selected on the firm’s capital value, he should be shown the path of growth within the firm and also explained what quality of behaviour is expected of him.
• The speaker advised that it was best to design the job in such a way that is inherently motivating, based on skill variety, task variety, autonomy and giving an opportunity to the employee to give feedback. The vision of the supervisor should be wider compared to the subordinate. The authority and responsibility of the manager should be commensurate.
Dr. Mulla said ‘AMO’ must work together as per the needs of the business. He also discussed a case study of one of the most valuable placement service companies, Egonzender, which has the following process:

1.    Understand client’s situation
2.    Confirm proposal and specification
3.    Conduct systematic research
4.    Interview potential candidate
5.    Present candidate and check references
6.    Assist in negotiation and follow-up.

Egonzender’s philosophy was to hire consultants who:

  •     have little interest in personal aggrandisement
  •     are team players
  •     get more pleasure from group’s success and their own advancement
  •     are collaborative
  •     eagerly share ideas and information about existing and potential clients
  •     share information about the candidate who may fit the best needs of the client
  •     wants to stay long with a company.

The reward strategy emerges from the business strategy and must be aligned with all elements of HR.

In the second part of the presentation, the discussion was on leadership.

•    Three ways of getting work done are authority, transaction and leadership.
•    Leader has to have clarity of purpose and he must walk the talk.
•    Leaders take responsibility and share success.
•    Leaders help others to find purpose at work by engaging them in the pursuit of a higher vision.

Dr. Mulla suggested two books for reading: Investing in People by Wayne F. Cascio, John W. Boudreau, Alexis A. Fink; The Servant: A Simple story about the true essence of Leadership by James C. Hunter.

After the presentation CA Mukesh Trivedi conducted the Q&A session and proposed the vote of thanks.

FOUNDING DAY LECTURE BY  AZIM PREMJI

On 6th July, the 73rd Founding Day of the BCAS,  Mr. Azim Premji addressed the members on ‘Professional Excellence and Social Responsibilities’. He complimented the BCAS for its ability to reinvent itself over 72 years and stated that professional excellence and social responsibilities were not separate but were interlinked in many ways.

Elaborating, he said, both required focus, execution and trust of the stakeholders. Considering the complexities of a country as diverse as India, bringing about social change was more difficult than running a big business. Hence, it was absolutely essential to partner with the Government institutions and build the right professional environment and execution capabilities in philanthropy. Professional excellence with good execution skills would help build the right ethos of social responsibilities that, in turn, would create a sustainable society.

After his very brief talk, Mr. Premji engaged in a conversation with CA Naushad Panjwani in the course of which he addressed several questions.

Asked about his inspiration, he said it was his mother and also Mahatma Gandhi who had inspired him to follow the concept of trusteeship of wealth. This was the driving force that made his Foundation commit more than Rs. 1,000 crores to help the people affected by Covid-19. At the same time, he pointed out, his biggest regret was that he did not start on his journey of philanthropy earlier in life. He advised the youth of the country to engage with the real world and work in the field to experience the injustice, inequity and hardship that the common man has to face. This will help them develop empathy.

Mr. Premji apprised members about the various social initiatives in the areas of education, agriculture and poultry-farming that his Foundation had been engaged in and said that these had helped generate employment for 83 lakh people.

What was his opinion about the best structure for a philanthropic organisation? His view was that no form or structure would work unless one collaborated with the Government institutions which alone had the wherewithal to ensure that the benefits percolated down to the ground level. The Government institutions have to be convinced of the intent and the capability of the organisation.

What would be the best way to take up the issue of education which had suffered the most during and after the Covid pandemic? Mr. Premji advocated mohalla classes in open spaces, proper vaccination of the teachers and also financial and infrastructure support to them.

How could the inequality in income be reduced? For that, he said, it was necessary to improve the level of public education – but the entire thrust of development should be on the common man as the beneficiary. No one could be emotionally detached from misery; after all, empathy to other human beings is the core of human existence.

Addressing the impact of Covid-19 on the IT industry,  Mr. Premji said that the IT industry was quick to ‘rethink’ and ‘reshape’ against the challenges and had adopted the hybrid model to find optimal balance. It was this ability that could help India become the IT hub of the world and also help the country reach the target of becoming a US $5 trillion economy. In fact, the IT industry had added 1,58,000 new jobs during the pandemic year.

What were the secrets behind his company’s ability to manage the ethics and values across various cultures where his business had a presence? His reply was that it had been through a process of ‘communicate’, ‘demonstrate’ and ‘enforce (when violated)’ that it had been made possible.

In the course of his personal journey and his experience after over five decades in business, Mr. Premji said his best learning experience had come from people on the ground, teachers, students, workers, etc. That had helped him to evolve.

CA Abhay Mehta proposed the vote of thanks and added that as a token of appreciation to the esteemed guest, BCAS has sponsored 101 trees to be planted across the country.

The lecture meeting can be viewed on the following YouTube link: https://www.youtube.com/watch?v=x46zwWVPZk8&t=135s

Regulatory Referencer

I. COMPANIES ACT, 2013

1. One-time relaxation for filing of Forms–3, Form–4 and Form–11 under the LLP Act without any additional fee: MCA has granted one-time relaxation in additional fees for LLPs that are/were unable to file Forms 3, 4 and 11 within due dates. Filing of Forms 3 and 4 without additional fees shall be applicable for event dates from 1st January, 2021 and onwards. The filing of Form 11 without additional fee shall be applicable for F.Y. 2021-22 onwards. Further, these forms shall be available for filing from 1st September, 2023 onwards till 30th November, 2023. [General Circular No. 8/2023, dated 23rd August, 2023]

2. MCA extends the tenure of the Company Law Committee by another one year till 16th September, 2024: The Ministry of Corporate Affairs vide an order dated 18th September, 2019 had constituted the Company Law Committee to examine and recommend various provisions and issues pertaining to the implementation of the Companies Act, 2013 and the LLP Act, 2008. The tenure of the said Company Law Committee was set to expire on 16th September, 2023 which is now extended till 16th September, 2024. [Order No. 2/1/2018-CL-V, dated 13th September, 2023]

II. SEBI

3. Voluntary delisting norms for non-convertible debt securities and non-convertible redeemable preference shares: SEBI (LODR) (3rd Amendment) Regulations, 2023 are notified. As per the amended norms, a new chapter —VI A has been added which prescribes the framework for voluntary delisting of non-convertible debt securities/ non-convertible redeemable preference shares. It shall not be applicable on certain listed entities like a listed entity that has outstanding listed non-convertible debt securities or non-convertible redeemable preference shares issued by way of a public issue etc. [Notification No. SEBI/LAD-NRO/GN/2023/149, dated 23rd August, 2023]

4. Additional disclosures for certain Foreign Portfolio Investors: SEBI has mandated the criteria for submission of additional disclosures by foreign portfolio investors under FPIs norms. As per the criteria, details of all entities holding any ownership, economic interest, or exercising control in the FPIs need to be provided by certain FPIs. These are FPIs that hold more than 50 per cent of their Indian equity Assets Under Management (AUM) in a single Indian corporate group and FPIs that individually, or along with others hold more than R25,000 crore of equity AUM in the Indian markets. [Circular No. SEBI/ HO/ AFD/ AFD — POD — 2/CIR/ P/2023/148, dated 24th August, 2023]

5. Framework for unitholders of REITs and InvITs allowing them to exercise their board nomination rights: SEBI has released a framework for eligible unit holders of Real Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) allowing them to exercise their board nomination rights. As per the framework, the manager of a REIT / InvIT must review whether the eligible unit holders who have exercised their board nomination right, continue to hold the required number of units of REIT / InvIT and make a report on the same. The circular shall be effective immediately. [Circular No: SEBI/HO/DDHS-POD-2/P/CIR/2023/153 & 154, dated 11th September, 2023]

DIRECT TAX: SPOTLIGHT

1. Guidelines under Section 10(10D) of the Income-tax Act, 1961 — Circular No. 15/2023, dated 16th August, 2023:

Finance Act, 2023 made amendments to Section 10(10D). These amendments significantly impact the income-tax exemption eligibility for sums received under life insurance policies.

The circular contains comprehensive guidelines, designed to determine the taxability of consideration received under eligible life insurance policies with the help of a series of detailed scenarios and examples.

2. Extension of timelines for filing Form 10B/10BB and Form ITR 7 for Assessment Year 2023-24 — Circular No. 16/2023, dated 18th September, 2023:

The CBDT has extended the due date for furnishing Audit reports in Form 10B/Form 10BB for A.Y. 2023–24 from 30th September, 2023 to 31st October, 2023.

Consequently, the due date for filing the Return of Income in Form ITR-7 for the A.Y. 2023–24 has also been extended from 31st October, 2023 to 30th November, 2023.

3. Insertion of Rule 11UACA Computation of income chargeable to tax under section 56(2)(xiii)- Income-tax (Sixteenth Amendment) Rules, 2023 – Notification No. 61/ 2023, dated 16th August, 2023:

The Rule provides computation of income chargeable to tax under Section 56(2)(xiii), where any person receives at any time during any previous year any sum under a life insurance policy.

4. Amendment to Rule 26 Rate of Exchange for the purpose of deduction of tax at source on income payable in foreign – Income-tax (Seventeenth Amendment) Rules, 2023 – Notification No. 64/ 2023, dated 17th August 2023.

5. Amendment to Rule 3(1) computation of perquisite value of rent-free accommodation provided by employer — Income-tax (Eighteenth Amendment) Rules, 2023 —Notification No. 65/ 2023, dated 18th August, 2023.

6. Insertion of Rule 134 and Form 71- Application under section 155(20) regarding credit of tax deduction at source – Income-tax (Twentieth Amendment) Rules, 2023 — Notification No. 73/2023, dated 30th August, 2023:

Where any income has been included in the return of income furnished by an assessee for any assessment year and tax on such income has been deducted at source in a subsequent financial year, the assessee can apply to the Assessing Officer in Form 71 to obtain credit of TDS.

FEMA AND IFSCA REGULATIONS

1. RBI allows residents to make study-related remittances in IFSCs under LRS:

Presently, remittances to IFSCs under LRS can be made only for making investments in securities. Resident individuals can now remit payment of fees to foreign universities or foreign institutions in IFSCs for pursuing courses mentioned in the Notification No. S.O. 2374(E), dated 23rd May, 2022 under the purpose ‘studies abroad’ as mentioned in Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000. [A.P. (DIR SERIES) Circular No. 6, dated 22nd June, 2023]

2.Discontinuation of MIFOR as a ‘Significant Benchmark’:

RBI has announced that after 30th June, 2023, the Mumbai Interbank Forward Outright Rate (MIFOR) shall cease to be recognised as a ‘significant benchmark’. This decision comes as a result of the cessation of the US Dollar LIBOR. The updated list of significant benchmarks shall come into effect from 1st July, 2023. [Circular No. FMRD.FMSD. 03/03.07.25/2023-24, dated 23rd June, 2023]

3. International Credit Card usage brought under LRS:

On 16th May, the Government omitted Rule 7 of Current Account Transaction Rules resulting in transactions made through the use of ICCs by residents abroad to be covered under LRS. The purpose was to bring transactions made through ICCs under the TCS net. This change was covered in the previous journal. However, after hue and cry, the Government has backtracked and reinstated the rule, w.e.f. 16th May. In effect, the use of ICCs abroad is again outside the LRS limit and the status quo is maintained. However, further changes can be expected by 1st October 2023, the date till when TCS on LRS has been deferred to. [Notification No. G.S.R. 472(E) [F. NO. 1/5/2023-EM], dated 30th June, 2023]

4. IFSCA introduces the definition of ‘distributor’:

IFSCA has introduced the definition of ‘distributor’ in IFSCA (Capital Market Intermediaries) Regulations, 2021 and made related amendments in other regulations. [Notification No. IFSCA/2023-24/GN/REG040, dated 3rd July, 2023]

5. Central Government prescribes the procedure for import, export, procurement and supply of ships by an IFSC Unit:

The Government has amended the SEZ Rules by inserting a new Rule 29B to set the procedures for import or export or procurement from or supply to the Domestic Tariff Area of ships by a Unit in the International Financial Services Centre. [Notification No. G.S.R. 481(E) [F. NO. K-43013(13)/2/2022-SEZ], dated 4th July, 2023]

6. RBI issues report of the IDG on Internationalization of INR:

An Inter-Departmental Group (IDG) of the Reserve Bank of India (RBI) was formed to examine the internationalization of INR. The objective of the IDG was to review the extant position of INR as an international currency and to frame a road map for the internationalization of INR. The IDG has submitted its report containing its final set of recommendations. The recommendations of the report will be examined by RBI for implementation. [Press Release 2023-2024/539, dated 5th July, 2023]

7. IFSCA allows IFSC Banking Companies to set up banking units in IFSC in addition to IFSC banking Units:

IFSCA has amended its Banking Regulations to allow IFSC Banking Companies to set up banking units in IFSC in addition to IFSC banking Units. The amendment allows the establishment of a banking unit in an IFSC as either an IFSC Banking Unit (IBU) or an IFSC Banking Company (IBC). Earlier, this option was not available. The key amendments include the introduction of the terms “IFSC Banking Unit” and “IFSC Banking Company”, along with the criteria for granting a license or permission to set up an IFSC banking company have been prescribed. [Notification No. IFSCA/2023-24/GN/REG041, dated 6th July, 2023]

Society News

LEARNING EVENTS AT BCAS

 

  1. MEETING ON COMPANY LAW: SCHEDULE III AND CARO

On 7th April, 2023, the Students Forum under the auspices of the HRD Committee organised a virtual’ Students’ Study Circle meeting on the topic “Company Law: Schedule III and CARO”.

In her presentation, CA Nidhi Patade, explained the Schedule III and applicability. The main focus of the session was on the disclosure aspects under the schedule and challenges thereon.

Under the guidance of the mentor CA Vijay Gajaria, important disclosures requirement such as Benami Properties disclosure, promoters’ shareholding, property plant and equipment, trade payable, etc. were discussed in detail along with format and examples.

Applicability of CARO 2020, its applicability and clauses were also discussed with a CARO report for better understanding of students.

The interactive session also addressed the questions raised by the participants.

The Students’ Study Circle program is designed in a way to train students under the guidance of the Mentor.

Youtube Link: https://www.youtube.com/watch?v=zlFlrOxniWk

QR Code:

 

  1. Suburban Study Circle Meeting on “Analysis of Section 45(4) and 9B of Income Tax Act, 1961”

Suburban Study Circle Meetings on “Analysis of Section 45(4) and 9B of Income Tax Act, 1961”, held in two parts, were addressed by CA Upamanyu Manjrekar as a Group Leader and chaired by CA Amit Sawant.

  1. Manjrekar made an insightful presentation with inputs from Sawant and shared his views on the following:
  • Applicability of Section 45(4) and 9B
  • Comparative analysis of erstwhile Section 45(4), new Section 9B and Section 45(4)
  • Case studies illustrating operation of provisions
  • Interpretational issues such as determination of nature of capital gains
  • Insightful discussion on Supreme Court case of ‘The Commissioner of Income Tax vs. M/s. Mansukh Dyeing and Printing Mills’
  • Process to be followed in case of double taxability
  • Supreme Court judgment on applicability of Section 45(4) of the Income Tax Act in cases of subsisting partners of a partnership, transferring the assets in favor of a retiring partner.

The session was knowledgeable, practical and all the points were very well covered with numerous case studies to make it simpler for the group.

Both sessions had wonderful interactive participation from the group. Large number of queries from the participants were satisfactorily addressed by CA. Manjrekar. The participants also benefited from the elaborate presentation shared by the group leader.

 

  1. XIITH RESIDENTIAL STUDY COURSE ON IND AS

The Accounting and Auditing Committee of the BCAS organised the XIIth Residential Study Course (RSC) on Ind AS (in physical mode) at The Dukes Retreat, Khandala which was attended by 66 participants from across India.

Welcoming the participants, CA Mihir Sheth, President, BCAS mentioned that the topics selected for the RSC were of great importance to the accounting and auditing fraternity and requested the participants to derive the maximum benefits. He concluded by giving his best wishes for the success of the RSC.

In his opening remarks, CA Manish Sampat, Chairman, Accounting and Auditing Committee traced the history of the previous RRCs and gave a broad overview of the structure and topics selected for the current RSC and thought process behind the same.

The RSC comprised three engaging papers for Group discussion along with two interesting presentation papers and an excellent Panel discussion.

The paper for group discussions comprised following topics:

  • Case studies on the Intricate issues of Ind As Standards across Industries
  • Case Studies on Consolidated Financial Statements (Ind AS 110) and Business Combinations (Ind AS 103)
  • Case Studies on Intricacies in Financial Instruments (Ind AS 32 and Ind AS 109)

Presentation Papers comprised following topics:

  • Recent Development in Global Reporting Framework
  • ESG- Concepts and Reporting

A Panel discussion was organized on:

Preparing for Regulatory Challenges and Managing Stakeholders’ expectations in Auditing. The Panel discussion gave the perspective from the viewpoint of Auditors, Audit Committee Representative and the Industry. It was very well moderated to generate interesting discussion.

The Auditor perspective was shared by CA Ashutosh Pednekar. The Audit Committee perspective was represented by CA Sanjay Khemani while the industry perspective was shared by CA Raj Mullick. The session was moderated by CA Raman Jokhakar.

Other speakers at the event included CA Dr. Anand Banka, CA Parag Kulkarni, CA Sarvesh Warty, CA Himanshu Kishnadwala and CA Raj Mullick.

The RSC concluded with closing remarks by the Chairman. He thanked all those who contributed to making the RSC a grand success. He also invited some of the participants to share their experience of the RSC and feedback.

  1. WORKSHOP ON APPROACH TO LITIGATION UNDER GST

The Indirect Tax Committee organised a full day workshop on “Approach to Litigation under GST” covering the entire gamut of litigation under GST. The workshop received 190 registrations (109 members and 81 non-members). 70 participants attended physically while 113 attended virtually.

The tone of the session was set by the key-note address delivered by Vipin Jain, Advocate by sharing important anecdotes from the experience he encountered during his legal carrier.

In the first technical session, Mr Deepak Mata, Dy. Commissioner explained how Department using AI/ML through different softwares obtains various data to identify instances of tax evasion and takes necessary actions. The inputs from Mr Mata gave an insight to the participants as to how the Department receives information from various sources, such as the income tax department, MCA, fast-tag, etc., to unearth tax-evasion and helped them understand the need to be careful while advising clients keeping various aspects in mind.

In the second technical session, Rinkey Jassuja, Advocate explained the provisions relating to notices under section 73 & 74, taking the audience through the necessary provisions, and explaining the ingredients which are necessary for a valid SCN and points to be captured while responding to the SCN.

The third session was addressed by CA. S S Gupta who gave the participants an insight into the appeal provisions, including pre-deposit and instances when a taxpayer should opt for writ route to get relief from High Court. He also dealt with the provisions related to condonation of delay and the importance of timely filing of appeal.

In the last session, Vinay Jain, Advocate, took up live case studies on various issues faced by businesses, such as GSTR-3B vs. GSTR-2A mismatch, circular trading, taxability of leasehold rights, cross-charge, etc.

  1. INDIRECT TAX LAWS STUDY CIRCLE MEETING ON ISSUES IN REPORTING

The group leader of the Indirect Tax Study Circle, CA Deepali Mehta conducted a meeting to discuss seven case studies addressing the practical issues in reporting vis-à-vis turnover for applicability of turnover for e-Invoice, and other practical issues in e-Way Bills and e-Invoices. The presentation and discussion broadly covered the intricacies on the following topics:

  1. Determination of turnover for e-Invoice while considering the specific transactions of WDV as per the Income Tax Act.
  1. Procedural lapse in the generation of e-Invoice and subsequent issues of credit eligibility, applicability of penalties thereon, if any
  1. Turnover issues for considering e-Invoicing when part of the services are exempted from generating e-Invoices
  1. Expiry of e-Way bill due to technical issue of conveyance like flat tyre, engine break down, etc. Penalty was paid under DRC-03 but whether same can be appealed later on to recover the same to prove the bonafide or any other remedy available to the registered person.

Determination of Jurisdiction against confiscation orders of goods in transit, whether in source state, destination state or transit state.

Issue of multiple e-Way bill in a single transaction of transshipment, whether updations will suffice or if PO is cancelled by recipient during the transit, then the issues emanating out of the same.

80 participants from all over India took an active part in the threadbare discussion on the seven detailed case studies and issues discussed with reference to various clarificatory circulars, jurisprudence including recent judgment in relation to Karanatak VAT for similar factors of tax invoice and collective discussion.

  1. HRD STUDY CIRCLE MEETING ON LIFE AND BREATH

The HRD Committee of the Study Circle organised a hybrid meeting on the topic ‘Life and Breath’ on 14th March, 2023, by Shri Pravin Mankar.

The discussion at the meeting revolved around the thought: ‘Life itself is the most wonderful fairy tale. Do we really live? Are we aware of our Breath? Are we conscious of our breathing and breathing habits?’

Listed Below a few points/glimpses from the teaching imparted at the meeting:

  1. Pneuma, Breath of Life, is the natural life of the body.
  1. CA’s got interested in this subject because health is very important to be able to function physically.
  1. A fundamental law: debit the receiver and credit the giver.
  1. Life is about how to balance in order to be successful.
  1. Following important terms were discussed at the meeting:
  1. a) We are not aware of how much we receive.
  1. b) Who is receiving, who is giving, we are receiving, Universe is giving. If I receive more and give less or if I give more and receive less, there will be an imbalance.
  1. c) Give and Take is the law of life. We cannot keep receiving, we have to learn to give also. You can’t even take a breath without giving out breath. Try to continuously inhale.
  1. d) Law is the existence of a condition irrespective of circumstances.
  1. e) Life – Dharma. Be clear of what you collect, you can give away what you collect. If you collect goodies you can give them out, if you collect rubbish, that’s what you’ll be able to give out to the society.
  1. f) Karma follows the law of Cause and Effect or reap as you sow.
  1. g) Dharma is the purpose for which you were born. Most of us don’t know why we were born.
  1. h) Disease is being ill at ease, physically or mentally.

Explore these points and correlate to life and breath.

Youtube Link: https://www.youtube.com/watch?v=ofgTAk0UXxo

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  1. WORKSHOP ON PRACTICAL ASPECTS OF AUDIT FOR SME PRACTITIONERS

A two-day hybrid workshop was held from 10th and 11th March, 2023 at the BCAS auditorium to comprehensively deal with various important and practical aspects of auditing for SME entities. The aim of workshop was to help SME practitioners improve the overall quality of audit, avoid pitfalls and make them aware of certain important aspects in audit. The workshop was attended by 35 participants in person and other 18 participants through virtual mode.

The workshop started with the topic: ‘Standards on Auditing – Practical aspects and important considerations SQC-1, AQMM. CA Rajesh Mody covered overall Audit Strategy and touched upon important SAs based on his more than 25 years of experience in identifying and assessing the Risk of Material Misstatements (ROMMS) by being aware to sniff the red flags and respond to the same to obtain Sufficient and Appropriate Audit Evidences (SAAE) in order to arrive at the conclusion for opining on the true and fairness of Financial Statement. He also covered briefly the SQC-1 and AQMM besides answering the queries raised by the participants.

The next session was on ‘Practical Challenges – CARO Reporting’ by CA Tejas Parikh. The speaker touched upon important 8- 10 items in CARO reporting and dealt with peculiar aspects of those items and how the auditors have dealt with and reported the same in the 2022 audited accounts based on the Published Results of listed entities.

After lunch, the third session on FRRB/QRB Observations on Financial Statements, Learnings from NFRA Orders on Audit Reviews, Procedures, and Documentation commenced. Moderated by CA Amit Purohit, the session aimed to  create awareness amongst the participants to realize the importance of complying with the SA and avoid the pitfalls as observed by NFRA, FRRB and QRB.

The last session was on practical aspects on SA-320 Materiality determination, SA-315, SA-330 – Risk Assessment and Auditors response, SA-450 – Evaluation of misstatements identified during Audit by CA Nikhil Patel. The standards covered were the most fundamental and the backbone of all quality audits.

The day two of the workshop began with the SAs covering all reporting aspects of audit including SA-700 series on Audit Conclusions and Reporting and SA-265 – Communicating deficiencies on Internal Control evaluation by CA Ajit Vishwanath. He dealt with all the reporting standards very lucidly and explained important considerations with practical examples. His session was well received by the participants.

The next session SA-530 – Audit sampling, SA- 300 Planning an Audit, SA-230 Audit Documentation and peer review readiness was moderated by CA Harshvardhan Dossa. He explained provisions with real life case studies besides demonstrating how the samples are derived, the Audit Program, how the things are documented and the real folder management.. The participants appreciated the session.

Post lunch the session was on SA 520 – Analytical Procedures and use of Technology in Conducting Audit by CA Gautam Shah. The speaker demonstrated how simple tools like excel can be used to carry out various kinds of analysis to identify the red flags and outliers and then carry out audit procedures to obtain SAAE to derive quality results. He also demonstrated many real life case studies wherein he had used the analysis and arrived at quality samples for minimizing the risk of material misstatement (ROMM). He also named few specialised software for the benefit of the participants. The last session of two days’ workshop was on use of Tally features for conducting an effective Audit by CA Anand Paurana. The speaker demonstrated on live tally data and explained the features available in Tally ERP which can help auditor execute certain important audit procedures and derive meaningful samples for conducting quality audit thereby minimizing the ROMM. He also answered the issue raised by the participants.

The two-day workshop concluded with vote of thanks.

  1. WORKSHOP ON PENALTIES UNDER INCOME TAX ACT 1961

The Taxation Committee organised a Workshop on Penalties under Income Tax Act 1961. The Workshop was divided into two parts. The first part of the workshop was held on 19th January 2023 and the second on 27th January, 2023.

The speaker of the Workshop, CA Jagdish Punjabi educated the participants about the recent
amendments made in the penalty provisions. He gave an overview of the provisions of sections 271AAC, 271AAD, 271D, 271DA, 271E, 271J and sections 270A, 270AA, 273B.

  1. Jagdish Punjabi highlighted the distinctive features between the erstwhile penal provisions and the amended penal provisions. He pointed out various technical issues in the erstwhile penal provisions which have been plugged in the new provisions.

The speaker further enlightened the participants about various points which one needs to keep in mind while replying to notices issued for levying penalty under various provisions.

The workshop got an overwhelming response.

Society News

LEARNING EVENTS AT BCAS

  1. POWER SUMMIT 2023 BY THE HRD COMMITTEE

Human Resource Development Committee organised a two-day residential program “The Power Summit 2023” on the 3rd and 4th March, 2023 at the Byke Suraj Plaza, Mumbai. This was the sixth season of the Power Summit with the first one being held in 2011.

Attended by 67 participants, the Power Summit had 13 eminent faculties. The program was curated and anchored by a team of three faculty members, CA Nandita Parekh, CA Ameet Patel, and CA Vaibhav Manek.

The benefits of holding the program in a residential format were truly reaped and cherished by the participants. They not only got added networking opportunities, but also a chance to have casual interactions with some of the faculties present during the entire duration of the program.

The topics of discussion at the Power Summit were selected to give momentum to the growth of the practicing firms. The summit aimed to help the participants develop and frame strategies to capitalise on the growth opportunities stirred up by the World Congress of Accountants held in Mumbai in November 2022.

The presentations by the faculties over the two days were creative, intriguing, and intertwined in such a way that all the participants returned home with good food for thought, and zeal to walk forward on the growth trajectory.

The program on Day 1 started with a session by CA Dinesh Kanabar, CA Jayesh Sanghrajka, and CA Vaibhav Manek on the importance of brand building for practicing CA firms with insights on how the same can be achieved.

In the next session, CA Druman Patel gave insights on how new-edge technologies like Artificial Intelligence would impact the profession. He also focused on the opportunities that these technologies open up for the CAs.

Thereafter, CA Vaibhav Manek and CA Nandita Parekh led an interesting discussion on the importance of capital in CA firms for growth, and the ways and options to exist.

 

CA Ajay Sethi, CA Arpit Jain, and CA Chetan Shah shared some of their strategies to navigate through road and mind blocks faced during their journeys over thee years.

On Day 2, CA Nitin Shingala talked about his desires he had during the early years of his career. Participants were also recommended several useful books read by the speaker in the past.

 

CA Rajat Dutta and Anu Chaudhary explained about the new and alternative service areas for CA firms including services around inheritance, succession planning, and ESG. Both speakers captivated the audience with their respective oratory styles as well as the contents of their talks.

 

CA Nikunj Shah explained how CA firms can use various technology-based tools in their day-to-day practice to improve their service offerings.

Three of the participating firms presented their mock pitch for possible merger and acquisition opportunities before the senior faculty members. The feedback shared by the faculty members helped all the participants.

The program ended with CA Vaibhav Manek, CA Ameet Patel, and CA Nandita Parekh sharing practical ways in which a firm should build up its strategic plan.

The interest of the participants was evident in terms of the involved discussions and the large number of questions raised during and after each session, and also during the casual networking interactions.

  1. SEMINAR ON BRAND Building Professional on Zoom

A seminar on ‘’Building a Professional and Personal Brand for Professionals,’ was held on 2nd March, 2023 on Zoom.

Led by speaker, CA Pankaj Mundra, the session provided insights and examples on ‘How to Build a Brand Personally and Professionally.’

He also explained the importance of brand-building, and cited social media as one of the driving factors of brand-building.

Link::- https://www.youtube.com/watch?v=aOtaI683Ah4

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  1. LECTURE MEETING – SOCIAL AUDIT OF SOCIAL ENTERPRISES

On 1st March, 2023, BCAS organised a virtual lecture meeting on “Social Audit of Social Enterprises” in virtual mode.

The speaker, CA Sangeeta Kumar approached the topic in a very simple and logical manner by dividing it into various sections broadly covering the following:

  1. Historical background and principles of social audit.
  1. The legislative and policy background for setting up a Social Stock Exchange including the formation of relevant working and technical groups.
  1. Kumar also focused on the key highlights of the SEBI guidelines dealing with the setting up of Social Stock Exchanges and the regulation of Social Enterprises. She also gave an outline of the two stock exchanges functioning currently i.e. the Bombay Social Stock Exchange and the NSE Social Stock Exchange.
  1. The functioning of the various global social stock exchanges in different countries was touched upon covering their success stories and their failures in some countries resulting in closure were highlighted.
  1. The modes and procedures for registration and raising funds (including specific financial instruments like Zero Interest Zero Principal Bonds) by Social Enterprises through Social Stock Exchanges coupled with the various disclosure requirements, both initially at the time of raising funds and on an ongoing basis were also dealt with.
  1. Additionally, the seminar also discussed changes recommended in tax laws and CSR guidelines arising out of the legislation of social enterprises.
  1. Further, it provided an interesting perspective on undertaking social audits by the CAG coupled with a video on a case study on the social audit under the MGNREGA emphasizing the practical aspects like site visits and interviews coupled with the role of Gram Panchayats and Gram Sabha. The legislative support and the various global reporting standards and organisations dealing with the Social Audit were covered along with the draft Standards and Guidelines issued by the ICAI,
  1. Finally, the challenges which lie ahead for implementation in our country were highlighted.

BCAS Lecture Meetings are high-quality professional development sessions which are open-to-all to attend and participate. Missed the Lecture Meeting, but still interested in viewing the entire meeting video

Visit the below link or scan the Q.R. Code with your phone scanner app:

Link:- https://www.youtube.com/watch?v=GM04TqhoyDg

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  1. study circle meeting on Deemed Conveyance

Corporate and Commercial Law Study Circle organised a meeting on the topic “an overview of Deemed Conveyance.” At the meeting, Adv. Viral Shukla gave an insight into the position related to Deemed Conveyance before the MOFA (Maharashtra Ownership Flat Act), and legal provisions relating thereto post-MOFA 1963. He also briefly summarized the subsequent amendments made thereto in 2008, 2010, and 2018. Further, he dealt with all the queries of the participants. The meeting was attended by 50 participants.

  1. PROGRAM ON SUCCESS IN CA EXAM

The society organized a program titled ‘Success in CA Exam ‘ on 19th February 2023 on Zoom. The program included a Q&A session with the rank holders.

In the first session of this program, Dr. CA Mayur Nayak shared his inspiring journey as a CA student who failed in CA intermediate exams but cracked the CA final exams in the first attempt and thereafter secured an all India rank with his sheer determination, hard work, and positive attitude. He focused on the ways to mentally prepare for the exams, and accept failure. He gave tips on how to mentally calm one’s mind while attempting the paper, besides teaching a few deep breathing techniques. He explained that the greatest danger faced by the students is not in setting their aim too high and falling short but in setting their aim too low and achieving their mark.

In Q&A with the Rank holders Session, students asked live questions to the rank holders. The answers were designed to help the students prepare their best strategy based on the experience of the rank holders. Moderated by CA Vishal Poddar, Penalist CA Radhika Beriwala, and CA Shubham Keshwani, the session was very interactive.

  1. CHATGPT – AN OPPORTUNITY OR A THREAT TO PROFESSIONALS?

Artificial Intelligence (AI) has already revolutionized most industries by taking up jobs that could only be performed by skilled and intelligent humans. The next move of AI is the professional services domain like law, medicine, and education, where it is all set to solve problems humanity faces. It looks like; we shall soon be blessed by technology!

In the session conducted by the society on 18th February 2023, the speaker CA Vatsal Kanakiya spoke about what is ChatGPT and whether it is an opportunity or a threat for professionals.

The event witnessed a thrilling registration count of 750 participants.

The speaker explained about Chat generative Pre-Trained Transformer (Chat GPT). This was a first-hand and insightful session that focused on how ChatGPT can be an opportunity for professionals.

Link:- https://www.youtube.com/watch?v=DcyqXjSH5f8

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 7.  23RD DTAA COURSE HELD VIA ONLINE PLATFORM

The society successfully conducted its 23rd Study Course on ‘Double Taxation Avoidance Agreement’ via an online platform spanning from December 2022 to February 2023. The course was spread over 30 days and included over 36 sessions delivered by leading tax professionals of the country.

The course was designed to cover all the articles of DTAA, an overview of FEMA / BEPS / MLI / GAAR, Transfer Pricing, Source Rules under the Income Tax Act, 1961, TDS under section 195, Substance v/s Form, and other relevant provisions. The course introduced complex topics such as taxation of specific structures (e.g., Partnership, triangular cases, AOP, etc.) and selection of structures.

The course concluded with a Brain Trust Session having trustees namely CA Gautam Nayak, CA Yogesh Thar, and Shri Sanjeev Sharma, IRS, and moderated by CA Ganesh Rajgoplan.

About 167 Participants from 15 states spread over 30 cities attended the course which was well-received and appreciated by the participants.

The society will shortly distribute the participation certificates to all the eligible participants.

  1. IESG Meeting on Budget 2023

In the meeting held by the IESG (International Economics Study Group) on 16th February, 2023, CA (Dr.) Kishore K. Pahuja made a presentation on the topic,‘Impact of Budget on Indian Economy.’ In this presentation, Pahuja made a detailed analysis of many sectors including Defence, Agriculture, Automotive, Building, Construction & Real Estate, Education & Skill Development, Energy & Natural Resources, Healthcare, Infrastructure, Financial Services, etc.

CA Harshad Shah presented his ‘Vision for Amrit Kaal – an Empowered & Inclusive Economy.’ Amrit Kaal originates from the Vedic astrology and translates to the Golden era. It is the critical time when the gates of greater pleasure open for the inhuman, angels, and human beings, laying out a new roadmap for India for the next 25 years, a blueprint for India@100. The theme of the Amrit Kaal is a technology-driven and knowledge-based economy with strong public finances and a robust financial sector. It also focuses on ushering in the latest technology and digitization and reducing government interference in public life.

74th Annual General Meeting and 75th Founding Day

The 74th Annual General Meeting of the BCAS was held on Thursday, 6th July, 2023 at MCA The Lounge, Wankhede Stadium, Marine Drive, Churchgate, Mumbai 400 020.

The President, CA Mihir Sheth, took the chair and called the meeting to order. All the business as per the agenda contained in the notice was conducted, including the adoption of accounts and the appointment of auditors.

CA Kinjal Shah, Hon. Joint Secretary, announced the results of the election of the President, the Vice-President, two Honorary Secretaries, the Treasurer and eight members of the Managing Committee for 2023-24.

The following members were elected unopposed for the year 2023-24:

President                     CA Chirag Doshi

Vice-President            CA Anand Bathiya

Hon. Joint Secretary   CA Zubin Billimoria

Hon. Joint Secretary   CA Mandar Telang

Treasurer                     CA Kinjal Shah

 
       MANAGING COMMITTEE
           ELECTED MEMBERS
 

CA Anand Kothari     CA Bhadresh Doshi

CA Divya Jokhakar    CA Hardik Mehta

CA Jagdish Punjabi    CA Kinjal Bhuta

CA Rutvik Sanghvi    CA Mrinal Mehta

CA Mahesh Nayak

CO-OPTED MEMBERS

 

CA Dushyant Bhat    CA Preeti Cherian
CA Samit Saraf         CA Siddharth Banwat
CA Sneh Bhuta         CA Vishesh Sangoi
               EX-OFFICIO

(Outgoing President)           CA Mihir Sheth

Member (Editor – BCAJ)     Dr CA Mayur Nayak

 

Dr CA Mayur Nayak, Editor of the BCAJ, announced the ‘Jal Erach Dastur Awards’ for the Best Article and Best Feature appearing in the BCA Journal during 2022-23. The ‘Best Article Award’ went to Adv. Hardeep Singh Chawla, for his article ‘Revisiting Non-Discrimination Clause of The India – US Tax Treaty in Light of India’s Corporate Tax Rate Reduction’. The ‘Best Feature Award’ went to CA Yazdi Tantra for ‘Tech Mantra’. The Editor then announced the ‘S V Ghatalia Foundation Award’ for the “Best Article on Audit”. The award went to CA Deepa Agarwal for the article ‘Sustainability Reporting and Assurance’, and to CA Rajendra Ponkshe for the article ‘Vulnerability Assessment: A Tool For Internal Audit’.

Before the conclusion of the AGM, members, including Past Presidents of the BCAS, were invited to share their views and observations about the Society.

The July 2023 special issue of the BCA Journal on Economic Development in India was released by the guest of honour Mr Sajjan Jindal.

At the end of the formal AGM proceedings, the 75th Founding Day Lecture was delivered to a packed auditorium. Members and attendees benefitted from the astute deliberation on India @2030 by Mr Sajjan Jindal. The meeting formally concluded with CA Zubin Billimoria thanking the speaker for sharing his visionary thoughts on a relevant topic with the attendees.

[The video of the lecture can be accessed on the BCAS YouTube Channel, and a Report on the Founding Day lecture is provided in the ‘Society News’ section of this journal.]

OUTGOING PRESIDENT’S SPEECH

 

MIHIR SHETH: Exactly one year back, I made a solemn pledge to deliver you on certain promises. Now, when I take a final bow, it is time to review how this pledge has been redeemed; to reflect on how well the promises have been fulfilled. But before I get on with that, let me tell you the inspiration behind those promises. The inspiration came from the quote by Mirza Galib which says…….  Highly motivated by it, we let ourselves go unrestrained in deciding our goals. The idea was to set the task tall and then give blood and soul to achieve it no matter whether we succeed or not. As they say in Gujarati,  … From that standpoint, I am happy to say that in this one year, we have tried to give best to ensure that those wishes — some of them indeed wild — translate into reality.

Before I get on with the activities and the initiatives of the last financial year, let me acknowledge the three biggest takeaways from BCAS in my life. I have reckoned that this is the institution that has made my life richer, fulfilled and accomplished. Hence, I will be failing in my duty to express my gratitude if I do not acknowledge it.

The three takeaways I mentioned are:

a) Power of Volunteering & Selfless Giving, b) Power of Networking, and c) Power of Perfection.

Let me tell you how each one influenced me.

Power of Volunteering-Selfless Giving

 

BCAS has taught me what the power of true volunteering and selfless giving means. Rarely would you find an institution where so many volunteers give so much back to the profession. It reminds me of a Sanskrit subhashita:

This is when I realised that in giving, you receive… and indeed, I have received so much love, respect and help from people I did not know earlier that it ties me down to this belief that only by giving, you prosper in terms of friends, values and even material success.

That brings me to the Power of Networking…

Power of Networking
One thing I learned from the BCAS is that real power is in network and not net worth. This is an institution where there is no professional rivalry despite the best of the best in the profession working together; name one institution where the tallest in the profession meets the smallest and mentors him in the most avuncular way. This is an institution which gives you a platform to build a network of true friends. Today, unfortunately, we are living in an era of Facebook and Instagram, where we have lost the meaning of friendship. As someone has rightly said in Gujarati that Facebook BCAS is the institution where you make friends for life. These are the real friends who will stand by you come whatever it may. The opportunity to network that BCAS provides across platforms is amazing and has definitely contributed to my personal progress, even without seeking the same.

Power of Perfection
This is the third thing I have to acknowledge BCAS for. What one learns is the Power of exploring the depth of the matter, howsoever difficult it may sound. This is something one has to learn from the BCAS. Its tireless pursuit for quality, never say die attitude to improve its own standards, and challenge its own benchmarks for better, is the learning I will ever cherish. When I see many stalwarts tirelessly toil to make their events the best, their publications the hallmark, I feel perhaps this is the real meaning of Mansi Ekam, Vachasi Ekam, Karyeshu Ekam. It is this single-minded focus on perfection that has helped BCAS reach its pinnacle.

With this background, let me give you a brief snapshot of the activities and initiatives. The theme for the year was EASE, and hence, we focused our attention to see how EASE could be provided for accessing knowledge, embracing emerging opportunities, and ease for networking and reskilling.

I am happy to state that with the active support of all Committees, we had a busy year with activities aligned to the theme. During the year, not only all the flagship events like RRCs, RSCs, budget lecture and long-term courses were organised successfully but also, some bespoke events were held on diverse topics such as Artificial Intelligence, Audit Quality Maturity Model (AQMM), Metaverse, Power Summit, Leadership Chanakya Way, Chat GPT, Forensic Accounting & Auditing, Capital Market and Investments. Apart from these, Mentorship and Students Felicitation Programs, Jal Erach Dastur Students’ Talent Program etc., were all received with tremendous response. Under the auspices of the BCAS Foundation, apart from blood donation and Tree plantation, etc., we also focused on the education of underprivileged children and 25 digital classrooms were set up with preloaded education software. The recipients very well appreciated this. Also, there were six representations made to the various government departments.

I request you to look at the list of the events and activities given in the Annual Report.

There were also several other initiatives taken to ensure that the expectations of the theme are reasonably met.

Some of the important initiatives taken to meet the stated objectives were:

ISO 9001:2015: We were successful in getting BCAS certified as an ISO 9001:2015 compliant organisation.

Hybrid Facility: In response to the demand of giving access to knowledge to the audience across the country, BCAS equipped its auditorium with a state-of-art hybrid event setup. With this facility, it can now offer members facility for attending the event either virtually or physically. While the facility for virtual attendance helped save the travelling time of the members; gave access to the audience across the country, an option also to be able to attend the event physically provided a networking opportunity to those who wished to avail the benefit of expanding their circle.

Social Media: With our focused efforts BCAS Social Media platform has reached 50k+ followers.

Engagement with other Associations: During the year, we had an opportunity to engage with the Coimbatore CA Association, Tirupur CA Association, Nanded CA Association, Karnataka State CA Association, Shri Vile Parle Kelavani Mandal, Bombay Industries Association, and The Auditors Association of Southern India for sharing knowledge. By collaborating with these associations, BCAS has expanded its reach and impact in the profession, education institutions and industry.

The BCAS also signed an MoU with the Institute of Risk Management (IRM) India to felicitate its members to attend courses offered by the IRM at an affordable price. As a result, this year, BCAS has conducted its first workshop on Enterprise Risk Management.

Knowledge Partnerships: We associated with Utpal Sanghavi School for Financial Literacy programme as a knowledge partner. Also tied up with Mithibai College and M. L. Dahanukar College of Commerce to conduct a Professional Accountancy Course.

Library: BCAS library has recently been updated with new features to enhance members’ experience with a range of new books.

Website & Mobile App: The new beta BCAS website, in tune with the current trends, was launched. It will provide members/professionals ease of navigation. The BCAS also developed a mobile application that will facilitate seamless access to the members for various functions.

Expanding the reach at Suburbs: BCAS expanded its reach for knowledge dissemination by arranging a lecture meeting in the suburbs as an experiment and has also encouraged the Suburban study circle. It is expected to help the professionals based in suburbs to easily access the knowledge resource provided by BCAS.

Office: During the year, it was decided to shift the administrative office of the BCAS from its existing location in the basement of the Churchgate Chambers to the first floor of the same building. The new office is more compact in size but is more in tune with the changed reality. It was observed by us that with the hybrid facility for holding events, the load of physical attendance at the Jolly Bhavan has been substantially subdued. This opened up the possibility of optimising the space by rearranging the staff between the two offices. Hence, it was found that the current large office could be dispensed with in exchange for a smaller office. This move will save the cost of Rs. 1.31 crore in the next five years of leave & license fees.

Course Play (e-Learn platform): BCAS enhanced its focus on the unique initiative of “e-Learn” through course play. We updated the platform consistently in consultation with the Chairmen of the committees to disseminate knowledge at the convenience of members/ professionals by paying a small fee. We have, in seven months, collected more than Rs. 2 lakh from this initiative, with 143 participants taking the benefit. I must make special reference to Kinjal Bhuta for her stellar contribution in making this project a success.

Podcasts: For the first time, BCAJ, in its August 2022 issue, incorporated the Podcast feature for the special pages to commemorate the 75th year of India’s independence. It received a good response.

Digitisation of Journals: We now have the digital repository of the BCA Journal since its inception, i.e., from the year 1969. The content is complimentary to all in tune with the BCAS philosophy that knowledge does not have boundaries.

Publication: Apart from the Budget booklet and Referencer, which are published every year, this year saw the publication of the much-awaited book FAQs on Charitable Trust. It has received a very encouraging response, with almost 2000 copies booked in the very first month.

Well. All this is about the year gone by. Let me give you a snippet of the year ahead. BCAS is entering the 75th year of its foundation, and this historical feat holds a special place in the heart of all its members. The sheer fact of our society’s meaningful existence for more than seven decades and its successful transformation into a modern, progressive, and digital institution, speaks a lot about it. Appreciating the importance of the milestone, there are some great plans to celebrate the Platinum Jubilee with programmes befitting the occasion. Several events are planned on the bespoke themes throughout the year, culminating with a Mega Event in the month of January 2024. There will also be a special entertainment programme for the members to participate on this joyful occasion. We are surely looking at the exciting year ahead. Incoming President Chirag will touch upon those in detail.

Let me come to the most important part of my speech. Big Thank YOU.

I thank all PPs, my OB colleagues Chirag, Anand, Kinjal and Zubin, for enthusiastically helping me pursue the promised goals. Thank you, all Chairmen and Co-Chairmen of the Committees, Trustees of the BCAS Foundation, Seniors, Managing Committee Members, Editors, CG members, entire BCAS staff, our vendors and esteemed service providers, printers, and our youth brigade for enthusiastically taking up various initiatives. I also thank Office Bearers of all sister organisations for supporting the joint programmes. My special thanks to our octogenarian member CA Anil Desai who has contributed Rs 50 lakhs to the BCAS during the year, which makes a total of Rs 75 lakhs of contribution in the last three years. I can only say one thing, sir, you inspire us to work harder.

This brings me to the last part of my speech. When I reflect on my journey at the BCAS, I have realised how true Frederique Nietzsche was when he said, “These are the ways in which men part. If you strive for the peace and pleasures of soul then believe, if you want to be a devotee of the truth then enquire.” Ladies & Gentlemen, I chose the path of enquiry because I realised that every enquiry starts in doubt and fulfils the need. And from that standpoint, let me tell you that this institution has fulfilled my need abundantly….generously. This is what has prompted me to give my best. Whether I have succeeded or not, only you can say. As Gujarati shayar Mariz, said,

So, I hope I can see the glint of satisfaction in your eyes that I have met your expectations.

I wish Chirag and his team of OBs great luck.

Thank you and goodbye.

 

INCOMING PRESIDENT’S SPEECH

 

CA CHIRAG DOSHI: Respected Past Presidents, Outgoing President Mihir Sheth, Incoming VP Anand Bathiya, Jt. Secretaries Zubin and Mandar, Treasurer Kinjal, Managing Committee members, Seniors, Distinguished invitees from the sister organisations, Press, core group members, my Yuva Shakti, ladies, and gentlemen.I stand before this august audience today with immense pride and profound gratitude as we have assembled together here to celebrate a momentous occasion — the 75th Founding Day of our esteemed society, THE BOMBAY CHARTERED ACCOUNTANTS’ SOCIETY. It is a milestone that fills our hearts with joy, reflecting upon the remarkable journey we have undertaken together in service to our profession and to society at large.

This is a momentous occasion that calls for reflection, celebration, and anticipation. It is an opportunity for us to acknowledge the achievements, contributions, and resilience of our association and its members over the years. It is a time to honour the legacy of excellence that has been our guiding principle throughout this incredible journey.

As we look back on the past 74 years, we are reminded of the visionaries and trailblazers who founded this association on 6th July 1949, with a membership of 29 members. Their commitment to professionalism, integrity, and ethical practices laid the foundation for our society’s success. We owe a debt of gratitude to those visionary individuals who had the foresight to establish an association that would become synonymous with excellence in knowledge sharing in the fields of tax and accountancy.

Friends, the accountancy profession has witnessed significant transformations over the past 74 years. Technological advancements, regulatory changes, globalisation, and dynamic economic landscapes have presented new challenges and opportunities. As an association, we have always adapted and evolved better to meet these changing demands, equipping our members with the necessary skills and knowledge to navigate the dynamic and complex financial landscapes.

Our commitment to continuous learning and professional development has been paramount to our success. We have invested in robust educational programs, training initiatives, and research endeavours to ensure that our members remain at the forefront of industry and regulatory developments. By embracing lifelong learning, our association has enabled our members to stay relevant, adapt to emerging trends, and maintain the highest standards of professional competence.

As we celebrate our 75th year, we must acknowledge the invaluable contributions of our members, past and present. It is the collective effort, dedication, and expertise of our members that have propelled our association to this remarkable milestone. Our members have demonstrated exceptional professionalism, leadership, and commitment to excellence, setting benchmarks for the profession and inspiring future generations.

Looking ahead, the path before us is filled with novel opportunities and challenges. We must embrace innovation so as to ride the technological developments and adapt to change so that we are sought-after professionals for guiding businesses in an ever-evolving regulatory environment. By staying ahead of the curve, we will continue to be at the forefront as the think tank of the accounting profession, driving positive change and making a significant impact.

My Journey

Dr APJ Abdul Kalam, the beloved former President of India, once remarked, “Dream, dream, dream. Dreams transform into thoughts, and thoughts result in action.”My journey at BCAS started in 2010 when one of the members late CA Manesh Gandhi, introduced me to CA Mukesh Trivedi, a core group member who introduced me to BCAS. I was invited by the Accounting and Auditing Committee to speak on the topic of IFRS implementation in India, and then I was invited to be a part of the committee. BCAS has played a significant role in my professional and personal development through active participation in various committees over the period of the last 13 years. In my journey at BCAS, I have delivered several lectures, contributed to Journals and Referencer of BCAS, and organised various RRCs, including youth RRC, non-technical events like Jhankar, Cricket, and much more.

Over the years, I have imbibed learnings from seniors of our profession at BCAS. I would request young CAs to be part of BCAS, and with your contribution and dedication, you can also achieve your dreams.

I take this opportunity to thank all my seniors who have always been pillars of support. I especially acknowledge, Past president Himanshu Kishnadwala, Shariq Contractor, Uday Sathe, Narayan Pasari, Nitin Shingala, Naushad Panjwani, Manish Sampat, the Presidents I worked with Abhay Mehta, Suhas Paranjape, Mihir Sheth, OB team Anand, Kinjal, Zubin. Thanks to my family for always supporting me, my Dad and my Mom, my wife Khushboo and my daughter Jhalak, thanks to my ex-partner, Pankaj Jain, for all his support during my initial years at BCAS, my friend Raj Mullick, colleagues at my office – Anirudh, Jay, Mohit, Richi Yash and my youth supporters…

Friends, coming to my today’s task of unveiling the logo of the 75th year and the plan for the forthcoming years.

The Logo depicts multiple elements of our Society, the Book at the top signifies the symbol of knowledge sharing, the tree represents the BCAS as a community/family, and the globe represents the overall development of professionals, which is the vision and mission of the Society.

The blue colour in the logo represents BCAS’s commitment to professionalism, expertise in financial matters, and maintaining high ethical standards, and the green colour symbolise financial prosperity, trustworthiness, and a focus on sustainable business practices.

One change we have made this year is to do away with the President’s yearly theme and to come up, jointly with the team by the Team Office Bearers, with a five-year plan for BCAS.

1. BCAS’s Five-Year Plan: REACH

a.    Increased Members, Leaners & Followers – Friends, we plan to increase our membership by organising more programs for members only and also plan to increase our reach on social media handles through various initiatives which shall be taken by BCAS through its technology initiative committee.b.    Geographic reach – We plan to reach 75 cities in person and also invite 75 BCAS Sherpas, one from each city, who would be entrusted with the task of coordinating the events in their cities and spreading various other initiatives of BCAS.

c.    Journal readership scale-up – Journal is one of the prestigious publications of BCAS with a wide readership. BCAS, in its coming year, would take many more initiatives to disseminate knowledge through its monthly journal.

2. PROFESSIONAL DEVELOPMENT

a.    Contemporary learning / event formats with relevant topics – More focused topics with the quarterly, theme-based approach.b.    Publications and Research – A research sub-committee is formed, and at least four to five research-based papers shall be issued in the coming year.

c.    Digital learning and crowdsourcing queries – BCAS is planning to come up with a strong digital library and also a community application dedicated to its members, establishing a digital platform or forum where members can post queries, seek advice and engage in knowledge-sharing discussions, job search and vacancy sharing and much more.

3. NETWORKING

a.    Embedded networking opportunities – We shall have many more networking opportunities embedded in our key programs and also the MEGA event planned for platinum jubilee celebrations.

b.    Digital networking initiative – BCAS community application will be launched.

c.    Enhanced engagement with industry / professional associations – We shall be reaching out to various Industry Associations like BIA, ASSOCHAM, FICCI, IMC, etc. and also many other professional organisations in India and abroad to have more engagement of our members with the outside world.

4. ADVOCACY

a.    Dedicated platform for focused advocacy.b.    Research-based advocacy – A sub-committee has been formed to do research-based advocacy.

c.    Engaging with regulators and tax authorities – Proactively engage with regulatory bodies, tax authorities, and government agencies to build relationships based on mutual respect and understanding.

5. YUVA SHAKTI

a.    Formalising the BCAS youth platform – BCAS community application.b.    Curated youth events (mixers, boot camps, hackathon, etc.) – Youth mixers and more events.

c.    Embedding more youth in the BCAS cadre/community – The average age of committees, OBS, and Managing committee.

6. CHARTEREDS’ FOR CHANGE

a.    Focussed efforts on financial literacy, education, etc.b.    Supporting CA students – Reading room, scholarships.

c.    Enabling NGOs.

BCAS theme for the next four quarters

1.    Technology and other updates (July to September).2.    Change – Leaders – Charity (October to December).

3.    Future Ready – Innovation, Growth & Succession (January to March).

4.    Partnering in Business Growth – Industry Focus (March to June).

BCAS MEGA event – 4th, 5th, 6th January, 2024 – ReImagine!!

On 6th July this year, BCAS completes 74 years of service to the community of Chartered Accountants and society at large and enters its 75th year. To celebrate this landmark year, events and initiatives will take place throughout the year. The jewel in the crown will be a grand three-day mega event on ReImagining the profession, which will be held at the prestigious JIO World Centre, Mumbai, on 4th, 5th, and 6th January, 2024.The three days of Manthan will include public eventsand community activities, as well as moments of reflection on BCAS’s 75 years of service. An exciting series of programs covering the future dynamics of the professionals, including a thought-provoking line-up of presentations, panel discussions, fireside chats, interviews, and leadership talks, will be the highlight of the event. There will also be cultural performances tostimulate your senses. The Celebrations will providea platform for knowledge dissemination, professional growth, and networking opportunities to make you future ready.

I would conclude my speech by saying that, as we all start the celebration for our 75th anniversary, let us take a moment to appreciate the remarkable journey we have undertaken together. Let us honour the visionaries who laid the foundation, the members who have contributed their expertise and dedication, and the countless individuals and organisations who have placed their trust in us. Let us also rekindle our commitment to the values that have guided us thus far — integrity, excellence, and lifelong learning. Let us renew our dedication to creating an environment that promotes intellectual growth, ethical leadership, and social responsibility.

Our association’s legacy of excellence will continueto guide us as we embark on the next chapter of our journey, the AMRIT KAAL, shaping the future of the accounting profession and making a lasting impact on the world.

Thank you, and let us celebrate this significant milestone with joy, gratitude, and a renewed commitment to our shared values.

Long live the Bombay Chartered Accountants Society!

JAI HIND

Letters to The Editor

Dear Dr Mayur B Nayak

Editor, BCAS Journal,

I hope this letter finds you in good health and high spirits. Firstly, I would like to extend my heartiest compliments on the smooth and seamless transition of BCAS Journal’s editorship from CA Raman Jokhakar to your capable hands. I am certain that your expertise and dedication will continue to elevate the standard of this esteemed journal.

I am writing to express my sincere appreciation for the enriching content that BCAS Journal has been publishing. Over the past few months, I have had the pleasure of reading and rereading some exceptional articles that have truly captivated my interest. I would like to specifically mention a few articles in the July 2023 edition of the BCAJ that have left a lasting impression on me:

1.    The insightful interview of Dr. Brinda Jagirdar shed light on significant aspects that are pertinent to our field. Her expertise and perspectives were both enlightening and thought-provoking.

2.    CA Pinakin Desai’s article on the role of direct tax in economic growth provided a comprehensive understanding of this crucial subject. The author’s lucid explanations made a complex topic easily comprehensible.

3.    The YouTube video featuring Senior Advocate Arvind Datar was not only informative but also highly engaging. His expertise in the legal realm, combined with the dynamic presentation, made it a pleasure to watch.

4.    The article titled “Future of Audit – The Transformation Agenda” by CA P R Ramesh was an eye-opener, highlighting the evolving landscape of auditing practices. The author’s vision for the future of audits was inspiring.

A well-coordinated team effort is evident in the quality and variety of articles published, and I applaud the whole team for their dedication and hard work.

Lastly, I cannot conclude without mentioning the delightful touch of culture and tradition that “NAMASKAAR” by CA C. N. Vaze brings to the journal. It is like the icing on the cake, adding a sense of warmth and authenticity to each issue.

Once again, I want to express my gratitude to you and the entire team for consistently delivering valuable content to your readers. The BCAS Journal continues to be a source of knowledge and inspiration for professionals like me, and I eagerly look forward to each new edition.

Thank you for your time and commitment to maintaining the journal’s high standards.

With warm regards

CA Dilip M Jani

Mumbai

‘सत्यमेव जयते’

Mr Mungeri, a Chartered Accountant, frustrated and aggrieved as always, was fed up with many things:

 

  • Clients coming at the 11th hour.
  • Clients not paying fees or delaying the payment.
  • Article – trainees not available.
  • Staff not sincere; taking leave at crucial periods.
  • Government changing the rules every now and then.
  • Government not clarifying many things, and their system not working.
  • Revenue department harassing for various reasons.
  • Clients expect him to sign their ‘untrue’ statement.
  • Own health issues – often neglected.
  • Wife unhappy since he is always available for clients(!), never for her!

…so on and so forth.

He was enduring this situation for many years. He found many CAs sailing in the same boat.

He thought to himself, “To hell with this humiliating life! What is the use of my education? Am I really my own boss? Can I enjoy my life like those friends who joined corporate jobs? Is my future secured?” He was feeling suffocated.

Once he read a short biography of Gandhiji. He saw the emblem of India on currency notes ‘Satyameva Jayate’ – Truth alone triumphs!

He recalled that as a professional, he should be independent and fearless. He got inspired and made up his mind to speak the truth.

So he sat down and created a very strong WhatsApp message, exposing everything and everyone. He cursed the Government, he cursed businessmen, he cursed revenue authorities, and became very outspoken like ‘Mungerilal’.

No wonder! The WhatsApp message became viral on social media. There was furore everywhere. Police took its cognisance, media persons came to meet him, Government Authorities got upset and planned strict action against him, and the Institute initiated disciplinary action.

Mungeri came to know all these reactions and was frightened! He lost his sleep and had to be hospitalised. He could not think of any way out. He thought that was the end of him.

His well-wishers consulted a lawyer. The lawyer advised that he should obtain a certificate from a Neurologist that he was a ‘mentally ill’ person, a lunatic and that he often behaved like a hysterical person.

A friend’s client was a neurologist. The certificate was ‘obtained’ and submitted everywhere. The Authorities got a little pacified.

But there was one difficulty. They asked him to produce precedents to show that he was not of sound mind. They wanted at least one proof of his ‘madness’.

The proof was obvious! His friends pointed out that he was in CA practice for so many years and still wanted to continue!!

NOTE

Mr C V Joshi (Chi. Vi. Joshi) was a noted Marathi writer and a leading humourist. He was a scholar in Buddhist philosophy and the Pali language. A Marathi serial, Chimanrao Gundyabhau was extremely popular even amongst non-Marathi speaking people. This serial was based on his famous book Chimanravache Charhat, which was replete with sophisticated humour. This story of CA Mungeri is adopted basically from a similar episode in the stories of Chimanrao Gundyabhau.

Learning Events at BCAS

1. Direct Tax Laws Study Circle meeting on recent SC Rulings

The Direct Tax Laws Committee of the Society organised a virtual meeting on 9th June, 2023 to discuss the recent Supreme Court Rulings. Chaired by Speaker, Natwar G. Thakrar, the meeting discussed the following rulings:

i.    US Technology Intl Pvt Ltd vs. CIT [2023]

ii.    CIT vs. Mansukh Dyeing & Printing Mills [2021]

iii.    Singapore Airlines Ltd vs. CIT [2022]

iv.    New Noble Education Society vs. CIT & Ors [2022]

The speaker explained the rulings to the attendees in a simplistic yet detailed manner. He began the explanation with Facts of the Case followed by Issue before the Supreme Court and concluded by ruling of the Apex Court.

The speaker then took up questions from the attendees wherein possible arguments to the rulings, other judicial precedents were discussed. The session concluded with a vote of thanks.

2. Seminar on ESG by the Internal Audit Commitee

A full-day ESG seminar was conducted by the BCAS Internal Audit Committee on 9th June, 2023. Titled ‘Decoding ESG through an Internal Auditor’s lens, the meeting was organised in a hybrid mode by the Internal Audit Committee of the Society. It aimed to enable the current and future generation of internal auditors to capitalise on the next-wave of ESG. A total of 87 participants attended this seminar, with a good mix of experienced professionals, new CAs and young aspiring CA students.

The seminar featured a unique blend of speakers from the industry, practice and consultancy who showcased their in-depth knowledge and insights on the subject. Each session was thoughtfully curated to include practical illustrations, real-life case scenarios and interactive communication with all participants. The seminar covered the following key topics:

  •     ESG and the pivotal role of Internal auditors in today’s scenario

 

  •     Basic principles, challenges faced and reporting requirements under ESG framework in India

 

  •     Practical guide on driving and implementing the ESG agenda

 

  •     Adding value to ESG ecosystem as Internal auditors

The speakers at the seminar included CA Nawshir Mirza, CA Mukundan KV, Ms. Chaitanya Kommukuri, CA Abhay Mehta, CA Raj Mullick, CA Vijayalakshmi S, CA Ashutosh Pednekar

The seminar was very well received by all the participants as was evident from their enthusiastic participation during Q&A sessions.

3. Lecture Meeting on Succession Planning and Drafting of Wills

BCAS organised a lecture meeting on ‘Succession Planning and Drafting of Wills’ on 2nd June, 2023. The meeting was organised with an aim to serve the members residing in the western suburbs. It began with an insightful presentation by CA Anup Shah on the following important aspects of wills and succession planning:

  •     Scope of succession planning

 

  •     Assets to be consider

 

  •     Legal implications in case where a person dies intestate and what if he had a prepared a will under all personal law in general and Hindu Succession Act (HSA) in specific

 

  •     Daughter’s right under HSA – prior to and post 2005 amendments

 

  •     Creation, Partition and dissolution of HUF under HSA and under the Income Tax Act

 

  •     Estate planning options through-Trust, Wills and Joint nomination

 

  •     Effect of nomination for immovable property and shares

 

  •     Rights of Joint Holder vs. Nominee

 

  •     Wills – What is a will, Who can make, How to make a will, concept of beneficiary, administrator

 

  •     Some Myths about the Wills

 

  •     Registration of Wills and Probate

 

  •     Recent developments on the methodology of preparing the wills – Video will, digital will, social custom will, organ donation

 

  •     Tax implications on wills and inheritance

 

  •     Private trust

 

  •     Gift/ release deed/ revocation of gift

The speaker addressed the queries raised by the members. The meeting was attended by more than 125 participants.

4. Release of BCAS publication – FAQs on Charitable Trust

The eagerly-awaited BCAS publication – FAQ on Charitable Trust was launched at the lecture meeting held on 2nd June 2023 in Mumbai. Released under the Shailesh Kapadia Memorial Publication fund, the publicationn covers FAQs on various important topics under Bombay Public Trust Act, Direct Tax, Indirect Tax, FCRA and CSR.Drafted in the form of Frequently Asked Questions (FAQs), the publication helps readers find the information they need. The questions have been carefully selected from a wide range of topics to provide in-depth knowledge on each subject. Their answers have been written in simple and easy to understand language making it accessible to everyone regardless of their legal background. Besides the Charitable Trust, the publication is likely to benefit professionals like lawyers, chartered accountants and consultants who advise charitable trust on legal and regulatory compliances.

Conceptualised by Late CA Tushar Doctor, the publication is authored by CA (Dr) Gautam Shah covering the topic of direct tax and other laws, and CA Naresh Sheth on the topic of indirect tax. It is reviewed by CA Anil Sathe, CA Himanshu Kishnadwala, CA Sunil Gabhawala, CA Gautam Nayak and Mr Nasir Dadrawala.

5. TDS and TCS Provisions – A 360° Perspective

IMC Chamber of Commerce and Industry teamed up with the Bombay Chartered Accountants Society, and Chamber of Tax Consultants to organise a full day seminar on “TDS and TCS Provisions – a 360° Perspective” at its premises.Held on 2nd June, 2023, the inaugural session of the seminar was managed by Anant Singhania, President, IMC; CA Chirag Doshi, Vice President, BCAS; CA Parag Ved, President, Chamber of Tax Consultant with a welcome address by CA Rajan Vora, Chairman, Direct-tax Committee, IMC.

Hosted in a hybrid mode, the seminar was attended by more than 300 participants. Before initiating the sessions, Rajan Vora, Chairman, Direct Taxation Committee, IMC, highlighted the need to streamline and simplify the TDS and TCS provisions as well as the related compliances to enable Ease of Doing Business in the true sense.

The seminar also included an interactive session with the attendees to highlight key topics like Domestic TDS & TCS provisions, Penalty, Prosecution and Compounding procedures under TDS/ TCS regime, TDS from payments to non-residents, etc.

Sangam Shrivastava, erstwhile Pr. CCIT (IT & TP), West Zone delivered the keynote address where he explained that even after amendment to section 115A by FA 2023, benefit of lower rate as per DTAA will be available to taxpayer instead of 20 per cent. (SC+EC). He also emphasised on reducing of litigation and increase dialogue between taxpayer and tax department.

Brajesh Kumar Singh, CCIT (TDS), Mumbai urged professionals to act as guide to taxpayers to undertake TDS compliances. He advised them to caution taxpayer that delay in TDS payment is tracked centrally and flagged by system thereby leaving no scope for department to not to initiate prosecution even in smallest of cases.

Moderated by Samir Kanabar from EY, the first session discussed issues under Domestic TDS & TCS provisions. The issues discussed on TDS included those under section, 193, 194-O, 194R, 194-Q, 194 BA, etc, TCS provisions under section 206C particular 206C(1G) and 206C(1H) were also discussed. The panelists for this session included Vikas Aggarwal from Novartis and Yogesh Thar from BSM

The second session was moderated by CA Atul Suraiya. It discussed issues pertaining to Penalty, Prosecution and Compounding procedures under TDS/ TCS regime

Other issues like penal and prosecution provision and compounding of offences; belated filing of returns/ belated payment of taxes; interest under section 201 and 201(1A), etc were also discussed.

Moderated by CA Shabbir Motorwala, the third session discussed issues related to TDS under section 195 from payments to non-residents

Other practical issues discussed at the session included: Non-filers checking, Lower deduction of tax; Rectifications of returns filed; Excess deduction – refund; Penal provision and compounding of offences; Belated filing of returns/belated payment of taxes; Interest under section 201 and 201(1A); Mechanism for Clarifications; etc.

The session also discussed issues arising on account of increase in rate of royalty/FTS taxation under Act, by FA 2023 and issues arising for filing of form 10F.

The conference was graced by eminent tax experts from the corporate and professional sectors as well as from the revenue department. who as panelists provided a comprehensive perspective and a blend of theoretical and practical solutions to the questions posed.

Comprising panel discussions and presentation sessions on relevant TDS and TCS issue, the seminar ended on a high note.

6. Recent PMLA notification and its impact on professional service firms

The Society organised a virtual panel discussion on 30th May, 2023 on the impact of the recent PMLA notification on professional service firms. The Panelist for the session were R N Dash, IRS and Adv Ashwani Taneja while the moderator was CA Anand Bathiya.

In his opening remarks, the moderator noted that the recent PMLA notification has brought about a sense of anxiety amongst CAs and certain other professionals due to increasing reporting obligations and greater responsibilities. He referred to it as the “fear of the unknown” and hoped that the discussion would clarify a lot of such fears and doubts.

Thereafter, both the panelists Dash and Adv Ashwani Taneja outlined the rationale behind the notifications dated 3rd May, 2023 and 9th May, 2023, which primarily stemmed from the FATF guidelines. Further, they indicated that
the notification expects the Professional Accountants to focus on the KYC and beneficial ownership status of their clients and to maintain complete details of their transactions.

The summary of the amendments covering the following matters were also touched upon:

  •     The obligations of Reporting Entities.

 

  •     Manner of verification of the identity of the clients by the Reporting Entity.

 

  •     Record maintenance in respect of specified transactions (covering buying and selling of investments and properties, managing client money, managing bank and security accounts etc.) undertaken or attempted to be undertaken.

 

  •     Timelines for maintenance of records.

 

  •     Enhanced due diligence to be undertaken in respect of all specified transactions by the reporting entities.

Powers of the Enforcement Directors and FIU-Ind

The discussion covered various questions put forth by the moderator and also by the participants which were comprehensively answered by the speakers. Some of the major points covered are as under:

  •     Services like internal audit undertaken as an employee of the Company are not covered.

 

  •     Services like virtual CFO in the capacity of a consultant are covered.

 

  •     In respect of tax related services it is better to avoid collection and reimbursement on behalf of clients.

 

  •     Currently, statutory audit services are not covered.

 

  •     Professionals should not adopt a casual attitude going forward, since the cost of non-compliance could be very high in many situations.

 

  •     Providing assistance in writing of the books of accounts of entities involved in suspicious transactions are not covered.

 

  •     Whilst undertaking transactions and assignments on behalf of clients the arm’s length principle should be adopted.

 

  •     Not to get associated with Benami Transactions.

 

  •     No clarity on whether a CA in his individual capacity or a firm of CAs would be considered as a Reporting Entity.

 

  •     Whilst independent directors appointed in their individual capacity are not covered. If they are nominees or representatives of the specified entities who undertake suspicious transactions, they would be covered. Similar considerations would also apply to trustees appointed.

 

  •     Entities providing space for use as a Registered Office and indulging in suspicious transactions are also covered.

 

  •     Pending the notification of the rules on certain matters it is important for Reporting Entities to maintain proper record for all specified transactions.

YouTube links: https://www.youtube.com/watch?v=hYXfaTEReog

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7. Serious threat to the US Banking System and US Dollar- International Economics Study Group meeting

The International Economics Study Group organised a virtual meeting on 29th May, 2023 to discuss the serious threat being faced by the US’ banking system currently. Chaired by CA Harshad Shah, the meeting noted, currently all US mid-cap banks are ‘full of’ bad commercial property loans worth $5.6 trillion. Confidence in the world’s largest banking system (American) is shaken and this could spread as there are concerns about Asset Liability mismatch, holding securities which have lost value since interest rates have risen at a sharp clip with brutal 450 basis points rise in interest rate in just 1 year from a near zero levels. Banks are sitting on $1.7 trillion in unrealized losses. Many U.S. banks have $7 trillion in uninsured bank deposits lying with them, which if withdrawn can create sudden rush.Further, the meeting discussed the serious challenges being faced by the Petro Dollar as many oil exporting countries (like Saudi Arabia, UAE, Iran, Venezuela, Russia) are looking at dealing in local currencies and avoiding Dollar due to threats of US sanctions and misuse of SWIFT.

Dedollarisation is fast catching up as many countries are entering and negotiating alternative to Dollar like bilateral currencies due to threats of blocking in SWIFT & other sanctions.

CA Milan Sanghani shared his views on current state of markets.

8. Internal Audit Mumbai Pune Express # 1

The inaugural edition of Internal Audit Mumbai Pune Express was held at MCCIA Trade Tower, Pune on 26th May, 2023. The event was jointly organized by the Internal Audit Committee of Bombay Chartered Accountants’ Society and IIA Pune Audit Club.

This was the first event held by the IA Committee of the Bombay Chartered Accountants’ Society in Pune.

The keynote address was delivered by Satish Shenoy who shared his views on “The focus – leveraging external events to deliver exceptional value”.

Dr. Milind Watve, a data scientist, presented his thoughts on “Data Analytics & Statistics in IA – a scientific view.”

A panel discussion ensued thereafter, whereby the panelists included Milind Limaye, Sanjay Deodhar and Satish Shenoy. The session was moderated by Madhavi Bhalerao. The topic for the panel discussion was “IA Standards – Mandatory or Recommendatory?”

Sameer Maheshwari delivered his session on “Auditing when the going is good”.

The last technical session for the day was by Arnob Choudhuri, who presented on the topic “IA Role in Business Responsibility & Sustainability Reporting”.

A total of 38 participants attended the day-long event which recorded a positive feedback.

The next edition of the Internal Audit Mumbai Pune Express series would be announced in due course.

9. Indirect Tax Laws Study Circle Meeting Specific issues in Customs laws, SEZ

The Indirect Tax Laws Committee of the Society organised a virtual study circle meeting on 25th May, 2023 under the leadership of CA. Prerana Shah. Ms. Shah had prepared six case studies regarding interplay of Customs and GST laws. The presentation and discussion broadly covered the intricacies on the following topics:

1.    HSN classification and rates of custom duty on import of goods in India

2.    Anti-dumping duties and import under advance authorisation

3.    Related Party Transactions under Customs Laws in regard to valuation,

4.    Value of export of goods under customs Law and GST Law

5.    Special Economic Zones – Refund

6.    Duty drawback, manufacturing under bond and FTWZ

More than 80 participants from across India participated in the meeting. The meeting was mentored by CA Udayan Chokshi

 

10. Direct Tax Home Refresher Course – 4

The Taxation Committee organised the Direct Tax Home Refresher Course 4 with eight other sister organizations i.e. All India Federation of Tax Practitioners (CZ), Association of Chartered Accountants, Chennai; Chartered Accountants Association, Ahmedabad; CA Association of Jalandhar; The Chartered Accountants Study Circle, Chennai; Hyderabad Chartered Accountants Society; Karnataka State Chartered Accountants’ Association and Lucknow Chartered Accountants’ Society.Held from 15th May, 2023 to 27th May, 2023, the virtual refresher course consisted of 12 sessions covering varied topics of income tax. The topics covered were

1)    Charitable Trust Taxation including recent amendments

2)    Taxation of various Financial products including AIFs, REITs, INVITs etc, Recent amendments and issues (IFSC)

3)    Taxation and Regulatory Aspects of various perquisites under Salaries including ESOPs

4)    Recent Developments in Sec 195 covering issues in 15CA & 15CB

5)    Taxation of Partnership Firms and LLPs on conversion incl. Issues on Amalgamation of LLPs

6)    Taxation and Regulatory aspects of Start-ups

7)    56 (2) (x) – An Evolving Deeming Fiction along with 56(2)(viib), 50CA, 50B r.w.r. 11UAE

8)    Taxation aspects of Redevelopment of Societies both from developer and the flat owner’s perspective (50C/43CA etc.)

9)    Valuation Under Income Tax Law vis-à-vis other laws – How to solve this game

10)    Case Studies on certain important aspects of Business Organisation & Reorganisation including M&A and Demergers

11)    Notice & Assessments related to Foreign Assets vis-a-vis Black Money Act and it’s Interplay with PMLA and other Economic Offences Laws

12)    Law of Evidence vis-à-vis Tax proceedings incl  Examination and Cross Examination / Do’s & Dont’s of rendering Tax Advice  ( special  reference to handle  arrest in such cases)

All the distinguished speakers shared their thoughts on the subject and their views on the practical issues arising out of them. They also engaged in a QnA with the participants and provided their insights. There was an overwhelming participation to the course with more than 650 registrations from across India.

11. Case Study based discussion on MLI

The International Taxation Committee of the Society conducted a hybrid meeting on 11th May, 2023. Titled, ‘:Case Study based discussion on MLI,’ the meeting was led by Group Leader CA. Ganesh Rajgopalan who discussed various case studies that were a part of the BCAS ITF conference held at Gandhinagar.The group leader also discussed issues arising out of the amendment to the treaties on account of signing of the MLI by various countries (including India). He highlighted the nuances under select treaties and the compared the change in language thereof on account signing of MLI. During the meeting, the group leader also encouraged a discussion on various aspects besides addressing queries by the participants. The discussion provided great insights provided to the participants.

12. HRD Study Circle Meeting -”Narmada Parikrama”

The HRD Committee of the Society organised a hybrid Study Circle meeting on 9th May, 2023 to discuss the below-mentioned Flash Points/Glimpses from the Experience Shared at the above Meeting:

  •     The Speaker, CA Prasad shared his experience of the Narmada Parikrama during the four months of November 2019 to March 2020. The walk was through the terrain of approximately 3,500 Kilometres in the state of Madhya Pradesh and Gujarat.

 

  •     “NARMADE HAR” This is a Staple word used during the Narmada Parikrama. The speaker related the mixed emotions he experienced the Parikrama. He related his entire journey for the benefit of the Young Professionals. He said, today’s youth, whether CA’s or not, have a lot to learn about the decision making process. Practical decision to take a walk along with Maa Narmada Maiyya. It is the food for thought if one decides to walk the stretch of Ma Narmada and understand India.

 

  •     There is great difference between qualification and enrichment. If one wants to enrich his or her experience with life, then, Narmada Parikrima is the Best Solution.

 

  •     Narmada River is like a mother, walking around it is like being in the lap of mother Narmada River.

 

  •     The walk teaches humility, patience, compassion and tolerance.

 

  •     The walk teaches how the poor are very generous and always willing to give. The villagers around the Narmada will ensure that every pilgrim is well fed, though they have to go in the neighborhood far away to bring ingredients like flour to make chapatis. The villagers sometimes are so poor that they do not have both ends to meet, yet they think of the Pilgrims before themselves or their family members. Can we try to think of others in the world around us? This was first glimpse of “param artha”.

 

  •     On being asked, whether one feels Homesick during the parikrama, the speaker answered that, there are so many interesting things in the nature and the atmosphere, that, one never feels homesick at all. In fact, sometimes, the persons feel that they should remain on the banks of Maa Narmada and not go back home.

 

  •     Some of the questions raised by the audience included about reading books on Parikrama or see any movies. However, the speaker advised the participants to talk to less people and concentrate and work. Over study and over thinking leads to failure whether in exam or during this pilgrimage. The speaker gave examples of over study and failures in the CA exams which some might have experienced.

The session ended with a Pranam by the speaker to all the offline and online participants.

YouTube Link : https://www.youtube.com/watch?v=Iv4tdY-mKEE

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13. Bringing hope when there is none left.

 

  •     The HRD committee of the Society organised a meeting on 18th April, 2023 to spread awareness about Noble Social cause work carried on by Respected Mittal Maulik Patel, Founder  and Managing Trustee, Vicharta Samuday Samarthan Manch(VSSM) who has been Honoured with Nari Shakti Award at National Level for most significant work in the field of women empowerment by the hands of His Excellency President Ram Nath Kovind and also awarded Nari Shakti Award at State Level for most significant work in the field of women empowerment by the hands of Honourable Governor of Gujarat O.P. Kohli.

 

  •     She made detail presentation about VSSM, which is a non-profit organisation whose mission is to ensure and enable holistic development of the people belonging to the Nomadic, De-Notified Tribes and other marginalised section of the society addressing the interdependence and co evolution of human economies and biodiversity.

 

  •     VSSM is working to empower the nomadic and de-notified communities while striving to create an inclusive society as well as government policies for these extremely marginalised sections of our society. Actively working for the welfare of the most downtrodden Nomadic and De-Notified tribes on several socio-economic problem related to education, livelihood, health, human rights, environment, water management, empowerment, building hostel for school children, etc.

 

  •     The meeting ended with a heart-felt gratitude expressed by Mittalben, to the participants and prospective donors for their whole-hearted support to the organisation.

 

  •     She made a further appeal to the members present to spread awareness about VSSM to support and contribute towards the noble work carried on by VSSM. Donation to VSSM is eligible under CSR.

14. Human Resources Development Committee – “Graphology-Handwriting Analysis”.

The HRD Committee of the Society organised a hybrid meeting on 11th April, 2023 at its premises. Led by Bhupesh Singh Dhundele, Graphologist, the meeting imparted the below teachings:

1.    The participants were guided as to how they can analyse their own handwriting and those of others who they would like to know better.

2.    Our Handwriting records our accurate picture of our real self because it is the end result of our brain in action. When we write we think. Handwriting reveals our personality, presence, authority.

3.    Handwriting Analysis helps choose career.

4.    Discussed how to explore the secrets of an individual hidden in their handwriting.

5.    You are what you write. (Writing reflects your personal image)

6.    Your nature lies in your signature. (Signature reflects your personal image)

7.    Your writing is as unique as your thumb print.

8.    It represents your personality. It is instant pen picture/mental X-ray of your total personality of that moment.

9.    It is mind writing. People lost their hand in accidents/war, start writing with leg/mouth, achieve same handwriting after practice.

10.    Graphology is a subject dealing with Graphs.

Presented by Mr. Bhupesh Singh Dhundele (Graphologist)

YouTube Link: https://www.youtube.com/watch?v=24_eFjxBjMs

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Letter to the Editor

Dear Sir,

“Auditor – Whether a Watchdog or a Bloodhound “

I am in agreement with the views expressed in your Editorial of June, 2023 issue of BCAJ, entitled, “CA- From a Watchdog to a Bloodhound” and the penultimate paragraph of “ Namaskar” column by  Shri C. N. Vaze.

The responsibilities cast on a CA as the Statutory Auditor of a Company are very extensive and excessive, and ever increasing, enough to deter a CA from undertaking the vast and excessive responsibilities  cast on the Statutory Auditor under the Companies Act, 2013.

All the Regulators and Enforcement Agencies should understand that the Auditor’s Responsibility ends with making appropriate disclosures in the Audit Report and it’s Annexures. It is upto various Stakeholders to read, understand and take the necessary remedial action(s).

The Auditor should not be made a scapegoat for the lack of knowledge, understanding and necessary timely action on the part of the Management and various other Stakeholders.

Further, requiring the Auditor to Report on every contravention  of various Laws or Regulations  to various Law Enforcement Agencies is neither feasible nor practical.

An Auditor is not a Bloodhound.

And now, on top of everything, comes the latest Notification under the PMLA. One really wonders why the legal profession has not been brought under the ambit of the said PMLA Notification, as the lawyers also render many of the services which come under the purview of PMLA.

In view of ever increasing responsibilities cast on a CA under the Companies Act, PMLA and various other Financial Regulations by various Regulators, and  looking at the increasing tendency of the Enforcement Agencies to arrest the Chartered Accountants for the financial irregularities committed by their Clients,  it is hightime that we, the Practising CAs, should not get entangled in the financial transactions and business dealings/ activities of our Clients and instead, should keep ourselves restricted to our advisory / attest functions .

The time has come for the Finance Ministry to issue elaborate instructions and Guidelines to the Field Officials which need to be scrupulously followed before a CA/ Auditor is arrested or prosecution proceedings are launched against him, to ensure that innocent professionals are not threatened or harrassed in the quest for catching the real culprits who are generally very rich and powerful and politically well connected.

An unnecessary and premature arrest of a CA under PMLA or any other law tends to irreparably destroy and damage the personal, social and professional life and career of a professional.

Various Government Agencies and Regulators need to call a halt on further extension on reporting requirements/responsibilities of the Statutory Auditors. In fact, there is an urgent need to review the existing requirements with a view to weed out the unnecessary requirements.

Yours Sincerely,
CA. Tarunkumar G. Singhal

Two Kids

Leo Tolstoy was a great Russian thinker and writer. His short stories are very famous. The following story is based on one of Tolstoy’s short stories which I vaguely remember. This is an adaptation of his theme.

Bunty and Pinky – both studied in the first standard in the same school. They liked each other and did many things together. Occasionally, they used to quarrel since they were good friends!

Once they quarrelled on occupying the first bench in the classroom. Pinky got angry since Bunty ran to capture the first bench. She wrote in her note book that ‘Bunty is a mad boy’; and showed it to him. Bunty wrote –‘Pinky is a dull girl’ and showed to her.

Bunty opened her tiffin box and ate something. Pinky took his water bag and poured half the water on the floor! Pinky hid Bunty’s pencil; Bunty threw away her eraser. Likewise, the fight went on!

Both walked separately back home without talking to each other. They were in ‘katti’. They narrated everything to their respective mothers. Mothers got furious! In the evening, after their husbands came back from office, parents of both of them met each other. They were staying quite close to each other. The ladies held their swords on the tongues! Husbands merely escorted them. Bunty and Pinky also accompanied them.

The ‘war’ started! Bunty’s mother blamed Pinky’s parents for lack of culture. Pinky’s mother retaliated by calling unty’s parents ‘uneducated’ and ‘mannerless’! The fathers just stood beside them discussing cricket, politics, and so on. In between, they watched the fight, cursorily intervening from time to time.

The passers-by on the road stopped for a while and got entertained. Both the mothers exaggerated what their respective kids had told them. When they wanted to verify certain facts from the kids, they were shocked! The kids were not around. They were missing. Now, their anger got converted into anxiety. They started searching for them. Mothers were in tears.

Suddenly they saw the kids in a park nearby. They were amazed to see them playing with each other with complete love and affection! They had forgotten all the quarrels. While playing in the mud, they spoiled the clothes of each other. They enjoyed it and laughed loudly!

Parents watched their innocence and felt ashamed on their dispute on the road!

12 Mantras of Effortless Leadership

Author: CA PAWAN KR AGARWAL

Reviewer: CA ZUBIN F. BILLIMORIA

CA Pawan Agarwal, a first-time author besides being a Chartered Accountant, also completed his LLB and LLM at the age of 57 and 60. He is also a member of Lions International, the world’s largest NGO. The initial reaction of any reader could well be – one more book on leadership! However, once you start a deep dive into the book, a realisation dawns on you that this book is different from several other books on the topic.

The author makes it clear that the book is a simple amalgamation of his understanding gained from reading more than a hundred books comprising autobiographies and biographies of Indian heroes and leaders. The book is divided into three parts – part one being the introduction in which he describes the woes of a first-time author in all humility; the second part is the heart of the book in which he encapsulates 12 mantras of successful leadership that stand out for their simplicity and common sense, without getting into complicated theoretical research which several management thinkers and gurus are prone to do, and the third part is the bonus mantras from Dr. Habil Khorakiwala; reproduced from his book Odyssey of Courage: The Story of an Indian Multinational.

In the first part, the author candidly admits that the book is a reflection of his learnings from hundreds of accomplished people, experts, books, and leaders. This finds reference at several places throughout the book, as also his habit of taking notes whilst reading; having more than 1,000 pages of handwritten notes jotted down over the last decade! His habit struck an immediate chord with me, being similar to my habit, but may not go down well with the current millennials who are glued to the electronic and digital media, as well as with the environmentalists who want to conserve natural resources like paper! The spiritual side of the author is articulated when he states that leadership is a mindset that is the source of one’s motivation. He indicates that The Shrimad Bhagavad Gita (SMB) is his favorite scripture, the quotes from which find a place in several of his leadership mantras in part two. In order to strike a chord with the common reader, the following extract from the book is pertinent to note. “Leadership does not mean that you are a manager, CEO, politician, or the president of a social organisation. You can lead everywhere and wherever you are at present. You lead in your personal life, job, business, and peer group. Even a child is a leader if he is passionate and eager to learn and grow. A housewife is a leader who manages a family and the household, nurtures kids, and is aware of social surroundings.”

The author begins the second and main part of the book discussing the 12 mantras (a term which he specifically emphasizes instead of chapters) of effortless leadership by setting the tone as under:

“Mantras, to be effective, must be understood properly.”

“Read the chapter three times and then make the mantras your daily ritual. Let them penetrate the depths of your unconscious mind. It does not matter whether you chant aloud, mentally, or just listen to them.”

“Soon you will begin to see your leadership skills in each area of your life reach a new level.”

Each of the mantras mentioned subsequently begins with a quotation in the context of the mantra by renowned spiritual and political leaders and motivational thinkers like Guru Mahatriaji, Mahatma Gandhi, Lal Bahadur Shastri, Sardar Patel, Dr. Abdul Kalam, Dale Carnegie, etc. The summary or takeaways at the end of each chapter is a unique way to help readers digest the content of that mantra, which the readers are encouraged to follow to gain the maximum.

Mantra 1 – “I Have a Mindset of Positive Thinking” is at the core of the rest of the mantras since according to the author without the adoption of this mantra the rest of the mantras would be of no use. It talks of the power of positive thinking in the form of a positive response which makes one proactive as opposed to negative thinking which is a reaction to a situation, the choice of either being with each of us.

Mantra 2 – “I Lead by Example by Leading Myself First” refers to several leaders in different fields who lead by example and mandate a detailed and concrete plan and policy, and practice walk the talk to implement the same. It emphasizes the authenticity of a leader whereby actions should speak louder than words. Reference to the famous incident of Dr. Kalam wherein he went to the house of a scientist and took his son for an exhibition since the scientist father was engrossed in his work, bears testimony to this mantra.

Mantra 3- “I Am a Motivating Force Behind My Team” emphasises the need for human connections and interactions together with undertaking a SWOT analysis to increase the effectiveness of the entire team and treating it like his family. It concludes by prescribing one golden rule; delegate but do not micro-manage.

Mantra 4- “I Have a Questioning Mind- I Question Every Answer” puts into focus asking the right type of open-ended empowering questions which elicit positive replies coupled with the art of active listening without which questions are powerless.

Mantra 5- “I Use My Sentiments to My benefit; I am Emotionally Intelligent” would help a leader to deal with people from different cultures and ignite hope and optimism despite challenges, by touching upon the concepts of self-awareness, self-management, social awareness, and relationship management as propounded by psychologist Daniel Goleman and emphasizes that one should never ignore emotional discomfort and suffocation amongst team members.

Mantra 6- “I Give More Than I Receive; I Am Servant Leader” is a mantra that particularly interested me as it is based on the author’s nearly three-decades-long association with Lions International. It touches upon temptations to receive awards, gifts, honours, etc. as being detrimental to effective leadership and talks of service to humanity and always giving more than what you receive. The concluding takeaway of “to be a master, first, you have to be a servant” has a very profound message.

Mantra 7- “Personal Initiative Is My Dictum; I Take Massive Action” starts with the importance of self-education particularly in the context of our education system and touches on the importance of a positive mindset and having a goal to know your why as well as a burning desire to alleviate one’s self from the ordinary to the sublime. He introduces the concept of the wheel of life or the life balance wheel to understand which parts of our life need more energy.

Mantra 8- “I Have Absolute Faith in My Beliefs; I Know My Purpose!” touches on the path of spirituality, humility, and prayers as a positive force and knowing your why which acts as a guiding light to keep track of our leadership journey. He concludes that Enthusiasm is the Electricity of Life which provides us the springboard to develop confidence and excel as a leader.

Mantra 9- “I Believe in the Culture of the Community- I Am connected!” is relevant in the current digital age whereby according to the author “we are more connected digitally than ever before but we seem to feel isolated and disconnected more personally than ever. We need community.” The author draws inspiration from the Buddhist Sangha which means a group of friends, community, or an affinity group that in the context of our diverse culture, will lead to a proper alignment of values, beliefs, mission, and goals.

Mantra 10- “The Only Thing constant in Life is Change; I Evolve Daily!” makes it imperative for us to reinvent, re-create and change consistently and adopt out-of-box thinking. The author exhorts us to use the left brain and the right brain simultaneously; representing the creative side and the imaginative side, respectively resulting in a golden brain ultimately helping us to consistently innovate and adapt to changes.

Mantra 11- “I Am Quick to Give Credit and Take Responsibility!” is very difficult to adopt in practice since a majority of us use blame as a handy defence mechanism. Applying this mantra in practice requires us to forego our ego.

Mantra 12- “I Enjoy Financial Freedom. I always Live in Abundance!” is a unique mantra that brings out the CA in the author and deals with financial empowerment. He discusses this mantra by giving his own 12 sub-mantras such as having a rich mindset; tax planning, investing wisely, tracking and creating wealth, and having multiple sources of income, amongst others. Two takeaways stand out; firstly, financial planning is each person’s individual responsibility even if you hire the best of brains and secondly, never fall into a debt trap and use credit cards only in emergencies which may not be music to the ears of financial consultants and the millennials!

To conclude the 12 mantras are age-old pearls of wisdom that are very much a simple reflection of our regular life and would help to bring out a perfect leader in each of us, without having to dwell into complex theories by management thinkers and gurus! Reading this book would bring back one to the basics in the midst of the complications and stress that one is forced to deal with.

Law and Order

Yogesh was an intelligent but a simple young boy. He belonged to an educated and cultured middle-class family. His girlfriend Priya was also from a similar family background. Both were doing their post-graduation.

Once, Yogesh’s father bought a new two-wheeler for Yogesh. He took a bank loan for buying it. Yogesh was very excited and took Priya with him to a garden. He parked the scooter on the road and they sat on a bench from where they could see the scooter. He was especially careful since it was new.

Unfortunately, an auto-rickshaw driver knocked down the scooter while parking his auto, causing some damage to it. Yogesh ran there and started shouting. People around came to help and caught the auto-driver. The auto driver had no regrets on his face. On the contrary, he started giving bad words at the top of his voice. He was drunk and blamed all those who had parked their vehicles!

The matter went to the police station. Both Yogesh and Priya were nervous and upset since their new scooter was damaged. That was their first occasion to go to the police station.

They were not afraid because they were honest and had not done anything wrong!

The policeman looked at them, realising what had happened. He looked at the auto driver who was cool and smiling. The police officer shouted at Yogesh: –

Police Officer: Show me your driving licence.

Yogesh showed it.

Police Officer: What do you do ?

Yogesh: Study at the University for Post-graduation.

Police Officer: Where is your identity card?

Yogesh: Sir, but my scooter was knocked down by this fellow. I have come to complain.

Police Officer: Shut up. Only answer my questions. Tell me, what does your father do?

Yogesh: He is a school teacher.

Police Officer: Then how did you get the money to buy a new scooter?

Yogesh: Sir, he took a bank loan,

Police Officer Bring all the papers of the scooter – the bill, delivery note, payment receipt, bank loan sanction letter….

Yogesh: Sir, what has that to do with the present episode?

Police Officer: Don’t argue with me. Have you got insurance and PUC?

Yogesh: Yes Sir. Everything is there.

Then Police Officer turned to Priya.

Police Officer: Tell me, what were you doing with this boy?

Priya: Sir, we are friends in the same class.

Police Officer: But what were you doing here in the garden? You should be studying for the exam.

Priya: Sir, why don’t you ask questions to the auto-wala?

Police Officer: Don’t teach me. Does your father know that you are roaming with this boy?

Priya: Yes, Sir. Our families are known to each other for long.

The police officer was getting a little nervous. All his attempts to intimidate or catch the young boy and girl were failing! As a last resort, he asked both Yogesh and Priya to bring their Parents. He told gently to the auto-wala that he could go since his business would suffer.

Next day, the fathers of Yogesh and Priya came to the police station. The police officer talked to them rudely and told them that their children were not behaving properly. He also scolded the children in front of their fathers.

They said – “Sir, we will take care of our children. But in this case, what is their fault?

In fact, they approached you for help since their scooter was damaged”

Police Officer “These children are enjoying sitting in the garden and unnecessarily troubling the poor rickshaw driver. We are so busy and have no time for such petty matters!

The fathers coolly went home. Children were very much upset!

Victims were themselves treated as criminals; and the real wrongdoer was scot-free! They did not even record the complaint!

SCENE 2

Same evening, the police officer and auto-wala called at Priya’s residence; and literally fell on her father’s feet! He was working as a PA to the Commissioner of Police!!

We CAs are often victims of wrong doings of others. We need to keep this story in mind.

BCAS 56th Residential Refresher Course

 

The flagship event of the Bombay Chartered Accountants’ Society (BCAS), the Residential Refresher Course (RRC), was held at Coimbatore or Kovai as it is called in the local language, from Thursday, 23rd February, 2023 to Sunday, 26th February, 2023..

The preparations for the RRC commenced in July 2022 with the formation of the Seminar, Public Relations and Membership Development (SPR&MD) Committee for 2022-23. Countless calls and meetings followed, even a recce to finalise the venue – after all, the 56th RRC was a special one. The previous RRC (the 55th RRC) had been a hybrid one (given that many of the participants were shy of travelling since the economy was slowly opening up after the onslaught caused by the global pandemic). The Committee was also conscious of the fact that they needed to deliver a program that was contemporary, relevant, and thought-provoking. The time-tested mix of panel discussion, paper presentations and group discussions were successfully adopted.

In Hindi, 56 is ‘chhappan’. The word evokes the memory of Chhappan Bhog, the special prasad offered to Lord Krishna during the Janmashtami festival. The preparation of the Chhappan Bhog is, by itself, an homage paid to the Divine. With great reverence and veneration, the bhog is lovingly cooked by the devotees with their hands – the rasas in the fingers slowly blending into the food. It is said that our five fingers have five rasas – sweet, salty, sour, spicy and savory. To the uninitiated, rasa is basically a source of emotion – it brings joy, brings back memories and opens up conversations.

To the participants of the 56th RRC this year – 138 participants drawn from 20 states and 38 cities – the event was akin to a Chhappan Bhog. Many of these participants have been devout bhakts of this annual pilgrimage, and the RRC gave them an opportunity to rekindle old friendships and reminisce over the past editions. For the first timers, the RRC gave a chance to experience the charm and bonhomie of this much-awaited event. Another unique feature was the four couple participants.

The excitement in the air on the 23rd February was palpable as delegates poured in from all corners of the country. Day 1 began with the inaugural session, with the CA Kinjal Bhuta, Convenor, SPR&MD Committee, welcoming everyone CA Mihir Sheth, President, BCAS officially opening the RRC. This was followed by an address by CA Chirag Doshi, Vice President, BCAS who spoke about the benefits of groups, associations, and local communities in the profession. CA Narayan Pasari, Chairman, SPR &MDSPR spoke about the relevance of the RRC, selection of its venue, detailed schedule and statistics of the RRC. The esteemed Chief Guest and Past President, CA Uday Sathaye, regaled the audience on the previous RRCs and how his involvement over the past decades has taught him precious life lessons, which have in turn contributed to his professional successes as well. He further noted how his passion for BCAS has led him to be crowned with the moniker, ‘BCAS che ladke vyaktimatva’ (the lovable personality at BCAS). The inaugural session was also graced by the presence of the Past President of ICAI, CA G Ramaswamy and the Officer Bearers of The Auditors’ Association of Southern India (TAASI) and SIRC members.

The inaugural session was followed by the curtain-raiser, the presentation paper on the contemporary topic “Handholding Startups – An emerging area of practice” by CA Eshank Shah. The session was chaired by CA Priya Bhansali. This was followed by a group discussion on “Case Studies in Direct Taxes” which saw the break-out groups discuss threadbare challenging and compelling case studies.

Day 2 saw the break-out groups continue their deliberations, followed by the erudite Adv. K.K. Chythanya who discussed the intricacies of the case studies at great length. The session was chaired by CA Phalguna Kumar Enukondla. Post a sumptuous lunch, the eager delegates set out to pay obeisance to Lord Shiva at the Perur Pateeswarar Temple. The temple traces its origins to the 2nd century CE, making it one of the oldest temples in the state and also India. This was followed by a visit to the Isha Foundation. Thanks to local participant, CA V Ramnath, both the visits went off smoothly. A special mention must be made of the Coimbatore team of Yuva participants, ably led by CA R Harish, who took it upon themselves to assist all the other delegates during the entire visit.

Day 3 witnessed the participants appreciate the complexities in the paper presentation on the topic “Additional Reporting Intricacies – Special focus on CARO, IFC & NOCLAR” by CA Mohan Lavi, ably chaired by CA Zubin Billimoria. Post lunch, the break-out groups gathered for yet another stimulating group discussion on the topic “Case Studies in penalty and prosecution in Direct & Indirect Taxes”. The evening ended with an engrossing brains trust session on multi-disciplinary areas of practice. The intellectual team comprising Past President CA Anil Sathe, CA Chinnsamy Ganesan, CA Rutvik Sanghvi and Past President CA Sunil Gabhawalla had a very engaging discussion, where they presented their individual views on the case studies at hand. The session was ably moderated by CA Kinjal Bhuta and CA Mandar Telang. The evening ended with some first-time participants sharing their feelings about the RRC. Post dinner, the young at heart and in age found themselves on the dance floor, grooving to the beat of the music which transcended all borders.

Day 4 commenced with Adv. Raghvan Rambhadran giving his replies on the topic, “Case Studies in penalty and prosecution in Direct & Indirect Taxes”. The session was chaired by CA Sanjeev Lalan. This was followed by the Presentation Paper, “Practice Automation Tools” by CA Druman Patel, ably chaired by CA Chirag Doshi. In the concluding session, Chairman Narayan Pasari once again acknowledged all those who had worked towards delivering a successful RRC, especially Committee member and local participant, CA Priya Bhansali who played an active role in making all the logistic arrangements. Apart from others, the ever energetic four Convenors – CA Kinjal Bhuta, CA Mrinal Mehta, CA Manmohan Sharma, and CA Preeti Cherian deserve credit – they were ably guided by Past President CA Uday Sathaye.

And as the curtains came down on yet another successful RRC, one was reminded of the passion that courses through the veins of the die-hard RRC fans, and the beautiful doha composed by the 15th century mystic poet and saint, Kabir:

“कबीरा कुंआ एक हैं, पानी भरैं अनेक। बर्तन में ही भेद है, पानी सबमें एक।।.”

 Meaning –

Kabira, the well is but one, from which many draw water,

Only the pots differ, the water they hold within is the same.

In the context of the RRC, the ‘well’ can be likened to the inexhaustible source of knowledge that the BCAS is – where the thirsty gather and meet; the ‘pots’ represent the diversity among the participants – drawn as they are from different corners of the country; and the ‘water’ is the knowledge that the participants and stakeholders of the RRC partake and emerge invigorated with.

 

Solutions to Climate Change

[This essay won the Best Essay Prize at Tarang 2k23 (CA Students Annual Day), organised by BCAS]

Climate change – A phenomenon of minor insignificant changes in seasons which piles up and accumulates to be a bigger issue. Many experts have presented their concern on this matter – a matter which if not resolved would become a black demon in the disguise of small, minor, ignorable changes.

The phenomenon of climate change is not a one-day event. It happens over time through subtle changes in seasons which are difficult to identify. But now these subtle changes have accumulated to be a big issue. We all have now experienced winters that are not as cold as they used to be earlier and hotter summers. It is now December and still, a majority of people are without their sweaters which is a matter of concern.

Talking about the reasons multiple factors are contributing to climate change be it depletion of the Ozone layer, pollution of air, water, and soil, or be it excess extraction of minerals, deforestation plays no lesser role in climate change. Lack of awareness amongst people and increase in industrialization are among the other contributors.

Talking about the ill effects that the environment has on society the first and foremost is the increased diseases among the people. The exposure of ultraviolet rays on humans has exposed them to various skin and eyes related diseases not only humans but animals, birds, and microorganisms and the entire ecosystem is a victim of such climate change. The Antarctician glaciers are melting day by day at an increasing rate which surely will drown down the coastal cities in water some or other day.

Considering the solution that can be bought to tackle this issue, the first thing to keep in mind is that it is not solely and exclusively the government’s responsibility to take care of the entire ecosystem, being affected by climate change the following changes need to be brought by all to be capable to solve the problem of climate change.

Stricter norms should be introduced to keep a check on untreated disposal of industrial influents. Though industrialization is important the waste it generates is not. Proper guidelines should be in place to regulate contamination of the environment, for instance, the manufacturing of single denim jeans consumes and contaminates water that can be consumed by an individual for 3 years.

Viable means of manufacturing should be introduced. Companies should be encouraged to install more pollution-controlling equipment. Companies should be given a rating on a per annum basis based on their contribution to polluting the environment and such rating needs to be disclosed on their packaging. Companies with below-expectation eating should be given a determined holiday period to improve their system and thus their ability to protect the environment. Their rating will not be publicly disclosed during this holiday period.

Another major contributor named plastic needs to be brought under control. Plastic takes considerable time to be disposed off thereby degrading the environment. Emphasis shall be placed on reusable bags rather than plastic bags. Also, the government can introduce a plastic tax on corporates that consume plastic above a pre-set limit or whose quality of plastic is below a pre-set limit.

The generation of electricity consumes many resources and contributed to the depletion of the Ozone layer. Awareness about solar panels, extension tax benefits for further periods, and government subsidies will help in the upbringing of solar panels thereby conserving electricity. Windmills are also a good substitute for generating electricity.

Motor Vehicles contribute about 20 per cent of total environmental pollution. The introduction of E- vehicles and the case of accessibility will help in controlling pollution we all witnessed the clarity in the environment during the lockdown owing to restrictions on traveling and industrialisation. Emphasis on shared public transportation and building good infrastructure therein can also help to tackle the issue.

Chloro Fluoro Carbon (CFC) has a major share in the depletion of the Ozone layer. CFC is emitted by equipment like air conditioners, refrigerators, etc. Purchasing  environment-efficient equipment can help in controlling CFC.

Due to increased population and urbanization the extent of deforestation has also increased. The scarcity of trees affects the entire ecosystem and thus the climate. Trees are natural machines that cut bad pollution and emit fresh air in the environment. Tree plantation should be instilled in citizens.

Education plays a vital role in conserving the climate and thus the planet Earth. Reforms should be brought into the educational system to make people in urban and rural areas aware of the environmental changes and the human duty to protect the same.

Thus, it can be said that the responsibility to protect the environment cannot be instilled upon the government only and citizens sitting with folded hands. People should keep aside their self-centric approach and work towards creating a better  tomorrow.

As a concerned citizen, every individual should take early steps to protect the environment with the
latest technology available we should work towards creating a sustainable environment for a better tomorrow.

Thank You!

MANAGED

Once upon a time, there was a large kingdom that was overpopulated. The new King was good. He had honest intentions to have a clean and efficient administration. He had a few good ministers; but over the past many years, there had been complete lawlessness and indiscipline. Many ministers and bureaucrats were addicted to lavish living and resorted to rampant corruption.

Nothing moved without ‘speed money’. Corruption was firmly rooted in every walk of life. School admissions, exam results, health services, transport, business deals, jobs, defense, internal security services, and even judiciary. Nothing favorable could be achieved without ‘setting’. All conscientious persons and professionals were finding it very difficult to survive and perform without resorting to undesirable things.

Nobody listened to professionals and wise people. Justice was delayed inordinately. Wrongdoers were never punished. On the contrary, they enjoyed a high status in society. The common man was frustrated. Meritorious students could not join their desired course of study due to peculiar policies of the Government. They preferred to go, study and settle abroad.

This corruption had percolated down to the common people. Nobody was interested in hard work. Everybody wanted easy and quick money. Therefore, even the common man had become lazy and corrupt. The new king wanted to clean up all these things, but bureaucracy never allowed him to do so. They troubled the common man more and more so that people would hate the king. Nobody wanted discipline.

Since there were many complaints and grievances, the king announced that he would listen to 10 grievances every day and would sort them out immediately. People had to personally come to collect coupons to meet him in serial order. King used to himself issue the tokens early morning strictly on a ‘first come first served’ basis. There was no record as to whom the tokens were issued as it was not considered necessary. The King had an ambitious plan to eradicate corruption.

One day, just after 10 tokens were distributed, a man came. He was educated and wanted to share many grievances against the revenue authorities. The King asked him to come the next day. He urged that he was traveling the next day; but the King was uncompromising and refused to entertain him.

At 9 am sharp, the King would sit for meeting the ten persons. To his surprise, the man who was refused the token appeared before him! King got confused and puzzled.

“Oh! You gentleman, the one who came late in the morning?

“Yes, Your Majesty”.

“How come, you got the serial number one token?”

“ I paid money to the first person!’

‘ How did you do it?”

“Sir, I am a tax professional. I have to manage all such things. Otherwise, we will not survive!

The King realised that even the common citizen who sold the token was tempted by money! He also realised that his task was endless like an ocean!
 

Society News – Learning Events at BCAS

LEARNING EVENTS AT BCAS

 

1. Lecture Meeting — the role of professionals in governance

In the first annual lecture meeting organised by the Society on 12th July, 2023, the speaker, CA Nawshir Mirza congratulated the incoming President and the Society for entering its 75th year. He indicated that Society needs to introspect on its role on the threshold of this historic moment. It is in this context that the topic ‘Role of Professionals in Governance’ assumes special significance. He then proceeded to provide a masterly analysis, of the following matters:

  • He began by dwelling on the hallmarks of professionals like competence, objectivity, independence, ethics, good communication and being effective influencers. He further added that they need to live by their vision.

 

  • Next, he went on to describe governance as similar to religion. It is primarily compliance-driven even though currently compliance is at a saturation point. He also touched upon the history of governance by stating that it began with the political system of governance in Europe comprising of the estates, barons, clergy and the common man. He further added that the French Revolution changed the concept of governance and the third estate (i.e., the common man) which paved the way for the universal adult franchise.

 

  • Moving forward, he elaborated that political governance moved towards corporate governance which initially was more to deal with the providers of capital. In this context, he emphasised that the Companies Act, 2013 (“the Act”) is a unique piece of legislation that deals with the interests of the providers of capital (primarily the shareholders).

 

  • However, recently, corporate governance has progressed further and now deals with the rights of all stakeholders, whereby he referred to a speech by the Chairman of the International Sustainability Standards Board that dealt with how the value of a company as a creator for its shareholders is inextricably linked with the ecosystem., thus signalling a shift from the efficiency mindset (from a shareholder’s perspective) to a sustainability mindset (from the stakeholder value perspective).

 

  • The role of Independent Directors was also discussed by referring to the provisions of section 166(2) read with Schedule IV of the Act, which outlines their duties and responsibilities towards the interests of the environment and society. Citing from his experience as an independent director, he noted that the following significant principles and recent changes need to be kept in mind whilst engaging and practicing governance by all professionals:

1.    The learnings from the Enron era which placed doubts on the integrity of the Corporate Managers and the global financial crisis of 2008 and the consequential wealth inequalities.

2.    Responsibility of the Board, management and managers to the interests of all the stakeholders.

3.    Practicing fairness, accountability and transparency towards all stakeholders.

4.    Being aware of the recent reporting changes, both locally and globally, like the BRSR Report, Integrated Reporting, Task Force on Climate-Related Disclosures, Carbon disclosure project, sustainability standards, etc.

5.    Being aware of the various ESG risks, greenwashing, and measurement tools for non-financial measures like the Science Based Target Initiatives (for reducing the impact of plastic on the environment).

6.    To steer discussions responsibly and be sensitive to the interests of all stakeholders.

  • He concluded by advising on the following matters both as professionals whilst engaging with clients and also in their personal capacity:

1.    As professionals, we need to be responsible for our behaviour and its impact on society.

2.    A road map or plan needs to be developed to embrace sustainability.

3.    To assist in measuring and reporting on various ESG parameters since top management compensation is now aligned in greater measure with ESG parameters rather than financial parameters.

4.    We need to curb irresponsible usage and consumption in our personal capacity to preserve and sustain the environment.

BCAS Lecture Meetings are high-quality professional development sessions that are open-to-all to attend and participate. Missed the Lecture Meeting, but still interested in viewing the entire meeting video?

 

Visit the below link or scan the QR Code with your phone scanner app:

YouTube Link: https://www.youtube.com/watch?v=uvNOUp2Aj6I

QR Code:
 
2. 75th Founding Day lecture meeting on India @2030

At the 75th Founding Day Lecture Meeting on India @2030, Sajjan Jindal, Chairman, JSW Group, began his keynote address by emphasising that the topic India @2030 is very close to his heart. He then proceeded by broadly touching upon the following areas:

  • The current decade will be India’s decade, and the time has come for the country to deliver, unlike the past, when we were like a pregnant lady who never delivered. He added that by 2030, India will be a very different country, and we will be proud of it. The stable governments in the last two decades, and especially the present government, have instilled a tremendous sense of pride coupled with a positive attitude which has resulted in awakening a sleeping giant.

 

  • He cited the example of the remarkable way in which the government navigated through the COVID-19 pandemic. Whilst the performance of the other countries post the pandemic was affected like the increase in the US inflation by 30 times, India managed its economy fairly well. He felt that India’s moment has now arrived just like that of Japan at the end of the Second World War, and it is well positioned to become the third largest economy in the world following USA and China by the end of the decade.

 

  • Next, he touched on several reforms undertaken by the present government, like GST, Swachh Bharat, IBC and digitization which have resulted in greater awareness and responsible behavior amongst the citizens. He made a specific reference to the IBC which has alerted defaulters and made companies more careful whilst borrowing.

He proceeded by touching upon several advantages that will help us to be major player by 2030, and propel India towards a 30 trillion dollar economy. These include:

1.    The demographic dividend is evidenced by our young population. The large population is and will continue to be our strength unlike in the past when the Government had to resort to family planning, sometimes forcibly.

2.    The digitisation drive has resulted in better transparency and governance. It has also brought about reforms in healthcare and education.

3.    We have the potential to scale up the manufacturing capacity under the ‘China plus One’ policy and match the gap created by ‘China as a result’  of decline in its manufacturing capacity. He referred to the JSW Group increasing its capacity with an aim to become the best manufacturer of steel in India.

4.    The energy transition from fossil fuel-based to renewable energy will be a game changer, since the latter is much cheaper. He indicated that he aims to make JSW the first company in India to fully use renewable energy.

5.    Continuing reforms in the financial, banking and capital market sectors will help us towards being a 5 trillion dollar economy in the next five years.

6.    The global leadership role of India is increasing visibly, including the current G20 leadership.

  • He concluded his address by emphasising that the growth of JSW is due to the highest standards of corporate governance adopted. He also indicated that CAs are the first line of defense by providing a governance control mechanism, which is the surest way to achieving growth.

BCAS Lecture Meetings are high-quality professional development sessions which are open-to-all to attend and participate. Missed the Lecture Meeting, but still interested in viewing the entire meeting video?

Visit the below link or scan the QR Code with your phone scanner app:

YouTube Link: https://www.youtube.com/watch?v=PxxNfYuIVpU

QR Code:
3. FEMA Study Circle meeting

FEMA organised a study circle meeting on the topics covering LRS and the new ODI regulations. The meeting included interactions with the AD Banker, Axis Bank.The meeting was held online where the members asked various queries and got the responses from the viewpoint of the Banker.

The speakers at the meeting included Ronnie Quadros and Anjali Jain, Vice Presidents of Axis Bank. Both the group leaders gave their views on various issues in outbound investments and LRS such as repatriation of funds to be made within 180 days of the August 2022 circular even for the earlier remittances made and unutilised. Amongst other things, they also provided their view on the procedure to be followed in case of a change of residential status to a non-resident.

Apart from the above, various other doubts of the group were cleared by the group leaders that made the session interactive and facilitated group learning.

 


4. Workshop on Strength — Pillars of Relationships

A hybrid workshop on the topic ‘Strength — Pillars of Relationship’ was held by the Society on 23rd June, 2023 at its premises. The workshop emphasised the following points:

  • It is important to have TRUST in relationships. This is one basis of any relationship and trust is built on Character & Competency (the basis for Trustworthiness). Both are required for building Trust.

 

  • It is also important to be AVAILABLE to each other as per mutual needs to have a strong relationship.

 

  • Another learning is that RESPECT is the most important element in the relationship. Respect for the other person, irrespective of their status, age, demography and educational background, builds a relationship.

 

  • We learned also about nine types of relationships and their features, e.g., Co-Dependent relationship between Doctor–Patient, husband–wife, etc.

 

  • Also, an important learning was that there are six types of unhealthy expectations, e.g., “Everyone will like me”. This kind of expectation leads to pretending to be “what I am NOT”! And we become incapable of accepting others’ opinions and judgements about us.

 

  • I don’t impose my views on my child and allow them to grow and flourish in their own way.

 

  • Also learned about 10 known worlds, e.g., the world of Buddhahood being the highest as complete and full of perfect freedom.

 

  • There are 20 ineffective habits, e.g., “Claiming credit that I do not deserve”, “Passing judgements on others”, and “Not listening to another person”. These habits come in the way for anyone to build healthy relationships.

 

  • Then we learned about the Characteristics of Good Relationships like Communication, Patience, Commitment, etc.

 

  • Overall, our awareness of how to build strong relationships has enhanced and this training will be of immense help in our development as a good human being.

5. HRD Study Circle Meeting to celebrate International Yoga Day

 

The HRD committee of the society organised a study circle meeting on the “Simple Yoga Asanas” for all ages to remain flexible and strong (Especially for the Busy Bee’s). The topic was presented by Mr Pradeep Thakkar, who:

1.    Explained and demonstrated exercises and benefits of common asanas for all ages to remain flexible, strong and healthy He also demonstrated exercises and explained benefits to get rid of osteo arthritis, knee pain, blood pressure, diabetes and be disease free.

Some more points elaborated by him on specific exercises included:
2.    Self-massage assana, which relaxes pain in the body.

3.    Pavan muktasana by which gases, in the body are released. It also gives relief from constipation and strengthens digestive system. Also provides benefits by relieving mental and physical stress.

4.    Shalabhasana (locust pose) provides stability to the spine and lengthens the upper back and arm. It can strengthen lower back and pelvic organs, hip joints, legs and arms.

5.    Siddhasana improves posture and straightens spine, hips, chest and shoulders. It increases flexibility in your hips and inner thigh muscles.

6.    Tadasana improves posture, alignment and balance.

7.    Vajrasana is also good for digestion. It relieves low back pain.

8.    Shavasana calms the body and relieves stress, depression and insomnia.

9.    Bhujang asana is good for the lower back. It is also good for flexibility.

Further, Mr Thakkar taught a number of asanas for flexibility, osteo arthritis, BP, Diabetes, thyroid, etc. The meeting was attended by 93 members, out of which 31 attended physically while 62 members attended the meeting online.

Visit the below link or scan the QR Code with your phone scanner app:


YouTube link: https://www.youtube.com/watch?v=etiZm6UJD40

QR Code:

 

6. HRD Study Circle Meeting on effective communication

In the meeting held on 18th June, 2023, the HRD Study Circle discussed the benefits of effective communication. The topic for the meeting was, ‘Communicate to Convince. Creating Win-win situations.’ The meeting emphasised that it is very important to communicate with yourself and others in various situations. The purpose is met only when we communicate successfully to make the other understand and get convinced. Also, both parties have to be in a winning mode as a result of the communication. It is an art to communicate what you want and get what you want.Some of the steps required for effective communication include:

1.    Creating a rapport.

2.    Getting to where the other person is.

3.    Bringing the person to where you want him to get in order that both you and the other person are mutually benefitted and get what each other wants.

4.    The process was explained with examples.

5.    NLP is a process that helps to give and convey the right meaning to the other person so that the person conveying the message and the person to whom it is conveyed is as required.

6.    A complimentary complete course in NLP, Speed Reading and Productivity is being offered by Knowledge and Karma for all BCAS Members.

7. HRD Committee Workshop on Learning Technology for Senior CAs

The HRD Committee organised a half-day workshop for Senior CAs and their spouses. The workshop aimed to equip the participants with essential precautions while using technology and introduce them to valuable tools that can enhance their day-to-day lives.The workshop was led by CA Yazdi Tantra, a highly regarded and experienced technologist. Mr Tantra shed light on the effective ways to safeguard against the various types of online fraud. Additionally, he provided valuable insights into spotting fake news amidst the vast ocean of information and misinformation on the internet.

The speaker addressed the pressing concerns surrounding online security and illuminated various tactics employed by cybercriminals to target unsuspecting individuals. Participants gained in-depth knowledge about common types of cyber fraud, including phishing, identity theft, and online scams. Moreover, they learned practical steps to strengthen their digital defence, protecting their sensitive data and financial assets.

Further, the workshop delved into the art of distinguishing genuine news from fake news, rumours, and misleading content. Participants acquired valuable techniques to critically analyse information and make informed decisions, thereby minimising the spread of misinformation.

Participants actively participated in discussions and real-life scenarios to apply the knowledge gained during the session. This approach ensured a more profound understanding of the subject matter and encouraged open dialogues among attendees.

8. Suburban Study Circle Meeting on “Audit Trail — Compliance under CARO 2020 and Practical Challenges”

The Suburban Study Circle Meeting on the topic “Audit Trail — Compliance under CARO 2020 and Practical Challenges”, was held by CA Taher Pepermintwala as a Group Leader.

Making an insightful presentation, Taher shared his views on the following:

  • Elaborate meaning and inclusions in ‘Audit Trail’

 

  • Applicability of Audit Trail to various classes of companies and LLP

 

  • Statutory provisions of Audit Trail under the Companies Act, 2013

 

  • Regulatory implications for CA / CS professionals and matters to be included in the audit report

 

  • Management responsibility

 

  • Compliance checkpoints

 

  • Illustration of an Audit Trail in various accounting systems

 

  • Other practical challenges

The knowledgeable and practical session coveredall the points with numerous case studies to make it simpler for the group to understand it better.

The session had wonderful interactive participation from the group. A large number of queries from the participants were addressed satisfactorily by the group leader. Taher’s command of the subject was well appreciated by the group. The senior and experienced members’ guidance and experiences on certain issues enriched the discussion.

The participants benefited from the elaborate presentation shared by the group leader.


9. Indirect Tax Laws Study Circle Meeting on GST Refunds

The Indirect Tax Laws Study Circle organised a meeting on the topic, ‘Practical Issues in GST Refunds’. The group leader and speaker CA Shuchi Sethi prepared seven case studies, including a presentation covering the intricacies, on the following topics:1.    Refund of ITC on exports under LUT

2.    Inverted rated turnover for Refund under inverted duty structure

3.    Third proviso to section 54(3)

4.    Calculation of Net ITC for Refunds under 89(4) and 89(5)

5.    Relevant Date after Deficiency Memo

6.    Refund of ineligible credit by exporters

7.    Refund of tax paid on excess rates in case of all-inclusive price contracts

More than 100 participants from across India benefitted, participating in the meeting under the able guidance of the group mentor CA Jignesh Kansara.

 


10. Workshop on the Use of Technology in Audit
A half-day workshop on the ‘Use of Technology in Audit’ was held by the Society on 30th June, 2023. The workshop envisioned to enable audit professionals to leverage technology solutions in planning and executing audit engagement.The workshop began with Speaker CA A Rafeq giving insights on ‘Developing Strategies for Automation and Designing Parameters for Evaluation and Selection of Audit Automation Software’. The moderator for the workshop was CA Amit Majmudar.
The workshop provided a platform to various technology solution vendors to showcase how audit professionals can implement their products and benefit from them. The softwares demonstrated were: Auditors Desk, AudTech and AssureAI.The third part was a panel discussion amongst audit professionals where leaders shared their experiences, insights, challenges and achievements from implementing technology solutions in audit engagements. The panelists CA Gautam Shah, CA Guru Prasad, CA Nemish Kapadia and moderator CA Amit Majmudar kept the audiences engaged and enthused throughout.The workshop witnessed a fabulous registration of 100 participants. It succeeded in achieving its objectives as the participants concluded the sessions with a “thunderous round of applause”!

New Year Resolution!

Shrikrishna: Hello, Arjun, all set to usher in New Year?

Arjun: Yes, Lord. Planning so many ambitious things!

Shrikrishna: Very good. For example?

Arjun: I am taking a pledge. I won’t start any work unless and until I am properly appointed.

Shrikrishna: Why? What makes you think that way? Of course, it is a good thing.

Arjun: Our friends are suffering unnecessarily for this reason.
        
Shrikrishna: What happened?

Arjun: Bhagwan, you know everything. Still, you are asking me?

Shrikrishna: True, I know what you are referring to. But tell it again so that other Pandavas also know.

Arjun: Fine. There was a large listed NBFC engaged in housing finance.

Shrikrishna: OK. What of that?

Arjun: Now it is facing many enquiries due to a big fraud of a few thousand crores!

Shrikrishna: Mostly, such frauds are sponsored by the management itself. One has to be very careful.

Arjun: True. For over 15 years, the company has been appointing only statutory auditors.

Shrikrishna: OK. Then?

Arjun: Then the company started appointing 25 to 30 SME firms to conduct branch audit of over 200 branches. This was in consultation with the statutory auditors.

Shrikrishna: So, the branch auditors were not appointed by the company directly in its annual general meeting. Right?

Arjun: Yes. The appointment letter of branches stated all terms and conditions in a couple of annexures and specified the fees.

Shrikrishna: Where was the problem?

Arjun: The branch auditors addressed their report to the statutory auditors, not the company! The company paid the fee to the branch auditors. This went on smoothly for several years!

Shrikrishna: Then, what is the issue?

Arjun: Now, NFRA has issued long notices to all branch auditors. Apart from other points, two basic points raised by NFRA are: The appointment of branch auditors itself is invalid since it was not made in the company’s general meeting, and the branch auditors did not give any engagement letter to the company!

Shrikrishna: Strange! And interesting! What are the branch auditors saying? And what was the fate of their branch audit reports?

Arjun: Statutory auditors have stated in their audit report that they have dealt with the branch auditors’ report while finalising the audit.
            
Shrikrishna: What about SA 210 regarding engagement letter?

Arjun: The appointment letter contained detailed terms and conditions and also the methodology of conducting the audit. The branch auditors accepted the appointment letter. So, no need was felt for a separate engagement letter. Moreover, they had been doing branch audits for many years. In such a case, the engagement letter every year was not warranted.

Shrikrishna: Oh! We had discussed many times that you people could be more serious about your own appointment and related provisions of the company law. You never bother to see secretarial records. See Clause (9) of Part I of the First Schedule.

Arjun: Lord, I agree that our members are careless about it. But here, it was a big reputed company. It had an army of qualified professionals employed with them. There was a full-time Company Secretary and a department under him. In addition, there was a secretarial audit.
Above all, the Statutory auditors are also a senior and reputed firm. Nobody noticed the flaw, if any.

Shrikrishna: But there is a big lesson! Don’t take anything for granted.

Arjun: Agreed. Our people never verify the minutes’ book, resolutions, notices or attendance records…. I realise that it is very essential. That’s my New Year’s Resolution to ensure that at least my appointment as an auditor is appropriately made!

Shrikrishna: My blessings to you, Paarth!

Om Shanti!!

        
[This dialogue is based on the importance of verifying the company’s secretarial compliances to ensure that an auditor is validly appointed. (Clause 9 Part I of First Schedule)].

Are You Tokenised Yet?

 
 

WHY?

When we shop online, say on Amazon/Flipkart, we make payments, inter alia, by using our debit/credit card. We usually enter the card details, including the card number, name, expiry date and the three-digit CVV. To make it more convenient for repeat purchases, the seller/merchant asks us for our one-time permission to store the card details on their server. If you provide permission, the data is securely stored on their servers, with encryption and masking technology. Now, if their security measures are inadequate or broken-into by a hacker, your entire data, including card number, CVV, etc. is vulnerable and susceptible to misuse, which could lead to a loss up to the value of your card limits.

Tokenisation is primarily designed to prevent such online or digital breaches.

HOW?

At the merchant’s end

Since October 2022, the RBI has mandated that the merchants will not save the customers’ card numbers on their servers. Instead, they will store a generated ‘token number’ for each debit/credit card that they want to be used recurrently on their servers.

  • What it means is that a random token number will be generated by the system, which will be stored at the merchant’s end.
  • This token number will be a unique combination of the debit/credit card number and the merchant. So, e.g., if you are shopping on Amazon, your card will be tokenised and a unique token number generated.
  • This token number can only be used to make purchases with that card on Amazon. It cannot be used on any other merchant website. Hence, a unique token number will be generated each for Flipkart, Rediff or any other shopping site.
  • Your card details will be held safe in a secure token vault.
  • This process will eliminate the possibility of hacking at the merchant’s end. Even if the data is hacked, all the hacker will receive will be a token number that will be unusable anywhere else and hence will be of no use to the hacker.
  • Thus, essentially, your card will have multiple tokens based on the number of merchants you have tokenised your card with.

For the user

 For the users (the debit/credit card holders), tokenisation is optional and not mandatory as of date.

  • As far as the user is concerned, the next time you pay online for something using your debit or credit card, you will be asked if you wish to ‘save the card as per RBI guidelines’ or ‘secure your card’. If you respond positively, you will immediately get an OTP on your mobile number linked to your card. Once you enter the OTP on the merchant site, your card will be automatically tokenised. It is as simple as that!
  • You will not have to remember your token number, nor will it be displayed to you.
  • However, you will still see the last four digits of your card at the merchant checkout page.
  • You can request tokenisation of any number of cards at a merchant website.
  • Whenever your card is renewed, reissued, or upgraded, you must visit the merchant page and create a fresh token by following the same instructions.
  • Each card you have, including add-on cards, will need to be tokenised, since each card has a unique card number.
  • If you wish to delete the token number already generated at a merchant’s website, you just need to disable that card at the merchant’s website/app, and your token number will be automatically deleted.
  • If your card has not been tokenised, it will be automatically removed from apps and websites, and you will be required to fill in all your card details every time you transact on that merchant platform.

Security

Tokenised transactions are more secure since the generated tokens are normally not reversible. In encrypted transactions, the process is reversible by decryption using a unique key, and decryption is mostly necessary to complete each transaction. It is, therefore, felt that tokenisation is relatively more secure than encryption.

Thus, from now onwards, you can transact online confidently, with the assurance that your transactions are more secure than before.

Happy shopping!

21st World Congress of Accountants – A Knowledge Powerhouse with Discussions on Technology, Innovation, Sustainability, Entrepreneurship, Wealth Creation, Taxation etc.

Learning from Kids

Many people cry nowadays about the degeneration of human values and the disappearance of ethics from human behaviour. I attribute this to the fact that elders have stopped learning from the innocent behaviour of small children. Due to the invasion of electronic and social media; and rat race for one-up-manship, there is no dialogue within the family. Children have so much to share with their parents, but parents have no time and mood to listen to them.

Children’s conversation is not only worth marking but worth taking a message from! Once I visited my friend’s house. His small 5-year kid came running from another room. I stared at him and said, “your nose is your mother’s, and your eyes are your dad’s”. The sweet boy retorted – “And this pant is of my bade-bhaiya (elder brother)”. This was a great lesson in sharing our belongings with brothers, sisters and friends. During the good old days, sharing textbooks with juniors was common. Presently, this system or culture is going away. One reason, perhaps, is that many parents have only one kid!

In Sanskrit, it is said Meaning – one must accept good thoughts even from children. It is important to note not only what children think and talk but also how they act. There is a well-known story that many kids participated in a running race. One of them fell. That time, others tried to lift him and helped him to reach the destination. This story was in the context of physically/ mentally challenged children. That is the reason why such children are called ‘differently-abled’. If we are contented and have no greed, the whole world, including we ourselves would be so happy!

In the field of psychology, one experiment is very famous. Forty kids in the age group of 5 to 6 years were selected. They gave one chocolate to each of them with an instruction that they would now visit a park. The boy or girl who preserves the chocolate until they come back will get one more chocolate. Many of them preserved it. Then, the lives of all of them were studied for the next 30 to 40 years. Those who preserved the chocolate were found to be more stable and happy in life. They did well in their career. The message is that of faith and patience (Shraddha and saburi). Have faith that you will get more as promised, and have patience till you get it! Small children, by their conduct, teach us a lot!

There was a housing society where there were many children. Fortunately, they were free from screen addiction. All were in the age group of 8 to 12 years. They decided to do some activities, like planting trees, for which they formed a ‘mandal’(club). They also felt that they should raise funds by contributions from all the society members.

The society consisted of many buildings. Boys and girls were allotted one building each. Accordingly, Chintu went from house to house collecting contributions. People were responding out of affection and appreciation. They encouraged the children.

One ‘uncle’ made a contribution. He was a little witty. He asked Chintu – “I have become a member of your mandal. Now, what will I get?” Chintu thought for a while, a little confused! But then he said, “Uncle, you will be able to give such a contribution next year also!”

Message – One should do good things, not with an expectation of returns but to be able to do good things again and again.

[This article has been written in the context of Children’s Day celebrated on 14th November.]

Cursed Animals

The Kingdom of Gods was governed by the God of Gods – GOG. Thousands of gods and demi-gods stayed happily in this kingdom. All facilities to enjoy their lives were freely available to them.

However, GOG was not sure whether all gods were performing their roles properly, and discharging their duties diligently. Therefore, he thought that a certain degree of checking or verification was required.

GOG asked Brihaspati, the Guru of the Gods, to set up certain principles and define the duties of various gods. It was a very complicated document to regulate the functions of all.

The question was – who would check all this? So, a very difficult examination was conducted. Very few intelligent gods passed the examination. GOG authorised them to perform the duty of checking. They were called ‘Registered Gods’ – RGs. The picture painted before them was a very rosy picture.

The first point of checking was Kubera, the treasurer of gods. Whether all gods to whom offerings were made by human beings on earth deposited their collections in the Kubera’s treasury. Whether Kubera utilised it properly, and whether the accounts were properly drawn up and presented.

GOG found that the Sun has become irregular. He disappeared in between and suddenly generated too much heat. It led to global warming. So, GOG introduced energy conservation checking and the overall functioning of the Sun.

It was then found that Varuna – the God of rains also became irregular. Issues of environment and pollution arose. So, environment checking was introduced.

Likewise, many things were added every year within the scope of RG’s work. RGs got tired. They did not get any extra remuneration. Gods whose performance was checked by RGs continued to behave in the same manner despite the adverse findings of RGs. In short, no one really respected RGs.

GOG once openly said, “RGs are not doing their job properly!” RGs had to face trials in the Heaven. They were found guilty. So, GOG cursed them – You shall go to the earth. You will work like donkeys; but the Government and common people will expect everything from you as if you were Gods. Your earnings will be meagre as no one will recognise the value of your services. You will have only responsibilities, and no one will care for what you want.

At the same time, you will have to pass very difficult exams. You will get a feeling that our status is elevated; but in reality you will always remain ineffective. You will not get support from anyone. Finally, you will feel frustrated.

Thereafter, these RGs were born on earth and came to be known as ‘Cursed Animals’.

Report On the 26th International Tax and Finance (ITF) Conference, 2022

The International Taxation Committee of BCAS conducted the 26th ITF Conference at Hotel Ananta and Resorts, Udaipur, from 4th to 7th August, 2022 – the first ITF Conference post-pandemic and the first to be held in a hybrid format. The total number of participants, including 30 online delegates, touched the 250 mark.

In line with the tradition, this year’s Conference, too, was designed to include various contemporary and practically relevant topics for the international tax practitioner. Eminent personalities and experts graced the Conference and shared their invaluable thoughts and experiences in their respective areas of expertise.

The participants were divided into four groups, each group ably led by group leaders who helped generate in-depth discussions of the case studies from the papers. The paper writers visited each group to witness the group discussion.

DAY 1

President CA Mihir Sheth gave his opening remarks and explained BCAS’s activities and various new initiatives. Immediate Past Chairman of the International Taxation Committee, Dr. CA Mayur B. Nayak, welcomed delegates and gave his introductory remarks. The Conference began with the lighting of the traditional lamp by the dignitaries.

 

Lighting of Traditional Lamp

Before the inaugural session, the participants had Group Discussion (GD) on “Cross Border Merger, Demergers and Restructuring – Tax and Regulatory Aspects”. CA Girish Vanvari addressed various points that emanated during the GD and provided his thoughts on the case studies. The session was chaired by the Past President, CA Gautam Nayak. It was followed by a special address by CA Padamchand Khincha, who introduced his paper and spoke about various issues relating to cross-border employment. Past President CA Kishor Karia chaired the session.

 

DAY 2

The day began with a GD on the paper written by CA Himanshu Parekh and CA Gaurav Mittal on “Select Controversies / Emerging trends in International Taxation”.CA Geeta Jani made a presentation on “BEPS 2.0 – GloBE Rules and Pillar 2 – Case Studies”. She explained various aspects of the subject in detail, including conceptual explanations, practical points for consideration, etc. Dr. CA Mayur Nayak chaired the session and provided insights on the issues.


CA Himanshu Parekh, while dealing with his paper “Select Controversies / Emerging trends in International Taxation”, explained the case studies on which the groups had detailed discussions. He addressed various points in his presentation that emanated from the discussion. His session was chaired by the Committee member CA Sushil Lakhani.The last session of the day was the panel discussion on “Cross Border Swift Payment Mechanism and its Importance, Rupee Rubble Payment System, Digital Currency and its Future”. The panel consisted of Shri Gopalaraman Padmanabhan, Shri Mahalingam Gurumoorthy, and Prof. Ananth Narayan. It was chaired by CA Dilip J. Thakkar and moderated by CA Sunil Kothare. The panel shared its thoughts and gave insights on specific issues revolving around the Payment System and allied topics. The entire panel discussion was in virtual mode and was well received by the participants.The day ended with an entertainment program comprising the Folk Dance of Rajasthan, Miming, and Mimicry.
DAY 3
The day began with a Group Discussion on the paper written by CA Padamchand Khincha, CA P Shivanand Nayak and CA Bibhuti Ram Krishna on “Cross Border Remuneration, Employment Benefits & Pensions – Case Studies”.Subsequently, there was a panel discussion on “Case Studies in International Taxation”. The panel consisted of Shri Ajay Vohra, Senior Advocate, Shri Ameet Shukla, Member ITAT, and Shri Sanjeev Sharma, Principal Director (Investigation). It was chaired and Moderated by CA Pranav Sayta. The panel covered various case studies which had practical relevance. The frank and thorough exchange of views among the panellists, ably supplemented by the Chairman’s remarks and probing queries, made the discussion very interesting and elaborate and provided much food for thought to the participants. The panel discussion was based on case studies prepared by various volunteers.Post that, more than 110 members joined for the Darshan of Lord Shrinathji at the Nathdwara Temple. This was followed by the gala dinner and a live orchestra. Some members also showcased their talent in singing, reciting poems and dancing.
DAY 4
The day began with the release of the August 2022 special issue of the BCA Journal, consisting of special pages on Azadi Ka Amrit Mahotsav and poems on this theme. The unique issue was released at the hands of Past President and member of the BCAJ Editorial Board, CA Kishor Karia.

Release of the August 2022 issue of BCA Journal

Thereafter, a panel discussion was held on “Transfer Pricing – Global Developments”. The panel consisted of CA Bhavesh Dedhia, CA Karishma Phatarphekar, and CA Paresh Parekh and was chaired and Moderated by CA T. P. Ostwal. It was a technically rich discussion, as the panellists discussed issues from different perspectives.After the Panel Discussion, CA Padamchand Khincha dealt with his paper on “Cross Border Remuneration, Employment Benefits & Pensions – Case Studies”. He had a detailed discussion on his paper and answered various issues raised by the  Group Leaders based on the discussions in their respective groups. CA Kishor Karia ably chaired the session.

 

CONCLUDING REMARKS

With the in-person (or physical) ITF Conference being held after two years, the participants enjoyed comradeship and networking.The ITF Conference was held under the guidance of Dr. CA Mayur Nayak. CA Natwar Thakrar, as the Chief Conference Director, ably assisted by CA Jagat Mehta, Joint Conference Director, put in a lot of effort to make the Conference successful. The contribution by CA Kishore Pahuja from Udaipur was significant  in various aspects, including arrangement for the Nathdwara visit and organising the entertainment programmes.Other members of the Core Team were CAs, Anil Doshi, Chaitanya Maheshwari, D. S. Sharma, Deepak Kanabar, Divya Jokhakar, Ganesh Rajagopalan, Kartik Badiani, Naman Shrimal, Tarunkumar Singhal, Utsav Hirani and Ujwal Thakrar. CA Deepak R. Shah, Past President of the Society, helped in negotiations with the hotel. Many other volunteers made laudable contributions to make the Conference a landmark event for BCAS. CA Nitin Shingala, Chairman of the Committee, chaired the concluding session wherein some members who attended the ITF conference for the first time shared their experiences and expressed satisfaction with all aspects of the Conference, especially enriching papers, GDs, Panel Discussions, arrangements at the venue, comradeship, and networking.The 26th ITF Conference ended on a high note and received encouraging responses and feedback from the participants.

BCAS Foundation’s Tree Plantation and Eye Camp Drive- 2022

BCAS Foundation is a registered Public Charitable Trust whose principal activities are to undertake various public charitable purposes such as relief of the poor, education and other objects of general public utility.

Last month, the HRD Committee of BCAS, under the aegis of the BCAS Foundation, undertook Tree Plantations and Eye Donation Camps at Pindval and Vansda, respectively. It is heartening to note that such noble activities started in 2011 and have completed 11 years. BCAS Foundation has been instrumental in planting more than 1,00,000 trees in and around Dharampur and conducting more than 1,000 cataract operations for tribals in and around Vansda, Gujarat. Thanks to coordinators CA Meena Shah, CA Utsav Shah, CA Darshan Nathwani and the young brigade of Articled Students and CAs who participated over these years.

This year, being India’s 76th Independence Day, the project visit was specifically planned for 13th and 14th August 2022 to commemorate and celebrate ‘Azadi ka Amrit Mahotsav’ with noble causes of contributing toward Greener India and giving a better vision to the underprivileged tribals of people in and around Vansda. We thank our esteemed BCAS Donors with whose support we could contribute a sum of Rs. 4,80,000 for these noble causes. A Group of 23 enthusiastic volunteers representing BCAS and donors planted trees and witnessed Cataract Eye Camp at the Sant Ranchoddas Eye Hospital in Vansda. The Group visited three different NGOs engaged in many noble activities.

SARVODAYA PARIVAR TRUST (SPT): The Group reached Pindval, Dharampur, to visit the SPT centre. SPT runs two Ashram Schools in Pindval and Khadaki. The trust is an initiative of founders who carried on the vision of Archarya Vinoba Bhave of unconditional service to tribals. SPT works in the areas of Environment, Education, and Water Conservation and follows a holistic approach to poverty alleviation based on Gandhian principles. The Group, and a team of local farmers planted saplings of mango and bamboo trees. The Team had the privilege of Flag hoisting with Farmers and Tribal Children on the field. BCAS contributed to the plantation of about 10,000 trees (@ Rs. 30 per tree, amounting to Rs. 3,00,000). SPT has a nursery wherein they prepare saplings of various fruits and non-fruits bearing trees throughout the year and distribute them to farmers during the monsoon season. The captive plantation ensures a higher survival rate of more than 60%.

Trustee, Shri CA Virendra Shah led the project and briefed about the outcome of the activities that have positively impacted the lives of several people in the hilly region.

DHANVANTRI TRUST (DT): Late Dr. Kanubhai Vaidya founded Sant Ranchoddas Eye Hospital, Vansda, which provides free cataract operations and other eye care facilities for needy people. Trustee, Shri Ghanshyambhai briefed about the facilities and Eye Treatment provided at the 100-bed Hospital. With the kind support of doctors and volunteers, till now they have conducted over 85,000 cataract surgeries. The Group got an idea about how ignorance and extreme poverty result in blindness amongst the poor. This year BCAS donated Rs. 1,85,000 sponsoring 185 cataract operations @ Rs. 1,000 per operation.

SHRIMAD RAJCHANDRA ASHRAM, DHARAMPUR (SRMD): SRMD is a spiritual mission for inner transformation through wisdom, meditation, and selfless service. Founded by Pujya Gurudev Shri Rakeshji, the organisation works through 196 centres in five continents. The Group visited the Ashram, the temple of Bhagwan Mahavir Swami and got an idea about various humanitarian activities undertaken by the Mission in the form of Schools, Colleges, Animal hospitals, etc. It was an enriching and enlightening experience witnessing devotion and selfless services by the Mission to upliftt tribals and poor people.

The visit ended with fond memories of the noble organisations and comradeship amongst team members. The visit not only contributes to the environment but also empowers and sensitised youngsters to undertake noble activities in life.

SOCIETY NEWS – Part 2

14TH JAL ERACH DASTUR CA STUDENTS’ ANNUAL DAY – ‘TARANG 2k22’
It
was three months ago, when the Students’ Team and members of the Human
Resource Development Committee (HRD) met, the day when the success and
grandeur of past thirteen glorious years began reverberating in
everyone’s minds.

The 14th edition of Jal Erach Dastur CA Students’ Annual Day under the brand of ‘Tarang’
had to be bigger and better. With this mission, the Students’ Team
embarked upon the journey with enthusiasm and dedication for Tarang 2k22, led by the student coordinators – Ms. Richi Monani, Ms. Divya Rai and Ms. Anushree Shah.

The
event was organized by the Students’ Committee under auspices of the
HRD Committee of BCAS. It was sponsored by Mr. Sohrab Dastur in memory
of his beloved brother Late Jal Erach Dastur. The Students’ Team
comprised of a group of 33 dedicated and enthusiastic students. It was
truly an event ‘OF CA students, BY CA students and FOR CA students.’ The
dull and monotonous perception regarding CA students was completely
changed when they were witnessed as event managers, anchors, talented
dancers and photographers too!

This year saw a huge enrolment of
550 students despite the delay in CA exams and the various pending due
dates. There were about 260 participants in Tarang 2k22, with the highest number of participants in the Talent Show and the Talk Hawk Competition. This year ‘Tarang’
reinvented its Short Film Making competition into Reel Making
Competition to create a fun-filled and thrilling experience for all the
students.

The 14th Jal Erach Dastur CA Students’ Annual Day – ‘Tarang 2k22’
elimination rounds were held at BCAS Hall on 18th and 19th of June,
2022 and the finale was held at K.C College Auditorium on 25th June,
2022.
 
The grand finale commenced with the lighting of the lamp by the HRD Committee and the student coordinators with the Ganesh Vandana and Saraswati Vandana playing in the background, invoking the blessings of Lord Ganesh (the god of Wisdom) and Maa Saraswati.
 
The three finalist teams of the ‘Antakshari Competition’ named ‘Deewane’, ‘Parwane’ and ‘Mastane’ were the first to compete on the stage. The Antakshari
had fun-filled and innovative rounds to test quick thinking though
tickling the lighter side of the participants. Everyone was quite
surprised to witness the accuracy of CA students, even in the arena of
Bollywood trivia and songs. The event was hosted by CA Hrudyesh Pankhania and CA Utsav Shah. Overall, it provided a great start to the event, and the audience got hooked from the beginning of the show.

The next event to follow was the ‘Debate’, wherein there were 8 finalists. The moderator for this event was CA Jigar Shah
who amazed the audience with his moderation skills. The topic for
Debate was “Content on OTT should not be censored” The jury and the audience were impressed with the debating skills of CA students. There were loud cheers among the audience as well.

The
next event was ‘Talk Hawk’ (sponsored by Smt. Chandanben Maganlal Bhatt
Elocution Fund), wherein the three finalists had to give a 4-minute
talk on any one of the topics. This enabled a level-playing field for
all participants who gave impressive performances on their chosen
topics. It was a close contest and even made it tough for judges to
decide the winner. One could only gasp at the ability of CA students to
give motivational talks with such wit and vigour.
 
Then, the time had ripened for the most awaited event of the evening – CA’s Got Talent. The singers had assembled, guitars, dholkis and
other instruments were in place, dancers were on their feet, and actors
began polishing their lines before they could thrill the audience with
their phenomenal performances. To give a spirited kick start to this
most awaited event, the Students’ Team presented a 4-minute musical
tribute to our beloved singers Lata Didi and KK. This was followed by a
3-minute dance flash mob by the Students’ Team which CA Rishikesh Joshi choreographed.

The
audience could figure that the spectacular flash mob was just a trailer
to what they were going to witness in the Talent Show. And rightly so,
the overall nine performances in various categories like music (which
included singing and instrumental), dancing and other performing arts
category enthralled the audience. The judges were fascinated, rather
bewitched, by the talent of young CA students. They indeed had a
mountainous task of choosing the winner in each category.

Post
the Talent Show, the winning film of Reel making competition –
‘TarangReelsStar’ was played. The reels were so precisely shot that one
could easily imagine CAs as the next social media influencers and
content creators.

Next, the best photographs from the Photography Competition ‘Khinch Le’
were displayed on the stage. For the public choice award, photographs
were put up by the participants on the BCAS Tarang Page, and the
photograph with the maximum likes was declared the winner. Participants
were given themes on which they had to click creative photographs and
post them on the Instagram Page with an innovative tagline based on the
theme selected. This competition saw a record participation of 51
entries which kept the Instagram Page thundering for weeks. With such
mind-boggling photographs, the judges indeed had a herculean task of
selecting the best one here as well.
 
With the clock ticking, the
participants began crossing their fingers as the moment of judgement
was here. The winners of the competition, representing their firms, were
finally announced. The list of winners is as under:

Essay Writing Competition – ‘Awaken the Writer Within!’

Prize

Name of CA Student

Name of Firm

1st
Prize Winner

Pooja
Sanghvi

——————

2nd
Prize Winner

Smit
Jain

BDO
India LLP

3rd
Prize Winner

Ekta
Galani

BDO
India LLP

Talk Hawk
– ‘Aspire to Inspire’

Prize

Name of CA Student

Name of Firm

Winner

Vishesh
Mehta

BDO
India LLP

The Rotating Trophy went to BDO India LLP

Talent
Show ‘CA’s Got Talent’

Prize

Name of CA Student

Name of Firm

1st
Prize
(Music Category)

Mithil
Shirke

——————

1st
Prize
(Dancing Category)

Manasvi
Pandharpatte

——————

1st
Prize
(Other Performing Arts Category)

Sakshi
Chaubey

Shah
Modi Kataudia & Co. LLP

Antakshari
Competition – ‘Suro ke Sartaaj’

Prize

Name of CA Student

Name of Firm

Winning
Team

Smit
Jain

BDO LLP

Gaurang
Shah

——————

Piyush
Jain

Mahajana
& Aibara Chartered Accountants LLP

Best
Individual Performer

Smit
Jain

BDO LLP

Slogan
& Sketch Competition – ‘Leave Your Mark’

Prize

Name of CA Student

Name of Firm

1st
Prize Winner

Aathira
Maniath

Baker
Tilly DHC

2nd
Prize Winner

Jeni
Shah

N.A.
Shah Associates

3rd
Prize Winner

Pooja
Patade

Patade
& Associates

Photography
Competition ‘Khinch Le’

Prize

Name of CA Student

Name of Firm

Judges’
Choice Prize

Priyank
Gosar

GBCA
& Associates LLP

Public
Choice Prize

Harsh
Shah

——————

Reel
Making Competition ‘TarangReelStar’

Prize

Name of CA Student

Name of Firm

Judges’
Choice Prize

Sushil
Khubchandani

——————

Public
Choice Prize

Ekta
Singh

S.K.
Rathi & Co.

Debate
Competition – ‘War of Words’

Prize

Name of CA Student

Name of Firm

Winning
Team

Vishesh
Mehta

BDO
India LLP

Ekta
Galani

BDO
India LLP

Harsh
Shah

——————

Jeni
Shah

N.A.
Shah Associates

Best
Debater

Vishesh
Mehta

BDO
India LLP

The Rotating Trophy went to BDO India LLP
Hearty Congratulations to all the winners and their firms.

Judges for the Various Competitions were as follows:

Competition

Elimination Round

Final Round

Essay
Writing

CA
Gracy Mendes and CA Hardik Mehta

Talk
Hawk

CA Khushbu Shah

CA Charmi Shroff

CA Ashish Fafadia

CA Atul Doshi

Talent
Show

CA Jigar Jain

Ms. Ridhima Limaye

CA Nirav Parikh

CA Rishikesh Joshi

CA Kartik Srinivasan

CA Devansh Doshi

Antakshari
Competition

CA Nidhi Shah

CA Mehul Shah

CA Meena Shah

CA Mayur Desai

Debate
Competition

CA Mukesh Trivedi

CA Samarth Patil

CA Mayur Nayak

CA Chirag Doshi

Slogan
& Sketch Competition

CA Jagat Mehta and CA Raman Jokhakar

Photography
Competition

Priyanshi Agarwal and CA Pankaj Singhal

Reel
Making Competition

CA Rimple Dedhia and CA Maitri Ahuja

Master
Of Ceremony Contest

CA Nilay Gokhale and CA Veerti Kothari

The entire evening was marvelously anchored by the Masters of
Ceremony – Mr. Aditya Sharma, Mr. Ankush Chirimar and Ms. Eesha Sawla
with their sheer display of energy coupled with the mind-blowing
performances. Together, they ensured that the audience had no reason to
lose their attention during the entire show.
 
Ms. Labdhi Mehta
proposed the well-deserved vote of thanks to Mr. Sohrab Erach Dastur for
sponsoring the annual day in the fond memory of his brother, late Jal
Erach Dastur, the family of Smt. Chandanben Maganlal Bhatt for
sponsoring the Elocution Competition, the members of the Managing
Committee, HRD Committee, the Coordinators of the Annual Day, the
photographers for the event, BCAS Staff, parents, principals of CA
students, sound technicians, the vibrant team of student volunteers and
all the CA students for participating in big numbers.
 
A
scrumptious dinner was arranged after the event for all those who marked
their presence at the annual day. The underlying purpose of the event
was to not only develop and encourage skills and extracurricular
participation but also to bring together the entire CA fraternity which
was very well achieved this time too. At last, with a sense of
satisfaction, joy of success, lasting motivation and some unforgettable
memories, we had to call it a day.

With the 14th edition scaling new heights and raising the bar, all eyes are now set on what the next edition offers.

Youtube Link:
https://www.youtube.com/watch?v=qz7_sn7aYzQ

QR Code:
POWER OF ATTRACTION
Every year, the Human Resource Development Committee of BCAS organises a 2/3 days residential retreat towards leadership development, wherein even spouses are allowed to join. This year, like last year, due to the pandemic, we decided to conduct this program virtually.

HRD Committee arranged a webinar on Power of Attraction by Naz Chougley on 30th June, 2022 and 1st July, 2022 (between 5.30 pm to 8 pm). Naz Chougley is the co-founder of ‘Asip Rise’ , a wellness company serving to empower lives. She is a life coach, meditation teacher, holistic healer, behaviour analyst and corporate trainer. The purpose of the webinar was to understand the principles of the law of attraction, how to handle stress and the power of working with intentions and practices to stay positive and to forgive.

The webinar was attended by 60 persons. The coach agreed to share some more thoughts for practices through the WhatsApp group. Hence, a WhatsApp group of participants was formed after the webinar. Participants were shared video recordings of the webinar for a recap and better understanding of the subject. The deliberation by Naz Chougleyji was highly appreciated by all the participants. It was felt that very powerful practical tips were shared that could be applied in practical life, and good results can be achieved. To enhance the benefits, it was decided to organise a recap webinar in September, 2022.   

FOUNDING DAY LECTURE BY MR. N. CHANDRASEKARAN


 

The BCAS Founding Day Lecture is a treasured legacy of the last many decades that has culminated into a best-in-class thought-leadership platform witnessing addresses by luminaries and leaders in the fields of profession, industry and government, among others. This year’s Founding Day Lecture further raised the bar with an insightful and engaging lecture by Padmabhushan Shri N. Chandrasekaran, Chairman, Tata Sons.

On 6th July, 2022, at the 74th Founding Day of BCAS, Mr. N. Chandrasekaran addressed the BCAS community on ‘Future Trends, Risks and Opportunities’ in the Indian context. In witness of a packed auditorium at MCA The Lounge at Wankhede Stadium, Mr. Chandrasekaran shared his insights into emerging trends in the near future along with the risks and opportunities that they may propagate.

He set the context in the backdrop of the last two years, emphasising that the change we have seen over the previous two years is almost equal to a decade of experience. The pandemic brought the world economy to its knees, and it was almost unthinkable that the world was at a standstill.

He emphasized that the world witnessed a sharp stock market slump and a sudden rise,  contracting GDP followed by a huge bounce-back, a military conflict and the stock market reaction. He expressed that we would continue to witness turbulence – military conflicts, supply chain constraints, etc., which will remain consistent in the near future.

Coming out of the pandemic waves, the expectations of a high-growth high-inflation economy have withered, and what we are experiencing is a slow-growth and super-high-inflationary economy.

On the positive side, he stated, we experienced a fantastic display of the human spirit, people adapting to the hardship, poor and rich equally, and the phenomenal adaptation of digital technologies – schools, shopping, work everywhere globally went digital. We also witnessed massive innovation, i.e., a vaccine produced in less than a year – probably, the largest effort globally to vaccinate 7 billion people. And in all this, if we look at the future, things are happening which will point to certain directions the world will take for businesses, society and nations. Out of the many such trends, he delved into four trends which he believes are fundamental shifts. He deeply felt that these trends would have a huge impact and are highly favourable for India, significantly increasing our country’s growth velocity.

1. Digital Adoption –  Digital Adoption is here to stay. Through the last two years, we have gained an adoption advantage of 10 years. This is a huge advantage for India as we have peculiar problems that cannot be solved otherwise. From an Indian perspective, our societal issues are surrounded by a lack of access and jobs. During the pandemic, rural kids lost two years. Similar was the case with hospitals. And we can’t solve this problem by building lakhs of schools and thousands of hospitals. The only way is to use digital technology to leverage the impact by creating jobs that can support the experts. So, when you provide access, you can include people in the market who are currently not in it. This will also push the formalization of jobs, change society and bring societal equality to some extent. From a business perspective, every business will be a digital business. On whether bots will take over jobs? He replied that he doesn’t think so, not in India. It will only expand the job landscape.

2. Sustainability – Moving towards a green economy is irreversible. We are seeing this in many western countries. People post-pandemic do not want to come to the office. Fortunately, we don’t have that problem. The pressure on countries to go carbon-free will remain, and the dates we keep hearing for meeting goals will only advance as time progresses.

India has a huge advantage in this as well. Whilst developed countries are required to replace their existing infrastructure with green infrastructure, we in India are still building our infrastructure. This will help us to build green infrastructure directly. Going forward, many jobs and businesses that revolve around sustainability will be created.

3. Supply Chain Resilience-  In all his years at work, he stated that they never had a business plan which was not ‘demand based’. For the first time, business plans are being built on supply availability. So, we are getting used to different ways of working. Earlier businesses required supply chains to be quick and efficient, while today, the need is for supply chains to be fast and ‘resilient’. The element of resilience would mean having alternate manufacturing and supply locations, and India will be a key beneficiary.

4. Talent – The fourth and perhaps the most pertinent trend is how the talent landscape pans out. He expressed that we are in a race and are still learning the future of work. Work from home (WFH) and work from anywhere (WFA) are new models, and modern-day technologies have enabled them. Perhaps, the ‘workplace and the workmen’ have been separated for the first time in human history. This trend is emerging, and we are seeing the gig economy grow on this trend. The adoption of technology will also help enhance women’s participation in India’s workforce.

Shri N. Chandrasekaran continued his thoughts and answered a few queries from the attendees.

CA Anand Bathiya proposed the vote of thanks.

The lecture can be viewed on the following:

YouTube Link:
https://www.youtube.com/watch?v=4BCEXL1Uv-I

QR Code:
 
TRAINING SESSION FOR CA ARTICLE STUDENTS ON “CHANGES IN INCOME-TAX FORMS FOR INDIVIDUALS AND HUFS FOR A.Y. 2022-23”
On 8th July, 2022, the Students Forum under the aegis of the HRD Committee organised an online training session on “Changes in Income-Tax Forms for Individuals and HUFs for A.Y. 2022-23”, led by CA Priyanshu Shah, a proficient speaker on the subject. Ms. Labdhi Mehta, the student coordinator, introduced the speaker to the participants. She was followed by CA Utsav Shah, a HRD Committee member who also addressed the students.

CA Priyanshu Shah, in his detailed presentation, covered Changes in ITRs, Dividends, Residential Status, Special Economic Presence, Taxability of Interest on Provident Fund, Investment in un-incorporated entity and Taxability of ESOPs. He elaborately explained the changes in rules, sections and in schedules in ITR form with illustrations. He meticulously addressed all the relevant amendments.

The session was interactive, whereby the speaker answered all the queries raised by the participants. The session ended with Student Study Circle Co-ordinator, Mr. Harsh Shah, proposing a vote of thanks to the speaker. With the ITR filing due date round the corner, the topic had its own importance which could be easily seen by the tremendous response from the students. Overall, 270+ students participated and benefited from the session.

Youtube Link:
https://www.youtube.com/watch?v=jW6VXxQDz1Q

QR Code:

SOCIETY NEWS – Part 1

“POWER SUMMIT 2022”

The Human Resource Development Committee of BCAS organised a one-day programme, “The Power Summit 2022: Thriving in a Transformed Hybrid World”, on 28th May, 2022 at the Orchid Hotel, Mumbai. The Summit was in continuation of a series of Power Summits organised annually since 2011.

The Power Summit, curated and anchored by a team of 3 faculty members, CA Nandita Parekh, CA Ameet Patel and CA Vaibhav Manek, was attended by 76 members from various cities in India and abroad. The programme was designed and seamlessly coordinated by this team. The presentations were creative, intriguing and intertwined with pointers that provided much food for thought. In addition to the trio, the faculty comprised CA Milin Mehta, CA Nilesh Vikamsey and CA Shariq Contractor.

The Summit raised important issues dealing with succession planning and sustainability of professional practices, merger mathematics and valuation of professional practices, the challenges and opportunities arising due to technological advances and the need to get ready to “thrive” and not just survive in these disruptive times.

The participant’s interest was evident in terms of involved discussions and the incessant questions raised at each session. The Summit was divided into five sessions on different topics, each undertaken by an experienced speaker.

The power-packed panel at the conclusion of the Summit included: CA Ameet Patel, CA Vaibhav Manek, CA Nilesh Vikamsey, CA Milin Mehta, CA Shariq Contractor, CA Druman Patel and CA Anand Bathiya. This diverse and multi-generational panel succeeded in providing thought leadership on various issues relevant to the Management of Professional Services Firms.

The speakers adeptly conducted each session, which kept the audience engaged throughout. The knowledge areas imparted is highlighted in a nutshell below:

–    Change management.

–  Infusing technology in day-to-day professional engagements for efficient management.

–    Valuable leadership qualities.

–    Growth strategies for professional firms in non-metro cities.

–    Succession planning and its invaluable importance.

–    Insights into the management challenges of mid-sized firms.

–    Strategies for accelerated growth for multi-generational firms.

The Summit generated immense interest among the participants in learning the art and science of practice management.

TRAINING SESSION FOR CA ARTICLE STUDENTS’ ON “ICAI NEW SCHEME FOR CA COURSE”

The only constant in life is change, and to keep up with the pace of change happening in our profession, ICAI has come up with New Scheme for CA Course. To address the doubts arising in the minds of students, the Students Forum, under the auspices of the HRD Committee, organised a session on the Topic “ICAI New Scheme for CA Course” on 12th June, 2022 via zoom. The session was led by CA Hrudyesh Pankhania, a proficient speaker on the subject.

Ms Anushree Shah, Student Coordinator, introduced the programme to the participants. It was followed by CA Jigar Shah, Convenor of HRD Committee, who addressed the students. Ms Divya Rai, Student Coordinator, introduced the speaker.

CA Hrudyesh Pankhania, in his detailed presentation, covered various aspects of the ICAI New Scheme.  He spoke about the need for change, online paced modules, new optional subjects, the impact of the new course on existing students and also the timeline for implementation. He meticulously explained the issues with practical examples and provided useful tips to focus upon.

The session was interactive; the speaker answered most of the queries raised by the participants. The session ended with Student Coordinator, Ms Divya Rai, proposing a vote of thanks. The topic’s importance could be easily seen based on the tremendous response to it from students. Overall, 80+ students participated and benefited from the session. For viewing the session,  visit the society’s:

Youtube Link:
https://www.youtube.com/watch?v=Yp7lOu9RUvY

INTERNAL AUDIT CONCLAVE: RE-IMAGINE!

After a long 2-year wait, the Internal Audit Committee held its flagship event – the Internal Audit Conclave, on 16th and 17th June, 2022 via physical mode at the Orchid Hotel in Vile Parle, Mumbai. The event was designed to cover various facets of internal audit with an innovative, interactive and practical approach delving into the event theme– “Internal Audit Conclave: Re-imagine”.

81 enthusiastic Internal Audit (IA) professionals from industry, as well as practice, joined the Conclave, of which 8 participants (10%) were from cities out of Mumbai. 60% of the participants were below the age of 40 years, and 30% of the participants were women professionals.

CA Abhay Mehta, President-BCAS, welcomed the participants on a monsoon morning on Day 1. He shared his views on the BCAS Internal Audit Committee’s vibrant programs and expressed his best wishes to all participants. CA Nandita Parekh, Co-Chair – IA Internal Audit Committee, then addressed participants with a delightful poem on the journey of an Internal auditor, which set the tone for the Conclave.

The keynote address on Day 1 was given by CA Uday Khanna, a well-reputed and seasoned professional with decades of experience. His address focussed on expectations from the IA professionals and Internal auditors, followed by an interactive Q&A session with a zealous audience. The events which followed on Day 1, along with key highlights of each event, is as follows:

Sr. No. Session details Speaker and Panelist details
1 Panel discussion on: “Addressing the expectation gaps: Building Bridges” CA Purvi Malani

CA Milan Mody

CA Mrugesh Shah

CA Jyotin Mehta

CA Ashutosh Pednekar

CA Nandita Parekh (Anchor)
This panel discussion focussed on prevalent expectation gaps between in-house IA team and outsourced IA team. The panel, with a combined experience of more than five decades, provided participants with practical solutions to address this gap and enhance overall IA service. The Q&A session allowed participants to raise real-life challenges faced, to which the panellists provided relevant solutions.
2 “Internal Audit: Acing the Fine Balancing Act” CA Anuja Ramdasi
The session shed light on how the internal auditor should balance resources and nurture an agile and energized audit team ready to serve a global or growing company.
3 “Forensics – Picking up the Early Warning Bells: A short film followed by an interactive session – introducing a new way of learning” CA Chetan Dalal
This session shared an innovative way of learning forensic techniques. All participants very well appreciated the real-life case studies and practical solutions shared by the speaker*.

(*) The session on forensics gave the participants a glimpse into an innovative way of learning. Feedback obtained at the end of Day 1 revealed that at least 92% of the respondents were interested in enrolling on such video and real-life case study based training sessions in future.

On Day 2, CA Murtaza Kachwala, Chairman – WIRC, a seasoned IA professional, gave the keynote address and shared his vision for the IA practice and the impressive agendas planned for IA professionals in upcoming years. The events which followed on Day 2, along with key highlights of each event, was as under:

Sr. No. Session details Speaker and Panelist details
1 “Bridging the Technology Divide: from Terrified to Terrific” CA Nikunj Shah
This session addressed the very pertinent need of internal audit, which is the use of technology. The speaker shared his insights and solutions on how technology can be adopted by Internal Auditors to manage obstacles and move from finding technology “Terrified” to “Terrific”. Practical anecdotes shared by the speaker helped participants envisage their shift into the next stage in technology adoption for internal audits.
2 “Auditing Related Party Transactions – The regulations are getting tighter, are you up to speed” CA Milan Mody
The session took a deep dive into understanding the auditing of RPTs, a space which has been subject to changing regulations and enhanced requirements over recent years. The speaker shared his insights on governance, processes and reporting checks, which an internal auditor should do to meet the Board’s expectations and provide greater degree of assurance.
3 Session followed by a panel discussion on: “Let’s talk Risks – Why an Internal Auditor should understand key risks? A deep dive into Data Risk, Climate Risk and Talent Risk” Mr. Anirban Ghosh

Ms. Shivangi Nadkarni

CA Hersh Shah

CA Prajit Gandhi (Anchor)
CA Hersh Shah kicked off this session by sharing his insights on various types of risks faced by organisations, along with very interesting statistics in today’s scenario. Ms. Shivangi Nadkarni, an expert in data risks and security, shared her thoughts on data privacy and vulnerabilities in today’s scenario. Later, Mr. Anirban Ghosh shared his passion and vision in today’s sustainability drives initiated by top Indian companies and what role various stakeholders, including internal auditors, play in this emerging drive.

After the opening address by the above speakers, a panel discussion was anchored by CA Prajit Gandhi on the importance of focusing on talent, data and climate risk, the role of auditors and key opportunities for IA. An interactive Q&A session was held towards the end of the panel discussion.

The participants made the most of the tea breaks between sessions, interacting with the esteemed speakers, committee members and fellow participants while being equally eager to return and attend the next session. The overall feedback from the participants was very positive and encouraging. The selection of topics, subject matter experts and speakers invited, and the overall event flow were some aspects of the encouraging feedback shared by a majority of the participants.

The closing remarks on Day 2 was given by CA Nandita Parekh, wherein she expressed her gratitude to all esteemed speakers, panellists, committee members and participants for making the Conclave a grand success! The general pulse of the room towards the end revealed that the Conclave delivered on its promise –to ensure that the Internal auditor who walked in at the beginning of Day 1 was different from the one who walked out at the end of Day 2!

FEMA STUDY CIRCLE

BCAS held its second FEMA Study Circle for the year on 24th June, 2022 via Zoom. The meeting was led by Mr. Bharat Sharma, Advocate on Record, Supreme Court. Mr. Sharma took a session on the implications of FEMA on Digital Assets. Needless to say, transactions in digital assets operate in a realm of their own and are more often than not shrouded in mystery.

The session started with an introduction to Digital Assets, their evolution and their background. Pursuant to this, he explained the different types of transactions that can be undertaken using digital assets, namely payment and receipts in cases of import and export, purchase and sale of fiat currency, as well as swap of digital assets and the implications of FEMA. He then touched upon the applicable definitions of FEMA and explained the rationale behind such transactions being considered either as goods or services. During the presentation, he touched upon the validity of digital assets from a legal and tax perspective, as well as the genesis of cryptocurrencies.

The presentation was followed by an intellectual discussion with members who discussed and debated the classification of such transactions from the FEMA perspective, as well as the practical approach taken by bankers while remitting funds abroad for undertaking such transactions. This discussion along with the questions posed by the members further brought out the nuances of such transactions from the FEMA perspective. Hopefully, this session would have helped clear the doubts of members on a topic that till then was something that all had heard a lot about, but a very few took the efforts to delve deep into it and understand its ramifications and it’s regulatory framework. And most rightly so, given the lack of recognition by Indian authorities and the number of transactions being few and far between.

11TH RESIDENTIAL STUDY COURSE (RSC) ON IND AS

The Accounting and Auditing Committee of BCAS organised this eagerly awaited 11th Residential Study Course (RSC) on Ind AS (in physical mode) at Deltin Hotel, Daman from 24th to 26th June, 2022. Attended by more than 60 participants from across India, The RSC comprised 2 engaging papers for group discussion, 3 interesting presentation papers and an excellent panel discussion.

Day 1
The RSC  started with a group discussion on Case Studies related to Impairment of Financial and Non-Financial Assets (paper writer CA Sachin Khopde). It covered the identification of CGUs, determination of discount rates, impairment assessment due to geo-political challenges, ECL provisions and various related matters.

Post the group discussion, the Chairman of the Accounting and Auditing Committee, CA Manish Sampat, gave his opening remarks and traced the history of the previous RRCs. He invited President CA Abhay Mehta to give his welcome address and inaugurate the RRC.

Welcoming the participants, CA Abhay Mehta indicated that the topics selected for the RSC were of great importance to the accounting and auditing fraternity and requested  the participants to derive maximum benefit from the course. Thereafter, Vice President CA Mihir Sheth also addressed the participants and gave his best wishes for the success of the RSC.

This was followed by a presentation on “Case Studies on Impairment of Non-financial and Financial Assets under IND AS 36 and IND AS 109 (including COVID lockdown, international geo-political scenario and market challenges)”. CA Raj Mullick, Chairman of the session, introduced the paper writer CA Sachin Khopde, who thereafter made his presentation on the various case studies and explained the nuances involved. He made the session very interactive and engaging. Thereafter, CA Raj Mullick, in his closing remarks, shared practical insights and challenges on various aspects related to impairment like goodwill impairment, determining CGUs etc. CA Amit Purohit concluded the session by proposing a well-deserved vote of thanks to the paper writer for preparing and dealing with excellent case studies and to the Chairman for sharing his valuable insights.

Day 2

The day commenced with a group discussion on “Case Studies on Revenue Recognition under Ind-AS-115 in case of new age businesses” covering various aspects like loyalty programmes, gift cards, web-based services, telecom and media based services, contract acquisition costs and other related matters.

This was followed by a session on “Learnings from Implementation of Revised Schedule III and CARO 2020” by CA Jayesh Gandhi. CA Shushrut Chitale, Chairman of the session, introduced the speaker who thereafter covered various practical aspects and implementation challenges on the topic.

The speaker concluded the session by indicating that many of the changes are a result of recent irregularities observed, would provide useful information to banks and other regulators and would warrant changes in digital and manpower requirements at audit firms. CA Nikhil Patel proposed a well-deserved vote of thanks to the speaker and the Chairman.

This session was followed by a presentation on case studies on revenue recognition by CA M.P. Vijay Kumar, in which CA Vijay Maniar, Chairman, introduced the speaker, who made an engaging presentation and also satisfactorily answered all the questions raised by the participants. CA Rajesh Mody concluded the session by proposing a well-deserved vote of thanks to the speaker.

In the day’s final session, CA Zubin Billimoria introduced the speaker CA Kishor Parikh, who presented  “Sustainability Reporting – A New Paradigm in Reporting”. The speaker  provided a broad overview, including a pictorial presentation on matters related to ESG / Sustainability Reporting.

CA Gunja Thakrar concluded the session by proposing a well-deserved vote of thanks to the speaker and the Chairman.

Day 3

The day commenced with an interesting presentation by CA Ashutosh Pednekar on the topic of “Non-Compliance with Laws and Regulations (NOCLAR) –  Understanding and Implementation Challenges”.  CA Rajesh Mody introduced the speaker.

CA Nikhil Patel concluded the session by proposing a well-deserved vote of thanks to the speaker.

Then, as a tradition and a happy memory, a group photograph was taken of all the participants, event organisers and speakers.

The final session was a  panel discussion on  “Valuation of start-ups- Bubble or Reality”, moderated by CA Anand Bathiya. The elite panel comprised  CA Paresh Clerk, CA Dipen Mehta, CA Nitesh Bhuta and Shreyas Trivedi, representing the interests of the Auditor, Investor, Valuer and Merchant Banker, respectively. The session involved an interesting discussion on providing a 360-degree view of the entire start-up ecosystem.

The RSC then concluded with closing remarks by the Chairman. He thanked all who contributed to making the RSC a grand success. He invited a few participants (attending the RSC for the first time) to share their experience. The RSC concluded with happy memories and knowledge enrichment for all the participants.

73RD ANNUAL GENERAL MEETING AND 74TH FOUNDING DAY

The 73rd Annual General Meeting of the BCAS was held on Wednesday, 6th
July, 2022 at MCA The Lounge, Wankhede Stadium, Marine Drive,
Churchgate, Mumbai 400 020.

The President, Mr. Abhay Mehta, took
the chair and called the meeting to order. All the business as per the
agenda contained in the notice was conducted, including adoption of
accounts and appointment of auditors.

Mr. Kinjal Shah, Hon. Joint
Secretary, announced the results of the election of the President, the
Vice-President, two Honorary Secretaries, the Treasurer and eight
members of the Managing Committee for 2022-23.

The following members were elected unopposed for the year 2022-23:

Mr.
Raman Jokhakar, Editor of the BCAJ, announced the ‘Jal Erach Dastur
Awards’ for the Best Article and Best Feature appearing in the BCA
Journal during 2021-22. The ‘Best Article Award’ went to CA Sneh Haresh
Machchhar for his article ‘Does Transfer of Equity Shares under Offer
for Sale (OFS) During the Process of Listing Trigger any Capital Gains?’
The ‘Best Feature Award’ went to Dr. CA Mayur Nayak, CA Tarun Singhal,
CA Anil Doshi and CA Mahesh Nayak for ‘International Taxation’. Mr.
Raman then announced the ‘S V Ghatalia Foundation Award’ for the “Best
Article on Audit”. The award went to CA Zubin Bilimoria for the article
‘CARO 2020’, and to CA Santosh Maller for the article ‘Accounting
Treatment of Cryptocurrencies’.

CA Abhay Mehta, President,
briefed the members on the relentless 42 years of service by Mr. Rajaram
Parwade to the Society. He was felicitated by CA Pranay Marfatia.
Members appreciated Mr. Rajaram’s services to the Society.

Before
the conclusion of the AGM, members, including Past Presidents of the
BCAS, were invited to share their views and observations about the
Society.

The July 2022 special issue of the BCA Journal on GST@5
was released by Padmabhushan Shri N. Chandrasekaran, Chairman, Tata
Sons.

At the end of the formal AGM proceedings, the 74th Founding
Day lecture was delivered to a jam-packed auditorium at the MCA The
Lounge. Members and attendees benefitted from the astute deliberation on
Future Trends – Risks and Opportunities by Padmabhushan Shri N.
Chandrasekaran, Chairman, Tata Sons. The meeting formally concluded with
CA Anand Bathiya thanking the speaker for sharing his visionary
thoughts on a relevant topic with the attendees.

[The video of
the lecture can be accessed on the BCAS YouTube Channel, and a Report on
the Founding Day lecture is provided in the ‘Society News’ section of
this journal.]

OUTGOING PRESIDENT’S SPEECH

ABHAY
MEHTA: This will be my last address to this august crowd as the
President of the Temple of Knowledge – known as BCAS. My journey
throughout the year has been with lots of learnings which has refined me
as a professional and as a human being too. The experiences which I
have gained shall be etched in my memory forever. I was guided through
this journey with constant reminder of my GURU Mahatria Ra’s following
sentence:

What should we do to inherit the fragrance
of the rose?
Just be in the rose garden long enough.

For
me, BCAS has been like a garden of rose, and the longer one is inside
the garden, one will be able to inculcate qualities preached at BCAS.
There were manifold responsibilities with which I commenced my journey
as the President. I had to ensure that the confidence which was reposed
in me by the torchbearers of BCAS is not belied by my performance. I was
also conscious of the rich legacy of BCAS which was not to be
compromised in any manner by any of the action initiated at my or my
committee’s behest.

I cannot judge and comment as to whether I
have been able to perform and execute my duties in a diligent manner. I
shall leave that judgment to the wisdom of the seniors and my colleagues
on various committees, who have been pillars of strength in each
initiative conceptualized and executed at BCAS.

I embarked on
this journey with an aim to implement some of the initiatives which I
had visualized for the profession, and which would be able to contribute
to the development of the profession thereby enhancing the image of
BCAS.

BCAS has always played the role of spotting upcoming areas
of professional opportunities and acting as a transformational
association, training pool of professionals to serve the trade, industry
and government as part of Nation Building.

Keeping all the
above aspects in mind, the theme for the year was finalized with the
acronym “ESG”. This acronym is a fancied one of late for businesses,
professionals, capital markets and economists as part of Sustainability
Opportunities, Compliance and Reporting. I too am very much focused to
assimilate knowledge on Sustainability themed ESG. However, the theme
ESG for us at BCAS was with a different meaning and purpose.
Individually, each word in the acronym is of critical importance to our
profession as well as country as a whole. For us, ESG stood for:

 EMPOWERING
SCALING
GLOBALISING

To
meet the objectives of Empowering, there were concerted efforts during
the year at BCAS to be an enabler of showcasing latest knowledge on the
upcoming areas of professional opportunities to SMPs and young CAs.
Efforts were also steered in the direction of creating a platform for
networking amongst members of BCAS from all over India.

Under the
objective of Scaling, the approach during the year was to bring
professionals who are considered thought leaders in their domain on BCAS
platform. This enables to guide SMPs by providing vision for scaling up
their offerings. A concerted effort was also made to bring on board CA
chapters from other parts of the country on a common platform for
seminars and representations. This has ensured dissemination of
knowledge to remote areas of India through BCAS. The participants from
such regions have benefitted from rich content and experts in enriching
their knowledge and vision. Another mode of scaling up services was to
make the professional aware of the latest technologies available for
effective execution of services.

To meet the objectives of
Globalising, efforts were initiated to create awareness of the
professional services which can be offered by members at the global
level. Speakers of international repute have also been invited to
deliver lectures and share their views with our members thereby
increasing their horizon for services.

I have purposely
restricted myself to provide a broad indication of the theme-based
activities which were carried out during the year by BCAS. The reason
for the same, is that I presume that the detailed listing of the
activities which are carried out under each theme have been read by the
members from the Annual Report. If not, then I request members to please
go through the Annual Report, as it provides a bird’s eye view of the
humongous efforts put in through the 10 committees for organizing events
throughout the year.

Another reason is that I want to keep my
message brief (though many of you may not feel so) and provide enough
time to the Incoming President Mihirbhai to share his vision for the
next year and ahead. It is the future in which members would be
interested more than what has already been executed.

Along with
the theme for the year, there was a conscious call taken by the Office
Bearers to have an effort towards Internal Goal Setting for the BCAS as
an Organisation. This was coined as LEAP:

Leadership for BCAS
Excellence at BCAS
Accountability to BCAS members
Professionalism in BCAS

Again,
to save on time, I am not elaborating the various projects and
initiatives which have enabled us to progress quite satisfactorily to
achieve the objectives of internal goal setting. They have been
elaborately described in the Annual Report. The unfinished agenda, I am
sure, will be executed with equal zeal during the ensuing year.

I
would like to make a particular reference to the initiative to
professionalise the organisation was a step in the direction of
implementing Quality Management System (ISO 9001-2015). The first round
of internal audit by the consultants before inviting the certification
authorities to test the implemented processes has been completed and
they have provided observations which have to be complied or addressed. I
am hopeful that by 15th August, 2022, BCAS should be an ISO 9001-2015
compliant organisation. I should acknowledge the efforts of Anand
Bathiya, Zubin Billimoria and the staff of BCAS in driving this
initiative diligently.

There are some memorable events which I
consider landmark events during the year. These shall be remembered by
me for my lifetime.

  • Hon. CBDT Chairman Mr. J B Mohapatra
    giving BCAS an opportunity to visit his office to discuss Post Budget
    Representation on Direct Tax Provisions of Finance Bill, 2022.

  • Hon. Chairman, CBDT, Shri. J B Mohapatra addressing from BCAS platform on the topic “Direction of Tax Policy in India”.

  • Recognition by BMC of BCAS’ contribution of disseminating knowledge
    and adding values in professionals by naming the junction where BCAS
    office is situated as “BCAS Chowk”.

  • BCAS got an opportunity to share views on the upcoming budget and post budget views on ET Now Swadesh Channel.

  • Diamond Jubilee Edition of BCAS Referencer, 2022-23 was released with
    much fanfare. This event was made even more memorable by felicitating
    Past President Mr. Pranay Marfatia for his passionate contribution for
    more than two decades in ensuring quality content and printing of the
    BCAS Referencer.

  • Release of “Law and Practice of Transfer
    Pricing in India – A Compendium”. This Compendium has contribution from
    more than 150 authors. This Compendium has the Foreword by Mr. Pascal
    Saint –Amans, Director, Centre for Tax Policy & Administration at
    the OECD.

  • Revival of TAXCON, after a gap of 7 years, with 6
    professional associations coming on a common platform. This was the
    first event held in Hybrid Mode.
  • Revival of physical events – 55th RRC, 16th GST RSC and 11th IndAS RSC
  • The event for youth and students – 9th YRRC and Tarang 2022, were really electrifying.

Whatever
I have stated as the progress or efforts in the direction of progress
at BCAS has been made possible due to efforts of many whom I would like
to acknowledge. First of all, the rock-solid support of the Chairmen,
Co-Chairpersons and Convenors of the 10 Sub-Committees has ensured
delivering more than 5,00,000 hours of education during the year through
seminars, workshops, residential courses, lecture meetings and study
circle meetings.

BCAS’ vibrancy is also due to the active involvement of the Past Presidents. Throughout the year, they were easily accessible for any guidance for the new initiatives and resolving vexatious issues. They, with their vast experience, come up with many suggestions for the image building initiatives of BCAS. Their contribution
in making representations to various regulatory authorities for better
governance and easing of difficulties faced by the citizens and
taxpayers is tremendous.

I was truly blessed to have a very
dynamic and young Managing Committee, where each and every member had
taken up individually or jointly projects identified at the commencement
of the year for effective execution. Some have already reached its
fruition and I am sure the unfinished ones will be executed during the
term of Mihirbhai.

My team of Office Bearers also provided
tremendous support in all the suggestions put forth for execution and
they were the real backbones for the co-ordination and monitoring of the
events and projects under ESG theme as well as the LEAP initiative.

In
Vice President, Mihirbhai, I had an ever charming person, who along
with the Jt. Secretary, Kinjal Shah, ensured to fine tune the ERP and
accounting software integration. Mihirbhai, also ensured the smooth
functioning and effective allocation of work within the BCAS staff. Jt.
Secretary, Chirag Doshi is the go-to person for the young members and he
ensured that we get enough mileage and visibility through Social Media
coverage. His contribution in designing programs for young CAs is worth
appreciating. Jt. Secretary, Kinjal Shah along with ERP related work
also effectively ensured digitization of journals and other website
related developments. In Treasurer Anand Bathiya, we had an able vendor
selector for various projects undertaken as well as a tough negotiator
for rates. He meticulously monitored progress of various projects with
effective coordination with the respective teams.

I would take
this opportunity to thank the Heads of Departments at BCAS as well as
all the staff members, who have always stood with me over the journey of
five years as Office Bearer and provided unstinted support at every
point of time.

On my professional life front too there had been
lot of adjustments to be made for professional commitments. I am
fortunate to have understanding partners who ensured that my absence did
not have much difference. A special mention of my partner Chetan Shah,
with whom there are many joint projects we work on. He ensured to deal
on many of them most effectively in my absence too. Looking at the way,
they have handled the assignments, I am worried that they would be
thinking “Arre iske bagair to kaam chal raha hai. Ab kya jaroorat hai
iski?” Well, I eagerly await to resume full-fledged and then wait for
their reactions!!!!

Lastly, turning to my personal life, the
year has been full of adjustments for my wife Nipa and my son Udit. They
are the real energy boosters for my journey. They ensured that whenever
I had some meeting clashing with some social commitments, they tried to
defer or accommodated by relieving me from attending those functions.
At residence also, there were times when I would be drafting some
messages, announcements or checking emails of BCAS. They would ensure
that I was provided my space to carry out work diligently. I am sure,
now they would be ready with the demand for the time which has been
sacrificed for BCAS be returned “Sud Samet”. Yes, I also feel they
deserve more time and attention from my end after the end of the
Founding Day Celebrations.

Before I end, I will bow to Lord
Shriji Bawa and thank him for giving me a chance to serve the Society
and profession. I am sure my Father and Mother, wherever they are, will
shower their blessings to continue to serve the Society and be on the
righteous path in my life.

I will end with a Gujarati quote
relating to dream by noted poet and writer Shri. Ankit Trivedi. I had
dreamt of becoming President of this august Society and when I have
lived the dream, I can say:

So, I have taken satisfaction of my dream even if it may be partly successful. Thank you all.


INCOMING PRESIDENT’S SPEECH

 

MIHIR
SHETH: As I stand here today what resonates in my mind is this
incredible and defining journey of mine at the BCAS. It has not only
shaped my thinking but also my life over the last few years that I have
been associated. What an awesome institution this is! How do you
describe it? – Perhaps words from an ordinary mortal like me may not be
able to express the intensity of the appreciation and respect I have and
I will have to borrow from a literary genius of Shakespeare to describe
it like how he described Cleopatra. He said… “Age cannot whither her,
nor can customs stale her infinite variety of charm, while others cloy
the hungers they feed she feeds where she is most hungered”. You can see
how aptly this description fits verbatim to the BCAS. While there are
institutions where members yearn and covet for the leadership position,
here is one institution that can pick up even an ordinary soul and
convert him into a leader just by its fine traditions, work ethics,
culture and values. This, I believe, is the hallmark of a great
institution.

Samuel Johnson, who was a prolific English writer
and an architect of modern English language said ‘Knowledge is of two
types – One you know the subject yourself and other.. you know the
people from where you can acquire it”. Admitting candidly how little I
know by myself; I am going to draw heavily from the knowledge pool of
BCAS members. I draw my comfort from the epitaph on Andrew Carnegie’s
grave which says, “Here lies the man who knew how to work and learn from the people far more capable and knowledgeable than he was”. I am deeply aware how eager each member
is to share his knowledge and expertise with others and personally,
this is what I have come to truly appreciate about BCAS. Each of my
predecessors, colleagues and friends at the BCAS have contributed so
much to widen my canvass, open my eyes to the possibilities I did not
see, and shift the paradigm to view things differently. It has been a
sheer delight to experience it. No wonder William Blake said ‘Knowledge
is an eternal delight’

Before I share my theme for the year, let
me briefly share my journey at the BCAS. Though I had been a member for
long time, my active association started only many years later when I
enrolled as participant in one of the HRD leadership camp. Soon thereafter, that one time association became an onward journey. Never once did I aspire nor dreamt -that one day this great institution will catapult me to the august position of
the President. Position which was once held by a few of my seniors like
Chinubhai Chokshi, B N Pardiwalla, N V Iyer, Ratanshaw Damanwaala. Past
Presidents of BCAS and partners at my alma-matter C. C. Chokshi &
Co.

I am deeply thankful to those who have made this journey
possible. I thank my late parents who would have been very proud to see
me here today. I thank them for giving me the right value system. I
thank Late Shri Pradeepbhai Shah for who demonstrated through his own
living example the virtues of humane leadership. Thank you, Awani, my
wife who has stood behind me for your rock-solid support in this
journey. Thanks CA Ambrish Mehta, my brother-in-law for your counselling
right from my college days, thank you Devang, my senior colleague at
work for taking over many responsibilities to make me free for BCAS.
Thanks to the immediate past presidents Abhay, Suhas, Manish, Sunil and
Narayan who have hand-held me in my journey with their extremely useful
guidance. Thanks to the HRD Committee with which I share a deep
emotional connect- where its respective Chairmen Rajesh Muni, Mayur
Nayak and Nitin Shingala groomed me to traverse this journey. And
lastly, but not the least, there is one person whom I cannot thank
enough. He is the person because of whom I could clear my CA exams.
Ladies and Gentlemen I am sure- like me there may be thousands of CAs
today who will share this deep rooted gratitude for the person I am
referring to. Ladies and Gentlemen- he is none other than our beloved,
adorable, one and only Shri N. P Sarda sir. Sir- I bow to you with
utmost humility and seek your blessings. But for your lessons on Holding
Company and Standard Costing, CA qualification would have only been a
distant dream for me. I can only pay my tributes through this subhashita
in Sanskrit which says:

What
it means is that there is nothing greater than Guru Tatva and no
service (Seva) greater than Guru Seva. There is no Knowledge (Gyan)
greater than Guru Gyan. I Bow to you, as I have gained everything in
life because of you.

Let me turn to my theme for the year.

Benjamin
Franklyn once said that it is so simple to be effective, but so
difficult to be simple. Therefore, in deciding my theme for the year, I
have tried to make things simple by focusing on systemic improvements.
So much has been already done by my predecessors that justice would not
be served if I abandoned the good work done under those initiatives and
tried to reinvent the wheel, creating complications. Therefore in my
opinion the wisdom is in continuing with some of those initiatives with
renewed vigour, ease and simplicity to be effective. Last year under
Abhay’s able leadership, number of initiatives were taken. In the next
2-3 years all these would have positively transformational effect for
the BCAS. Most relate to the adoption of new technology and syncing the
trajectory of plans with the demand of current times. My effort is to
continue in that direction and take forward the great work. Hence, I
have integrated in my theme many of those trend setting initiatives.
Ladies and Gentlemen- with this preamble, let me have the pleasure of
unveiling my theme for the year 2022-23….. It is named ‘EASE’.

What are the focus areas where this Ease is sought to be provided? Let me briefly explain.

i. Ease of Access to the knowledge.

ii. Ease of Embracing Emerging Opportunities.

iii. Ease of Reskilling.

iv. Ease of Networking and Reach.

Ease of access to the Knowledge is planned to be provided by conducting Hybrid programmes and expanding
the technology footprints by encouraging podcasts, short videos, and
promotion of archived programmes on course-play as also digitizing and
cataloguing the library

Ease of Embracing Emerging Opportunities
is planned to be provided by planning LM and workshops on Data
Analytics, MSME incentives, Finance & Capital Markets, AI,
Valuations, Digital assets, and PLI etc.

Ease of Networking is
planned to be provided by expanding the geographical reach of the
lecture meetings, workshops and Study Circles in Mumbai suburbs,
collaborations with local associations especially in non-metro cities,
felicitation programme for new CAs, mobile app and its messaging feature
and job fair in addition to the regular programmes being conducted.
Ease of Reach is sought to be provided through fine tuning of website,
SEO and active social media campaigning for the programmes and
activities of the BCAS and focusing on students’ programmes.

Ease
of Reskilling is planned to be provided by reinitiating Professional
Accounting Course through active back up of HRD Committee, programmes on
soft skills, digital orientation for senior citizens and short
certification programmes for management skills and other current areas.

What does EASE signify?

EASE
is an acronym for Excellence Achieved by Systemic Empowerment.
Empowerment comes out of Excellence. Excellence is achieved when
Knowledge is backed by an appropriate Skill and applied in the right
context. For the purpose a few systemic improvements may be required to
provide ‘Ease’. The result will Empower people.

You may have a question as to how this is going to be accomplished. The answer is simple.

Visualize,
Virtualize and Actualize and Globalize. All that we need to do is to
visualize, by brainstorming with the think- tanks of the BCAS, the
activities covering the above areas. Next step is to plan how they can
be virtualized so that the benefits can be multilateral. Finally, we
form an action committee to oversee each area of the initiative under
OBs to actualize and globalize it. I am sure a lot could be achieved
with your blessings, cooperation, guidance and most importantly shared
pool of knowledge.

I started my speech with an ode to this great
institution. Let me end my speech also in the same context. We will be
celebrating our 75th year shortly. This is one voluntary institution
that has stood the test of times despite the fact that the Profession
today is passing through interesting times. On one hand there is an
identity crisis while on the other hand there are host of opportunities.
While the enlightened lot is availing themselves of the opportunities
with catalytic support of institutions like BCAS, there are cynics who
proclaim that the CA profession is finished, and nobody can do anything.
In their perception, institutions like BCAS have outlived their
utility. I would like to give fitting reply to those dooms-day seekers
by way of a poem…….The name of the poem is…

And
that is why… that is why Ladies and Gentlemen… that is why… every time I
read this quote by Winston Churchill about great English king Alfred, I
cannot help but relate it to BCAS. With due apologies to Churchill I
have modified it to substitute King Alfred by BCAS. Here is the quote…

“That
sublime ability to rise above the whole force of circumstance, to
remain unbiased by the extremes of success and failure, to persevere in
the teeth of challenges and yet greet returning fortune with a cool eye,
to have faith in its team despite repeated setbacks raises BCAS far above the turmoil of tumultuous setbacks to its pinnacle of deathless
glory”.

With that Ladies and Gentlemen I conclude my acceptance speech seeking your blessings and best wishes for the year ahead.

THE SOCIETY OF TOMORROW

[This essay won the Best Essay Prize at Tarang 2k22 (CA Students Annual Day), organised by BCAS]

Where the mind is without fear,
And the head is held high!

These are the very words that come to my mind when I dream about tomorrow’s society. How would it be? Sustainable, all-encompassing, filled with glad acceptance and eco-friendly! Ah! These are just a few words for the beautiful society of tomorrow.

Let us but retrospect first. Society is not other people, as we often look at it as a distant bird of a different tree. Bursting this bubble and accepting that society is not ‘them’, but it’s ‘us’; it’s made of you and me shall be the first step to improving our lives. As our Bapu, a human with impeccable foresight, had said “Be the change you want to see”. Yes! You and I can make a difference. The butterfly effect is logical, and the ripples of kindness we make in our society shall prove to be big waves for the nation.

The society of tomorrow cares for a clean environment as much as it cares for a clean grid on its Instagram. Because honestly, ‘What are you doing? Why are you even doing it when it is harming the Earth, our true home in the widest of senses’. A society that is conscious about its choices saves water and cycles to work to ensure lesser pollution, does not mindlessly pump factory poison into rivers, carpools and rekindles the joy of candle lights on a rooftop and views stars to relax!

The society of tomorrow is one that knows about being psychologically advanced as much as it knows to be technologically sound. A society that throws away prickly thorns of judgement, hugs change and innovation as if they were the cutest of teddy bears and dances to the rhythm of mutual respect and support. A society that changes its perspective from: “Huh, she’s like that!” To Why is she like that? How can I help? A society that treats mental diseases as simply diseases and not a hullabaloo of whacky thoughts and shame.

Imagine this point of view: The whole society is a safe space. This simple thought makes you breathe a little deeper, smile a little wider and live a little better! A society that has freedom, not just independence, but also free from the humdrum!

The society of tomorrow is free in the true sense, free from opinions and biases and free from fear. As they rightly say – “Duniya Ka Sabse Bada Rog, Kya Kahenge Log.” A society whose subjects don’t shy away from being themselves. Where education and knowledge and kindness and personality reflect a person’s status and not just a façade that social media has created. Superficial beauty standards are broken, and disguised glass ceiling spells are cancelled. Where women support women and life is good. Support and care, invest in skill and ideas and support start-ups they create.

A society of tomorrow is free from politics. I laugh as I write this. I’m sure you laugh as you read this because how can that be? We have all experienced, at least once, the powerplay of powerful individuals. How an influential person bends all rules! How a politician takes and makes bribes! How a common man pays taxes, or shall I say, finances gold biscuits and diamond tiaras for the politicians and their wives. You may ask, how do I still have the guts to say “without” and “politics” in the same lines!? Because I have the bird of hope in my heart, fluttering and singing – Hum Honge Kaamyaab! Today let’s promise that we won’t pay bribes, come what may, not even when the traffic police catches us! Not even when we want to offer our tender! Let us promise to use our voices for good and to raise our voices for the better!

And a society that knows to respect our farmers, the real Annadaata’s, who work relentlessly, be it in scorching heat or pouring rains. So many times, their produce earns next to nothing, yet their love for Mother Earth is priceless. A society that supports fair trade policies and ensures that the farmers get their true and fair share. A society that knows the difference they can make by buying from local businesses instead of multinational brands. A society that supports not just “Make in India” but also “Buy from Indians”.

The society of tomorrow, as I see, is the one that idolises heroes! The true heroes! Indian soldiers, their own fathers and mothers, their teachers. The heroes that truly do heroic acts and add value to life. A society that does not confuse glamour and glitz with genuineness and humility. A society that knows rights comes with duties and does not fear doing hard work for the right things.

My society of tomorrow is not a foreign concept. It’s the innate desire of ‘us’, of ‘you and me’, and the place we would like to call our home. The Sanskrit concept of Vasudhaiva Kutumbakam, to strive for a better tomorrow, not ‘them’ but ‘you and me’ need to start today. Why even call it the Society of Tomorrow when it can be the Society of Today!

Trust me, it’s all about baby steps, and you can start now! Maybe by deciding to assist your house help’s kids, by choosing to carpool, by offering food to stray animals, by choosing to stay with the farmer for a day (Yes, such eco-tourism exists!) instead of lounging at a five-star, by setting up e-payments for that old uncle’s shop, by just being kind, by simply taking accountability, by not blaming the society! Because now you know, society is not them, it is you and me!

Care for your environment, kindness is free!

On your birthday, promise to plant a fruit tree!

Don’t care for wasteful trends, important is your degrees!

Because, an educated person is a wise resident,

For this society of tomorrow.

RIGHT TO INFORMATION (r2i)

In loving Memory of Narayan Varma

PART A | DECISION OF HIGH COURT

State Vigilance Department not completely exempted from operation of RTI Act1
 

Case name:

Subash Mohapatra & Ors. vs.
State of Odisha & Anr.

Citation:

W.P.(C) No. 14286 of
2016

Court:

Hon’ble High Court, Orissa

Bench:

Hon’ble Chief Justice Dr. S.
Muralidhar and Hon’ble Justice Radha Krishna Pattnaik

Decided on:

20th June, 2022

Relevant Act / sections:

Section 24 and 28 of the Right to
Information Act, 2005

Brief facts
• The notification dated 11th August, 2016, stating that Nothing in the RTI Act shall apply to the General Administration (Vigilance) Department of the Government of Odisha and its organization, issued by the Commissioner/Secretary of the Information and Public Relations Department of the Government of Odisha in accordance with Section 24(4) of the Right to Information Act, 2005, was the subject of three writ petitions, each of which was submitted as a Public Interest Litigation (PIL).

 

1   https://theleaflet.in/vigilance-department-cannot-claim-blanket-immunity-from-rti-act-says-orissa-high-court/

Contentions of the Petitioners:
• Violation of Article 19(1)(a) of the Constitution of India which guarantees all citizens the fundamental right to information.

• Exemption provided under Section 24(4) of the Right to Information Act, 2005 is not available to intelligence and security organizations where the allegations pertain to corruption and human rights violations. Therefore, inasmuch as the impugned notification seeks to exempt the entire Vigilance Department in Odisha from the purview of the RTI Act, irrespective of the proviso to Section 24(4), it is ultra vires Section 24(4).
    
Decision:
“For all of the aforementioned reasons, this Court issues a declaratory writ to the effect that the impugned notification dated 11th August, 2016 issued by the Information and Public Relations Department, Government of Odisha under Section 24 (4) of the RTI Act, will not permit the Government to deny information pertaining to the Vigilance Department involving allegations of corruption and human rights violations, and other information that does not touch upon any of the sensitive and confidential activities undertaken by the Vigilance Department. A further clarificatory notification to the above effect be issued by the Government of Odisha within four weeks.”

PART B |  DECODING RTI (SECTION-WISE), PART 2

In Part 1, we understood about the background and basic understanding, objective of the Right to Information Act what is Information and what is a Public Authority?

In Part 2, we will understand about some more basic definitions under the Act.

Record:
Includes
(a) any document, manuscript and file;
(b) any microfilm, microfiche and facsimile copy of a document;
(c) any reproduction of image or images embodied in such microfilm (whether enlarged or not); and
(d) any other material produced by a computer or any other device.

Right to Information
means the right to information accessible under this Act which is held by or under the control of any public authority and includes the right to—
(i) inspection of work, documents, records;
(ii) taking notes, extracts or certified copies of documents or records;
(iii) taking certified samples of material;
(iv) obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device;

Third Party
means a person other than the citizen making a request for information and includes a public authority.

In part 1, we understood who a Public Authority is, now we shall understand its obligations and duties, the same is provided under Section 4 of the Act.

Section 4(1) of the RTI Act defines the obligations of public authorities. Every public authority must maintain all its records. They must be duly catalogued and indexed in a manner that facilitates easy dispersal of information under the right to information under this Act. It is to ensure that all appropriate records are computerised and connected through a network all over the country on different systems for easy access.

The authority must publish information pertaining to its organisation, functions, and duties. It must explain publicly the powers and duties of its officers and employees. Further, it must enunciate the procedure followed in its decision-making process, and the norms and rules followed by it in discharging its functions. It must issue a statement of the categories of documents that are held by it or are under its control.

It must also publish a directory of its officers and the system of remuneration for their services. It must make public details of its Public Information Officer such as name, designation and contact details. Information relating to avenues and channels for obtaining information from the authority must be made public in an easy and accessible way. It must publish all relevant facts that were taken into consideration in policy formulation. It must also provide reasons for its administrative and quasi-judicial decision to persons affected by its decisions.

Details of its financial plans and budget allocations must be made public. Further, it must illustrate the execution of subsidy programmes and provide details of the expenditures incurred. If any concessions and permits have been granted by it then details of the recipients of these must be included. It must clearly state the details of arrangements made for consultation in relation to policymaking. Details of board or councils or committees must be furnished along with minutes of their meetings.

All information must be disseminated widely and in a manner that is easily accessible to the public. The authority must also on its own volition make all such information public instead of waiting for citizens to file RTIs seeking such information. The dissemination must be conducted in a cost-effective manner.

PART C | INFORMATION ON & AROUND

Delhi HC Dismisses Students’ Plea Requiring GGSIP Universit y To Provide Certified Copies Of Answer Scripts As Per Fee Prescribed Under RTI Rules2

The Delhi High Court has dismissed a plea filed by two final year law students seeking directions on Guru Gobind Singh Indraprastha University for providing certified copies of answer-scripts to students as per the fee prescribed under the RTI Rules, 2012 at candidate’s request. A division bench comprising of Acting Chief Justice Vipin Sanghi and Justice Sachin Datta however clarified that the Court has not examined the issue as to whether the charges or fee prescribed by the University of Rs. 1,500 per examination answer sheet is excessive, or could be said to defeat the right to obtain information, as no challenge was raised to the prescription of the said fee under its Rules.
_________________________________________

2   https://www.livelaw.in/news-updates/delhi-high-court-ggsip-university-certified-copies-answer-scripts-rti-rules-200014

CIC Slams UGC for Forwarding an RTI Application 16 Times from One Deptartment to Another! 3
Slamming the University Grants Commission (UGC) for making the right to information (RTI) applicant wait for two years during which time it pushed his RTI application from one department to another, 16 times over, the central information commissioner (CIC) observed this delay “as a blatant error and wilful violation of the provision of the RTI Act and that of the public authority.”

Rajiv Khatri, the RTI applicant, sought certified copies under RTI, as follows: 1) Mechanism of grievance redressal for faculty members of affiliated private self-financing colleges of universities under the list of universities of UGC. 2) Standard operating procedure (SOP) of processing of a complaint. And; 3) Name and address of the authority to forward the complaint in case of non-action of the complaint.

____________________________________________________

3   https://www.moneylife.in/article/cic-slams-ugc-for-forwarding-an-rti-application-16-times-from-one-dept-to-another/67426.html

RTI Act | Penalty under section 20(2) For Destruction Of Information Sought Not Attracted In Absence Of Malafide: Gujarat High Court4
The Gujarat High Court has held that where any information sought under the Right to Information Act is destroyed and it is not the case of malafide destruction of information, penalty under Section 20(2) of RTI Act shall not be attracted. Section 20 stipulates disciplinary action against a Public Information Officer where information sought is not supplied within the time specified, or is malafidely denied or incorrect information is knowingly given or information is destroyed.
______________________________________________________

4   https://www.livelaw.in/news-updates/gujarat-high-court-rti-act-section-202-destruction-or-non-preservation-of-record-article-226-201897

 

RETHINKING THE IND AS 116 – LEASE STANDARD

We are aware that the above IND AS 116 brings in a new Leases accounting standard where apart from short term and low value leases with other minor exemptions, we have the Assets residing in the books of 2 parties – the Lessor and the Lessee.

Moving from the earlier Ind AS 17 to Ind AS 116, the following are the changes that are occurring from the Lessee’s perspective:

1)    Almost all Leases get recognized on the Balance Sheet as ‘Right of Use assets’ and ‘Lease liability’. The only exception being as already stated – short term and low value leases;

2)    Distinction between Operating and Financial Leases gets eliminated;

3)    Right of Use Assets need to show their depreciation charge for the year separately in the Schedules to the Financial Statements.

For the Lessor there is not much difference in accounting but for the Lessee there is a lot of pain of conversion of the Lease Agreements into ‘Right – Of – Use’ (ROU) Assets and ‘Lease Liability’. Accounting was made to stand on it’s head and the article that follows attempts to highlight the infirmities of the current IND AS 116 and proposes a different solution.

The writer is well aware that IND AS 116 is in a way a reflection of the IFRS standard on ‘Leases’ but as professionals we need to understand the apparent shortcomings.

1)    Shortcoming # 1 – It is believed that the reason why this Accounting Standard was conceptualized is because entities with large value assets like Aircraft, Ships, Transport trucks, etc were running the business on Lease Assets which were not reflected in the Fixed Assets block of those entities. Those entities / industry became Asset light and it was felt that disclosures on Business Profitability such as EBITDA % and Return on Capital Employed % were distorted. However, while across the World there may be a few thousand lessors, there are millions of lessees and this Standard has increased the workload of millions of entities, with no apparent benefit.

2)    Shortcoming # 2 – In the new Standard the Lessee has to account for ‘Right – Of – Use’ Assets and ‘Lease Liability’. An important question that arises is that these ROU Assets should have no value as Asset Cover for the purpose of taking Loans (asset backed long term loans). Technically, we have High Value Assets in the books of Lessees which cannot be used as Asset Cover for taking Borrowings. The real owner of the assets is the Lessor. However, this Lease Standard shows both the Lessor and Lessee owners of the same asset class, though the Lessee has to make a separate disclosure.

3)    Shortcoming # 3 – The Lessee in his books of Accounts has to Account for Asset Depreciation, Interest on the Liability of Lease Asset funding and the reduction in liability as lease rentals get paid &discharged. The real danger is in artificial increase of Depreciation and Interest Costs in the Statement of Profit & Loss while lease rental costs come down. However, for EBITDA %, both these inflated costs are added to Profit before Tax. Similarly, for Return on Capital Employed %, inflated interest costs are added back. Without any effort on the part of Corporate Management of the concerned entity – the EBITDA and ROCE % rise, which is a severe distortion when it comes to trend analysis. Both these EBITDA and ROCE % ratios improvements should be a reflection of management actions on the entity business.

4)    Shortcoming # 4 – The Structure of the Cash Flow Statement of the entity changes. Since lease rentals costs will not be there for these ROU Assets, the net Operating Cash Flow will appear higher. Lease liability payments and related interest payment are shown under Financing activities. We therefore see a shift in net Operating Cash Flow improving but net financing activities having a greater payout.

Having raised issues on the shortcomings of the IND AS 116 Leases standard, the issue is how this could have been avoided through better disclosures in Notes forming part of the Financial Statements. They are:

A)    In the Books of the Lessor entity:

a.    List of Lessees with values and Type of Fixed Asset funded who comprise 80% of the net depreciated value of Leased assets. Balance 20% are considered as others;

b.    Break up of these Leased Assets on Asset Type with disclosure of Gross and Net Depreciated values at start of year (period) and end of year (period);

c.    Whether lessees in Para (a) are paying their lease rentals as specified for the year / period;

d.    In case of default in payment of lease rentals by Lessees – disclosures by names (per para (a) above) and the Type of asset where lease payments are in default;

e.    Indicate whether provisioning for bad / doubtful lessees has been done and the Asset types where such provisioning is required as per audit requirements.

B)    In the books of the Lessee entity:

a.    Types of Assets taken on Lease at Gross Value of Lease Rentals payable, cumulative total lease rentals paid up to the period end and balance lease rentals payable in the future periods;

b.    Any lease rentals due and not paid up to the end period of review per Type of Asset;

c.    Lease rentals expense charge in the Statement of Profit & Loss and whether this closely matches the number of days of yearly lease rental as accrued expense;

d.    The names of Lessors who have funded 80% of the Leased Assets based at Net Lease Value Liability payable at the year (period) end. Others to be forming balance 20%. This breakup also to indicate Type of Asset leased;

e.    Are lease expenses properly booked per number of days expense liability for leased assets;

f.    Have lease rental payments been made as due or at the end of the accounting period there are unpaid lease rentals though payment due date has passed. The unpaid amount to be disclosed by Type of Asset.

It is possible to take the view that this ‘IND AS 116’ – Leases Standard could have been handled better with Disclosures rather than with bringing in a sort of Accounting heresy, the major shortcomings of which have been highlighted above.

It is hoped that Accounting Bodies and Institutes will take a relook and make the Accounting Standard more robust.

I must be willing to
give up what I am in order to become what I will be.

—
Albert Einstein

MESSAGES TO THE EDITOR

(with respect to the Editorial of April 2022)

Raman, nobody would have covered the issues more holistically and with so elaborate analysis. Congratulations.
 
Covers the current state of affairs very well and also the mindset. Compliments.
 
Absolutely spot on.
 
Nothing could be more hard-hitting….
 
Hi Raman, Appreciate your article on the forms and substance of external self-regulation, your views especially on Parliament debate touched the chord.
 
Unfortunate there is no single strategy to grow Indian firms.
 
Raman, Congrats on the very hard-hitting, reality-based editorial of BCAJ.
 
Good afternoon Raman,
I read your editorial in BCAJ. I’m so glad that you have penned down the facts in such a fearless way. Over the last few years, this is what is seen as lacking. Sometimes I feel that if IIA is created and members of that institute get preference in getting PSU PSB audits then we will see a natural clean-up of the council and the institute. In any case, the private sector will always go for quality and IIA which could possibly have reservations and an easy syllabus will never be able to match up either in terms of quality or credibility. Of course, this would mean we could see a drop in membership and resources. This in turn will lead to less interest by people who want to enjoy the free lunches and lavish tours at the ICAI. But, then we could see a new dawn for our profession.
 
One of the best editorials I have ever read…! Salute to CA Raman Jokhakar, Editor for his courage & the managing committee of BCA for taking responsibility for the Editorial… it’s remarkable & I salute him for his daring to write such a journal of a professional body. He has guts. We need such leaders to lead ICAI.
 
Very well articulated and also point-blank.
 
Hello Raman Sir,
Just read your Editorial in BCAJ this month. It is excellent and audacious. Feel really proud that you don’t mince your words and tell a spade – a spade. Hoping to read many more inspirational thoughts from you.
 
Raman, I wanted to say that your editorial is well written and congratulations.
Hope better sense prevails in the politicians and bureaucrats, sad but true. This government is intrusive without purpose and has no trust in goodwill. Keep well.

Congratulations, Raman. There is a systematic process to concentrate all powers with Central Government & that too, with PMO. India will have to start another “Independence Movement”. Independence for the citizens of India from the Government of India.
 
Very well written and honest editorial Raman. Really appreciate the candour and the craftsmanship that you’ve put into it. Loved it.

ACCOUNTING FOR ‘SPECIAL’ TRANSACTIONS

PREAMBLE

A new Accounting Standard is proposed to be introduced to bring transparency in accounting and enable a ‘True and Fair’ view in Audit Reports regarding certain ‘Special’ Transactions. This Accounting Standard may be known as Accounting for Special Transactions (AST).

SPECIAL TRANSACTIONS

These Special Transactions include the following. These are only illustrative. It covers all such transactions which were hitherto going unaccounted.

1. Kickback: For getting special favours in business or securing sales-orders/contracts.

2. Speed money: For getting quicker results on an out of turn basis.

3. Goodwill amount: For expressing gratitude for some important work done by others.

4. Setting amount: For ensuring a favourable result from an authority or any other person.

5. Settling amount: For settling a dispute decided against the entity whose accounts are to be maintained.

6. Adjustments: Payments made for a legitimate purpose and objective but are required to be shown under different heads.

Similar payments may be made in different forms under various names and for different purposes.

Explanation:

The word ‘legitimate’ used in Item No. 6 shall not mean and imply that the payments mentioned in item nos. (1) to (5) are illegitimate. These are normal and inevitable expenditures of any business.

METHOD OF ACCOUNTING

In the past, there was a practice of accounting for all such payments on cash basis since no work would be completed without a prior or advance payment or payment immediately after obtaining the desired results.

However, it was observed after the demonetisation and during the pandemic period that payments were deferred due to the cash crunch in many business entities. Therefore, there is a need to issue guidelines on accounting for such payments.

THE STANDARD

1. Payments need to be classified between capital and revenue. Payments effected for acquiring capital assets shall be capitalised to respective assets.

2. Payments made for obtaining permissions, licences, registrations, permits, etc., shall be accounted as deferred revenue expenses.

3. The remaining categories may be accounted for as revenue expenses and charged to the profit and loss account.

4. Payments made without obtaining desired results may be written off in the year they were made.

ACCRUAL

5. In case the payments are committed, and the credit is allowed by the person to whom it is due, it can be shown as outstanding, and a proper disclosure shall be made in the Notes to Accounts.

6. In case the payment is uncertain, depending on whether the desired result will be obtained or otherwise, the same shall be disclosed as a contingent liability.

It is hereby clarified that no accounts shall be treated as True and Fair unless such Special Transactions are reported in the manner prescribed in this Standard. In case the transactions are disclosed in this manner, the provisions of NOCLAR shall not be applicable.

Note: Views and suggestions from readers are invited for better interpretation and implementation of this standard within 15 days from receiving this journal.

REPRESENTATION MADE

BCAS has made a Representation to the Ministry of Corporate Affairs and the Central Board of Direct Taxes to include approval u/s. 10(23C)(vi) & (via) of the Income Tax Rules in Rule 4(1) of the Companies (CSR Policy) Amendment Rules, 2021.
 

Please scan to read full texts –

 

TIME BARRING

Arjun: Oh Lord! Save me!

Shrikrishna: Arey Arjun, you are sweating. Too much heat this year?

Arjun: Yes, Lord. But I didn’t remember you for this heat.

Shrikrishna: Then what for?

Arjun: This burden of Ethics! You say it is for our protection. But after all, it is a very heavy shield to hold continuously in hand. And the armour is often unbearably heavy.

Shrikrishna: True. But you have no option!

Arjun: That also I accept. But tell me, how long do we remain answerable for our work? Is there no time barring – as we have in income tax?

Shrikrishna: There is! But not in the sense that you have in mind. It is not a rigid or blanket limitation of time.

Arjun: Do you mean it is different for different types of misconduct? Like in income tax, we have different time limits depending upon the stakes involved.

Shrikrishna: Why don’t you read the relevant rules? The title of those rules is very long. Difficult to remember.

These rules may be called The Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.
    
Arjun: Oh! I wonder how you remember this. For a short cut, let us call it as misconduct procedural rules.

Shrikrishna: Fine. See Rule 12.

Time limit on entertaining complaint or information – Where the Director is satisfied that there would be difficulty in securing proper evidence of the alleged misconduct, or that the member or firm against whom the information has been received or the complaint has been filed, would find it difficult to lead evidence to defend himself or itself, as the case may be, on account of the time lag, or that changes have taken place rendering the inquiry procedurally inconvenient or difficult, he may refuse to entertain a complaint or information in respect of any misconduct made more than seven years after the same was alleged to have been committed and submit the same to the Board of Discipline for taking decision on it under sub-section 21A of the Act.

Arjun: This is very vague. How do you decide?

Shrikrishna: Yes. It is a loose type of time barring. There is an important rider. If the production of evidence is difficult or it is otherwise inconvenient to continue the proceeding.

Arjun: But who decides this? Solely at the discretion of the Director?

Shrikrishna: To some extent, yes. But he has to seek the concurrence of the Board of Discipline. He is not the sole person to decide.

Arjun: Oh God! But on what basis he will decide it? How can we keep a record or remember what happened so many years ago?

Shrikrishna: I appreciate this. But Arjun, sometimes the misconduct is very apparent. Self-evident. Not much external document is required.

Arjun: Like what?

Shrikrishna: Like your balance sheet is not tallied at all! Or you have issued a report in an incorrect format; or certain mandatory disclosures not done at all!

Arjun: Oh! I understood. This is horrible. So it is endless!

Shrikrishna: I will tell you an interesting case. I had perhaps already told you earlier.

Arjun: Tell me. Your stories are interesting.

Shrikrishna: One lady’s Will was prepared. She died 12 years after the preparation of the Will.

Arjun: Then what happened?

Shrikrishna: When it was opened after her death, it was found that the CA had signed it as a witness, but there was no signature of that lady at all!

Arjun: Strange! But is it so serious?

Shrikrishna: Obviously. When you sign as a witness, you indirectly state and affirm that the concerned person has signed in your presence. You saw him signing. If you put your sign as a witness without that person’s signature, it is a false statement. It is a lie!

Arjun: But quite often, we put our signatures on balance sheet first and then send it for directors’ to sign.

Shrikrishna: This is very wrong; and dangerous. At the same time, signing as an auditor is different from signing as a witness.

Arjun: Yes, I appreciate that. In short, the sword of a disciplinary case remains hanging on our heads forever!

Shrikrishna: Yes. But remember, try to do things perfect. Take care, so that you don’t have to worry!

Arjun: Agreed! Bhagwan! Thank you.

 

Report On 55th BCAS Residential Refresher Course

After a year’s hiatus, which witnessed the 54th Residential Refresher Course (RRC) of the BCAS being held in the virtual mode for the very first time in January of last year, the possibility of hosting the 55th RRC as a physical event sent the blood coursing through the veins of everyone associated with its organisation.
With the venue for this year’s RRC being the holy town of Nashik, surely the stars were aligned in our favour! Think ‘Nashik’ and the much-revered Shirdi Sai Baba also comes to mind. A visit to the temple to pay obeisance and seek Baba’s blessings was a definite given. Those of a certain vintage may remember the lyrics of the popular song ‘Shirdiwale Sai Baba…’ from the movie ‘Shirdi Ke Sai Baba’,
…Tujhe sab maante hain,
Tera ghar jaante hain,
Chale aate hain daude,
Jo khush kismat hain thode,
Yeh har rahi ki manzil,
Yeh har kashti ka sahil…

To those who look upon the RRC as an annual pilgrimage – and there are many – these words apply as much to Shirdi Baba as they do to the RRC. ?

Of course, given that the third wave was still holding sway, the RRC – from Thursday, 24th February to Sunday, 27th February 2022 – was planned in hybrid mode – both physically and virtually. The expectation was that participants might prefer to wait out and not register during the early-bird phase (which normally happens); however, within a few days of the announcement, we had 100 plus registrations! Well, as the line goes, chale aate hain daude, jo khush kismat hain thode…

The venue was the newly opened Radisson Blu, Nashik. We had 110 participants who joined us physically at the venue and 43 who joined us virtually; the participants hailed from 22 cities across India at this 4-day conference.

The first day, post a sumptuous lunch with old friends and new acquaintances, the event was formally inaugurated with the traditional lighting of the lamp by the eminent Chief Guest, CA Dr. Vinayak Govilkar; the President, CA Abhay Mehta; the Vice President, CA Mihir Sheth; and the Chairman of the Seminar, Public Relation & Membership Development Committee, CA Narayan Pasari. The Chief Guest spoke lucidly on the highly engaging and pertinent topic of ‘Journey of Currency – from Barter to Bitcoin’.

The RRC was kick-started with the ice-breaking Presentation Paper on Practice Talks. The engaging trio of new generation practitioners, CA Anand Bathiya, CA Mayank Lakhani and CA Jeenendra Bhandari traversed all practical issues and aspects of modern-day practice. The audience was pulled into the conversation through the innovative use of technology which required them to answer questions by logging into a link created for the event. The answers to the poll questions were available for all to see and mull over – it gave the practitioners a quick fact check on where they stood as far as the others. CA Hitesh Gajaria ably chaired the talk.

Friday morning saw most participants getting into the coaches organised to take them for darshan at the Shirdi Sai Baba temple. Once back at the hotel, the group discussion (GD) on ‘Case Studies in Accounting, Auditing and Company Law’ began. The quartet of vibrant Group Leaders – CA Kaustubh Deshpande, CA Manoj Chandalia, CA Monica Challani and CA Ronak Rambhia ensured that the discussion among the participants – both physical and virtual – was fruitful and engaging.

GD-1 was followed up by a thought-provoking Paper Presentation on ‘Valuation of New Age Tech Companies’ by CA Ravishu Shah, chaired by Past President CA Deepak Shah. During the calendar year 2021, 63 companies had come out with an initial public offering (IPO) and raised around Rs 1.3 lakh crore from investors. The practical approach adopted by the speaker by discussing the recent IPOs and their valuations offered the attendees a good macro and micro insight on the topic, thus prompting some pertinent questions from the participants. The last session of the day was the presentation by a paper-writer, a veteran professional and Past President, CA Himanshu Kishnadwala, who enlightened the participants with solutions to the case studies discussed earlier by the various groups.

Saturday morning witnessed the participants dive into the brainstorming GD on ‘Case Studies on Direct Taxes’. Once again, the group leaders, CA Divya Jokhakar, CA E. Chaitanya, CA Kinjal Bhuta and CA R.Harishably steered the discussion on the case studies. This was followed by a thought-provoking session by CA Aseem Trivedi on the ‘Recent Issues on Disciplinary Cases and Code of Ethics’. The session of Ethics was intricately chaired by Past President CA Uday Sathaye. Critical aspects of recent ethical issues faced by Chartered Accountants were discussed. This was followed by the Direct Tax session ably chaired by our BCAS veteran and Past President, CA Anil Sathe. Advocate Devendra Jain, the paper writer, ably discussed each case study in an erudite manner.

The last session on Sunday morning, a Panel Discussion on the concept of ‘Related Party Transactions’ under various laws such as the Companies Act, Accounting Standards, Income Tax Act and the GST Law had the panelists CA Parind Mehta, CA Sonalee Godbole and CA Sudhir Soni, share their subject expertise on 11 case studies with the audience. The session was moderated by the BCAJ Editor and Past President, CA Raman Jokhakar. The participants found the panel discussion truly enriching as the discussion was focused on various practical issues faced by professionals.

The event concluded with Chairman CA Narayan Pasari acknowledging the tireless efforts of Convenors of Seminar, Public Relations & Membership Development Committee – CA Kinjal Bhuta, CA Manmohan Sharma, CA Mrinal Mehta and CA Preeti Cherian and thanking all those who worked towards delivering a successful RRC.

Till we gather next year under one umbrella, let’s pay an ode to our dear RRC with that evergreen number yet again…

Tareef teri nikli hai dil se,
Aayi hai lab pe, ban ke qawaali!

Highlights of Volume 53 (Y.E. 31st March, 2022)

•    67 Articles (an average of more than 5 articles a month) in addition to 24 Regular Features.
•    3 New Series during the year [International Taxation – MLI Series; Accountancy and Audit – CARO 2020 Series; Practice Management and Technology – Digital Workplace Series].
•    2 Reader Surveys.
•    A Unique Industry Article – JDA Structuring: A 360-degree View.
•   Annual Special Issue – Effects of the Pandemic on the CA Profession, the Economy, and the Human Psyche [July 2021].
•    Cryptocurrencies – Covered holistically under the sections on Laws and Business, Taxation & Accounts and Audit.

At a Glance: Listing of Articles Published in Volume 53

Accountancy and Audit
•    Revisiting Auditing Standards [April, 2021]
•    Audit: Building Public Trust [June, 2021]
•    CARO 2020 Series: New Clauses and Modifications: Property, Plant & Equipment & Intangible Assets [June, 2021]
•    Auditor’s Reporting – Unveiling the Ultimate Beneficiary of Funding Transactions [July, 2021]
•    Covid Impact on Internal Controls Over Financial Reporting [August, 2021]
•    CARO 2020 Series: New Clauses and Modifications – Inventories and Other Current Assets [August, 2021]
•    CARO 2020 Series: New Clauses and Modifications- Loans & Advances, Guarantees & Investments [October, 2021]
•    Going Concern Assessment by Management [October, 2021]
•    Auditors Evaluation of Going Concern Assessment [November, 2021]
•    CARO 2020 Series: New Clauses and Modifications – Deposits, Loans and Borrowings [November, 2021]
•    CARO 2020 Series: Frauds and Unrecorded Transactions [December, 2021]
•    Accounting Treatment of Cryptocurrencies [December, 2021]
•    NOCLAR (Non-Compliance with Laws and Regulations) [December, 2021]
•    CARO 2020 Series: Non-Banking Finance Companies (NBFCs) [Including Core Investment Companies] [January, 2022]
•    Audit Quality Maturity Model – What is Your Score? [February, 2022]
•    CARO 2020 Series: Reporting on Financial Position [February, 2022]
•    Auditor’s Reporting – Group Audit and Using the Work of Other Auditors [March, 2022]
•    Internal Control Considerations for Upcoming Audits [March, 2022]
•    The ESG Agenda and Implications for C-Suite and Corporate India [March, 2022]
•    CARO 2020 Series: Resignation of Statutory Auditors and CSR [March, 2022]

Corporate and Other Laws
•    Cognizance of the Offence of Money-laundering [April, 2021]
•    Understanding Prepack Resolution [April, 2021]
•    Valuation of Contingent Consideration [August, 2021]
•    Introduction to Accredited Investors – The New Investor Diaspora [August, 2021]
•    Special Purpose Acquisition Companies – Accounting and Tax Issues [September, 2021]
•    Implications of Key Amendments to Companies Act, 2013 on Management and Auditors [September, 2021]
•    India’s Macro-economic & Financial Problems and Some Macro-level Solutions [September, 2021]
•    Empowering Independent Directors [October, 2021]
•    Person in Control (PIC):  New Modification in the Entity [November, 2021]
•    SEBI Tightens Regulations for Related Party Transactions – Key Amendments and Auditor’s Responsibilities [January, 2022]
•    Do Conglomerate Structures Facilitate Business Efficiency? [January, 2022]

Direct Taxes
•    Covid Impact and Tax Residential Status: The Conundrum Continues [April, 2021]
•    I Had a Dream [April, 2021]
•    Changes in Partnership Taxation in Case of Capital Gain by Finance Act, 2021 [May, 2021]
•    JDA Structuring: A 360-degree View [May, 2021]
•    Unfairness and the Indian Tax System [June, 2021]
•    Faceless Regime under Income-tax Law: Some Issues and the Way Forward [July, 2021]
•    Slump Sale – Amendments by Finance Act, 2021 [July, 2021]
•    Should Charity Suffer the Wrath of Section 50C? [August, 2021]
•    The Ghost of B.C. Srinivasa Setty is not yet Exorcised in India [February, 2022]
•    Does Transfer of Equity Shares Under Offer for Sale (OFS) During the Process of Listing Trigger any Capital Gains? [February, 2022]
•    Fungibility Of Direct Tax and Indirect Tax For Individual Income Taxpayers And Income Tax Returns Filers [March, 2022]

International Taxation
•    MLI Series: Introduction and Background of MLI, Including Applicability, Compatibility and Effect [April, 2021]
•    MLI Series: Dual Resident Entities – Article 4 of MLI [May, 2021]
•    MLI Series: Anti-tax Avoidance Measures for Capital Gains: Article 9 of MLI [June, 2021]
•    MLI Series: MAP 2.0 – Dispute Resolution Framework under The Multilateral Convention [August, 2021]
•    MLI Series: Analysis of Articles 3, 5 & 11 of the MLI [September, 2021]
•    MLI Series: Article 13: Artificial Avoidance of PE through Specific Activity Exemption [October, 2021]
•    TLA 2021 – A Dignified Exit from a Self-Splashed Mess: An Analysis of Reversal of Retrospective Amendment [October, 2021]
•    MLI Series:  Article 10 – Anti-Abuse Rule for PEs Situated in Third Jurisdictions (Part 1) [December, 2021]
•    Value chain analysis – Adding Value to Arm’s Length Principle [December, 2021]
•    MLI Series: Article 10- Anti-Abuse Rule for PEs Situated in Third Jurisdictions (Part 2) [January, 2022]
•    MLI Series: Purpose of a Covered Tax Agreement, Prevention of Treaty Abuse: Article 6 and 7 of MLI [February, 2022]

Practice Management and Technology
•    Rolling out ‘Coaching’ in Professional Services Firms [April, 2021]
•    Youtube- How to Use it As a Branding Tool [May, 2021]
•    Strategy: The Heart of Business – Part II [May, 2021]
•    Personal Branding for CAs [May, 2021]
•    Creating Your Digital Persona on Twitter #tweetandgrow [July, 2021]
•    Digitial Workplace – A Stitch in Time Saves Nine [August, 2021]
•    Digital Workplace – When All Roads Lead to Rome… [September, 2021]
•    Digital Workplace: Finding the Right Balance [October, 2021]
•    Change is Constant [December, 2021]
•    Smallcase Investing – An innovative concept for retail investors [January, 2022]

Indirect Taxes
•    Latent Issues Under GST Law on Interception, Detention, Inspection & Confiscation of Goods in Transit [October, 2021]

Annual Special Issue – Effects of the Pandemic on the CA Profession, the Economy, and the Human Psyche
•    CA Profession in the Post-Covid Era: Doom or Boom? [July, 2021]
•    Effect of Covid on Economy [July, 2021]
•    Into that Heaven of Freedom, My Father…. [July, 2021]

Surveys
•    Auditors’ Report – BCAJ Survey of Auditors, Users and Preparers [July, 2021]
•    Statutory Audit – BCAJ Survey on Perspectives on NFRA Consultation Paper [November, 2021]

CENTRAL GOVERNMENT BUDGETS: RECEIPTS SIDE TRENDS AND LEARNINGS FOR FUTURE ACTIONS

We are all aware that the Budget document is a Receipts and Payments Statement of the Central Government for the year the Budget is prepared for and the comparative previous years.

The Central Government Budgets Statement of Receipts has four main breakups:

1)    Actual Receipts of the accounting year previous to the accounting year the Budget is being announced in.

2)    Budget Estimates of the current ongoing year as submitted when the Budget is presented to Parliament.

3)    Revised Budget Estimates of the current ongoing year ending being informed to Parliament.

4)    Budget Estimates for the year the Budget is submitted for Parliamentary approval.

Therefore, the Budget document for the year 2022-23 would have Actuals for 2020-21, Budget Estimates and Revised Budget Estimates for the year 2021-22 and Budget Estimates for the year 2022-23.

We need to understand that effective July 2017, GST replaced multiple indirect taxes. GST implementation was followed by periods of tightening controls and the two-year pandemic impact. The GST collections for the last three months (January – March, 2022) show buoyancy, and it is hoped that the buoyancy will stay intact as consumption revives, though inflation could impact consumption.

Table A – Composition of Central Government Budget Receipts

(In Rs.Crores)

Types of Receipts

Actuals
2014-15

Actuals
2017-18

Actuals
2020-21

Revised Estimate
2021-22

Budget Estimate
2022-23

Revenue Receipts

 

 

 

 

 

Corporation Tax

428,925

571,202

457,719

635,000

720,000

Income Tax

265,733

430,772

487,144

615,000

700,000

Wealth Tax

1,086

63

12

–

–

Total – Direct Taxes

695,744

1,002,037

944,875

1,250,000

1,420,000

Indirect Taxes

549,141

916,971

1,082,228

1,266,059

1,337,820

 

 

 

 

 

 

Gross Tax Revenue

1,244,885

1,919,008

2,027,103

2,516,059

2,757,820

Non-Tax Revenue

197,857

192,744

207,633

313,791

269,651

Total Revenue Receipts

1,442,742

2,111,752

2,234,736

2,829,850

3,027,471

 

 

 

 

 

 

CAPITAL RECEIPTS

484,448

702,650

1,883,105

1,516,877

1,739,735

Gross Total Receipts

1,927,190

2,814,402

4,117,841

4,346,727

4,767,206

 

 

 

 

 

 

Less – States share of Tax collection

(337,808)

(673,005)

(594,997)

(744,785)

(816,649)

Transfers to NCCF/NDRF

(3,461)

(3,515)

(5,820)

(6,130)

(6,400)

Total Receipts-Centre (Net)

1,585,921

2,137,882

3,517,024

3,595,812

3,944,157

 

 

 

 

 

 

Ratios

 

 

 

 

 

Direct Tax as % of Gross

Total Receipts

36.10

35.60

22.95

28.76

29.79

Indirect Tax as % of
Gross Total Receipts

28.49

32.58

26.28

29.13

28.06

States share of taxes – %
of Total Tax Revenues

27.14

35.07

29.35

29.60

29.61

Total Taxes as % of
Gross Total Receipts

64.60

68.19

49.23

57.88

57.85

Capital Receipts (incl. divestment) as % of
Gross Total Receipts

25.14

24.97

45.73

34.90

36.49

Income Tax as % of  Gross Total Receipts

13.79

15.31

11.83

14.15

14.68

Source: Budget Documents uploaded on Internet

The Budget process could be used for the following disclosures and computations purposes:

1)    Disclose amounts the Government of India (GOI) may have to pay towards various forms of subsidies to state governments, corporates, devolution of tax revenues etc. Let the dues be computed on an accrual basis less the amounts considered as paid through the budget process. The balance liability should be shown as dues payable.

2)    What is the future pension liability on an actuarial basis the GOI is carrying?

3)    What are claims against the GOI from domestic/overseas corporates or governments (including state governments) though they may be in dispute from the GOI end.

4)    If there are tax or other commercial claims by the GOI against corporates – these claims could be split into private sector corporates and public sector corporates. If there is a commonality between disputes by both private and public sector units, instead of the revenue authorities wasting taxpayer money by proceeding against companies on the strength that their tax claims are correct, should they not have serious discussions within themselves and review whether the tax claims made by them are tenable and they have not gone into a classic tax overreach. This could be a very important decision because much of judicial time and taxpayer money could be saved.

In the disclosures of the above four restricted points, the Government of India is being requested to provide information that all Indian corporates are expected to provide at the time they submit their audited accounts to stakeholders. It makes for superior disclosures quality and would be very useful at the time of country ratings and review of financial and economic management.

The time has come for India to not just have an Inflow/Outflow of Funds Budget, but also to reveal that which has not been considered in the Budget process as liabilities which may have to be settled in the future or look at the tenability of claims that they are raising. The fair value of assets in terms of claims would then be known. Recognition of assets and liabilities are important elements of a budgetary process. You can manage inflows/outflows until the day of reckoning arrives but being aware of liabilities and assets, and open disclosure of the same will force an action mode.

THE CANTEEN BILL

Here is a story of a raid by Excise authorities. I am told this is a true incident that occurred in Pune.

Mr. Joshi was a hardcore technocrat but an accomplished businessman, very disciplined and upright, and uncompromising on his principles. His business of manufacturing certain engineering goods was very prosperous. Mr. Joshi believed in clean and transparent financial records. Therefore, his company’s Chartered Accountant never had any difficulty completing his audit, submitting all documents and other forms under any law, tax payments, and other compliances. The CA’s fees also used to be paid regularly and in time, within seven days from receiving his invoice.

All the workers and staff members of Mr. Joshi’s company were well trained, satisfied with the working conditions, happy with the remuneration and naturally, loyal to the company. In short, it was a dream situation for all concerned – a role model. The assessments of income and all other revenue laws were very smooth.

The Revenue authorities were rather unhappy with this type of an assessee. They had no ‘incentive’ in this case. Mr. Joshi did not mind fighting up to the highest forum for justice. If there was anything unfair in any law, he had the courage to raise his voice against it and approach the Government for necessary amendments. The Revenue authorities used to think twice before raising any objection on his records or his stand.

In short, Mr. Joshi’s position in his business and his performance on all fronts was too nice to be true! But fortunately, it was a reality. Naturally, some people were jealous due to rivalry. They used to file mischievous complaints against him.

One day, there was a raid on his factory on the pretext of some ‘information’. The Authorities came with the police force. Mr. Joshi coolly received them and asked them to go to any place and check anything, but warned them that they should not harass any employee or disturb the production process. He told them that they could meet him after they finished. The employees also were calm and undisturbed.

The authorities resorted to all types of tricks and intimidating tactics. They checked everything very thoroughly and interrogated the staff. Mr. Joshi was in his cabin throughout the day, entertaining his visitors. At the end of the day, the authorities were tired. They could not find any flaw. They virtually surrendered and wound up the raid. They came to meet Mr. Joshi who smilingly inquired whether they found anything and said that if anything were even slightly wrong, he would close his business! He maintained his cool despite some over smartness of the authorities. He apologised that he could not spare time for them since he had important visitors from abroad.

The authorities finally said, “we would get nothing out of the raid, especially when we saw that during lunchtime, your tiffin came from your residence, and you and your two sons had your lunch without even offering anything to us!” They admitted that it was an unprecedented experience for them!

“OK, Mr. Joshi, we have finished our job. Congratulations on your excellent, disciplined and transparent record keeping. We take your leave”.

“Oh! How can you leave like that? You had lunch and snacks in our canteen; and this is the bill of our canteen – Rs. 24,370. I will appreciate it if you clear it before leaving, as the canteen-man is accountable for this!’ said Mr. Joshi.

Is any of us having such a client?

OTHER MISCONDUCT

Shrikrishna: Arjun, you look quite relaxed today. I am sure you have uploaded all audited accounts comfortably.

Arjun: Yes, Bhagwan. At the time of every signing and uploading, I used to chant your name!

Shrikrishna: Why?

Arjun: At the time of signing, I pray that the blunders committed by us should not be exposed; and at the time of uploading, I pray that the technology should not fail. It is a task in itself!

Shrikrishna: Why do you think of blunders? You got so much time.

Arjun: True, but no accounts in today’s world can ever be perfect! Too much work at a time, no competent assistants, clients own imperfection and indifference; too much of regulation; and above all, our own ignorance and inefficiency, some error or other is inevitable and can be held as ‘negligence’.

Shrikrishna: Professional misconduct! But today, I heard something about ‘other misconduct’.

Arjun: You mean section 22 of the CA Act?

Shrikrishna: Yes, now even other misconduct is largely codified in the sense that Part IV of First Schedule and Part III of Second Schedule of CA Act provide for the ‘other misconduct’.

Arjun: Yes, – for example, you are held guilty by some other civil or criminal court, and the prescribed punishment is of ‘imprisonment’.

Shrikrishna: And also, bringing disrepute to the profession.

Arjun: What case you heard of other misconduct?

Shrikrishna: In one of the CA firms, a partner retired at 65 as per their deed of partnership.

Arjun: Then?

Shrikrishna: He signed the settlement of accounts – based on audited financial statements. But after a few months, when his accounts were to be explained in his income tax scrutiny, he noticed that he had introduced about Rs. 20 lakhs into the firm, and the same had not been credited to his account!

Arjun: Oh! Then where had it gone?

Shrikrishna: To some other account.

Arjun: Surprising! Then what happened?

Shrikrishna: He wrote to his ex-partners; and pointed out the discrepancy. He asked for that amount to be paid to him.

Arjun: Naturally! The partners would have immediately accepted.

Shrikrishna: No, my dear! The partners said, since you have signed the settlement sheet, now you won’t get it!

Arjun: Disgusting! Shameful!

Shrikrishna: Poor fellow has been following up with them for the last 5 years! They are not even responding.

Arjun: It is really a disgrace to our profession. In fact, it is against basic human courtesy. Forget about the profession.

Shrikrishna: True. But there are members like this!
Arjun: And what about auditors?

Shrikrishna: Obviously, they had signed the tax audit. So, the person wrote to the auditors as well.

Arjun: And what was their response?

Shrikrishna: Same thing. No response at all!

Arjun: This is really unbecoming of a professional. How can a CA behave like this with another CA? and that also, with own ex-partner?

Shrikrishna: True, that is why I had often told you that you people are utterly lacking in unity. Since there is no unity amongst yourself, people take advantage. Ultimately the profession suffers.

Arjun: Yes, we should come out of this mindset of distrust, and there should be more cordiality and cooperation among all of us or else we are ourselves to suffer.

Shrikrishna: If your own partner does not pay your legitimate dues, how a client will pay you promptly and smoothly. Think it over seriously and act soon. It is high time you all introspect and improve your ways.

SOME INTERESTING WEBSITES

In this issue, we cover some interesting websites useful for daily use to increase our productivity.

PEXELS.COM

 

We often need to use photos from the web in our presentations, blogs, brochures or websites. Looking up images online and using them is always fraught with copyright and proprietary risks. You never know when you could be sued!

Pexels is a free stock photo and video website and app that helps designers, bloggers, and everyone looking for visuals to find great photos and videos that can be downloaded and used for free. If you see an image or video you like, simply download it – no strings attached! All photos and videos on Pexels are free for commercial use also. The only condition is that you should not profess that the projected pictures endorse your product or service. Of course, you cannot sell the photos or videos unless you have edited them or added value to the original.

If you wish, you could create your account at Pexels, which would help you create collections, follow photographers you love and get a customized, curated homepage depending on your preferences. And, if you’d like to contribute your work to Pexels, they accept photos and videos from everyone.

So go ahead and get world famous with your pics and videos!

Website: https://pexels.com  
Android: https://bit.ly/3uOKzke       
iOS: https://apple.co/3BeoZad

REMOVE.BG


This very simple website does what it says – it just removes the background from any of your photos. More often than not, when we have wonderful pics, they are marred by the background, and it is painfully difficult to remove.

In such cases, you need to head to https://remove.bg and upload your pic there, and within seconds, you can get the same pic without the background. The AI engine that drives the entire process is very efficient and can instantly give you the pic with a transparent background. You could use this for portraits, pets and even objects.

And, if you want more than the original with a transparent background, you may automatically turn that image into a design with another elaborate background with a single click! With various embellishments available, you can surprise yourself and your friends with an excellent pic with a background of your choice!

Website: https://www.remove.bg/

EMICALCULATOR.NET


 
This is a very simple and efficient EMI calculator online. Just enter the principal amount, interest rate, and loan period, and you will instantly get the EMI. It also gives you the calculations and the working for the entire calculation, the principal amount repaid, the interest you are paying each year, and their totals over the entire loan period.

If you are working for a bank or financial institution and have to do these calculations daily, they have a mobile-friendly EMI Calculator widget that you can install on your phone.

If you have a Banking or Financial Website developed on WordPress, they also provide you with a WordPress plugin which you could incorporate directly on your website and allow your users to do the calculations right on your WordPress website.

Website: https://emicalculator.net/
Android: https://bit.ly/3HNrz9B      
iOS: https://apple.co/3rGfA86

MANUALSLIB.COM


 
In this modern age, we purchase and use many devices and gadgets in our homes and offices. They all come with a warranty and a manual. The manual is invariably misplaced and difficult to find when the warranty is over. And after five years, the company website may not have the required manual or may be very difficult to locate.

In comes ManualsLib.com, with manuals of over 3.9 million products belonging to more than 1,07,000 brands. Just type in the Brand Name, Product and Model Number, and you will instantly get a pdf version of the manual you are looking for, no lengthy multi-level searches which may take a while.

They also have an Android App which performs the same function – you may also add manuals and guides to your ‘My Manuals’ list, create folders for easy access and even search inside a document!

A very valuable tool to get your manual instantly at your fingertips.

Website: https://www.manualslib.com/
Android : https://bit.ly/3BinKGX

BOOK EXTRACT

BANKING DECEITS: ROGUE CREDIT CULTURE

“A diamond is forever” is the tag line of De Beers, the world’s household name for diamonds. Nirav Modi diamonds, which aspired to be the Indian De Beers brand equivalent, however failed to get its name etched as a diamond jeweller forever.

The unassuming Nirav Modi, owner of the once famed brand, grew up in Belgium, got admitted to Wharton School but failed to continue. He moved back to India in 1990 when he was 19. He trained for the diamond jewellery business under the sharp eyes of his uncle Mehul Choksi, promoter of another scam-hit, stock-market listed company, Gitanjali Gems.

In 1999, Nirav Modi branched out on his own, under the banner of Firestar Diamonds, starting his own diamond jewellery-making facility in India. Meanwhile the diamond industry was undergoing two major shifts. First, brands loomed large on the landscape that was once ruled by mom-and-pop boutiques and family jewellers. Clients began moving to branded jewellery – assurance of ethics was needed to repose trust. Second, design started taking precedence – shifting to ‘wearable’ creativity instead of just traditional diamonds and stones.

Nirav Modi took full advantage of these shifts in consumer preference. He realized that the luxury jewellery market was red hot, pushing into the ultra-luxe retail jewellery market in 2010. With the tagline “Haut Diamantaire”, he launched an eponymous jewellery business branded NIRAV MODI with 8 boutiques worldwide, including high street luxury stores in London, New York and Hong Kong.

Nirav Modi was just flying higher and higher in the $275 billion global jewellery market. Firestar group turnover grew to a whopping Rs 14,700 crore ($2 billion) by 2016-17 and he expressed his vision of having 100 stores by 2025. His name became the stamp of corporate India’s growing global status.

His diamonds sparkled on Hollywood red-carpets, adorning the necks and earlobes of celebrities like Kate Winslet. Back home in India, the Nirav Modi brand was splashed on hoardings across Delhi and Mumbai bearing the image of its global brand ambassador, actor and former Miss World, Priyanka Chopra.

Then came out the fraud – the mega heist structured by the borrower, aided by the lender. Nirav Modi used the classical method of relying on bank insiders, greasing palms and dodging technology, more than using it.

His lender, Punjab National Bank (PNB) stunned markets when it declared in February 2018 that its Mumbai branch in Fort area has lost over Rs 11,000 crore ($1.5 billion). Nirav Modi, three of his relatives (his wife, brother and uncle Mehul Choksi) and three firms (Diamonds R US, Solar Exports and Stellar Diamonds) in which Modi and Choksi were partners, got embroiled in one of the largest scams in the Indian financial market.

How was the fraud committed? It began with the diamond firms approaching PNB for financing import of rough diamonds. The much popular Letter of Credit (LC) facilities were opened by the bank, in favour of Nirav Modi’s firms, which allowed credit for a certain period. Nirav Modi bribed his way to obtain the LCs without any security, which is the primary requirement for any such facility. What these LCs allowed were imports for which payment can be made by the importer to the bank later that is, after the agreed credit period.

Based on the strength of the LCs, Nirav Modi firms got PNB to open Letters of Undertakings (LoUs) apparently for one year (though legally, it could not exceed three months), on foreign branches of certain Indian banks (LoU is a bank guarantee which allows bank’s customer to raise money from another Indian bank’s foreign branch in the form of short-term credit). When these LoUs were shown at the foreign branches, these banks remitted funds to PNB’s Nostro Accounts (accounts PNB had with the overseas banks). The available funds were then drawn and utilized by Nirav Modi’s team.

It was expected that Nirav Modi’s firms would settle their obligations with PNB on the expiry of the LoU period. This last leg did not happen; and this was the problem and obviously the swindle!

About 150 LoUs were fake – issued by a few PNB employees. Based on these unauthorized LoUs, PNB employees misused SWIFT network to transmit messages to foreign banks communicating details of sanctioned LoUs; by wilfully not recording these SWIFT messages in the bank’s core system. These omissions made the transactions by-pass the main PNB banking control system.   

When the news of the fraud got flashed all over – ironically on a Valentine’s Day – Nirav Modi’s abrupt upsurge to eminence came crashing down.

Why did he cheat? A logical reason could be his need for continuous funding. The pace of growth of his business was so fast and furious, it was perhaps difficult for him to fund his enormous marketing cost, super-model remunerations, new luxury-stores and investing in working capital.

Nirav Modi tagline “Say Yes, Forever” was literally followed by the lax Indian bank by continuing to heed his request for incessant loan-guarantees, fraudulently or otherwise.

Nirav Modi’s troubles mirror those of another Indian tycoon, Vijay Mallya. [Both Nirav Modi and Vijay Mallya are holed up in UK with the Indian government desperately trying to lock them up in Indian jails.]

When corporate tycoons run away with the money they have borrowed from banks, what credit culture are we talking about? It is sheer corporate crime of the highest order.  

Instances abound on entrepreneurs running away after loan defaults, especially when they have the ability to pay but do not do so. These instances raise doubts on the prevalent credit habits among the Indian corporates. It is true that all businesses cannot be painted with the same brush. But thousands including big names like Winsome Diamonds, Zoom Developers, Varun Industries, S Kumars and DSQ Software have taken the banking system to the cleaners.

Exasperated over the behaviour of certain borrowers, India’s largest banker lamented in 2017 that they no longer trusted ‘steel companies’. It was a sad day. Arundhati Bhattacharya, ex-State Bank of India chief, slammed steel firms for being non-transparent in their data presentation to the banks – disappointed over the way the industry misrepresented by twisting facts, while seeking loans. It was a bank-chief’s way of expressing annoyance over corporate India’s attitude towards taking bank funding and servicing thereof.

Many woes of non-payment in the Indian economy are due to past instances of political gridlocks, delayed permissions and economic slowdown. But it does not provide the license to any borrower, not to repay its liabilities willingly. Poor business conditions leading to banking defaults are excusable, but not when the borrower wilfully defaults. Sadly, numerous borrowers default in paying bank debts even when economic situations improve. This is poor corporate culture.

Tailpiece

Credit is oxygen to business. Its adequate flow is a necessity for any business to function effectively. The loans disbursed need to be supervised and recovered by the lenders, in accordance with the lending terms. But what if the borrower does not, purposefully? This is a significant issue of banking fraud. Money borrowed if properly utilised for intended purposes are often duly paid-back. But if the borrowed sums are either siphoned off, money laundered or used for unapproved projects, it becomes a huge hoax.  

Not returning money borrowed are deceptions which render short term gains to the borrowers but obliterate their long term wellbeing.

Extract from the book: CORPORATE FRAUDS: BIGGER, BROADER, BOLDER  by Robin Banerjee
Chapter 6 titled “Banking Deceits”, Pages 114-118

ABOUT THE BOOK

Think of East India Company. This business outfit came to India to do business and then stayed on to loot for 200 years. And this is not a solitary instance of corporate artifice.

Look around, and you will find businesses are cheating on you and me.

Take instances like banking mischiefs, which have been long known. It happens both ways. When banks are cheated and when banks cheat on us.

Many rich hide their wealth. Money laundering, creating shell companies, offshore banking and hiding ill-gotten wealth from the taxmen, are practised by many of the who’s who of our society.

Converting black money into white and vice versa is rather popular. Try to buy a home, and the chances are that a proportion needs to be paid in black. And you will need to figure out ways to acquire it!

Stock markets are somewhere we place our confidence to maximise our savings. But it’s full of potholes. Instances of insider trading, penny stocks, short selling, falsified profit numbers of companies are rather common.
Our way of knowing how companies perform is through their accounting numbers. But there are various ways to doctor them. This is a colossal  value destroyer.

There are numerous such stories and anecdotes in the book – over 350 of them. Simply written in understandable form, for all of us to understand. A recommended reading for all professionals.

SHOCK

A very interesting case was going on in the Court. The issue was very sensitive, and there were many stakeholders. The case had many social and financial ramifications. One party to the dispute was very influential and financially sound. The opponent party was aggrieved was not so resourceful.

The influential party had engaged a very reputed counsel who had an enviable track record of success. He and his client both were celebrities. The other party was a mediocre person. He could not afford a senior counsel. He had engaged a not so well-known junior counsel.  People had concluded that it was then a one-sided battle.

However, contrary to the expectations of all, the junior counsel fought it brilliantly. He had taken it as a challenge. And merits were really on his side. In the good old days, such merits had a good value in courts of law. Today, truth has to live with a lot of fear, and it does not come out that easily. It gets buried under money or muscle power!

Many experienced lawyers say that they win the cases not because of merits or their arguing skills, but just because the opponent’s lawyer is often not well prepared. In this case, the senior counsel, as usual, was very well prepared and had not taken it lightly. Still, the junior posed a great challenge to the senior. He made such brilliant arguments so beautifully that the people in the courtroom were pleasantly surprised. They were impressed. The senior was often put into a defensive position.

The balance had clearly tiled on the juniors side. The mediocre party was completely satisfied with his counsel’s performance.

He could barely afford the juniors counsel’s fees but had no means to purchase the decision.

The court was adjourned. The decision was to be announced the next day. The senior counsel was a little embarrassed, while the junior appeared to be triumphant. Many people congratulated him and even the media persons were all praise for him. The curiosity about the decision was mounting!.

The next day the proceedings resumed. The influential party and his counsel were very cool. The other party was very anxious. There was a pin-drop silence when the court started reading the judgement. The contents appeared to be quite balanced, though a little in favour of the smaller party.

However, unfortunately, the final verdict went against the junior; everybody was stunned! The influential party and his counsel were smiling as if they knew the outcome beforehand.

The junior counsel stood up and exclaimed –“I am shocked by this decision!” The court looked at him with a frown. It took it as an offence. People were confused about reacting, although they held the same opinion. There were anxious moments in the Court.

However, a very senior and respected counsel came to the rescue of junior counsel. He said, “My Lord, please forgive my learned young friend. He is new and has not much experience. Had he been experienced enough, he would not have been even half as much shocked as he is today!”

TAX PLANNING? BE CAREFUL

Shrikrishna: Arjun, you are looking very worried today. I’m sure the compliance pressure of tax deadlines keeps you under stress.

Arjun: Yes, Bhagwan. That stress is always there. We are now quite used to it. But there is something else.

Shrikrishna: Really? And what’s that?

Arjun: That my friend, Ritesh…

Shrikrishna: Yes. I know him. His office is adjoining yours. Right?

Arjun: Yes. He is in deep trouble.

Shrikrishna: What happened?

Arjun: A girl closely known to him got married into a business family.

Shrikrishna: Very good. When?

Arjun: About 15 years ago.

Shrikrishna: Oh! Then what is the problem now?

Arjun: Her in-laws are Ritesh’s clients. The entire group.

Shrikrishna: Good.

Arjun: At their request, Ritesh suggested ideas of tax planning. He built up a good amount of capital in her name. Actually, she was only a home-maker. Not even a graduate! She was shown to be earning some salary over the years.

Shrikrishna: So, where’s the problem?

Arjun: Now, she is separating from her husband.

Shrikrishna: Oh! After 15 years? This is kaliyug. No relations are permanent.

Arjun: And she is claiming a big amount in alimony. A good amount of capital stands in her name. She says she is a housewife and has no source of income.

Shrikrishna: So what? There must be some documentation. Some evidence of employment.

Arjun: No, Bhagwan. Ritesh had shown her as his employee. And her salary was ‘paid’ in cash. Later, she was shown to be in employment with some group company.

Shrikrishna: Oh! Interesting.

Arjun: There is no documentation whatsoever. All returns of the family members including her return were filed through Ritesh’s office; and she is demanding the tax records from him.

Shrikrishna: He has to give them to her – Isn’t it?

Arjun: True. But that will bring the family into trouble. She has great nuisance value.

Shrikrishna: It’s better to settle it amicably.

Arjun: She has threatened that she will approach the Institute if the CA refuses to give the file. Now, he is in a dilemma.

Shrikrishna: Arjun, I have always been telling you to give up the short-sighted approach. There are many instances of separation of spouses even after 30 to 40 years of married life. Social life is now vitiated.

Arjun: I agree. You have been warning me – not to do anything in good faith.

Shrikrishna: Due to the inevitable dispute between any two persons, the things done with good intentions are viewed maliciously afterwards. The context in which a thing is done is conveniently forgotten.

Arjun: Anything can misfire. So, careful and timely documentation is essential.

Shrikrishna: Yes. There are instances where two of the Directors sign the financials; meetings are not held. Secretarial record is lacking. And when there is a dispute among Directors, they disown everything. They say, they were never shown any balance sheet, no meetings were ever called. And the two Directors are in collusion with the auditor. They have manipulated the accounts with the help of the auditor.

Arjun: True. I have heard of such cases. Then, what is the remedy?

Shrikrishna: Documentation! Working papers! Secretarial records, minutes. The faintest of inks is stronger than the strongest of memories! And, preferably, keep a balance sheet copy signed by all Directors or partners or trustees, managing committee members… and so on.

Arjun: Very good advice. An eye-opener.

Shrikrishna: This is not a complete solution. It only protects you from allegations that they were kept in the dark. After all, every small thing should be properly documented with signatures of the persons concerned.

Arjun: Thank you, Bhagwan. I will always keep this in mind. Please bless me.

Shrikrishna: Tathaastu!

!! OM SHANTI !!

(This dialogue is based on the common experience of loose documentation, weak tax planning, breaking relationships in the society and the consequences on the profession.)

TELEGRAM

In the world of instant messaging, Whatsapp is the number one. However, with increasing discovery of security issues in Whatsapp, Telegram is fast catching up. Telegram is a Whatsapp alternative which is fast, simple, secure and available across devices. You can send media and files without any size limitation (Whatsapp has limitations) – your entire chat history will require no disk space on your device and will be securely stored in the Telegram cloud for as long as you need it.

In Whatsapp if you create groups there is a limitation of 256 members. On Telegram, you can create groups with 2,00,000 members!

Telegram can be used on multiple devices simultaneously. This makes it so much more flexible to handle. Also, if you change your mobile number, you can easily migrate to the new number without any problem – in your settings you just go and change your number.

You can also create polls on the fly – no need to have any programming knowledge. In a group conversation just tap on attachments and the option for poll will be visible. Once you tap on that, you can create your own poll, define your questions, propose multiple choice answers and launch your poll instantly. The group members can respond – the results are visible online. Very neat!

There is a facility to neatly organise your chats in folders. So you can have a folder for your office chats, family chats or any other topic of your choice. Once you create folders and assign groups and any individual conversations there, it becomes very easy to search / locate any conversation.

There are a host of options when you send messages – you can send silent messages, schedule messages for a later date and time, send self-destructing messages, edit or delete messages after sending them and even save messages for future reference. There is an option for setting reminders for yourself, too! And just like Whatsapp, you could share your live location to your contacts / groups.

If you wish to send YouTube videos or GIFs you may search directly from your text-send window. Telegram has its own browser also, so if you click on a link, it will open in Telegram itself. It also has powerful photo and video editing tools and an open sticker / GIF platform to cater to your creative genes. It is 100% free, without ads, and there is no third-party access to your data.

In terms of privacy, Telegram offers many features – you can turn notifications on / off for multiple actions, individually or for groups. You can choose not to be added to groups by random people and also by your friends.

For those interested in maximum privacy, Telegram offers Secret Chat. Messages can be programmed to self-destruct after a pre-determined time frame after reading. This feature is now available in normal chats also.

All in all, Telegram is a growing, safe and secure platform for instant messaging. Try it out today!

Android: http://bit.ly/2Povr7E /iOS: https://apple.co/2VjExqd  

BOOK REVIEW

FORENSIC INVESTIGATIONS AND FRAUD REPORTING IN INDIA

Authors: Sandeep Baldava and Deepa Agarwal

Reviewed by Satish Shenoy

A home without books is like a body without a soul. My major investment in life is books. I was delighted when my professional colleagues Sandeep and Deepa gave me this book, fresh from the press. Something inside me instantly told me that I need to read this book cover to cover. Our minds are truly shaped by the books we read.

Here are a few thoughts on the book.

This book, aimed to benefit a cross-section of professionals, including Forensic Practitioners, Independent Directors and Audit Committee Members, CEOs / CFOs / CHROs, Statutory Auditors, Internal Auditors, Corporate, Legal, Accounting and Compliance teams and students alike, introduces all the essential ideas that are to be found in the work of Forensic Investigations and Fraud Reporting in India in a concise and straightforward manner. Each activity is described not only in terms of its relevance but also the science and reasoning that underpins it.

Be insatiably curious. Ask ‘why’ a lot – and that’s exactly what the authors did. While employing examples from Forensic Investigation, the book uses principles and ideas applicable to most of the forensic sciences. The authors examine the role of the investigator, describe the fundamental methods for investigation, discuss the optimal way to organise evidence and explore the most common reasons why some investigations fail. The book provides case studies that exemplify proper communication of findings. Concise and illustrative, this volume demonstrates how scientific methods can be applied to investigation in ways that avoid flawed reasoning while delivering convincing reconstruction scenarios. Investigators can pinpoint where things went wrong, providing valuable information that can prevent another catastrophe.

As I dived deep into the book, I told myself, ‘Don’t read the book and be a follower, read the book and be a student’. Covering a range of fundamental topics essential to modern Forensic Investigation, the book presents contributions and case studies from the personal files of experts in the field. It discusses the intersection of law and forensic science, how pieces of information become evidence and how courts decide whether an item or testimony is admissible. It provides insights on how practitioners must follow evidence all the way from the incident scene to laboratory analysis and even on to the judicial authorities. Going beyond theory to application, the book incorporates the wisdom of the authors who discuss anonymous real life case studies and their rich experience in the subject. Each chapter begins with an introduction and ends with a conclusion. The ‘Expert Speak’ sections at the end of a few chapters showcase contributions from high-profile experts in the field.

Life is like a book – don’t jump to the end to see if it is worth it. Going by the size of the book, I was indeed tempted to jump to the end. But my daughter Sneha read my mind (she has this uncanny knack) and remarked, ‘Daddy, just enjoy every page of it and you will find the script more interesting and exciting’. The words hit me like it was the last word said on the subject. So let me continue…

A practical, accessible and informative guide to the science of Forensic Investigations and Fraud Reporting, the book has 20 chapters very logically divided and covering the fundamentals of White Collar crime; Ethics, Integrity and Fraud; Governing Framework including roles and responsibilities of Stakeholders towards prevention, detection and investigation; Financial Statements Fraud, including roles and responsibilities of Statutory Auditors; Evolution, types, methodology and approach to FRM and Forensic Investigation; Frauds at Financial Institutions, including banks; Forensic Standards; Cyber Fraud Risks with illustrative examples of reporting. I particularly enjoyed the case studies which encompassed various facets of business such as procurement, critical information leakage, phishing, window dressing and fund diversion – the learnings are immense. I also appreciate the ease with which the roles of the Boards, the Internal Auditor, the CFOs and other CXOs are explained. The emphasis on the science of law enforcement, how evidence is gathered, processed, analysed and viewed in the courtroom and more, were a delight. This informative book also includes an extensive index, adding to its usefulness. It contains over 100 case studies, case laws and examples.

Good books are like good company. As I read the book, I got the feeling that I am in good company – well done, Sandeep and Deepa. Forensic document examination is a long-established specialty and its practitioners have regularly been shown to have acquired skills that enable them to assist the judicial process. The book introduces all the essential ideas that are crucial in the work of the Forensic Document Examiner and Fraud Reporting in a concise and straightforward manner. Each examination type is well described in detail in chapter 12.

The reader will be able to relate the different kinds of interpretative skills used by the document examiner to those used in other forensic disciplines. Besides being an invaluable text for readers, the book will also be a useful reference for researchers new to the field or practitioners looking for an accessible overview.

Written in an easy-to-understand format, this outstanding guide by two of the leading professionals with wide experience in Forensic Investigations and Reporting introduces you to the basics of Forensic Investigation and Fraud Reporting. It teaches us excellent ways to make our investigation solid and successful. It is packed with valuable information about the details of collecting, storing, and analysing all types of physical evidence.

Life is a book of mysteries; you never know which page will bring a new twist; so keep on reading and happiness will come suddenly – this is precisely what I felt when reading this book. Most investigations begin at the end of the story, namely, after the collapse. In many instances, information about the last event and the starting event is known reasonably well. Information about what occurred between these endpoints, however, is often unclear, confusing and perhaps contradictory. Chapter 13 explains how scientific investigative methods can best be used to determine why and how a particular event occurred and how it is to be reported.

Rules related to admissibility of evidence in India (13.6.4.3) explore the legal implications of forensic science – an increasingly important and complex part of the justice system. In the ‘Expert Speak’ section of chapter 13, Aditya Vikram Bhat, Senior Partner, AZB & Partners, brings out the different facets of applicability and importance of attorney-client privilege.

Assessing the strengths and limitations of each kind of evidence, the authors also discuss how they can contribute to identifying the ‘who,’ ‘how,’ and ‘whether’ questions that arise in criminal prosecutions; they draw on the depth of their Forensic Investigation and Fraud Reporting experience to provide a well-rounded look at these increasingly critical issues. Case studies have very effectively brought the issues to life and show how forensic science has been used in real-world situations.

The reader will learn how real-world forensics experts work every day in fields as diverse as Biology, Psychology, Information Technology and more. If you are interested in a forensics career, you will find out how to break in and the education you will need to do the type of forensics work that interests you the most. Written for the true forensics fan, the book does not shy away from the details – why are frauds committed (1.7), Evolution of Fraud (1.8), Definition of Fraud (chapter 2), Integrity and Ethics (chapter 3), Reporting Regulations under various statutes (chapter 4), Role of Directors (chapter 6), Role of Internal Auditors (chapter 7), Financial Statement Frauds (chapter 9), Identification of Frauds, including role of whistle-blowers (chapter 10), Types of Forensic Investigation in India (chapter 12), Audit vs. Forensic Investigation (chapter 14), Forensic Accounting and Investigation Standards by the ICAI (chapter 18), Cyber Fraud Risk and the Auditor’s Role (chapter 19) and lastly the Illustrative Reporting (chapter 20). What more can one ask from one book?

The book includes coverage of physical evidence, evidence collection, crime scene processing, pattern evidence, fingerprint evidence, questioned documents and computer and digital forensic evidence. The authors’ 40-plus years of investigation, forensic science laboratory experience, regulatory compliance and auditing experience is brought to bear on the application of forensic science to the investigation and prosecution of cases.

A truly international and multi-disciplinary compendium of current best practices authored by the ones amongst the best in the profession, the book covers current trends and technology advances in various disciplines including forensic science. The book serves as an invaluable resource and handbook for forensic professionals, auditors and directors, audit committees and CEOs / CFOs / CHROs in India

Let me list a few new learnings for me from the book – The Fraud Diamond Theory (1.7.2), Theory of Dark Triad Personality (1.7.3), Robinhood Fraudsters (1.7.4), Working of a Ponzi Scheme (Amit Garg ‘Expert Speak’), the Social Psychology of Corruption (3.4), SOX Section 302 (6.2.7), Whistle-blower complaints – CVC (10.14), some of the rules related to Admissibility of Evidence (13.6.4.3), few Insights in using Predictive Analytics for Fraud Prevention (15.6.6) and few aspects of Common Security Elements that entities may use to prevent or detect a cyber-attack (19.6.1).

I particularly liked the way that important topics were handled and here are a few examples – Case studies of White Collar Crime (1.7.6), Social Psychology of Corruption (3.4), Management’s Responsibility to
prevent Fraud (5.2), Internal Auditor in Spotlight (7.6), Stages of Identification of Fraud (8.5), Financial Statement Frauds (9.6), how to Mitigate Common Fraud Risks (9.9), Best Practices for an effective Whistle-blowing Mechanism (10.15), Impact of Whistle-blowing Systems (10.16), Learnings from Arthasastra (11.3 and 11.4), the entire chapters 12 to 14 (which to my mind are the fulcrum of the book), Case Studies on Banking Frauds (16.9 to 16.12), chapter 17 on Case Studies (real life examples based on the rich experience of the authors) and chapter 18 on ICAI Standards (which I am so proud to be an integral part of).

I read with great interest chapter 19 on Cyber Risk which appears towards the end. I must mention that the focus is limited to the role of auditors but the topic deserved more attention. Perhaps the authors will delight us with this and more in the next edition.

Let me read the mind of the authors before they started this book project, ‘If there is a book that you want to read but has not yet been written, write it.’ That’s precisely what Sandeep and Deepa have done.

A few final take-aways:
* It is better to fail with honesty than succeed with fraud.
* One best book is equal to hundred good friends.
* That’s the thing about books. They let you travel without moving your feet.
* A clear sign we are stupid is if we do not read new books.
* The problem with a good book is, the moment you read that last word, you wish you hadn’t.
Well done, Sandeep and Deepa. I am proud of you.

PAYMENT GATEWAYS

A Payment Gateway is a service that provides a payment transaction interface between a customer and the supplier. It can be used for direct payments in-store or for e-businesses or online commercial transactions. Earlier, banks were the primary payment gateway service providers. However, today specialised Fintech organisations are the preferred providers of this service.

When a customer makes a payment using a Payment Gateway, the following tasks are performed to complete the transaction:

1. Typically, the credit / debit card number is entered online, or a credit / debit card is swiped or scanned using a contactless card-reading device. In the case of online transactions, the CVV and the name on the card is also requested.
2. The card number is encrypted as soon as it is entered and transmitted to the Card Association (Master / Visa / Amex) through the Acquiring Bank.
3. The Card Association then routes the transaction to the appropriate Card Issuing Bank.
4. The Card Issuing Bank verifies the debit or credit available on the card concerned and sends a response back to the Acquiring Bank and subsequently to the Payment Gateway with a response code, i.e., whether approved or denied.
5. The Payment Gateway then conveys the response back to the device or website from which the transaction originated.
6. The merchant will then process the transaction for goods or services based on his own internal guidelines.
7. The entire process will take not more than five to ten seconds!
8. At the end of the day, or at periodic intervals, the Issuing Bank will settle the aggregate of transactions to the Acquiring Bank after deducting its commission on the same.
9. The Acquiring Bank will pay the Payment Gateway service provider who will in turn settle all amounts received on behalf of the merchant after deducting its charges for the same.

Many payment gateways also provide tools to automatically screen orders for fraud, blocked card lookups, velocity pattern analysis, ‘black-list’ lookups, IP address lookups, etc.

Points to be considered by a seller of goods and services while choosing a good Payment Gateway:

(i) The Payment Gateway needs to be fast and secure. Speed and security are the main considerations, since without either of them the Payment Gateway would be unsuitable for use.
(ii) A good Payment Gateway also needs to provide a variety of payment options to the user. Apart from Credit Cards and Debit Cards, many Payment Gateways in India also allow use of e-wallets, Online Banking and Virtual Cards. This gives total flexibility to the client and ensures that the client can complete the transaction, irrespective of his preferred mode of payment.
(iii) If your business is global, multi-currency options would be a great advantage.
(iv) Many Payment Gateways make it extremely easy to integrate them in your website or other software platforms, which can get you up and running immediately.
(v) The settlement cycle may vary from a day to a week which will depend on the number and value of transactions.
(vi) Earlier, there used to be one-time setup charges being levied by Payment Gateways – nowadays, the one-time setup charge is waived by many providers.
(vii) The per transaction fees may vary for each Payment Gateway and for each type of transaction. This is negotiable with the Payment Gateway service. The higher the value and volume of transactions, the lower will be
the per transaction fee. Typical transaction costs may have a fixed component and a variable component. The variable component may range from 0.25% to 3% of the value of the transaction.

PayPal is one of the pioneers in the field. It has an international presence and handles a variety of currencies. It is different in the way it handles payments. You have to enter your credit card information only once and create a user-id and password. PayPal will then handle all your payments going through its gateway. The merchant never gets to access your credit card information at all, hence it is completely safe.

Amazon Pay is designed for Amazon merchants and shoppers. It facilitates easy payment through its wallet which needs to be refilled from time to time.

Square is a Payment Gateway which also has its own hardware, making it very easy to acquire payments. The hardware may be in the form of a POS terminal, contactless slide-in, magstripe squares connected to your mobile or in-Stand form.

Among the Indian Payment Gateways, the most popular are Razorpay, CCAvenue, PayUBiz, Instamojo, PayTm and Atom. Each of them has similar features with ease of use and a variety of payment options. PayTm is easiest to deploy – both for the customer and the seller for offline and online transactions. However, Razorpay and Instamojo are the easiest to integrate
into your website. A detailed comparison between the 15 popular Payment Gateway providers is available at http://bit.ly/pgcomparison.

As for the risk factors, all Payment Gateways are regulated by Reserve Bank of India and have strict reporting norms. Transactions are encrypted with 128 bit (or higher) security protocol and are therefore extremely safe and reliable. Breaches, if any, are to be instantly reported and monitored. Hence, most of the popular Payment Gateways are safe and reliable on all counts. RBI Guidelines on Regulation of Payment Aggregators and Payment Gateways are available at https://bit.ly/3tpmCwm.

In these days of growing online transactions, a Payment Gateway for your website is a must-have tool, not only for selling goods and services but also for easy and smooth collection of payments!

VIRTUAL HEARING

The other day I visited the office of a senior Chartered Accountant (hereinafter ‘the senior’) unannounced after a long time. He is indeed very ‘senior’, not less than 80, but still in practice. Age is just a number for him; he is both energetic and active. Before I entered the chamber, his driver Jaya told me, ‘Sir is about to begin a virtual hearing’. But as soon as I knocked on the door, I heard him shout, ‘Get out, Tommy!’

Tommy, for your information, is his pet dog. The senior operates from his four-bedroom flat, with the hall converted into his office. And believe me, Tommy ran out as soon as I opened the door, brushing against my leg. I was caught unawares and got scared. The senior was scanning the papers littered on his table, maybe making last-minute preparations. As he heard the sound of my footsteps, he looked up, squinted at me and hurriedly waved to me to sit down. I slowly lowered myself into the chair in front of him.

‘Herambh, you! What a pleasure!’ he greeted me, as if he had been waiting for me.

‘Sir, just a courtesy call, nothing more.’

‘Herambh, you know, today is the first-ever virtual hearing of my life,’ he stated.

‘Sir, Jaya told me that when I was entering your cabin,’ I said.

‘Jaya told you? Okay, no problem.’ But the senior seemed to be nervous, his nervousness conspicuous on his face. I thought it would be better to leave.

‘Sir, I could come some other day,’ I said politely.

‘No, no, Herambh, I have no problem, you stay till the end of the hearing; look, I am not computer-savvy and this new technology, internet blah blah… you would be a great help to me,’ he said.

‘I can understand your concern, Sir, when I began to learn computers long back, I was afraid of pressing a button on the keyboard thinking something would go wrong!’

‘Are you scaring me, Herambh?’ he asked.

‘No, Sir, not at all! I was just telling you my experience from my initial days,’ I hastily clarified.

‘Look, I have learnt the ABC of computers from my grandsons Bunty and Babli who are in the 7th and 8th standards; very smart chaps. Let me call them.’ The senior got up, went to the balcony and shouted ‘Bunty-Babli, come up immediately!’

Bunty and Babli replied in chorus ‘Yes, Grandpa, coming! Last ball!’

After a while the door behind me cracked open and Bunty with a bat and Babli with the ball, both with cricket caps on their heads, entered the hall-turned-office.

‘Relax, Bunty-Babli, relax! Sit by my side, drink a glass of water.’ I observed that two chairs were arranged for Bunty and Babli on either side of the senior’s chair. They settled down and wiped their faces that were full of sweat and dust. The senior was looking at them with great pride and hope [hope, maybe, for a successful hearing]. Then he brought out two medium-size chocolate bars from a drawer and gave these to them. I was watching the scene silently, seeing the grandpa and his love and affection for his grandsons.

‘Well, Herambh, because of on-line education, Bunty and Babli are well versed with this internet technology, they will guide me in this “virtual hearing”, the first ever in my life, you know,’ confessed the senior without being asked.

‘Hello Bunty, Babli,’ I greeted them.

They somehow managed to say ‘Hi, Uncle’, in chorus, still munching on the chocolate bars.

As soon as they finished them, they took charge of all the computer apparatus on the table – keyboard, mouse, headphone, etc.

‘Grandpa, let’s start; Babli, switch on,’ Bunty ordered.

‘Yes, Dadu,’ Babli got up and switched on the main supply.

As the computer turned on, Bunty and Babli glued their eyes to the screen, searching for the internet connection.

‘Yes! Grandpa, we got the internet connection,’ shouted Bunty. Both the senior and I became alert. Following Bunty’s declaration, the senior wore his spectacles and started to locate the hearing notice which had the log-in details.

‘Bunty beta, these are the log-in details,’ the senior handed over the paper to Bunty, looking at him with great hope and placing one hand on his shoulder. On the other side, Babli was fidgeting in his chair, waiting to contribute his bit.

‘Grandpa, you are not allowing me to do anything; only Bunty beta do this, Bunty beta do that,’ complained Babli.

‘Calm down, Babli, you find my pen and mobile,’ the senior said.

Babli moved swiftly to look for the two articles in the heap of papers and files littered on the table. He somehow succeeded in his search, messing up the papers and files even further. And he handed over the mobile and the pen to the senior.

‘Good boy, God bless you.’ the Senior said, looking at Babli.

As the time of hearing was approaching, he told Bunty to log in. Doing as told, Bunty logged in and declared, ‘Grandpa, put on your specs and headphone, we are about to start the virtual hearing session.’

Fortunately, the case was before a single-member bench. At the scheduled time, there was some movement on the screen and the Member appeared.

‘Speak, grandpa, speak,’ advised Bunty and Babli in hushed tones.

‘Good morning, Sir,’ greeted the senior.

‘How are you, Bhishmacharya?’ asked the Member. Being the senior-most in Tribunal practice, the senior was addressed as ‘Bhishmacharya’ with reverence.

‘I’m fine,’ replied the senior. Having exchanged initial pleasantries, the case references were brought on record. However, the departmental representative was still not in the loop.

On the other hand, the senior was very eager to begin his first-ever experience of a ‘virtual hearing.’ But all of a sudden, the screen went blank.

‘Bunty-Babli, see what happened,’ shouted the senior.

‘Grandpa, wait, the internet may be down on the other side,’ advised Bunty.

After a while, the Member appeared on the screen. ‘Internet trouble, connectivity dropped, I wonder the learned DR is still not on air,’ said the Member.

‘Your Honour, I emailed my paper book for your ready reference well in advance, it must have reached the learned DR also,’ said the senior.

There was a pause. The senior could hear the Member’s mobile ringing. The Member picked up his phone and the senior overheard the conversation, ‘What happened? Not possible… why… power outage plus no connectivity… Oh my God!… No alternative… adjourn… next date… wait, I will call you back…”

‘Sorry, Counsel, we will have to adjourn the hearing; the learned DR says no power, no connectivity… Counsel can we make it to 1st April, is it suitable to you?’ the Member asked.

‘No problem, Your Honour, make it to 1st April,’ said the senior with a heavy heart. The Member logged off instantly. Bunty did the same. The senior took a long breath and removed the headphone. Bunty and Babli ran away to complete their interrupted cricket match. I, too, got up and consoled the senior.

‘Better luck next time, Sir; don’t be nervous, it happens very often, you are not an exception,’ and moved towards the door. And Tommy ran in to meet his master.

Thus, the first-ever virtual hearing ended with the first-ever virtual adjournment!

THE FIRST ‘VIRTUAL’ RRC! IS IT HERE TO STAY? A REPORT ON THE 54TH BCAS RRC

THE FIRST ‘VIRTUAL’ RRC! IS IT HERE TO STAY?

A REPORT ON THE 54TH BCAS RRC

Greater attendance from more cities, the first-ever virtually hosted ‘refresher’ programme and a puppeteer-ventriloquist to boot! These are some of the highlights of the annual Gyan Ganga, also known as the Annual Residential Refresher Course (RRC) of the Bombay Chartered Accountants’ Society (BCAS), that was organised in the midst of the Covid-19 pandemic from the 7th to the 10th of January, 2021.

This was the 54th edition of the flagship event and it was attended by more than 160 participants from 39 cities and towns apart from Mumbai.

The organisers treated the difficulties, restraints and restrictions posed by the pandemic as opportunities to seek out the best in terms of the Chief Guest, the panellists, faculty, thought providers and so on. Overlapping and sometimes clashing engagements, physical locations and distances were no longer a limitation. Acknowledging the need to ‘admit rather than to restrict’, the doors of the RRC were virtually thrown open to non-members, a few of whom attended and took benefit of the landmark annual event.

From left: Uday Sathaye, Suhas Paranjpe, Narayan Pasari

Countless calls and virtual meetings resulted in drawing up a programme that promised to provoke and trigger fresh thought, debate and conversation. Of course, the time-tested mix of panel discussions, paper presentations, group discussions and talks was not neglected.

As members are aware, one of the main attractions of an RRC is the opportunity to interact with a melange of like-minded professionals and experts from diverse fields, practices and regions.

Any misgivings about the ability to attract an audience in the pandemic were washed away with the early registration of one of our senior-most Past Presidents, Pradyumna Shah, under whose aegis and Presidentship the very first RRC was held in the year 1968-69.

Invigorated by this vote of confidence, the days leading up to D-Day were spent in smoothening out technical issues, preparing videos and notes on how to log in, mock trials with panellists, paper presenters and so on to check the reception quality and also to test their bandwidths!

The first morning (7th January) was earmarked for young delegates to participate in the ice-breaking event, the ‘40s under 40’ programme led by our own youth, or Yuva Shakti, Anand Bathiya and Chirag Doshi.

President Suhas Paranjpe then went on to start the inaugural session by welcoming the participants and briefing them about the BCAS. Seminar, Public Relations and Membership Development Committee Chairman Narayan Pasari spoke about the RRC and gave details of the schedule.

Clockwise from top left: Adv Ajay Singh, Prof. Sunil Sharma, CA Sumit Seth, CA Vikram Pandya, CA Abhay Desai, CA Abhitan Mehta

In acknowledgement of the stellar contribution of our Past President under whose leadership the seed of the RRC was planted half a century ago, the BCAS felicitated Pradyumna Shah who, at the young age of 91, leads by example, proving that learning never stops. Vice-President Abhay Mehta read out the citation that was presented to him.

This was followed by the release of a book authored by another Past President, Uday Sathaye. BCAS also launched its ‘Gift A Membership Scheme’ under the benign gaze of the esteemed Guest of Honour, Mr. Dilip Piramal, Chairman, VIP Industries. In his address, Mr. Piramal spoke candidly on the subject ‘The New Normal – Doing Business in India’. An interactive session, deftly moderated by Joint Secretary Mihir Sheth and the SPRMD Committee Member Dr. Sangeeta Pandit followed.

Mr. Dilip Piramal reflected upon his life experiences and motivated the online audience with his frankness, simplicity and humility on a number of contemporary issues posed to him by the moderators.

Treasurer Chirag Doshi proposed the vote of thanks to the Chief Guest. Also present at the opening session were the Conveners of the Committee, Kinjal Bhuta, Mrinal Mehta and Preeti Cherian.

The inaugural session was followed by the much anticipated curtain-raiser Panel Discussion which saw Jayesh Sheth, Raj Mullick, Vishal Gada and Rutvik Sanghvi lay threadbare the intricacies relating to ‘Business in Digital Economy – An Overall Perspective from Direct Tax, Indirect Taxes, Accounting & FEMA’. The panel was moderated and deftly steered by Past President Chetan Shah and Treasurer Chirag Doshi.

On the second morning, 8th January, Abhitan Mehta started the Group Discussion on ‘Revenue Recognition Accounting – Direct Taxes & Indirect Taxes Aspects’. For each Group Discussion Paper, the participants were divided into four online groups with a Group Leader and an Observer in each for interactive deliberations and discussions on the subject.

Later, the participants took active interest in the Paper Presentation by Sumit Sheth on the subject ‘CARO Reporting & Other Recent Company Law Issues’. This session was chaired by Past President Ashok Dhere. In the evening, Abhitan Mehta returned in a lengthy session in which he presented his replies to the paper that had been discussed in the morning. This session was chaired by Vice-President Abhay Mehta.

Day 3 commenced with the Group Discussion on ‘Case Studies in Direct Taxes (Special Emphasis on Corporate Taxation Schemes & Issues, Penalties & Prosecutions & COVID Impact)’ by Advocate Ajay Singh. In-depth discussions took place among all the four groups. This was followed by the Paper Presentation by Abhay Desai on ‘Intricate Issues in GST, Special Emphasis on Input Tax Credit, Place of Supply, Point of Taxation & Valuation’. This session was chaired by Past President Govind Goyal.

Glimpses of the 54th BCAS RRC

The array of speakers, paper-writers, moderators and others who enriched the
proceedings of the RRC

Yet another stimulating Paper Presentation followed. This one was by Vikram Pandya on the ‘Use & Impact of Artificial Intelligence & Data Analytics for Professionals’. Dr. Sangeeta Pandit chaired this session.

And then it was time to release the much-awaited BCAS App. This was formally done by President Suhas Paranjpe and other office-bearers with much fanfare. The contribution of Joint Secretary Mihir Sheth in the making of the App was hailed and recognised.

The evening ended with a unique entertainment programme by Satyajit Padhaye, a CA and also an ace puppeteer and ventriloquist, which was enjoyed by all the participants and their families. This programme was chaired by Past President Pranay Marfatia.
Day 4 started with replies by Advocate Ajay Singh on his paper ‘Case Studies in Direct Taxes (Special Emphasis on Corporate Taxation Schemes & Issues, Penalties & Prosecutions & COVID Impact)’. This session was chaired by Past President Anil Sathe.

The pièce de résistance of the 54th RRC was the talk by Prof. Sunil Sharma, Faculty, IIM-Ahmedabad, on ‘Strategic Thinking & Organisational Alignment’ which was chaired by Past President Rajesh Muni. The occasion also marked the e-release of the e-book‘Gita for Professionals’ authored                                                                                       by Chetan Dalal.

The virtual RRC concluded with acknowledgements and thanksgiving to all those who had worked towards delivering a successful RRC, especially the ‘Tech Team’ comprising Anand Kothari, Gaurav Save, Mehul Gada, Rimple Dedhia and Ronak Rambhia who had worked tirelessly to deliver a seamless experience.

Till we meet again in 2022 at the 55th RRC!

    

 

PREFACE

‘Dear Esteemed Readers,

In the words of our dear Father of the Nation, Mahatma Gandhi, “Be the change you wish to see in the world”. This phrase aptly describes our respected vadil, our Past President, Shri Pradyumnabhai N Shah.

The seeds of the Bombay Chartered Accountants’ Society’s Residential Refresher Course (RRC) were planted under his Presidentship in the year 1968-69. Over the past five decades, countless members, nay generations, have reaped the fruits of this bountiful tree, while sheltering and prospering under its benevolent reach.

One of the early registrations at the 54th edition of the RRC this year, the first one in virtual mode, was none other than our dear Shri Pradyumnabhai himself. All of 92 years of age, his hunger for learning and his commitment to the Society and profession are truly inspirational.

The Seminar, Public Relations & Membership Development Committee (SPR&MD Committee) of the BCAS, which organises the RRC every year, was privileged to honour the contributions of our dear Shri Pradyumnabhai with a citation presented at the hands of the esteemed Chief Guest, Shri Dilip Piramal, Chairman, VIP Industries.

Pradyumnabhai, thank you for showing us the path, for being the torchbearer for the RRC. We, at the BCAS, will be eternally grateful for the legacy you have bestowed on all – the past, the current and the future generations of members – all part of this vibrant Society.’

 

VACCINATION

Today, corona and vaccination are hitting the front pages of all newspapers. Of course, of late Sachin Waze has started taking precedence over these two. But the main topic of discussion among the general public is still corona and vaccination.

Vaccination stock is over!
Mismanagement at corona vaccination camps;
Vaccine not effective!
Man catches corona despite vaccination;
Bogus and adulterated vaccination stocks held!
Long queues at vaccination centres.

All these reports revolve around the corona virus. And people are flocking to the centres to avail of the facility offered by the Government.

People are taking leave from work, keeping aside other important tasks, to get vaccinated. However, one particular community has no time to take the vaccine. For them, certain things are more important than even their lives and health. This community is engaged in commercial activity but functions like NGOs.

They were keen to keep their offices open even during the pandemic. They incurred heavy expenditure to ensure that their staff should be able to work from home. They worked day and night to meet the deadlines for their clients. Of course, their clients always take it for granted that this community’s charges are never to be paid promptly. And the NGOs consider it inhuman to ask for fees during the pandemic. As soon as the lockdown was relaxed and the unlocking process started, the same clients travelled for ‘outings’. Clients were sure that the NGO would be slogging for them and sacrifice everything for the clients. Not only that, the clients were also sure that since the fees are not received, the NGOs would borrow from banks to run their show. On top of it, the alma mater of these NGOs would tie up with banks and other financial institutions to offer credit facilities for them. And the NGOs kept on slogging, forgetting everything happening around them.

After some time, the Government conducted a review and felt that almost every citizen of the country should get vaccinated. So, it announced the date for closure of vaccination centres.

Suddenly, the NGO community woke up and started representing to the Government for extension of time. They started begging, praying and a few of them even thought of filing writ petitions. They could produce the Object clause of the constitution of many NGOs which prohibited doing things in time. Their object was to start the work only at the eleventh hour, issue certificates based on inadequate data, risk their own licence, work without asking for payment of fees and so on.

Their ‘incidental’ object was to carry all tensions for their clients, sacrifice their personal lives and health, lose their sleep and fight for getting extension of time.

These NGOs are always making some ‘submission’ or other. In the process, they suffer from the virus of ‘submissiveness’. They have lost the energy to be assertive.

The researchers should come out with a new vaccine for the NGOs to make them immune from this virus called ‘submissiveness’.

Note: In case the NGOs described in this article resemble any professional group, it is only a coincidence.

TRIBUTE ARVIND H. DALAL

ARVIND H. DALAL

(2nd July, 1929 – 15th March, 2021)

In the passing away of Shri Arvindbhai Dalal we have lost a great professional. My association with him started more than six decades back. He had a soft corner for junior members of our profession and whenever a junior wanted his help, he was always available.

He served our profession in many different capacities. He was Chairman of WIRC in 1962-63, President of the BCA Society in 1963-64 and President of ICAI in 1989-90. He was also a Founder Trustee of the BCAS Foundation. During his association with all these professional bodies, he rendered exemplary service to the profession.

Some CA friends used to meet every Thursday to discuss the developments in the fields of taxation, accounting, auditing and other professional subjects. And Arvindbhai used to attend these meetings regularly. I came in close contact with him at these meetings. Even when his health was not good, he tried to attend these meetings and gave us the benefit of his knowledge.

He used to attend almost all the lecture meetings, seminars, conferences, and Residential Reference Courses organised by the WIRC, the BCAS, the ICAI and other professional bodies either as a paper writer, speaker or a participant. He always believed that by such participation we can share our knowledge with other professionals and also gain some knowledge. His pet subject was ‘Charitable Trusts’. In fact, he has authored the book ‘Taxation of Charitable Trusts’ published by the BCAS. He has argued several cases of Charitable Trusts before the Income-tax Appellate Authorities.

In 1998, the Golden Jubilee Year of the ICAI, the ICAI Council entrusted the work of writing the history of the accounting profession to me along with Arvindbhai and Shri Harishbhai Motiwala. We had to cover the period from 1973 to 1999 within one year. We completed the task in record time and the book ‘History of the Accounting Profession in India – Vol. II’ was published in January, 2000. Arvindbhai took great care in going through the draft of this publication, which records the achievements of our profession in these 25 years.

It is difficult to believe that Shri Arvindbhai is no more with us. All of us professionals will feel his absence. We pray that this noble soul rests in eternal peace.

– P.N. Shah, Past President, BCAS and ICAI
_____________________________________________

Shri Arvindbhai became known to me as a worthy senior of stature from the day I joined the BCAS. It was indeed a privilege for me to have been, in the years to follow, associated with him at the BCAS, at the ICAI and also at the personal level. In him we have lost a fatherly figure to whom any junior could turn for guidance without any fear.

He was a great human being. He maintained high ethical standards as a professional all through. In his dealings with all he was soft-spoken and humble. His devotion to the Society and to the profession hardly had any parallel. He contributed as much to the development as to the academic profile of the profession. He remained active with the Society almost till the end, despite his uneven health during the last few years. It was so pleasing to see him participate in the lecture meetings as a keen learner till even very recently. In him we have lost a giant personality. He will always be remembered by all those around him.

May the members of his family have courage to bear this loss and may the noble soul rest in peace.

– Pinakin D. Desai, Past President, BCAS
_____________________________________________

Shri Arvindbhai Dalal passed away peacefully on 15th March, 2021.We have lost a genuine well-wisher of the Society and a senior, disciplined guardian of the profession who was always extremely concerned about the image of our profession. His selfless and invaluable contribution with utmost devotion to the development of the profession in various aspects was self-evident and does not require any recognition. His commitment and dedicated approach in this regard were extremely remarkable and for this he remained active till his last days. I still recall that he last participated, despite his advanced age and health challenges, in the virtual post-Budget meeting of the BCAS Taxation Committee on 18th February, 2021, and even prior to that, he kept on checking with me about the BCAS Annual Budget Booklet of which he was one of the main pillars. I salute his dedication and passion for the development of our profession in general and the Society in particular.

I still can’t forget my initial introduction to him during one of the RRCs in the early 1980s at Matheran where I was innocently raising many questions during the reporting session as one of the young group leaders in his paper and the patience with which he was responding and encouraging me in the process. What was even more noteworthy was his approach during the General Assembly Session while giving his replies where, at appropriate relevant stages, he referred to such questions with my name and that shocked me as I had never expected such encouragement for a very junior member from such a senior professional. Of course, subsequently, I also learned that this kind of culture was nurtured by such pillars of the RRCs. This made me an integral part of the Society’s close academic circle, immensely benefiting me in making my academic career in the profession. For me, since then, in addition to a few others, Arvindbhai became a role model.

While I have many personal experiences to share, it is impossible to describe his innumerable qualities and his selfless contribution to the profession here. But I can’t resist mentioning one or two episodes. I still remember when we were revising the Tax Audit Manual of the BCAS around 1989; for that purpose we stayed in a hotel in Mumbai along with the late Shri Narayanbhai to complete the work in a short time – the kind of dedication and humility that I witnessed during that stay and the personal encouragement given to me are both unforgettable and remain etched in my mind even today.

He was a rare human being with such outstanding qualities. On the ethical front, I still recall his extreme resistance to my request to be a Faculty at the seminar following that Tax Audit Manual at Patkar Hall on the ground that since he is the Chairman of the Organising Committee, he can’t be a Faculty. It took a lot of time and effort to persuade him with the help of the late Narayanbhai in the evening discussion session in that hotel room to effectively thrust on him this responsibility for the benefit of the large number of members attending that seminar from various parts of the country. I had similar experiences as part of the Golden Jubilee Celebration Committee of the Society of which he was Chairman, as well as during my association with him as his Co-Chairman of the Taxation Committee.

On a personal note, I was fortunate to have had the privilege of working closely with him in the Society as well as at a personal level and to learn a lot from him, especially on the ethical front. I will be missing travelling with him regularly for punctually attending various BCAS and other meetings and our discussions on various subjects.

On his departure I feel like I have lost an elderly friend, philosopher and guide. He used to mostly call me on my wife’s mobile and would always first affectionately ask her, ‘Ilaben, kem cho?’ We will miss all this now. We sincerely pray to the Almighty that his soul rest in eternal peace.

– Kishor Karia, Past President, BCAS, Editorial Board
_____________________________________________

I was fortunate to have come in contact with Arvindbhai in my formative years of practice, a time when he was the doyen of the profession. The association established then, in the early 80s, continued till God recalled him for better things. He was one of the very few persons who shaped and moulded my professional career and beyond. In recent years, since the passing away of my father, I relied on him as a source of inspiration in many matters of life.

The long association, full of fascinating and inspiring instances, is difficult to express in words; surely not in a note that is limited by the number of words. He was a kind of hand-holder for me who was around silently, throughout, without being physically present, and guided my thoughts, at times without expressly communicating it in words. The way he conducted himself and carried on with his life became guiding posts for me.

I first met him in his chamber at Nariman Point when he was already the Past President of the ICAI, a humbling experience which has stayed with me for long; a very unassuming place and the decorum and the person’s all-attentive stance and willingness to help with no desire to impress, in spite of his scholarly insight into the subjects of accounts, auditing and taxation. I was guided by his precision in writing; in editing any text, he would not hesitate to devote long hours to fine-tune any text on complex technical matters and would ensure that the final product is delivered within the deadline. Anyone who has sat with him in meetings of professional associations would have witnessed his immense contribution with humility, patience and persistence; all of these encouraged me to request him to join the Chamber’s Managing Committee. He not only honoured our request but guided the Chamber with exemplary leadership. Dignity was natural to him and those who were present at numerous full court conferences addressed by him would confirm this with respect.

We come across people who inspire our faith in them; but he was one who inspired one’s faith in one’s own abilities. I will always remember him for this. He was not ‘all work and no play’; he was witty and full of Surti humour and was fun to be with. The best example of his dedication to BCAS is that he attended the last meeting of the BCA Foundation.

I had the benefit of presenting several papers under his chairmanship and I have no hesitation in stating that those were the best of the times, where he would very politely but firmly correct mistakes, share valuable suggestions and at times be a shield and would still ensure that he claimed no credit for the same.

I conclude with a fervent hope that his life continues to guide the profession in the right direction and
his soul enlightens our path by being a torchbearer for long.

– Pradip Kapasi, Past President, BCAS
_____________________________________________

Rare are the people who are calm reservoir of knowledge and experience and are generous with it. Rarer are those who inspire those qualities in others with their life example. In spite of many achievements and stature, they remain approachable and accessible. Arvindbhai was such a person ever since I have known him since I was a young boy. Author, speaker, guide, past president of BCAS and ICAI and a friend and elder to so many.

We would have asked several times questions on charitable trust matters and taken his counsel for our clients. At the BCAS he was someone you could call upon and count on. Today many people are very busy and have little time to spare. He shared his time and so his life for the BCAS. At RRCs and on overnight train travels especially, it was a treat to hear him chit chat. He often shared stories of his times. At lecture meetings, one saw him sitting in the first row listening attentively and patiently. As a Chairman of sessions, his words were measured and his comments were not taxing. We will miss his benign demeanor, meticulous counsel. However, above all we will have one person less to go to and look upon as an elder.

– Editor, BCAJ
_____________________________________________

Shri Arvind Bhai Dalal was one of the best but unassuming chartered accountants I have seen. I had the pleasure of working with him in Central Council for six years. As President of Institute, he had initiated far-reaching steps for the growth of the professional. He will be missed by the profession.

– Anand Rathi, Central Council Member, ICAI – 1985 to 1991, Ex President, BSE

Highlights of Volume 52 (YE March 31, 2021)

BCAJ

THE BOMBAY CHARTERED ACCOUNTANT JOURNAL

• 70 Articles / Surveys in addition to our 24 regular features
• Special Issue on ‘Impact of Covid-19’ [May 2020]
• Annual Special Issue – ‘Risk and Technology Challenges for Professionals’ [July 2020]
• New Section on Technology under the title ‘Practice Management and Technology’ from November 2020
• Regulatory Referencer: Feature in new avatar bringing a curated set of changes in Tax, Company Law, Accounting and Audit, and FEMA
At a Glance: Listing of Articles Published in Volume 52

Direct Taxes
•    Remuneration by a Firm to Partners: Section 194J Attracted? [April 2020]
•    Domestic Tax Considerations Due to Covid-19 [May 2020]
•    Specified Domestic Transactions; Retrospective Operability of Omission of Clause (I) To Section 92Ba(1) on GST [June 2020]
•    Tax and Technology: Are Tax Professionals at Risk? [July 2020]
•    The Finance Act, 2020 [September 2020]
•    Report: Role of the Professional in a Changing Tax Landscape [September 2020]
•    New TCS Provisions – An Analysis [October 2020]
•    Taxability of Transfer Fee Received by a Co-Operative Housing Society [November 2020]
•    Taxability of Forfeiture of Security Deposit [November 2020]
•    Taxability of Private Trust’s Income [February 2021]

International Tax
•    The Impact of Covid-19 on International Taxation [May 2020]
•    Covid-19 and Transfer Pricing – Top 5 Impact Areas [May 2020]
•    Transfer Pricing Databases – Requirements, Usage and Review [November 2020]
•    Taxing the Digital Economy – The Way Forward [January 2021]
•    The Conundrum of ‘May be Taxed’ in a DTAA [January 2021]
•    OECD’s Pillar One Proposals: A Solution Trapped in Web of Complexities [March 2021]

Indirect Taxes
•    Operational Impact of Coronavirus Outbreak on GST [May 2020]
•    GST on Payments Made to Directors [June 2020]

Accountancy & Audit

•    Financial Reporting and Auditing Considerations on Account of Covid-19 [May 2020]
•    Governance & Internal Controls: The Touchstone of Sustainable Business – Part II [June 2020]
•    Internal Audit Analytics and AI [June 2020]
•    Financial Reporting Dossier [June 2020]
•    The Run Up to Audit in the 2030s [July 2020]
•    Learnings for Audit firms in the Era of PCAOB and NFRA [July 2020]
•    Data Driven Internal Audit -1 [August 2020]
•    Data Driven Internal Audit -II Practical Case Studies [September 2020]
•    Fraud Analytics in Internal Audit [October 2020]
•    Provisioning for Expected Credit Losses for
Financial Institutions and NBFCs Post Covid-19 [October 2020]
•    Integrated Reporting – A Paradigm Shift in Reporting [December 2020]
•    Value Addition in Internal Audit [December 2020]
•    CARO 2020 – Enhanced Auditor Reporting Requirements [December 2020]
•    Fraud Risk Management in Internal Audit
[January 2021]
•    The Long Form Audit Report for Banks Gets Even Longer [February 2021]

Corporate and Other Laws

•    Overview of Amendments to the Arbitration and Conciliation Act 1996: One Step Forward and Two Steps Back [April 2020]
•    Transition to Cash Flow Based Funding [April 2020]
•    Housekeeping for Bhudevi [April 2020]
•    Covid-19 and the Reshaping of the Global Geopolitical order [April 2020]
•    Impact of Covid-19 on Corporate and Allied Laws [May 2020]
•    Some Reflections on Covid-19 and the Economy: Reset Time [May 2020]
•    Covid-19 Impact on Indian Economy and the Financial Markets [May 2020]
•    Possible Solution to the Problem of Stressed Assets [June 2020]
•    Current Themes in Corporate Restructurings and M&As [July 2020]
•    Mutually Assured Destruction in Corporate Lending [August 2020]
•    Corporate Law in India Promoting Ease of Doing Business without Diluting Stakeholder Interests [December 2020]
•    Statement Recorded Under PMLA and Other Laws: Whether Admissible as Evidence? [December 2020]
•    PFUTP Regulations – Background, Scope and Implications of 2020 Amendment [January 2021]
•    Offence of Money Laundering: Far-reaching Implications of Recent Amendment [January 2021]
•    ‘Proceeds of Crime’ – PMLA Definition Undergoes Retrospective Sea Change [February 2021]
•    CSR Rules Amendment – An Analysis [March 2021]
•    Daughter’s Right in Coparcenary – Part VI [March 2021]

Practice Management and Technology
•    Self-Quarantine your mind whilst working from Home [April 2020]
•    Overcoming the Challenge of Risk Management in Professional Services [July 2020]
•    Working Capital Challenges for CA Firms in Covid Times [July 2020]
•    Excel in What you Do – Some Personal Tips [August 2020]
•    ‘Collaborate to Consolidate’ – A Growth Model for Professional Services Firms [September 2020]
•    Benefits for SMPs Under MSME Act & Other Statutes [October 2020]
•    Executive Presence [October 2020]
•    Whether Practising CAs can Deal in Derivatives on Stock exchanges [November 2020]
•    Personal Data Protection [November 2020]
•    Effective use of Quora for a Professional [January 2021]
•    Digital Marketing? Naah, It’s Digital Branding [February 2021]
•    Initiatives During Pandemic – Personal Experiences [February 2021]
•    Podcasting – The Novel Mode of Storytelling for Your Professional Brand [March 2021]
•    Strategy: The Heart of Business – Part I (March 2021)

Others

•    How to Restart the Engine after the Lockdown [May 2020]
•    India: The Land of Creativity [August 2020]
•    The New Edge Banking [November 2020]
•    WHO Controversy: Lack of Global Leadership in Corona Crisis [September 2020]

Surveys


•    Impact of Covid-19 on Chartered Accountant Firms [May 2020]
•    Digital Gearing of Chartered Accountant Firms [October 2020]

THE IMPORTANCE OF STRONG PASSWORDS

We have all been there – any website that we visit wants us to share our email id and insists that we create a userid and password. The normal tendency is to use our regular email id and password on all sites. This is the primary mistake we commit while accessing the online world.
 

At the same time, if you are a business owner and have a website of your own, you need to know the people who visit your website and have their email ids. Besides, you would not like anyone and everyone to access and nose through your website without proper authentication.

 

Unauthorised access to your digital world is a major problem for anyone who uses computers or any other devices, especially if connected to the internet. The effects for victims of these break-ins can include the loss of valuable data, including bank account information, money, or even having their identity stolen. Moreover, unauthorised users may use someone else’s computer to break the law which could put the victim in legal trouble.

 

Surprisingly, although strong passwords are the most important in keeping our information secure online, this fact is often also the most overlooked. It may surprise you to know that in 2013, 90% of all online passwords were considered vulnerable to hacking. It was also found that 70% of people do not use a unique password for each website they access and more than 33% users share their password with others!

 

Another study showed that a majority of users use passwords which are so easy to guess – e.g., 123456 or ‘password’ or 111111. Using such passwords is suicidal as they are easiest to guess and hack.

 

The following points need to be kept in mind for ensuring your password security:

* Passwords must be long and complex – never use personal information like name of self or spouse, kids, pets, birthdays, etc. They are very easy to guess. Never use common words.

* Passwords should contain at least twelve characters. It has been calculated that if a hacker generates 1 billion passwords per second, a 5-digit password can be cracked in 0.38 seconds, while a 12-digit password would take 12,386.42 years to crack!

* Passwords must have at least one upper case, one lower case, one numeric and one special character (like !@#$%^&) each.

* Never write down passwords, as that makes it easier for the passwords to be stolen and used by someone else.

* Never use the same password for two or more devices, as someone who breaks into one machine will try to use the same password to take control of the others.

* Never use the same password on multiple sites, especially banking or transactional sites.

* Try and change all your passwords periodically – preferably once in six months.

* Use a good password manager (like LastPass) to manage all your passwords, since it is impossible to remember so many passwords.

 

Passwords are undoubtedly essential to security, but they are not the only method that can or should be used to protect one’s computers and devices. In addition to creating a good password, Windows 10 allows face recognition (Hello Windows / Hello Asus / Hello HP). Facial Recognition uses the FIDO (Fast Identity Online) protocol. Many laptops have fingerprint and / or iris recognition devices also, which provide an additional layer of security for your devices.

 

SECURITY FOR MOBILE DEVICES

On mobile devices, a PIN or passcode is used. This is like a password for a computer, but it may have a minimum of four characters or digits and should be something that is not personal or easily guessable. Passcodes for devices should also be set to time out after a short period of time. On time-out, the code will then need to be re-entered. Ideally, the timeout should occur in no more than ten minutes, although shorter periods between time-outs are best. Besides, these days many cell phones allow fingerprint and face recognition options which make your device more secure.

 

2 FACTOR AUTHENTICATION (2FA)

The use of 2 Factor Authentication (2FA) adds another layer to your security. For every large / reputed site you visit, this option is always there. To enable 2FA, you need to download an app like Authy or Google Authenticator.

 

In the case of Google, for example, once you have the app installed, go to your Google / Gmail account (myaccount.google.com/security) and look for 2-Step verification. Once you enable it and link your phone to your Google account, every time you login to your account from a different device, in addition to your password, it will also ask you for the 2FA code. You will have to go to your Authenticator App, read the code there for Google and enter it when prompted on your computer. This ensures that even if your password is hacked, the hacker cannot get into your account without the 2FA code which is unique to you and your device. Similarly, for your Amazon account – go to your account, login & security, enable 2-step verification and follow the same process as prompted. Facebook has similar options in Settings & Privacy, Settings, Security & Login – Two-Factor Authorisation.

 

The online world is dangerous and unforgiving. Sensible use of passwords, face recognition, 2FA all add to your security levels and allow you to conduct your online affairs safely. Stay safe, stay protected in this hazardous world by using the above tools sensibly and effectively.

 

Happy Browsing!

CORONA? IT’S A MINOR PROBLEM!

A Chartered Accountant was under a lot of tension. He had lost quite a few friends and relatives due to Corona. Many others known to him had tested positive and were hospitalised. Although he had stopped watching news channels, the negativity in his mind refused to subside. When the stress became unbearable, he surrendered to a Sadhu Maharaj. The following was the dialogue between the two:

CA: Pranaam, Sadhu Maharaj.

Sadhu: Vatsa, kaunsi chinta tumhe mere paas laayi hai? (My child, what’s brought you here to me?)

CA: Guruji, you may be aware that this Corona is playing havoc everywhere in our country.

Sadhu:    It is world-wide.

CA: Yes, but this second wave in India is more disastrous than in any other country. I have lost my sleep. Even in my dreams I see Corona viruses all around.

Sadhu: I wonder why we Indians are so afraid of Corona. There is another virus which is very familiar to you and it has been killing the country over the last seven decades.

CA: Achchha! I was not aware. What is that?

Sadhu: Surprising! Are you really a CA?

CA: Maharaj, I was so much engrossed with my practice that I never read anything about any other virus which is so serious.

Sadhu: That other virus is so dangerous that this Corona is nothing before it.

CA: In what way, Guruji?

Sadhu: See, Corona stays with a person for just eight to 15 days. After that, either the Corona goes or the person goes. And some money also goes. But the other virus stays with you all your life and takes away your money every day.

CA: How is it that I never heard about it?

Sadhu: That other virus is omnipresent. It is present in Corona testing. It decides whether you are Covid positive or negative. It decides whether you should be hospitalised. Without it you cannot even get a hospital bed. That other virus decides what treatment to give. It arranges for medicines, including Remdesivir. Without it, how can you get oxygen?

CA: You mean it is some Government Authority? Or some Minister?

Sadhu: Arey nahi, vatsa. It is neither a Minister nor an authority. But it is there with every Minister and authority.

CA: (Completely puzzled) Maharaj?

Sadhu: Not only this, but that other virus decides whether or not there is a Corona wave. It decides whether vaccines are available. It decides how much gap should be there between two doses of the vaccine.

CA: Guruji, it was after a lot of effort that I have only now come to understand GST and other tax laws; and even Accounting Standards to some extent. I attempted to know even ICDS. But what you are telling me is simply baffling. I can’t even imagine how I never learnt about the other virus. And you are saying it is even more dangerous.

Sadhu: Many times more dangerous than this Covid-19. It has many variants and mutations. There is no place in our country where it is not there. It is in cities as well as in villages, in every walk of life – education, health, administration, judiciary and defence.

CA: Maharaj, it also comes in waves?

Sadhu:    No, it is constant. It never dies. It is ever increasing. If you try to suppress it, it bounces back, it grows. Even the statistics of this Corona are controlled by that other virus.

CA: Please give me some clue.

Sadhu: What more do you want? It is there even in our spiritualism. It kills many things at a time. It kills many men, it kills our character, it destroys our values, it spoils our social and personal life. I will give you a clue. The first three letters of the other virus are the same as those of Corona.

CA: Maharaj, I understood! That other virus is  ‘CORruption!’ Thank you. I am aware that this Corona can be treated, cured or at least controlled, but the other one has no remedy. Now, my fear about this Corona has completely vanished. Once again, Pranaam to you, Maharaj!

SMALLCASE INVESTING – AN INNOVATIVE CONCEPT FOR RETAIL INVESTORS

A mutual fund investor spreads his investment across a basket of stocks by investing in units of mutual funds. An investor can also invest in Sectoral Mutual Funds like Pharma, Banking, Infrastructure etc.

Thematic investments is a broader approach to identify financially sound and sustainably growing companies whose business models are based on particular themes or ideas and would include companies across market capitalization and sectors. Thematic investment philosophy involves identifying curated or theme-based stocks which support a particular idea or theme like Rural Development, Robotics, Future Mobility, Make in India etc. However, an investor willing to invest in direct equity would have to spend considerable time in identifying such stocks and executing individual orders for stocks instead of a single click order to invest in a basket of the thematic or curated portfolio of stocks.

If you have a perfect investment methodology and philosophy but lack time of investing in specific stocks or funds, then Smallcase Investing is an option for you.

Bengaluru-based Smallcase Technologies is a start-up by three IIT graduates, which have introduced an exciting technology-based platform for modern retail investors allowing them to invest in a basket of stocks / mutual funds that reflects an idea or a theme. Each theme consists of professionally tailored baskets of stocks that reflect an investing theme, idea or strategy.

This concept is very popular in the developed markets and is made available by various intermediaries like Motifs, Personal Capital, Tiger Brokers, Cazenove Capital and Jarvis Securities.

While Smallcase was initially incubated by Zerodha but have now collaborated with several online brokers (13 as of now) including Kotak Securities, HDFC Securities, 5paisa, Edelweiss, Zerodha and Axis Securities. Smallcase has gained popularity among new and young investors and has become synonym with a curated portfolio-based investment strategy. An attempt has been made in this article to explain the concept illustrating the platform provided by Smallcase and can be applied by investors to other service providers offering a similar platform.

Smallcase ecosystem consists of:

•    Technology platform provided by Smallcase – They charge fees to Smallcase managers for providing the platform.
•    Trading platform provided by Stock Brokers for the execution of trades by investors – They charge commissions to investors for the execution of trades through their trading platform.
•    Research and Advisory Services provided by Smallcase managers who are SEBI registered Investment Advisors, Research Analysts or Portfolio Managers (PMS) – They charge fees to investors (either a fixed fee or percentage-based fee).
•    Investors – Investors have the option of investing on a thematic basis.

The following table shows the comparison with a mutual fund:

 

PARTICULAR

MUTUAL FUND

SMALLcase

Ownership

You own units of the mutual funds and not the underlying stocks

In the case of Smallcase, you directly own the stocks. Equity
Mutual Funds only need to disclose their holdings once a month, so you don’t
necessarily know what your fund owns at any given time (this is not
necessarily a bad thing given you have delegated the task of picking stocks
to the fund manager). With Smallcase, you know exactly what you own because
the holdings sit in your Demat account

Holding Pattern

Mutual funds investors own units of mutual funds, which are
separate from stocks. So, the holding pattern is based on mutual funds units
and not related to stock

Smallcase investments give direct control over the holdings. The
shares are held directly in the investor’s Demat account, and the dividends
are transferred to the bank account. Also, in case a particular stock isn’t
performing well, the investor can sell those shares and continue to hold the
remaining part of the Smallcase

Taxes

A mutual fund where the investor pays tax
only upon redemption of units. Hence the overall tax burden in this structure
is expected to be higher

Every time investor sells the stock, he shall pay short-term
capital gains tax

 

Lock-in

If mutual funds investment is redeemed before the expiry of the lock-in
period, it may even attract an exit load

Investment through the Smallcase platform does not have a
lock-in period

Portfolio Diversification

Mutual funds offer a wide variety of diversification, as mutual
funds can invest in 100+ companies

Smallcase follows a strategy, idea or theme and investment in a
particular Smallcase is restricted to a particular strategy, idea or theme.
So, the diversification is limited to a particular strategy, idea or theme

Capital requirement

Mutual funds investors have the option of buying mutual funds
units, thereby even small investment by investors is feasible

Smallcase requires a higher capital for investing in comparison
to mutual funds. In a Smallcase portfolio, one has to invest in at least 1
share of particular shares, thereby requiring higher capital investment

Expense Ratio

The mutual fund expense ratio is determined by SEBI and its
range is between 1-2%

Some Smallcase are open to the public, while some are with a
subscription. Some cases are created by the in-house teams, while some by
external analyst companies. Therefore, the charges vary accordingly

Exit load

Some scheme of mutual funds can charge up to 1-2%

There is no exit load in Smallcase

 

HOW IT WORKS
The platform offers a user interface to invest in multiple baskets of stocks / ETFs based on a theme selected by the investor. An investor can either invest in a Smallcase created by SEBI registered individuals / entities such as registered investment advisors, research analysts or portfolio managers or create his or her own Smallcase with two or more stocks or ETFs.

For Example, if an investor wants to invest in the theme of growing rural consumption in India, they can directly buy a Smallcase that is curated by experts representing this particular theme. The underlying constituents of the Smallcase would have stocks that would form part of the underlying theme along with the weightage assigned to their share in the overall basket.

The investor can place a consolidated order for all the underlying stocks with a single click through his respective broker. In case of any issue of order fulfillment, the investor can repair the Smallcase later by replacing the fresh order and ensuring the portfolio complements the original theme.

The professionally managed Smallcase are periodically updated by the Smallcase manager to continue tracking the underlying strategy or theme. These updates in the portfolio composition are shared through the platform to the investor so that the investor can make the changes to reflect the updated composition.

The investor has the option to exit the Smallcase which would trigger sell orders across all the underlying securities within a Smallcase. In every Smallcase, investors can set up a SIP (Systematic Investment Plan) to invest a fixed amount to the selected portfolio every month following the first investment.

USING SMALLcase INVESTING OPTION
• Choose: Go to the Smallcase website and click on login. You have to use the credentials provided by your broker to log in. However, if you use any other broker other than mentioned above, you may not be able to access the services.

• Buy: Once logged in, the investor has the option to choose from the array of themes such as all-weather, smart beta, bargain buys, electronic vehicles among others.

• Track: You will now be able to see stocks that form part of the portfolio, their proportion and the rationale behind their inclusion. You can customize the Smallcase by adding or removing stocks.

• Manage: While some brokers allow you to create your personalized Smallcase, others offer curated Smallcase.

It offers the convenience of one-click investing for transacting in a basket of stocks. Once the theme is selected, an investor can also opt for SIP (Systematic Investment Plan) similar to Mutual Funds.

Any investor can create its own model portfolio (Smallcase) or invest in professionally managed Smallcase created by SEBI registered entities or individuals such as research analysts, registered investment advisor (RIA) etc. The creation and management of Smallcase are restricted to registered entities only.

The concept of thematic investing is fast gaining popularity among retail investors who prefer DIY (Do it Yourself) stock / MF selection. In fact, theme-based stock / ETF investments are becoming akin to Smallcase. The concept is riding on the bull market and is yet to face a major market correction that will test the inherent quality of underlying research. It is advisable that investors should do their own due diligence before investing instead of just getting carried away with market sentiments.

Note: The purpose of this article is only to make the readers aware of the concept which is gaining popularity amongst investors and is not to influence readers to trade or invest. The reader should exercise caution before they start using the platform.

STORY OF THE GLORY

It is very nice to hear a speaker
at a conference describe ours as a ‘glorious’ profession! But what is the
reality? Here is an interesting (and frightening) true story.

 

A very big bank lent rupees one
thousand crores to a company. The bank had a ‘positive’ name. But there was a
scandal in the company. The bank had given huge advances to many such
companies. The bank went into deep trouble and the negative side of the
positive bank was exposed in the media. The bank’s high-profile CMD was
arrested. Many were put behind bars.

 

As usual, the question asked in the
public was ‘What was the auditor doing?’ As if the auditor is sitting
in the company the whole day and managing it!? It is the tradition in the
banking sector to make the auditor of the borrower a scapegoat regardless of
the person who may be at fault. The bank filed a complaint of professional
misconduct with the ICAI. Although ICAI is aware of the scandals in the banks
and the motivation behind such complaints, it has no choice but to entertain
such complaints. The reason is, it is a ‘glorious’ profession!

 

It was later revealed that the
auditor had signed the correct financial statements, made disclosures and
maintained good working papers. However, the borrower company had manipulated
the audited statements by masking certain figures and adverse observations and
qualifications. A photocopy which was not signed by the auditor was presented
to the bank for the loan. And since the bank was ‘positive’ it sanctioned the
loan of Rs. 1,000 crores. Please don’t ask stupid questions such as why did the
bank not insist on original signed statements, why it did not verify them in
the public domain, and so on. As per the banking norms, such questions are to
be asked only to small borrowers of Rs. 5 lakhs. If you want Rs. 1,000 crores,
the processing is very ‘simple’ and quick – on ‘a fast track’.

 

The poor auditor, despite doing a
fairly good job, was dragged into the investigations. Needless to say, he never
received his fees. On top of it, he has to face inquiries by CBI, SFIO, EOW,
etc., etc.

 

The poor auditor is made to visit
the investigators’ offices every day, answer the same questions, spend on his
lawyers’ fees, conveyance, humongous paperwork and what not. Everyone is
puzzled why the auditor carried out the audit properly and gave a qualified
report. Everybody feels that he could have given a clean report and shared some
Rs. 25 crores from the loan. He could have had a share in that sum!

 

And the beauty is that in the
inquiry, on some very technical grounds, the auditor may be held guilty of
professional misconduct. In other words, the auditor is the only person who
really suffers. The huge scam, the fraudulent people around, all that is irrelevant.
The reason is that ‘ours is a dignified and respectable profession’. Hence,
vulnerable.

 

Friends,
this is the common story of the ‘glory’ of our profession.

REPRESENTATION

On 9th November, 2021, the Bombay Chartered Accountants’ Society (BCAS) jointly with other six voluntary professional associations submitted a Representation to the National Financial Regulatory Authority on Consultation Paper – September, 2021 on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs).

 

There had been requests received from many of the members to make an effective representation.

 

To read the Representation – Scan here

IS IT FAIR? INDIAN TAXPAYERS / SAVINGS CLASS AND THE PROPOSED ROLE OF REGULATORS AND MINISTRY OF FINANCE IN GIVING THEM JUSTICE

The purpose of this article is to highlight some injustices being meted out to the individual taxpayers / savings class by the regulators – the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) – along with the Ministry of Finance (MOF), and to stop / prevent the same

WHY TAX INCOME TWICE?
The first issue needing to be looked at is – ‘Why does income become taxable a second time when it has already been taxed ONCE?’ This becomes a matter of greater injustice when the individual (who is a salaried employee) retires and becomes a senior citizen. An employee earns salary income on which he has already paid income tax. He invests some savings in shares, debentures, bank fixed deposits and savings accounts. Why should income from these investments be taxed once again under Income Tax Law? He has paid Income Tax on his salary income. Just because there is a change in ‘Head of Income’, should the income become liable to taxation once again? Is there not a possibility that we are positively discouraging financial savings and perhaps encouraging savings in gold and property?

Why is Income Tax treatment differential – by nature of contributor?
Taking this argument a little further, why do we have an Income Tax differential on interest earnings? An employee invests in PPF / PF which gives him tax-free income at interest rates which are 7.00% +. PPF contribution cannot exceed Rs. 1.50 lakhs in the year. For the year 2021-22, it has been stated that PF interest income on an annual private employee’s contribution in excess of Rs. 2.50 lakhs and a government sector employee’s contribution of Rs. 5.00 lakhs will be taxable. Why this separation of private sector and Government sector employees? What is the logic guiding this differentiation? Why the favouritism to Government employees? Are not all taxpayers equal?

https://economictimes.indiatimes.com/wealth/invest/contributing-over-rs-2-5-lakh-in-epf-you-will-now-have-two-pf-accounts/articleshow/85825052.cms?frm=mailtofriend&intenttarget=no

Why are bank savings and fixed deposit interest rates not at par with other small savings interest plans?
What needs to be understood is why are bank savings and term deposit interest rates so low (between 4.00 – 6.00%) per annum? When small savings interest plans give interest rates around 6.00 – 7.00%, why are bank deposit interest rates so low? Also, except for a very low threshold of tax-free income, these interest earnings are taxable. Can RBI and the Ministry of Finance please explain why bank interest income to the taxpayer has such a low interest rate (and post-tax the rate drops further)?
If the Ministry of Labour is able to get tax-free interest on PF contributions at 7.00+%, why is RBI as regulator failing the bank depositors by accepting rates of interest lower than 6.00% and that, too, as taxable income?

The Table below shows the unfairness of interest taxability for individuals. The RBI and the MOF need to sit down and put an end to this unfairness:

Nature
of interest income

Rate
of interest – % per annum

Taxable
/ non-taxable income

Authority
in charge

PPF Interest (maximum annual
contribution R1.50
lakhs per person)

7.00%
+

Non-taxable

Ministry of Finance

Interest on PF accumulation

7.00% +

Mainly non-taxable (refer above para for new tax-free / taxable
contribution limit)

Ministry of Finance and Ministry of Labour (EPFO – Board of
Trustees)

Bank Savings and Term Deposit
accounts

<6.00%
mainly at most banks

Taxable after certain tax-free value

Reserve Bank of India and Ministry of
Finance

Debentures and company deposits

7.00 – 9.00%

Taxable

Ministry of Finance

Why are bank savings and term deposits getting such a raw deal on taxability considering that these are the favourite savings options of senior citizens? Net of income tax, these bank interest earnings don’t even cover the consumer inflation rate. Are we not penalising the savings class?

Why are savings and fixed deposits with banks not fully insured?
Another area where the RBI has let down bank depositors very badly is in the security of the deposits made by the individual savings class with banks. As regulator, it is the responsibility of RBI to take care of the interests of bank depositors (savings accounts and / or term deposits). Why cannot RBI mandate that all deposits should be fully insured by bankers? If the Deposit Insurance and Credit Guarantee Corporation of India cannot take the load, let this insurance arena be open to other domestic and foreign insurers. The MOF may need to step into this. If other small savings like PPF, Post Office savings, etc., are fully secured, why cannot deposits with banks be made fully secured (through insurance)?

This issue is a lot more complex on behavioural economics. Rightly or wrongly, Indians believe that their money is fully secured with nationalised public sector banks (PSBs). It would be a huge shock to 90% of individual depositors if they were told that they are secured only to a maximum of Rs. 5.00 lakhs per bank, per individual.

https://cleartax.in/g/terms/deposit-insurance-and-credit-guarantee-corporation-dicgc

This is inherently unfair and the RBI / MOF argument that the current limit of Rs. 5.00 lakhs covers 90% of the depositors’ population is misleading and unjust. Nobody should risk losing a major part of their savings just because effective risk mitigation steps are not taken. It is the responsibility of RBI and MOF to take these steps so that the individual savings class is protected. In my view, this would squarely fall in the RBI’s domain. It is RBI’s responsibility to get matters organised at the Government and Ministry of Finance levels.

Why is SEBI not confronting misuse of the dividend payout option by Mutual Funds AMCs?
Another preferred area of investment by the individual taxpayer is Mutual Funds – Dividend Payout option. This is obviously to get a steady stream of income, particularly by a senior citizen and retired individual.

However, there is a catch in these dividend payouts and SEBI needs to be mindful of the same.

https://www.business-standard.com/article/pti-stories/sebi-directs-the-renaming-of-dividend-options-of-mutual-fund-schemes-120100501347_1.html

What SEBI should address is the fact that the Mutual Fund AMC cannot distribute dividend that is more than the amount sitting in the difference between the market price and the cost of the units. SEBI has recognised that in certain instances there could be return of capital as dividend which is taxed in the MF holder’s hands. This is unfair. The illustration below will explain the position:
(a) Investments into the MF scheme (cost) – Rs. 10 lakhs;
(b) Dividend declared @10% – Rs. 1 lakh worth of units will be redeemed;
(c) Market value on dividend payout date – Rs. 12 lakhs;
(There is no problem in this since dividend payout is less than the MF units’ appreciation.)
(d) Alternatively, the market value on dividend payout date is Rs. 10.75 lakhs;
(In this case, dividend on MF unit appreciation is Rs. 75,000 and Rs. 25,000 is Capital Units redemption, total dividend Rs. 1 lakh).

In my view, this payout of Rs. 25,000 to the scheme’s unit holders by the AMC is wrong. The individual is also being taxed on Capital Redemption as Dividend. SEBI should actually mandate that dividend paid to the MF unit holder cannot exceed the appreciation of units in his folio. Therefore, in the second instance described above (d), only Rs. 75,000 can be declared as dividend, and thus the real dividend rate becomes 7.50% and not 10.00% for the scheme unit holder concerned. This enables the MF unit holder to take a view on continuing or discontinuing his investment in the scheme. In my opinion, SEBI has realised the problem, but needs to take it further for the sake of the individual investor.

Why the regulators must think of the individual as taxpayer and investor
It is the opinion of the writer that the regulators and the MOF must make the individual income tax payer central to their economic and financial plans. Both RBI and SEBI need to be very conscious of their responsibility to the savings / investing class. They cannot operate in the arena taking care only of the interests of banks / AMCs and totally ignore the individual’s interests.

(The author is grateful to the news links that have facilitated his understanding of the subject and helped develop his point of view)

 

 
 

MICROSOFT WORD TRICKS

Microsoft Word is one of the most overused and probably underutilised softwares across the board. There is so much to explore and discover to make our day-to-day working more productive. Let us see some of the daily-used tricks which make working on Word faster and more effective.

Inserting horizontal lines in Word is super simple, just enter a – (dash) 3 times and press enter and you will immediately get a horizontal line across the screen. If you want a different type of line, you can experiment with = or ~ or * or # and play around till you get what you want.

Inserting a symbol of copyright? Just use (c) and magically it will change to a copyright symbol like this ©. The same holds true for the Trade Mark symbol – enter ™ and watch it change to ™ instantly.

Para numbering in Word is something which all users MUST use. Here again, you start the first para with 1. and automatically it will start para numbering. This is most useful since it numbers all paragraphs serially and, most importantly, if you wish to rearrange your paragraphs, the numbering will change automatically. In cases where you have a large document and need to rearrange the paragraphs in multiple edits, it takes the load off renumbering the paras over and over again.

Writing fractions is very intuitive in Word. Just type it as you would want it – like 1 1/2 and it will transform into 1 ½ as you move ahead!

In all the above cases, be sure to press a space after each word to make it work seamlessly.

All accountants use Excel for Tables – we can’t live without Tables. But what if we need to insert a Table in a Word Document? There are several ways of doing this:

1. You could make a Table in Excel and Copy Paste it into Word directly. This is the easiest and most obvious. Moreover, you could make the pasted Table live in Word, meaning, if you make changes in your original Excel Sheet, the same changes would be reflected in your Word Document, live. This applies not only to Tables, but also to Graphs and Charts which are copy-pasted from Excel.
2. Creating a new Table in Word is also simple – just go to the Insert Menu and click on Table – it will show you a dummy table and you can move your mouse around and insert a Table with as many rows and columns as you like. The other option is to click on Insert Table and specify the rows and columns you want in the Table. In both cases, the Table will be inserted at the point where your cursor is currently located.
3. The next option under Insert Table is to Draw a Table manually. Just click and drag your mouse wherever you want the Table lines to be drawn, and automatically, Word will draw the Table for you.
4. Another way of inserting a Table in your document is to enter the following:
+———+————+———+ Press Enter
Here, the number of dashes that you insert will determine the width of each column. You may enter your data in the cells and move to each next cell with a Tab. When you reach the last column and press the Tab, automatically another row will be inserted and you may continue filling the cells. This way, you are not limited by the number of rows that you declare in the beginning, under the earlier methods.

Did you know that Word also allows you to sort a list of values or text or dates, one below the other? Just select the list and in the Paragraph Tab on the top, click on A?Z and voila! – Your list is sorted instantly.

In the Office 365 ecosystem, in Word Excel or PowerPoint, there is an inbuilt Clipboard which you can use across all the apps during each session and also across devices. On the Home Tab, under Clipboard in the right bottom corner, there is an arrow pointing diagonally downwards – just click on that arrow and you will get the entire clipboard history for your session.

Word and Windows also have the option to insert emojis in your documents in any text area. Just press the Windows Key + ; together and the possible emojis will pop up for you to select.

It is interesting to know that you can open most open PDFs directly in Word, and even edit them. This will work only if the PDF document is not password-protected or encrypted. However, it’s worth a try.

And if you want to share your document with others, just head to File-Transform and you will be able to publish your document on the web and share it with friends / colleagues / clients and the world at large. This could be very useful for quickly making an FAQs page or for collaboration and sharing large documents.

Now that you know what all Word can do, try these simple tricks and enhance your computing experience with Microsoft Word. Happy Wording!

PARADOX

‘Oh, hell! What a disgusting profession! I wonder why I chose it!’ A Chartered Accountant was cursing his profession.

‘What happened?’ I asked in a sympathetic tone.

He continued, ‘It’s very easy to say from the dais – “A dignified profession”. But in reality nobody cares for our profession.’

‘But people feel very highly about a CA. Your course is so difficult. The passing percentage is so low.’

The CA: ‘But what’s the use? You become “out-dated” every six months! Many things change every day! Zindagi mein kitne saal padhate rahane ka ? (How long to keep on learning and studying in life?)’

I pointed out, ‘But your signature is valuable. Government requires your signature on many documents and certificates – Not only on financial statements.’

‘But that is only a responsibility, a burden without commensurate rewards. There’s too much of regulation. It is impossible to keep track…’

I said, ‘Audit is your monopoly.’

He countered: ‘That is killing us. Nobody really wants audit. Nobody wants to pay tax. So our services are unwelcome…’

‘But you alone can guide the clients to comply with all laws and the rules and regulations.’

‘The client has no value for all these things. He says that all that we are doing is for ourselves; just to save our skin. He never feels any value addition in those regulations and compliances’.

I ventured, ‘But since these things are mandatory, you get fees…’

‘Fees? Bah! This is the most unremunerative profession. Payment of our fees is at the bottom of the ladder. And they bargain even for small amounts.’

‘But due to the system of articleship, you get good assistants at low cost?’

‘Articles? The less said about them the better. Everybody dictates to us – clients, staff, articles, regulators – and also the wife at home!’

‘But you do get the satisfaction of rendering good service?’

‘Satisfaction? There is nothing but frustration. Don’t you know that without corruption you cannot give results.’

I pointed out that there are many opportunities in the corporate sector. There are many other avenues and a variety of other services that one can render.

The CA agreed with me and added, ‘But for that you need not be a CA. And in corporates there is slogging like glorified slaves… No personal life… No independence. There is hypocrisy everywhere. And now everything is technology-driven. There is no application of mind.’

I said, ‘But don’t your clients maintain a long relationship with you?’

The CA responded sceptically with, ‘As soon as the fees are increased, the relations come to an end! There is no loyalty.’

The discussion was endless. We stopped after two hours – with his final remark, ‘I wonder why people go for this course at all! It was a wrong decision on my part. This profession has no future’.

We dispersed.

Next morning, I received a WhatsApp massage from my CA friend: ‘Pleased and proud to inform you that my son has passed his CPT exam and will be joining the CA course…’

In the Mahabharat, there is a very interesting chapter called ‘Yaksha-Prashna.’ It is an enlightening dialogue between Yudhishtira and a ‘super’ human being, Yaksha. He asks, ‘What is the most paradoxical situation in the world?’

Yudhishtira replies, ‘Everybody knows that death is inevitable; yet they behave as if they are immortal’.

I think many CAs feel that this profession has no future, yet their next generation takes up the course. Perhaps this applies to all professions.

Poem For Independence Day

PDF VIEWERS / EDITORS / CONVERTERS

PDF stands for Portable Data Format, meaning a file format which can be ported across Operating Systems. Whether you use Windows, Mac, iOS or Linux, if you get a file in a PDF format it will look just the same – the formatting does not change or get distorted. As per Wikipedia, Portable Document Format, standardised as ISO 32000, is a file format developed by Adobe in 1993 to present documents, including text formatting and images, in a manner independent of application software, hardware and operating systems.

Opening and viewing a PDF file is very simple – most web browsers will open a PDF file directly within the browser. If you need to view the file multiple times, it may be easier to download it and view it later in any of the PDF file viewers which are easily available online for free. Adobe Reader is one of the most popular PDF viewers available across operating systems.

Creating a PDF file is also very simple. If you are using Word, Excel or Google Docs, just head to the Print option and select PDF from the list of printers available. This allows you to create a PDF of anything that you could otherwise print, including documents, sheets, emails, etc. In any of the above, you could also Save the file as PDF and that would do the job.

By definition, PDF files are ‘read only’. But there could be many situations where you may need to edit them, for example, it may be a PDF form which you need to fill, or a document prepared by a colleague which you need to edit. You may also need to convert from / to PDF format in many situations. Let us see the possibilities and the options available.

Adobe Acrobat Pro DC
This is, by far, the best PDF editor available. It is different from the Adobe Acrobat DC Reader on your PC, which is just a plain reader. If you sign up for the Trial Version of PRO, you get to use the full features of the pro version. You can use PDFs on any device and stay connected to your PDF tasks wherever you go. You can pick up right where you left off across your desktop, laptop, mobile phone or tablet. You can even convert scans, images, web pages and more to PDFs and work on them on any device, anytime, anywhere. You can edit text and images, fill, sign, and work on your PDFs seamlessly and even send a link to multiple reviewers to track status, gather feedback and collect signatures. This version supports a variety of languages across your devices.

The free trial lasts for just seven days and if you wish to use it beyond the trial period, there is a price to pay. It is a bit steep, but it will give you all the bells and whistles that you may desire to use with your PDF files.

Sejda
Sejda (Sejda.com) is an easy, pleasant and productive PDF editor. Apart from editing PDF files, you can merge files, edit and sign files, and also split and compress files. By way of security you can Protect and Lock your files and also insert a Watermark. Conversion to and from PDF format from / to multiple formats is supported – Excel, JPG, PPT, Text, Word. You can extract and / or delete pages selectively within PDFs. A special utility allows you to extract images from a PDF file. OCR is supported with the ability to Resize and Rotate the contents.

You can use Sejda directly online, on the web, or download the Desktop version and use it offline. The Web version works in your browser. Their servers process the files and send them back to you after editing / conversion. Your files stay secure and after processing they are permanently deleted. The Desktop version works offline just like the online version, and the files never leave your computer. You can use the desktop version on Windows, MacOS and Linux.

The free version has daily limits such as three tasks per day, documents up to 50 MB and 200 pages and images up to 5 MB. For a reasonable, nominal fee you could unlock these limitations and use it for unlimited tasks.

XODO PDF Reader
One of the best PDF editors for Android. It lets you create and edit PDFs. You can also write directly onto existing PDFs, highlight and underline text, fill forms, sign documents and take notes on blank PDFs. You can auto-sync the work that you do, with your cloud storage and annotate PDFs with others in real time!

Drawboard PDF
Drawboard PDF is the most intuitive PDF app on the Microsoft Store. Designed to replace pen and paper, an extensive array of tools and intuitive interface make Drawboard PDF the #1 rated productivity app on the Microsoft Store. With a wonderfully intuitive layout and the radial menu button, you can switch quickly between documents and customise your layout style. If you are using a touch screen, the pressure-sensitive ink with colour choice, custom opacity and thickness create an experience even better than pen and paper. You can insert editable shapes, lines, arrows and insert dynamic content like ink signatures, images, text boxes and notes. And, of course, the regular PDF editing tools are all there – rotate, insert, delete pages, annotate, import and export and much more. Available in multiple languages, it also provides relevant industry tools for drafters and engineers to project managers.

ILovePDF
ILovePDF (ILovePDF.com) gives you every tool that you need to work with PDFs in one place. All are FREE and easy to use. Merge, split, compress, convert, rotate, unlock and watermark PDFs all with just a few clicks. Conversion of PDFs is such a breeze with this tool. You may convert to or from the PDF format to multiple formats. All conversions are online and easy to use. You need not download any app for the purpose.

However, if you need a desktop version, you may download from ILovePDF.com/Desktop and use it from the comfort of your device. And, of course, if you need an Android or iOS app, you can install it from ILovePDF.com/mobile. A very efficient tool to manage your PDFs from any device!

There are so many other such tools which help you to handle PDF files on the go. Which one do you like and use? Write to me and share your experiences.

SOME INTERESTING FREE WINDOWS 10 APPS & DOWNLOADS

We have all been using Windows 10 for many years now. However, there are some hidden, little-known apps and some free third-party apps which can make our productivity soar in multiple ways. Here are a few of them which you can use in your day-to-day work life.

STICKY NOTES
We have all used Sticky Notes some time or other at the workplace. Windows 10 offers you digital Sticky Notes right on your desktop. Just press the Windows Key and type Sticky Notes and you will be presented with the Sticky Notes app. You may create as many Sticky Notes as you desire and paste them at your desired locations on your desktop. You can format the Sticky Notes, add pictures, create bulleted lists and assign some basic colours to your Sticky Notes based on your preferences and categorisation of each or a group of Notes.

If you are using a Microsoft Launcher on your Android phone, you will be able to sync the Notes to your phone automatically and effortlessly.

This is a very simple tool to boost your productivity and comes in-built with Windows 10. Try it and use it – it is free, right on your desktop.

NIGHT LIGHT SETTINGS
All computer monitors emanate light which hits our eyes all the time. Prolonged usage could tire our eyes. Besides, after sunset, the blue light emanating from the monitor could even affect our eyes adversely. Windows 10 allows us to change our display settings to reduce the strain on our eyes.

On any blank area of the desktop, right-click with your mouse and then select Display Settings. In the Find a Setting box on the top left, just type Night Light and select the item displayed for Night Light. The Night Light Settings will be displayed. Here, you can turn Night Light on or off manually. You may also select the strength or intensity of the light when the Night Light is on, based on your comfort level.

If you wish to automate the process, you could set the time when Night Light comes on and when it would be turned off. Further, if you switch on your location settings for Windows, the system will automatically turn it on at Sunset and turn it off at Sunrise.

Pretty cool and comfy!

EVERYTHING
This is a very simple and extremely fast utility which allows you to search all areas on your computer in a jiffy.

Very often, we just remember the name of the file, but just can’t remember where it is buried in the plethora of folders and multiple sub-folders on our hard disk. For all you know, it may be lying on the external drive of our computer or even on a data card, inserted into our computer. Sometimes, we may not even remember the file name accurately, but we may just remember that it is a document file or an image file.

Windows 10 provides native search across the entire ecosystem. But if you have ever tried it, it can be very tardy and time-consuming, especially if you have a large hard disk with multiple levels of folders.

This is where Everything steps in. Once you download and install it, just enter the name or part name of the file you are searching and you will be amazed at the speed of the results. You can even search for part of the file name or for a type of file in combination with its name. The Advanced Search option allows you to specify matching case, any or all words in the file name and much more.

From the list of files displayed, you may double-click any file to open it.

You can download Everything from https://www.voidtools.com/. Try it once, you will never use Windows Search ever again.

FILE-CONVERTER
There are loads of file converters available online. Zamzar.com is one of the popular options which allows you to convert files from one format to another. For using the online file converter, you must upload your file to their servers and then specify to which format you wish to convert the file. It takes a few seconds to perform the conversion and you can then download the file back to your computer when it is ready. Since this involves uploading your file to their server, many times users are worried about the privacy of their data.

Enter File-Converter – a very simple and light utility that will change the way you convert files on a day-to-day basis. Just head to https://file-converter.org and download and install the file converter. Don’t worry if you don’t see anything on your screen yet. Once installed, go to any folder and right-click on the file which you wish to convert. You will see the File-Converter option in your context menu. When you hover over it, you will be able to see the types of files to which you can convert your original file. For example, if you right-click on a pdf file, it will show you the option to convert it to a png file! Just click on your option and the conversion begins. It’s as simple as that. No need to upload any files or install any more programmes.

You also have the option to configure the pre-sets and set your choices, and the conversions are instant and free. You may choose to convert multiple files at once and either retain or delete the original files after conversion.

You may find some limitations in case of certain types of files or files which have very complex formatting, but for a major part of daily usage, this is a very sleek, swift and light utility.

So now, open up Windows and let your productivity soar by using these tips on a daily basis. Good luck!

BOMBAY CHARTERED ACCOUNTANTS’ SOCIETY: ANNUAL PLAN 2021-22

72ND ANNUAL GENERAL MEETING AND 73RD FOUNDING DAY

The 72nd Annual General Meeting of the BCAS was held online on Tuesday, 6th July, 2021.

The President, Mr. Suhas Paranjpe,
took the chair and called the meeting to order. All the business as per
the agenda contained in the notice was conducted, including adoption of
accounts and appointment of auditors.

Mr. Mihir Sheth,
Hon. Joint Secretary, announced the results of the election of the
President, the Vice-President, two Honorary Secretaries, the Treasurer
and eight members of the Managing Committee for the year 2021-22.

The ‘Jal Erach Dastur Awards’ for the Best Articles and Features appearing in the BCAS Journal during the year 2020-21 were also presented on the occasion. For Best Article the Award went to Sandeep Parekh and Manal Shah (both Advocates) for their Article PFUTP Regulations – Background, Scope and Implications of 2020 Amendment. The Award for Best Feature went to CA Vinayak Pai for Financial Reporting Dossier.

The July special issue of the BCA Journal was e-released by Mr. Azim Premji. It carried special articles on Effects of the Pandemic on CA Profession (by CA Ninad Karpe and CA Madhukar N. Hiregange), The Economy (by Niranjan Rajadhyaksha), The Human Psyche (by Dr. Bharat Vatwani) in addition to the regular articles and features. Before the conclusion of the AGM, members, including Past Presidents of the BCAS, were invited to share their views and observations about the Society.

The 73rd Founding Day lecture was delivered at the end of the formal proceedings of the AGM. It was an outstanding oration by Mr. Azim Premji, Founder Chairman of WIPRO, who spoke on the topic ‘Professional Excellence and Social Responsibility’. It was attended online by more than 3,392 professionals on Zoom and the YouTube channel of the BCAS.

OUTGOING PRESIDENT’S REPORT

SUHAS PARANJAPE:
You have just witnessed a short video clip presenting the annual
activities for 2021-22 in summarised form. (The annual report has
already been emailed to members.) You must have also noticed that the
clip ended with my favourite song Jai ho! from the popular movie Slumdog
Millionaire.

During the year just gone by, I received many
answers / solutions / feeds to various situations through intuition,
experience, the observations of many Past Presidents, my Chairmen,
Office-Bearers, Managing Committee members and volunteers. They made my
year successful so that today I can say with pride – ‘Jai Ho!’

I acknowledge the virtual presence of Past President P.N. Shah, Dilipbhai Thakkar and other seniors. I offer my namaskaar, adab to all of you for the opportunity given to me to serve you as President of the BCAS. I thank each and every one of you from the bottom of my heart.

I have had a unique privilege and I feel honoured to say that I am the first-ever ‘virtual’ President of the BCAS in
its 72-year history! At the same time, I sincerely hope and pray that I
would be the last one to have registered such an achievement. I don’t
wish to have any competition in this! On a lighter note, if ever the BCAS decides
to make Past Presidents eligible for Presidentship in the future, I
should be given the honour of being the first in the line! All of you
will agree with me, and since this is a recorded meeting, I can take
this as proof of your agreement!

I do not wish to repeat how
challenging the year was and how we converted all ideas into
opportunities and so on. All of you were part of this endeavour. I will
only say that we explored and exploited the power of the BCAS platform and the power of digitalisation to a large extent to create visibility, to reach higher, to perform better.

Right
from the beginning of my tenure, I had decided that I would try to be
like plain, simple and clean (nirmal) water in which one can mix any
colour that would lead to a colourful experience. My role was only to
ensure that the colours are shuddha, satvik, traditional Indian colours
without any chemicals in them. In actual fact, I never had to play the
role of identifying whether the colours are good, genuine or otherwise.
All the colours during the year were original, shuddha and satvik beyond
my imagination. I am happy that I could carry this thought process to a
large extent to my satisfaction and it made my tenure and term really
colourful and glorious. I thank all of you for the same.

There are two or three initiatives that I would like to mention.

First, the BCAS Chowk.
I had heard this subject being discussed in the Managing Committee
meetings many times and for many years. It became my focus area and I
started working on it immediately after taking over as President. There
were many hurdles and roadblocks in the process. The process is very
long and requires a lot of follow-up. As per the Municipal Corporation’s
policy, special permission is required for names to be given for an
organisation. Had there been no Covid lockdowns, we would have had our BCAS Chowk by now. But we are still trying our best and we hope that we will have BCAS Chowk
added to our address in the next few weeks. I must place on record the
one person, other than our Past Presidents, Office-Bearers and
volunteers, who stood by me, none other than the Maharashtra Industry
Minister, Shri Subhash Desaiji. He considered our request
immediately and set out to honour our voluntary organisation that has
existed for 72 years and which is an outstanding achievement. All of us @
BCAS thank him for his support.

A second initiative which I kept as my focus point was to bring more vibrancy and activity to the BCAS Foundation. All the trustees supported us as we formed our Project Management Committee (PMC) under the chairmanship of CA Dr. Mayur Nayak.
We have started joint activities with other NGOs. But we feel that
there is still a long way to go and much more to be done. I thank all
the trustees and PMC members for their active involvement and support.

Last
but not the least, we had a good fellowship and association with sister
organisations such as the IMC, the CTC, our own WIRC, the regional CA
associations of Ahmedabad, Chennai, Bengaluru, Lucknow and Surat – we
had joint programmes, joint representations and so on. It was easier
with our digital base. For BCAS members we did good networking
with publication services for regular discounted publications and with
software vendors to give competitive pricing.

The pandemic taught
us so much – how to work, how to conduct events / programmes, how to be
educated without attending physical seminars and conferences, how to do
audits and render services without visiting our clients’ place – in a
nutshell, how to remain relevant under all circumstances. The show must
go on and with much more force through innovations. Zoom, Meet, Teams,
etc., became our family members, ‘You are on mute, Sir’ became our tag
line! To be positive became negative and stressful, being and remaining
negative became an honour. We of this generation are lucky to have lived
this experience. But the sad part is that the pandemic also taught
families how to face health crises, financial crises and in a few cases,
even to live without their near and dear ones.

Ironically, the
pandemic created a great deal of financial inequality but it treated
every one equally – the rich, the poor, the elderly, the youngsters, and
there was no gender inequality. One thing is certain now, the ‘new
normal’ is now settled and it will be the future – maybe in a hybrid
manner and for which the BCAS should prepare itself, both mentally and technologically.

I congratulate the incoming new team of Abhay, Mihir, Chirag, Anand and Kinjal – it is a great combination of experience, maturity, technical and tech-savvy people to take BCAS forward
and into a new orbit and zoom towards its 75th year in style with new
hope (asha) and inspiration (akanksha) and to greater heights
(unchaiyaan). I wish them all the best with my support and good wishes.
All of you have played your innings for me and now it’s my turn to help
you in whatever way I can. I wish you all the very best.

I can’t thank my family members enough – my mother Shalini, wife Swati and son Aarav, for their support and encouragement. My senior partners Mayurbhai Vora, Bharatbhai Chovatia and their families kept me motivated all along, as did all my other partners, Kinnari, Bhakti, Ronak and Vinit and
all the team members. I thank everyone in my office for their help and
support. Many of my clients-cum-mentors, friends and relatives always
provided me with inputs and appreciation.

Team BCAS has
always been the backbone of all Presidents. I and my Office-Bearers
hardly met any of them during the year. We are aware that Work From Home
is not always easy. It has its advantages and disadvantages, but all of
them worked to the best of their abilities. There is always a scope for
improvement which will enhance the Office-Bearers’ execution and
productivity. We are all time-bound executives. As our long-term
resources, it is our duty and responsibility to keep team BCAS motivated at all times. I wish all of you a good life ahead.

Covid
is still in the air and it will require a huge effort by the Government
machinery to keep it in control. Besides, there is the vaccination
(which is an external support); but if all of us build our own immunity
(an internal strength), I am sure we would be able to tackle this health
challenge. I wish all of you a healthy and happy life.

I
conclude by bowing down to the huge membership of this large
organisation for its support during the year. May I now request incoming
President Abhay to present his annual plan for the year 2021-22.

INCOMING PRESIDENT’S SPEECH

ABHAY MEHTA: Good evening, BCAS family. My colleagues on the virtual dais, Suhas, Vice President Mihirbhai, outgoing Joint Secretary Samir, Joint Secretary Chirag, Incoming Duo – Treasurer Anand and Joint Secretary Kinjal, virtually assembled, respected Past Torchbearers of BCAS, seniors and fellow professionals.

I heartily welcome you all to the AGM.

I am addressing this august gathering due to the honour showered on me to lead the Temple of Knowledge – BCAS as the President in its 73rd Year.

I have a mixed feeling of elation and responsibility at this moment when I am addressing you all.

Elation, because I have been considered worthy to lead BCAS for a year and Responsibility for upholding and carrying forward the rich legacy of BCAS. I am also excited
that I shall have an opportunity to implement some of the initiatives
which I feel will be able to contribute to the development of the
profession thereby enhancing the image of BCAS.

The responsibilities are manifold. First of all, I have to prove my worth during the year to the torchbearers of BCAS who have reposed their confidence in me to lead the Society. Secondly, I have to meet the high standards set by my worthy predecessors. Thirdly, I am conscious of the dynamic changes which our profession is passing through, where an organisation like BCAS has to play the role of catalyst to empower professionals with relevant learnings.

The role of BCAS over
all these years has been transformational and I am conscious of this
role, which has been passed on over all these years by each President to
follow. Here, I shall be guided by the wisdom of my GURU Mahatria Ra,
who has very well said:

The purpose of knowledge
is not to build memory
but to create
understanding and transformation.

At
this juncture, I would like to bow before Lord Shriji Bawa, for
blessing me and making me worthy for the coveted post of President at BCAS.

I also seek the blessings of my parents Late Rashmikant Mehta and Late Kailas Mehta. I am sure wherever they are, they would shower their blessings and would feel proud to see me at the helm of BCAS. In climbing up the ladder of the profession, there is one critic and well-wisher who has played a vital role by taking care of the responsibilities of the family and also on the social front. She is my wife Nipa,
whom I want to thank profusely for being a solid support in my journey
as a professional. She ensured inculcating values and taking care of the
upbringing of our son Udit, who is also a qualified professional.

Before I share my journey at BCAS and my vision for the year, I take this opportunity to summarise the year gone by under the able leadership of Suhas.

The year had started amidst the pandemic, but the zeal of Suhas was like a double vaccinated person in a hurry to serve BCAS with his selfless service. His Theme for the year was ‘Tradition, Transition and Transformation’. He has excellently steered BCAS as per his theme to take it through the process of Transition in a manner which did not lose the values and ethos of Tradition. He stepped on the accelerator and increased the speed of Transition which brought about many Transformational changes in the way BCAS delivered its offerings to its members and the public at large.

Suhas’s approach made me relive the preaching given by my GURU Mahatria Ra,

‘Make
yourself a success magnet. Begin. Take the lantern in your hand, and
you will always have light enough for your next step. One step at a
time… Go… Keep going… Keep growing.’

I felt he ably
applied the above during the time of the pandemic when things were hazy
and the road was not just less travelled but I would say, it was never
travelled.

During the year, we witnessed Lecture Meetings and Panel Discussions on topics as varied as ‘Building a Professional Services Firm’ to ‘Cryptocurrencies’. The Residential Courses in Virtual Avatar were so engrossing that everybody was saying ‘Yeh Dil Maange More’. The meticulous planning and the thought process which went into organising Group Discussions and General Assembly were immaculate. It is for certain that a trend is set, even after restrictions on physical meetings are lifted, there will be a Hybrid Model to be worked out to serve the interest of participants who may not be able to travel to the destination of the event.

Suhas, I was witness to the interest you took in the planning of each event and the way in which you delegated decision-making for each event in the hands of the able teams backed by effective inputs and guidance wherever required from your end. Though the year was only through Virtual Events, you made your presence felt as if you were there with each one of the executing people involved in the events.

I was a silent observer of your management style and I must admit that you have a humane approach to deal with the situations. You remained calm and composed and were never tensed even during the moments of crisis. I can definitely say that my key takeaway while being deputy has been to remain cool in all situations.

Suhas, I convey my best wishes for the future, with confidence that your contribution during my tenure will be equally valuable in taking BCAS to greater heights.

Now, I turn to my exciting journey at BCAS. I was witness to my father’s passion as a BCAS member as he was an avid reader of the BCA Journal and actively participated in the seminars and RRCs. He always encouraged me to become a member of BCAS, which I did in 1994 and immediately started attending RRCs. In those years the RRC was held in the month of April and I used to celebrate my birthday at RRCs for some years.

My participation at the RRCs and seminars was noticed by our Past President Mr. Rajesh Muni and he invited me to join the Core Group in the year 1999-2000. I convey my sincere thanks to Rajeshbhai, for involving me actively at BCAS. I was inducted in the Accounting & Auditing Committee which gave an impetus to my passion in this area of the profession. I was made Convener of this Committee in the year 2003-04 and continued to serve in that capacity for 15 long years. During my journey as Convener of the Accounting & Auditing Committee, I worked under the Chairmanship of not less than six Past Presidents.
The learnings from each one moulded my outlook towards the profession
and assurance area of practice in particular. I would make a special
mention of Himanshu Kishnadwala, under whom I was convener for
the maximum number of years. He has that sense of urgency with an eye
for detailing, which appealed to me and also inspired me to become
meticulous in approach and to be prompt in responding to the issues. I
served during the past two decades on other committees too, but my heart
was always in the field of Auditing and Company Law.

On my birthday in 2017, Narayanji, who was to take charge as President for 2017-18, approached me to be part of his team. Narayanji,
I convey my sincere gratitude to repose confidence in me and inducting
me as an Office-Bearer. I also got fair glimpses of working at BCAS when my partner and dear friend Chetan had been the President in the year 2016-17.

I can vouch for one thing from my experience, that the model of BCAS with Past Presidents as Chairmen to guide the Conveners and the Committees, is so robust that there is perfect grooming of the young talent to be sound not just academically but also administratively.

I owe a lot to BCAS for improving my skills and outlook towards the profession. The culture at BCAS
is such that the seniors make youngsters really comfortable during
exchange of ideas by frankly sharing their knowledge and experience.

After reminiscing my journey at BCAS, I am now eager to share with you my thoughts on the year 2021-22 where I aspire to contribute to the progress of BCAS and the profession at large. This aspiration is with an approach where I would be heavily banking on the collective wisdom and support of all the Committees. I had occasion to convey my thoughts to each committee when we had our first meeting for planning the activities for the year. I am glad that each committee has wholeheartedly supported the Theme which I have for the year and they have commenced planning events encompassing the theme.

I firmly believe in what my GURU has preached on pursuing goals and achieving the same. He says:

The strength with which an idea is pursued
Will magnetise the resources
that are required
for the accomplishment of the idea.

You
may feel, I am referring many a time to my GURU Mahatria Ra. However, I
would at this juncture share that I have developed a lot of positivity
by going through his teachings. I always remind myself to have a
positive approach whenever I face situations of difficulties or crisis
in my professional or personal life. This approach has always provided
me a path since it is calmness which allows a rational thought process.

Let
me now delve into my theme for the year. It is based on the acronym
which is the current flavour for businesses, professionals, capital
markets and economists. However, the same acronym for my theme is for a
different meaning and purpose. Individually, each word in the acronym is
of critical importance to our profession as well as the country as a
whole.

The Theme for the Year is ‘ESG’.
EMPOWERING     SCALING     GLOBALISING

To achieve Empowering, I have identified certain executable initiatives:

  •  I wish that BCAS becomes an enabler of showcasing latest knowledge on the upcoming areas of professional opportunities to the SMPs and Young CAs.
  •  Concerted efforts be made to create a platform for networking amongst members of BCAS from all over India.
  •  My aim is that the public at large should not view CAs merely as Tax Advisors but they should perceive CAs as Business Advisors.
    Towards this shift BCAS shall aim to equip its members and CA community
    with working knowledge on other relevant ancillary laws.

Scaling up of the Professionals at BCAS is planned through the following initiatives:

  •  We have in all ten committees, professionals with experiences in varied fields of profession and business. It is my endeavour to create a platform, where thought leaders from BCAS Core Group and through the contacts of BCAS members be brought on the BCAS Platform to guide SMPs by providing vision for scaling up their offerings. The dissemination of knowledge
    should be such that they can equip themselves for providing services
    which offers professional satisfaction and in turn adds to the efforts
    towards nation building.
  •  BCAS has been a leading professional association and has its reach throughout India. However, there have been barriers to go on its own beyond a certain reach. A concerted effort shall be made to reach out to various local CA chapters from different parts of the country as well as trade and industry bodies of various states. In reaching out, I have requested each committee to become knowledge partners with them, thereby attracting members and also to jointly create advocacy on critical issues to be taken up with the regulators.
  •  The year gone by has provided glimpses of the changes in the profession which are to come, in fact at a rapid pace on account of adoption of technology in all spheres of life. BCAS shall ensure to design seminars, workshops enabling professionals to embrace technology. This will bring accuracy in the execution of services and efficiencies in deliverables.

Indian
businesses are going places and have internationalised their
operations. Our profession is also spreading its wings. To ensure our
members are provided opportunities to explore Globalising their services, I have plans for BCAS to take the following steps:

  •  To organise programmes creating awareness of the professional services which may be offered by members at a global level.
  •  In this virtual world, distances do not matter. We can now be enlightened by speakers of international repute. Efforts shall be to share latest global developments in varied fields of professional interest through such speakers. Also seminars, workshops shall be planned to disseminate knowledge on latest developments which enables members to equip in rendering services at global level.
  •  There would be professional associations similar to BCAS operating in different geographies worldwide. There will be efforts to tie up with few such associations to cross-sell events and publications. Efforts will also be made to understand best practices from such counterparts and bring to our members to enable them to be globally relevant.

These are my thoughts which I will drive through the year. I am of the humble belief that if our team of dedicated Core Group provides their valued inputs on the aspects of this year’s theme, we shall be able to add at least some additional value to the members’ professional capabilities.

I have been part of the Core Group since two decades. There have been many initiatives over the years, which have developed the Brand BCAS. Over these years and lately since I entered the Managing Committee and have been a part of the Office-Bearers, I have observed that there are various pockets of operations within BCAS, which can be further improved.

We have to make conscious efforts not just in a single year of each President. Rather, a concerted and long-drawn process has to be evolved to improve the functionality within BCAS. With this approach in mind, I discussed my thoughts with the incoming Office-Bearers team. As an outcome of the same, I am laying before you all, the Internal Goal-Setting exercise for BCAS, for which I have taken assurance from the Office-Bearers to continue on the same in the years to come.

I have termed this Internal Goal-Setting as LEAP.

This is my Leap of Faith, that the BCAS will attain much greater heights in the years to come by executing the exercise by the name LEAP.

Again, I am tempted to quote my GURU Mahatria Ra:
Highest manifestation of
Human intelligence is
FAITH

LEAP denotes:
• Leadership for BCAS;
• Excellence at BCAS;
• Accountability to BCAS members; and
• Professionalism in BCAS.

I would like to elaborate each in a few words.

Leadership
BCAS is unarguably one of the leading professional associations. To continue and improve its Leadership position and to be of relevance for the profession, BCAS will have to identify and groom future leaders.

Excellence
Excellence will be possible by keeping a close watch on the latest developments in the profession. There has to be continuous exchange of ideas in each committee and frequent meetings to deliberate on such developments. Once there is such alacrity, then it would be easy to identify relevant offerings for the benefit of members and public at large.

During the pandemic, we have realised the power of technology. Now there are no barriers of distance for bringing on board excellent faculty and for attracting participants for professional offerings. BCAS will initiate all the necessary steps to have an edge technologically while offering learning initiatives so as to be considered as an excellent place to imbibe knowledge.

Accountability
I am aware that we have been receiving lots of grievances related to the website functioning, online payments functionalities, delayed responses to the issues raised by members, etc.

There is a thought process to improve experience of members with the BCAS as an organisation. Towards this end, we shall be creating dedicated email ids for various types of grievances to be monitored by a responsible person at BCAS.

At Office-Bearers level, we shall take on responsibility to monitor the replies given and unattended grievances.

We shall develop a feedback mechanism, whereby professionals can send their experiences for the hardships faced in various compliances as well as their viewpoints on topical subjects for the progress of the profession. The collation of such feedback will be sent to the respective committees to deliberate and on quarterly basis the Managing Committee would discuss to give responses to the respective members regarding the BCAS view and action taken at its end.

Professionalism
BCAS is an organisation run by the professionals and for the professionals. It is of paramount importance to have professionalism inculcated in each area of its operations. We are conscious of the fact that BCAS is run by volunteers and hence there is a need to have technology playing
a greater role in seamless execution of its functions. This year while
passing the accounts, the Managing Committee has allocated a substantial sum of Rs. 35 lakhs towards Technology Fund. We shall ensure effective use of the allocation towards a robust database, efficient execution of events and provision of timely information for the members. We shall take steps to have effective training of the manpower so
as to execute their functions in the most efficient manner. This will
also reduce the burden on the young core group members who have to
devote time and effort during the events’ execution.

I know I have projected many things to be carried out during the year, which may be felt difficult to attain. However, I commence my journey as President with a clear conscience, which is truth. The truth is both honesty and integrity. I want to assure each one in the BCAS family, that my efforts to achieve what I have laid before you all will be with honesty and integrity.

With these words, I conclude my speech and I hope that my efforts with your guidance and support will take BCAS to further heights of glory.

Thank you all.

WORK FROM HOME

In my school days, the most boring thing was ‘Homework’. It was a serious hindrance to my playtime. Even during Diwali and Christmas vacations, there used to be homework. I used to curse the teachers and parents and used to wonder who had invented this stupid idea of homework for school children.

After I grew older and saw the homework assignments of my children, I realised that teachers could not do full justice to teaching in class and expected the parents to take care of the deficiencies in their teaching. When parents realised that their ward had not understood what the teachers taught, they would think of tuitions or coaching classes. That added to the misery of the poor school students. So now, even little kids are occupied at least ten hours a day (!), including school time, tuitions, hobby-class and so on. What a torture.

After the school days were over, I heaved a great sigh of relief – relief from ‘homework’. But destiny can be cruel. Corona and the consequent lockdown are the culprits and the ghost of homework has come back to haunt us again, this time in the form of ‘Work From Home!’

When a person physically attended a corporate office, she used to be occupied for a maximum of 12 hours a day, including commuting time. It is a different story that the new work culture makes a corporate employee start working in the evening. This is actually just to ‘show’ his ‘sincerity and dedication’. One of the pretexts is to sit in late to suit the US timings.

But now this ‘Work From Home’ culture has crossed all limits and keeps us ostensibly occupied for 16 hours a day if not more.

I am told that since we are already in the era of regulations, the Government has tabled a Bill called ‘Work From Home Regulations (Restrictions, Liberties and Facilities) Bill, 2021’.

The salient features of the proposed regulations reveal that in addition to the salary, employers shall pay to the employees:

1) Domestic harassment / violence allowance (at the wife’s hands);

2) Allowance for tea, refreshments and meals that they would have got in the office but not now;

3) ‘Voucher allowance’ – the amount which an employee is deprived of for not being able to claim ‘reimbursement’ of un-incurred expenses.

4) Rent allowance – an employee is required to use some space at his residence. The office saves the corresponding expenses on maintenance of office, electricity, etc. So, a proportionate rent allowance would be paid to the employees;
5) Fitness allowance – In physical working, employees could maintain their fitness by commuting in trains, running to catch buses, some walking, etc. But people sitting at home have to specially spend time and money on exercises and fitness.

The Bill also seeks to regulate working hours at home, holidays and so on.

ICAI has demanded that the implementation of this Act be audited by practising CAs. It has also formed a committee to frame a separate Standard on Auditing for this purpose!

Note:

This may seem like fiction, BUT, please note that France has passed a law that there won’t be any obligation on the part of employees to receive / act upon any instructions or directions from employers on their weekly and other holidays. So there!

Suggestions on the Bill are invited from our valued readers.

BLAST FROM THE PAST

Here is a rare nugget from the archives of veteran Uday Chitale. This photograph was clicked in 1951-52 (about 70 years ago when the BCAS was just three years old!). The occasion was the visit of Mr. J.S. Seidman, the then President of the American Institute of CPAs, when he visited and interacted with members of the BCAS. He is seated third from left, holding a bouquet of flowers.

Those seated in the front row are, from left, N.M. Shah, R.B. Sheth, G.M. Kapadia, C.N. Sanghavi, R.P. Dalal and M.L. Bhatt.

Standing (from left to right), H.S. Banaji, D.L. Bhatt, R.S. Phadke, M.P. Chitale, D.P. Vora, M.H. Contractor, B.D. Jokhakar, S.N. Desai, S.V. Ghatalia, E.C. Pavri, A.S. Thakkar and A.H. Dalal.

USHERING IN UTOPIA

Your Editorial, EPIC SPEECH ON ‘BABUCRACY’ (BCAJ, December, 2020), is really an eye-opener. If such conditions are ushered in, we will be in UTOPIA. You have wonderfully brought out the quintessence of the Minister’s lamentations. Standards of general honesty are very low in our country. One Nitin Gadkari cannot bring in sweeping changes. People should raise their levels of integrity. Rama Rajyam cannot be established overnight. So many years of Independence have not made any marked change of attitude… You have done well, Editor, and let us hope for a transformation.

                                                                                                                   – R. Krishnan

WHO OR WHAT’S A CAP?

Mr. Thinkeshwar was a senior Chartered Accountant in practice for many years. His real name was Ishwar. However, he used to think so much that people started calling him ‘Thinkeshwar’. He was very sensitive and quite aware of social issues. He had genuine sympathy for the pains and miseries of the people, was a social activist and a good writer, too.

In the months of June and July, 2020 when Covid-19 was at its peak, he read a news item about how ‘Corona Afflicted People’ (CAP) were treated in society. One person tested Corona positive while he was in his office. Immediately, the boss asked him to leave. The CAP said there was no conveyance available. He was working in an essential service office – in a bank. But the boss ordered him to quit immediately and refused to even meet him. The driver refused to take him home in the car. The poor fellow walked about six km. to reach home. The security person was surprised to see him back so early. The news had already reached all the occupants of the society and the watchman was instructed not to let him enter the building. His family members were watching from their balcony. They threw his clothes and personal things down and asked him to go and stay in some hotel or any other place. He pleaded with each one of them – boss, colleagues, bank customers, driver, watchman, family members – about how he had done good things for them. But no one was in a mood to listen.

Thinkeshwar was moved by such true stories and started writing a very emotional article.

Suddenly, a thought occurred to him which gave him the shivers – what would happen if he himself became a CAP! He imagined certain scenes and dialogues:

With partners: ‘I slogged for the development of the firm with utmost good faith and sacrificed my personal life.’

Partners: ‘See, our agreement is to share only the profits of the firm, not each other’s personal difficulties’.

With articles: ‘I was generous to you – granting leaves, giving concessions in timings, imparting good training’.
Articles: ‘That’s nothing. It was your duty and our right.’

With staff: ‘I treated you so nicely and affectionately. Never did any bossing, paid salaries and bonus on time.’
Staff: ‘So what? We worked on lower salary. We would have earned much more outside (although everybody had tried outside). On the contrary, we obliged you by working with you.’

To clients: ‘I sacrificed my personal life to provide better service to you, carried all your anxieties on my head and remained in stress always. I helped you in many difficult situations on low fees, which were never received promptly, and undertook so much risk in certifying your accounts.’
Clients: ‘Sorry. That was your professional duty. We could have hired some other CA at a much cheaper cost but due to our “relations” we kept on obliging you. And we believe there is some law that prohibits prompt and regular payment of fees to CA’s!’

To family members: ‘I slogged at the cost of my health and sacrificed all personal pleasures. I committed so many sins to provide you a happy life.’
Family: ‘What’s great about that? It is the fate of all CAs. It’s your destiny. We are not going to share your sins and pains.’

Many similar scenes took place in Mr. Thinkeshwar’s vivid imagination – with Revenue Officers, friends, relatives and neighbours, but everybody disowned him.

Poor CAP’s, he thought to himself. He remembered the story of ‘Valya the dacoit’ who became Valmiki to write the Ramayan. And then suddenly he trembled as he realised that CAP also stands for CA’s in Practice.

He smiled to himself and happily started writing ‘Light Elements’ for BCAJ with a heavy heart.

OFFICE ON YOUR PHONE!


We are all used to working
on Office (earlier Microsoft Office) on
our desktops and laptops. Most of us use Microsoft Word, Excel and PowerPoint
routinely without even having heard of anything else. They are a natural part
of our computing life.

 

And now, Microsoft has come
up with an Android and iOS version of Office. Anyone can download the Office app on phones for Android and iOS.
The app is free to use, even without signing in. An Office 365
or Microsoft 365 subscription
will also unlock various premium features, consistent with those in the current
Word, Excel, and PowerPoint apps. Just head to the Play Store or App Store and
download the version appropriate for your use.

 

Now, who will think of
typing letters on his mobile phone? Or making spreadsheets? Welcome to Office
on your phone – Word, Excel and PowerPoint, all rolled into one. On your phone
you can open all original Word documents, Excel spreadsheets and PowerPoint
presentations which you may have received by email, WhatsApp or SMS. But you
can do even more. Let’s explore.

 

In Word, you can scan text directly into a Word
document. So, if you read any printed text in a letter or book or newspaper,
you can just point your camera to the text and scan it right into your Word
document. This allows you to edit, save or forward the document for further
use. This is a real cool feature which helps you create Word documents without
having to type them.

 

Besides, if you wish to
create a totally new document, apart from typing it (boring and cumbersome) on
your phone, you may just dictate it directly. Just tap on Dictate and you will
be able to create a new Word document seamlessly. A few spelling errors, when
the microphone does not accurately catch what you are saying, may just need to
be edited and you will have your document ready in a jiffy. An easy way to
dispense with your secretary or at least not be fully dependent on him / her!
You can dictate while you are travelling or even on a Sunday when you get
bursts of inspiration.

 

Of course, the traditional
methods of creating a document right from scratch or using a pre-configured
template are also available, just in case you want to type out your document.

 

Coming to Excel, you have the option to create a
new spreadsheet the old, boring way – by entering the cells manually or from a
pre-configured template. But now you have another exciting way to create a
spreadsheet – just scan a printed table on your phone and get your cells
populated instantly into an Excel file. If the original is well printed and
your phone has a reasonably good camera, you may not even have to edit the file
– else a bit of editing may be required. But the very idea of having a full,
ready table imported directly into an Excel sheet is a dream come true – you
have to try it to experience the joy of importing.

 

PowerPoint has
the option to create a new presentation right from scratch or from a
pre-configured template. You may choose pictures from your phone and also
create an outline for the presentation. It’s a bit difficult, but still doable.
The best part is that you can Rehearse your PowerPoint presentation with a
built-in coach. Just run the PowerPoint presentation and start speaking as if
you are presenting it live. The Rehearsal Coach will analyse what you are
speaking and give you tips to improve your speaking skills – it could give you
hints such as ‘Do not read out your presentation verbatim’ or ‘Vary your tone
and pitch’ or ‘Don’t use too many filler words like “umm”, or “you see”’ or
even help you with the speed of your speech – whether you are too fast or too slow
or just right. Indeed, a wonderful in-built tool to help you prepare a
perfectly timed and worded presentation.

 

Apart
from the expected tools of Word, Excel and PowerPoint, Office also helps you
with PDFs in a variety of ways. It allows you to sign any PDF document with your
signature and you can scan a document directly to a PDF file on your phone. You
can even convert your pictures to PDF, convert your document to PDF, or convert
PDF files to Word documents. Extremely useful for day-to-day functioning.

 

With QR
codes becoming more and more prevalent, Office allows you to scan a QR code and
decipher what it says – you can save it as Text or even save it as a Note.

 

Office also allows you to
create Surveys and other Forms which you
can share and solicit responses to from your clients, suppliers or co-workers.

 

And finally, Office helps
you create Yellow Post-it Notes
which can be stored on your phone and are searchable instantly.

 

The Search function in Office is very
powerful. It allows you to Search for keywords in your Office files, your media
(including text within images) and in your notes. The Search works on all your
folders within your  phone, or on
One-Drive, or on your Google Drive or any other drive that you connect it with
(e.g. even Dropbox or Box.net).

 

Now,
with so many wonderful, unique and time-saving features, why would you not use
Office on your phone regularly?

 

You have brains in your head. You have feet in your
shoes. You can steer yourself any direction you choose. You’re on your own. And
you know what you know. And YOU are the one who’ll decide where to go…

—  Dr. Seuss,
Oh, the Places You’ll Go!

IF TOMORROW COMES…

(This
article appeared in the BCAJ edition of February, 2002.
It is as delightful to read today as it was 19 years ago. As we read about the
tomorrow written 19 years ago, we can see that today was visualised, with
uncanny precision)


Stanley
Kubrick was a maverick film director. In his movie 2001: A space Odyssey, he had
predicted that man would finally encounter extra-terrestrial intelligence in
the year 2001. Nothing like that happened. It did, however, inspire Steven
Spielberg to make the critically acclaimed movie AI.

 

What are
the technologies that will drive our tomorrow? Will we live in twilight
‘sci-fi’ zone where everything is virtual? How will technologies affect our
daily lives? As a chartered accountant, should you really bother? So here they
are. A wild walk into the future – Technologies that will reshape you and your
future.

 

1. Wireless world:

Bet your
last paisa on wireless technology. There is no doubt that wireless will change
our lives dramatically. The only question being asked is – ‘when will it
happen?’

 

Today, the
biggest impact of wireless is in mobile phones. Can you imagine your daily life
without your Nokia or Samsung mobile phone? Mobile phones will proliferate with
‘amoeba-like’ growth. And this is just the beginning.

 

The next
big application of wire-less technology will be wireless Internet.
Third-generation (3G) wireless Internet will roll out soon, with capability of
high bandwidth Internet and streaming audio, video and multi-media. Do-Co-Mo in
Japan has already started giving these services and has met with an exciting
response.

 

Wireless
Internet will become ubiquitous. Your laptop, your mobile phone and your
personal digital assistant (PDA) will have wireless Internet. What will be the
impact on business? Any employee located anywhere in the world will be able to
access the latest corporate information, the latest news and will communicate
with the office and colleagues. Imagine a scenario where you communicate with
all your articled clerks and employees spread all over the globe on a real-time
basis. Imagine being able to update them with the latest notifications and
amendments, whilst they are at a client site rendering advice. Imagine the
endless potential for large companies with a huge sales force. Truly, geography
will become history – unlike Iridium, which coined the tagline ‘Geography is
history’, only to find itself in the history books.

 

2. Byte a chip!

Today, to
access the Internet you need a carrier – typically, a computer. Tomorrow, you
won’t!

 

Everything
you can truly conceive of will have the capability to connect to the Internet –
your lassi-maker, your refrigerator, your
toaster and your car – all your devices. But, what the hell! How does this
impact business?

 

A chip has
the embedded ability to receive, crunch and send data. Imagine a small chip on
all inventory parts in the factory, communicating constantly with wireless
Internet. You will know all details about the entire supply chain, without
having to do any physical check. With embedded intelligence, such chips will be
able to send alerts if certain parameters are breached. It could be an e-mail
alert or an SMS.

 

3. Distribute your computing:

When you
press the switch to start your fan, you expect the electricity to come on
instantly. You do not own a power generation unit either at home or in your
building. Then why do you need to have a huge PC or invest in a server to have
access to computing power? Much like the electricity grid, can’t you have a
computing grid?

 

Distributed
computing gives you the power of a super computer, without having to invest in
one. The processing power of thousands of PCs is aggregated. A central server
sub-divides a large task into bits and assigns it to thousands of computers.
These computers do their processing job and return the results to the server,
which aggregates the results. This kind of computing is ideal for large
processing tasks and is already used in research. Large tasks involving
financial transactions are amenable to distributed computing.

 

4. Move over B2B, it’s time for P2P:

Imagine a
large network with thousands and millions of persons with a commonality of
interest, sharing data and information, creating databases and communicating
instantly. All this without the need to invest in expensive servers. Through
the medium of the Internet, you can communicate and share your files without a
centralised server. Numerous workgroups can create their own space and work
efficiently.

 

The most
famous commercial application of P2P technology is Napster, which allows anyone
to share music files on their computers.

 

Stanley
Kubrick’s futuristic prediction that man will encounter extra-terrestrial
intelligence went awry. But that will not halt the progress of some
technologies which will aptly respond to Sydney Sheldon’s famous best seller If tomorrow comes. The
question you need to ask yourself is – Are
you ready?

 

 

DISTANCE AND MASK

While going down memory lane, I recall that
in my childhood whenever I used to travel by road with my parents I never
missed to read the words painted in bold, KEEP DISTANCE, on the
backs of trucks running ahead of us. When the car overtook a truck, I got
excited and cheered the driver. As if I had won the race. I was under the
impression that our driver would have got the permission to go ahead from the
driver of the truck!

 

At that time I did not know the reason for
the display of those words KEEP DISTANCE on the back of every
truck. Later I realised that it is for safety and to avoid a mishap if the
truck ahead of you brakes suddenly. This principle is applicable to all vehicles
running on the road. It is a part of traffic rules all over the world. So, KEEP
DISTANCE.

 

But you and I never imagined that one day
this traffic rule would be applicable between human beings. With the outburst
of the corona pandemic, the words KEEP DISTANCE started echoing in every
nook and corner of the world, with its Indian version of ‘Do gaz ki doori’.

 

However, just ‘Keep Distance’ or ‘Do gaz ki
doori’ is not enough; this traffic rule of ‘Keep Distance’ is incomplete if you
don’t mask your face. So distance without mask is not safe. The reason for this
is to keep the deadly virus away. The only route this virus gets into your body
is through the nose, the ‘Gateway of Corona’. When you cover your face, you
become ‘faceless’. Don’t take anybody at face value, meaning don’t be in
contact with anyone with an open face. He or she can be a carrier of the
‘predator’ called corona.

 

Before the mask being used in the corona
pandemic, let us recall that in some communities women are required to cover
their face; it’s called ‘Ghunghat’ or ‘Burqa’. This practice is followed
religiously in patriarchal families in rural parts of India. Even at home, a
married woman is to wear a ‘ghunghat’ to show respect to the elders in the
family. So you will find a married woman standing on the threshold of the
drawing room adjusting her ‘ghunghat’ constantly to cover her face even if she
is arguing with the elders at home. Often, a female cannot step out of her home
without covering her face. And this has been in vogue from times immemorial.

 

Interestingly, the ‘ghunghat’ has been a
source of comedy of errors in many Hindi films and serials. And then covering
the face with a ‘gamacha’ is common in the underworld. The underworld is always
a big threat to law and order of the ordinary world where you and I live. The
term ‘underworld’ covers everyone, right from ‘Chambal ke daku / Thugs’ to bank
robbers, ATM robbers [a new category] and every evil soul indulging in crime on
earth. The dominant intention of those evil souls is to hide their identity
while committing heinous crimes.

 

We also see girls and women covering their
face with an ‘Odhani’ or ‘Dupatta’ whenever they are riding a vehicle solo or
pillion-riding. Why do they follow this practice? We should not intrude into
their privacy too much. I think you understand what I mean.

 

When it comes to the mask being used now,
what we observe all around us is quite amusing. Initially, there was a lot of
talk about masks, right from the World Health Organization to heads of nation
to the Prime Minister of India, the Health Minister, epidemiologists, doctors
and ‘WhatsApp universities’. In this corona pandemic, the mask is the only
‘panacea’ to stay safe before the virus enters your body. Surprisingly, this
claim was turned down by none other than the President of the USA Donald Trump
before he was caught by the deadly virus during the Presidential election
campaign!

 

There have been a lot of discussions and
debates, particularly on electronic media, about what constitutes a proper
mask. Initially, the N95 mask was highly recommended by WHO. But it was not
affordable in India. So we see ‘desi’ versions of masks of different designs,
colours, material, layers in use. Even a simple cotton ‘gamacha’ is used as a
mask in many parts of India. In fact, it is more popular than the N95 mask.
Many people take pride in using ‘gamacha masks’ (perhaps they believe in
‘Aatmanirbhar Bharat’). Go to YouTube and you will find at least a hundred
videos of ‘How to make home-made masks’ with practical instructions in sweet
voices.

 

The use of a mask is compulsory outside your
home, without mask you are liable for a penalty. The penalty varies from city
to city. So don’t become the target of the police department because some
overzealous police uses physical force, too. You may have seen those visuals on
your TV screen.

So distance and mask are inseparable to curb
the spread of the corona virus. Earlier it was social distancing, but it is all
about physical distancing at present.

 

But for corona
distance doesn’t matter; it emanated from the laboratory in Wuhan in China and
travelled to every nook and corner of the world. The health and the wealth of
the world have been destroyed by this deadly pandemic.

 

Remember, the humble ‘gamacha’ along with
‘Do gaz ki doori’ is the only vaccine available till a real vaccine comes to
the rescue of the human race.  

 

USEFUL APPS AND EXTENSIONS WHILE WORKING FROM HOME

These days when we are
working from home and / or working with a reduced workforce, it is a good idea
to be digitally enabled with the latest Apps and Extensions which make our life
easier and our efforts more productive. Here are some Apps which are designed
to make a difference on a day-to-day basis.

 

Zoom
Scheduler: This nifty Chrome extension helps you schedule and join meetings
instantly. Once installed, just click on its icon on the top right and you can
either join a meeting or schedule a meeting right away.

 

It also allows you to
schedule Zoom meetings directly from your Google Calendar. Once you have set up
a Zoom meeting from Google Calendar and invited others, the invitees can join
the Zoom meeting with a single click. Makes life super simple!

 

StretchClock:
This simple extension reminds you to stretch from time to time. The timer runs
in your browser and is configurable. When the countdown timer reaches zero,
StretchClock shows easy, no-sweat exercises that you can do at your desk in
business attire. It includes some easy Office Yoga poses also.

 

You can change the settings
to match your working style. Easy to pause when you don’t need it and easy to
unpause so that the hurt doesn’t come back. You can browse through the
different exercises during your break and use the ones you need.

 

It’s a professional break reminder
for desk warriors. Take a break and follow the simple no-sweat exercises to
avoid pain and stay fit. The easy way to feel better and be more productive!

 

Free
Video Email by CloudHQ: This is a unique extension which
allows you to record and send videos directly from Gmail. If you want to stand
out in your emails or you’re just too busy to type an email, you can send a
Video Email by using this extension.

 

Video Email is 100% free
and allows you to record your video, overlay multiple filters on it and send it
directly through Gmail – all with just three taps: record, upload, and send.

 

You can also upload your
video privately to YouTube, Google Drive, or create video file (which you can
then send as an attachment).

 

This is ideal for
salespeople, realtors, lawyers, marketers, and anyone who’s looking to cut
through the noise of boring text emails.

 

Grammarly:
This free Chrome Extension is a marvellous free tool which makes a huge
difference to the quality of your communication.

 

Whatever you type in Gmail
or on Messenger or in Google Doc, or Social Media, on Chrome, Grammarly will
automatically check your Grammar, point out mistakes and offer suggestions for
the correct grammatical syntax. You may accept what is suggested or just ignore
it and move ahead. It will even suggest reframing of sentences based on the
context and what you wish to convey. Grammarly is totally AI-based.

 

From grammar and spelling
to style and tone, Grammarly helps you eliminate errors and find the perfect
words to express yourself.

 

Recommended for anyone and
everyone regardless of where they work or what they do.

 

Export
Emails to Google Sheets by CloudHQ: This is an
excellent tool for all workplaces. The data sitting in your Gmail emails can be
a goldmine. With this extension you can parse and export your Gmail messages
and labels to Google Sheets, CSV or Excel.

 

All
you have to do is to install the extension. Then on the left, select the label
to export and select ‘Save Label to Google Sheets’ in the Label menu. Once the options dialog box opens,
you can just tick the columns you wish to export, such as Subject, Sender, etc.
In options, you could select continuous export, name of a spreadsheet, etc.
Then start the export – and you would have exported all your data in Spreadsheet
/ CSV format and use the goldmine to further your analysis, tracking, etc.

 

A very neat tool to analyse
your emails.

 

Mercury
Reader: The Mercury Reader extension for Chrome removes ads and
distractions, leaving only text and images for a clean and consistent reading
view on every site. It just clears the clutter instantly.

 

Once installed and enabled,
with just one click you can read text on your webpages in a clear, uncluttered,
ad-free environment. You can eliminate all the ads and the noise surrounding
the text on your webpage. You can even adjust typeface and text size and toggle
between light or dark themes for ease of reading. Options to optimise printing
are also available to print a webpage without ads and unnecessary clutter.

 

An interesting add-on to
browse the web comfortably.

 

Now that you have so many extensions to ease
your job, you can breathe easy and enjoy working from home. Best Wishes!

THE FORTUNE-TELLER

Every human
being is ever anxious to know about his future. Chartered Accountants are still
considered as ‘human beings’, although they work like donkeys.

 

Man is all the
more worried about the future, especially when he has to make some crucial
decisions. Covid-19 has put the future of everyone in the dark.

 

In a small
town, a Sadhu Maharaj arrived one fine day. He stayed in a temple at a
little distance from the town. But soon the news spread that he has great
spiritual powers. People started flocking to the place where he had put up his
tent. It soon became very crowded as people from nearby places also started
coming in.

 

There was a
lot of talk among the people…

 

‘How does the sadhubaba look like? What does he wear?’

 

‘Does he talk
to everyone? Is there privacy while you are talking to him?’

 

‘How much does
he charge?’

 

‘Which
language does he speak?’

 

‘Is there any
separate queue for “special darshan”?’

 

Some sceptics
said they never believed in such sadhus. They said that fortune-tellers are
bogus people; and astrology is humbug. However, secretly almost everyone wanted
to visit him and meet him. His presence had mesmerised the people.

 

Suddenly, the
news came in that the sadhubaba actually does not talk with anyone. You have to simply go and enter
your name in a register. You have to utter a short question in your mind. Then
you get a token. You then go to another room where many chits are kept. You
have to pick up the chit bearing your token number. On that chit there is a
short message. It will be a boon or a curse depending upon your past karma. ‘Boons’ will be in blue letters and
‘curses’ in red.

 

A group of
friends went to the sadhu. CA Chandrakant was one of them. Many of them uttered a question in
their minds about their children’s future.

 

They then
picked up their chits in great anxiety and eagerness.

 

On reading
their respective chits, the faces of many glowed with happiness. Most of them
had got a ‘boon’.

 

Somebody’s son
would become a minister; someone else’s daughter would get married to a
millionaire. Some people’s children would get a US visa smoothly and quickly
although Mr. Trump was still there. A few were delighted to know that their
wives would leave them alone for a long time! Likewise, many of them got some
good message or other and they felt that the sadhu was like an angel.

 

But
Chandrakant’s face turned pale. His mood changed quickly. His friends asked,
‘What’s there in your chit?’

 

‘It says my
son will join the CA course.’

 

The friends
said, ‘Very good! Then why are you so sad? You should be happy! It’s a boon.’

 

‘No,’ said
Chandrakant, ‘the letters are in red.’

 

Grief must be shared to be
endured

— 
Kalidasa, AbhiGyaanShakuntalam

THE NEW EDGE BANKING

REPRESENTATIONS

1.  Dated: 8th
September, 2020

     Subject: Request for making necessary legislative and procedural amendments
in the Income-tax Act, 1961 to ensure transparency in claim of Tax Deducted at
Source (TDS) and to reduce hardships to the taxpayers.

     To: The Chairman,
Central Board of Direct Taxes, New Delhi

     Representation by:
Lucknow Chartered Accountants’ Society, Bombay Chartered Accountants’ Society,
Chartered Accountants Association, Ahmedabad, Chartered Accountants
Association, Surat, Karnataka State Chartered Accountants Association.

 

Note: For full Text of the above
Representation, visit our website www.bcasonline.org

 

2.  Dated: 23rd
September, 2020

     Subject: Request for taking up certain measures under Income-tax Act, 1961
in the backdrop of Covid-19 outbreak.

     To: Smt. Nirmala
Sitharaman, Hon’ble Minister of Finance, Government of India, New Delhi

     Representation by:
Lucknow Chartered Accountants’ Society, Bombay Chartered Accountants’ Society,
Chartered Accountants Association, Ahmedabad, Chartered Accountants
Association, Surat, Karnataka State Chartered Accountants Association.

 

Note: For full Text of the above
Representation, visit our website www.bcasonline.org

 

3.  Dated: 23rd
September, 2020

     Subject: Request for granting relief from provisions of Tax Collection at
Source (TCS) under section 206C(1H) of the Income-tax Act, 1961.

     To: Smt. Nirmala
Sitharaman, Hon’ble Minister of Finance, Government of India, New Delhi

     Representation by:
Lucknow Chartered Accountants’ Society, Bombay Chartered Accountants’ Society,
Chartered Accountants Association, Ahmedabad, Chartered Accountants
Association, Surat, Karnataka State Chartered Accountants Association.

 

Note: For full Text of the above
Representation, visit our website www.bcasonline.org

 

4.  Dated: 24th
September, 2020

     Subject: Extension of dates for various provisions under Goods &
Services Tax Act, 2017.

     To: The Hon’ble
Finance Minister & Chairperson, GST Council North Block, New Delhi

     Representation by:
Bombay Chartered Accountants’ Society.

 

Note: For full Text of the above Representation,
visit our website www.bcasonline.org

 

 

 

The structure of the atom has
been found by the mind. Therefore the mind is subtler than the atom. That which
is behind the mind, namely the individual soul, is subtler than the mind

—  Ramanna Maharshi