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Category: News And Views

Miscellanea

I. TECHNOLOGY

16 A third of US social media users creating fake accounts

Fake social media accounts are usually associated with bot networks, but some research released Tuesday revealed many social media users are creating their own fake accounts for a variety of reasons.

According to a survey of 1,500 American social media users by USCasinos.com, one in three social media users in the US has numerous accounts on the social media networks they frequent. Nearly half (48%) of individuals with multiple accounts have two or more additional accounts.

The most common justifications given for opening extra accounts are to “express my opinions without being criticised” (mentioned by 41% of people) and “spy on someone else’s profile” (38%).

Other reasons for creating false accounts include “improving my chances of winning online contests” (13%), “increasing the likes, followers, and other metrics on my real account” (5%), “to fool others” (2.6%), and “to scam others” (0.4%).

Respondents were asked where they were making their fake accounts, and the top three responses were Twitter (41%), Facebook (31%), and Instagram (28%). Will Duffield, a policy analyst with the Cato Institute, a Washington, D.C.- based think tank, explained that this was the case because Twitter is significantly more open by default.

He told TechNewsWorld that Twitter power users frequently have many accounts, including ones for large audiences, smaller groups, and default open and private accounts.

According to the study’s co-author Ines Ferreira, noted that Twitter served as inspiration for the study’s online casino directory website. She told TechNewsWorld, that “We launched this analysis mostly because of the hoopla over the Elon Musk and Twitter merger.”

A legal battle over that accord between Musk and the Twitter board over the volume of fake accounts on the platform is still pending. However, the study’s examples of fake accounts are distinct from the ones that flustering Musk. Duffield said that “the survey conflates two quite different issues.”

“On the one hand, there are automated accounts—things that are controlled by machines and frequently used for spam. Elon Musk claims that there are too many accounts like that on Twitter, according to TechNewsWorld.” There are also pseudonymous accounts, which is what this study is looking at. Users that don’t want to use their real names operate them.

The survey also found that the majority of users (80.9%) kept their same sex when creating false profiles. According to the report, the primary exception to this rule is when users want to spy on other accounts. They therefore prefer to create a fake account with the opposite sex. Generally speaking, 13.1% of survey respondents indicated they created fake accounts using the other sex.

There are lots of reasons, according to Duffield, why we don’t want everything we do online to be attached to our real names. And it’s not always due to Cancel Culture or something like.

He said, that the ability to compartmentalise identities or take on several personalities without committing to them on the internet allows us to present different aspects of ourselves at once. The use of pseudonyms online is fairly common. Using genuine names is, in fact, a more modern expectation, he claimed.

Accounts Made Without Remorse

The study also discovered that the majority of false account creators (53.3%) prefer to conceal their behaviour from their close friends. When they do mention their false accounts, friends (29.9%) and family (9.9%) are the most likely recipients, followed by partners (7.7%).

The researchers also found that 53.3 percent of phoney account owners were millennials, compared to Gen X’s average of three and Gen Z’s average of two.

According to the report, those who create phoney accounts seem to be free to do so. 94% of the interviewees said no when asked if their bogus accounts had ever been reported to the platforms where they were created.

According to Ferreira, “these platforms frequently introduce new algorithms to report these accounts, but the majority of them never get reported.” It’s quite difficult to distinguish between all of the false accounts since there are so many of them and they are so simple to create.

“These platforms are going to think a little bit more how they’re going to do it after the Elon Musk deal with Twitter,” she continued.

Duffield, though, minimised the necessity of monitoring user-created false accounts. There is no justification for the platforms to view the creation of these accounts as a concern, he continued, given it is not against the terms of service.

He continued, “Even though they don’t have genuine names, these accounts are run by real individuals, and they act like real people. They only send messages to one individual at a time. They’re typing stuff out slowly. Their day/night cycle is regular. They don’t send out 1,000 messages to 100 different people at once, at all hours of the day.

Unharmful fakes?

Fake accounts generated by individuals are less damaging to the networks hosting them than fake accounts produced by bots, according to Duffield.

According to a theory, users who use pseudonymous accounts or accounts unrelated to their real identities misbehave more frequently, but from the standpoint of moderation, banning a pseudonymous account is the same as banning a real person, he said.

Facebook has a real name policy, despite receiving a lot of criticism for it over the years, he continued. It is currently being purposefully under-enforced, in my opinion.

He insisted, that “It isn’t a problem for the platforms, as long as the pseudonymous user is following the regulations,”.

Bot accounts don’t support a social media platform’s revenue model, but phoney user accounts do.

According to Duffield, “If the pseudonymous account is being utilised by a real human being, they are still receiving adverts.” It’s not like a robot clicking on stuff by itself. Regardless of the name on the account, if people are watching and receiving relevant advertising, it is not a big deal from the platform’s perspective.

Platforms, advertisers, and prospective buyers are interested in the activity since it is shown in the statistics for monthly active users, he stated. “People frequently abandon accounts, thus the total number of accounts is a worthless figure.” Still, Ferreira claimed that any kind of fraudulent account weakens the trust of a social media network. She predicted that eventually there would be more fraudulent users than actual ones, thus something needed to be done right away.

[Source: technewsworld.com dated 10th August, 2022.]

II. WORLD NEWS

17 US pharmacy chains ordered to pay $650 m in Ohio opioids suit

A federal judge has ruled that America’s three largest pharmacy chains must pay $650.5m (£539.8m) for helping fuel a painkiller crisis in two Ohio counties. In November, a federal court found Walgreens Boots Alliance, CVS and Walmart helped create an oversupply of addictive opioid pills.

The money will be used to help combat the impact of the crisis in Lake and Trumbull counties. The companies plan to appeal. Millions of people in the US have become addicted to opiate-based painkillers such as fentanyl and OxyContin over the last 20 years.

Nearly half a million deaths were attributed to painkiller overdoses between 1999 and 2019. In court, attorneys for Lake and Trumbull counties – both near Cleveland – put the total financial cost of the crisis at $3.3 billion. Both counties, like other jurisdictions across the US, have argued that the crisis has put an enormous strain on local resources, social programmes and legal systems.

A failure to ensure that prescriptions were valid, their attorneys have argued, created a public nuisance as vast quantities of pills flooded their communities.

Between 2012 and 2016, more than 80 million painkillers were reportedly distributed in Trumbull County – about 400 pills per resident. In Lake County, the figure stood at 61 million pills over the same time frame. A US district judge ruled that Lake County will receive $306m over 15 years, while Trumbull County will receive $344m.

In the short-term, the three companies have been ordered to pay about $87m to cover the first two years of the plan. The ruling was quickly praised by officials from both counties.

Lake County Commissioner John Hamercheck, for example, said that the ruling “marks the start of a new day in our fight to end the opioid crisis”. The three companies have repeatedly denied the allegations and claimed they attempted to prevent painkillers from being diverted towards illicit use. Additionally, they argued that it was doctors – rather than pharmacies – that ultimately determined how many pills were prescribed and to whom.

When contacted by the BBC, all three companies said they will appeal the ruling. “We never manufactured or marketed opioids nor did we distribute them to the ‘pill mills’ and internet pharmacies that fuelled this crisis,” Walgreens said in a statement.

More than 3,000 lawsuits have been filed against opioid manufacturers and pharmacies in the hopes of recouping the costs spent combating the crisis.

[Source: BBC.com dated 18th August, 2022.]


18 PwC fined nearly £1.8m over BT fraud audit failures

PwC has been fined almost £1.8m for failing to properly scrutinise the accounts of telecoms company BT after a £500m accounting fraud had been uncovered at its Italian operation.

The accounting giant failed to act with the “requisite professional scepticism” and did not obtain “sufficient appropriate audit evidence” in its work on BT’s 2017 financial statements, which had to be adjusted by £513m because of the Italian scandal, according to the Financial Reporting Council (FRC).

The UK’s accounting regulator also severely reprimanded PwC, which was paid £4.3m for its work on BT’s accounts, and Richard Hughes, the audit engagement partner at the firm. The FRC fined PwC £1.75m and Hughes £42,000.

“The respondents failed to act with the requisite professional scepticism [and] did not obtain sufficient appropriate audit evidence,” the FRC said in its 27-page final ruling published on Monday. “The respondents did not approach the audit of BT’s treatment of the debt adjustments with the necessary professional scepticism and they failed to adequately document their audit work across the entirety of the BT Italy adjustments.”

The 2017 scandal wiped almost £8bn off BT’s market value, prompted a restructure including the axing of 4,000 jobs, and ultimately was a factor that resulted in the departure of former chief executive Gavin Patterson as investors lost confidence in management.

The FRC also said PwC and Hughes had not produced an audit that was understandable to third parties.

“The respondents also failed to prepare audit documentation that was sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the nature, timing and extent of the audit procedures performed,” said the regulator.

However, the FRC’s executive counsel said its decision did not mean that BT’s 2017 financial statements were misstated, that the £513m adjustment for Italy was wrong or that the breaches it found were “intentional, dishonest or reckless”.

The FRC fined PwC and Hughes £2.56m in relation to the audit of the 2017 accounts, but reduced this by 30% because the issues were raised by the parties at an early stage.

“In determining the financial impact of a major fraud detected within a business, difficult but important issues relating to appropriate accounting treatment and disclosures will need to be addressed,” said the FRC deputy executive counsel, Claudia Mortimore.

“It is vital that these are subject to robust audit so that the users of financial statements can have confidence that the financial impact is properly and accurately stated in subsequent financial statements. The sanctions imposed in this case, where certain elements of the adjustments following a fraud were not subject to the required level of professional scepticism, underscore this message and will serve as a timely reminder to the profession.”

PwC has been sanctioned five times since 2018.

The FRC has previously fined PwC a total of more than £17m in relation to audit failings for clients Taveta, Redcentric, Kier Group and Galliford Try. In 2020, PwC was the largest accountancy firm in the UK with revenue of £3.5bn, of which £754m was for auditing services.

“We are sorry that aspects of this audit were not of the required standard,” said a spokesperson for PwC. “We have made significant investment in strengthening audit quality in recent years, which has been recognised in improved quality inspection results. We remain committed to maintaining and building on this progress through the delivery of consistently high-quality audits.”

[Source: theguardian.com dated 8th August, 2022.]

III. ENVIRONMENT

19 Climate change: Drought highlights dangers for electricity supplies

Overall, the amount of electricity produced by hydropower, which uses water to generate power, has decreased by 20%. Additionally, access to nuclear power plants that use river water for cooling has been restricted. There are fears that the shortfalls are a taste of what may occur in winter.

High temperatures in the UK are reducing the amount of energy produced by fossil, nuclear, and solar sources. That is because the technology in power plants and solar panels work much less well in high temperatures.

As Europe looks for alternate sources of energy in the wake of Russia’s invasion of Ukraine, the prolonged dry period is adding to the strain on energy supplies.

  • Millions hit by hosepipe bans as drought declared

  • US Senate passes sweeping $700bn economic package

  • Causes of deadly dry-lightning wildfires revealed

“Hydropower is a vital source of energy for Europe, but as rivers and reservoirs dry up, it is becoming much harder for facilities to generate electricity. Around 1/5 of Italy’s energy comes from hydropower, however this percentage has decreased by almost 40% during the past 12 months.”

Similar trends can be seen in Spain, where electricity production is down 44%, per data from energy analysts Rystad Energy.

According to Fabian Rnningen, a power expert with Rystad, hydropower can be extremely unpredictable, but 40% is by far the most extreme. He emphasises that not only are the numbers declining across all of Europe, but also in the major hydropower-producing nations. It’s really a big impact.

Hydroelectricity is a problem in Norway as well. It issued a warning that unless its reservoirs were full, it might not be able to continue exporting energy to nations like the UK. Some in the hydro industry say that lack of investment in modernisation and in transmission lines are also causing problems.

Eddie Rich from the International Hydropower Association says that we are going to face a problem this winter. And that should be a wake-up call to have more investment in the infrastructure for the next few years.

The exceptionally hot weather is also hitting nuclear power production, especially in France. Around half of the 56 reactors in the fleet are offline, with several affected by a systemic issue with corrosion.

When temperatures are high, water from rivers that are now running low is frequently used to cool those reactors that are operating.

[Source: BBC.com dated 12th August, 2022.]

Letters to The Editor

Dear Sir,

This has reference to the article “Rethinking the Ind AS-116 Lease Standard’ by Mr. H.J.Tavaraia in the July, 2022 issue of BCAJ. Whilst the article is well thought of, there are certain comments which I would like to offer:

  • The issue raised on increase in the work load for millions of lessees does not cut much ice since Ind AS does provide exemptions for leases which are less than 1 year and low value leases. Further, with data recorded and processed electronically, the increase in the work load if at all will be marginal. It is at best a different way of analysing and processing transactions.

  • On the issue of “no asset cover”, the lenders in any case would keep in mind the fact that ROUs represent intangible assets which they would appropriately factor in whilst laying down the terms and covenants.

  • The issue of severe distortion due to a rise in EBITA and ROCE is mitigated due to the fact that it will be similar across the main user industries.

  • The shift in the net operating cash flow improving but net financing activities having a greater pay-out is an economic reality which we cannot escape from.

  • Some of the disclosures whilst being relevant should not lead to an overkill since Ind AS-116 already provides for enough relevant disclosures.

To conclude, IndAS-116 itself represents a rethink reflecting economic realities which are in accordance with the conceptual framework for preparation of financial statements to reflect substance rather than the legal form!

CA Zubin F. Billimoria

Dear Sir,

The August, 2022 issue of BCAJ came as a pleasant surprise. It was a treat to read the experiences of several past presidents of BCAS and the passionately written poems on India@75. Thank you for the beautiful package of contents.

I also see that you have now taken over as the editor of BCAJ. I appreciate the importance given to accounting, the core of our profession, in your first editorial where an editor, for the first time, has signed in this manner: Dr. CA Mayur B. Nayak.

Many readers might have missed it. A Dr. denotes what we learned on Day 1 of accounting; ‘Real’ accounts are ‘debited’ when they ‘come in’. A warm welcome to you, and by the end of your term, readers can be expected to ‘credit’ you for the memorable things you did at BCAJ.

Vinayak Pai

Regulatory Referencer

Direct Tax

1. Income-tax (22nd Amendment) Rules, 2022: Section 158AA provides that where the Commissioner or Principal Commissioner is of the opinion that any question of law arising in the case of an assessee (relevant case) is identical with a question of law arising in his case for any another assessment year (another case) which is pending in appeal before the Supreme Court against an order of High Court which was in favour of assessee, he may direct the Assessing Officer (AO) to make an application to the Appellate Tribunal in the prescribed form stating that an appeal on the question of law in the relevant case may be filed when the decision on the question of law becomes final in the other case. Form No. 8A is now prescribed in which the AO shall make an application to the Appellate Tribunal. [Notification No. 83/2022 dated 12th July, 2022.]

2. Certain forms, returns, statements etc., prescribed in Appendix II to be furnished electronically: Forms 3CEF, 10F, 10IA, 3BB, 3BC, 10BC, 10FC, 28A, 27C, 58D, 58C and Form 68 are to be filed electronically. [Notification No. 3/2022 dated 16th July, 2022.]

3. Condonation of delay in filing Form No. 10BB for A.Y. 2018-19 and subsequent years: CBDT had, in its earlier circular, authorized the Commissioner of Income Tax to admit applications for condonation of delay in filing Form 10BB for A.Y. 2018-19 and subsequent years where the delay is up to 365 days and decide on merits. Now, the Pr. Chief Commissioners of Income-tax /Chief Commissioners of Income-tax are authorized to admit such applications and decide on merits where there is a delay beyond 365 days upto three years in filing Form No. 10BB for A.Y. 2018-19 or any subsequent assessment years. [Circular No. 15 of 2022 dated 19th July, 2022.]

4. Condonation of delay in filing Form No. 10B for A.Y. 2018-19 and subsequent years: CBDT had, in its earlier circular, authorized the Commissioner of Income Tax to admit applications for condonation of delay in filing Form 10B for A.Y. 2018-19 and subsequent years where the delay is up to 365 days and decide on merits. Now, the Pr. Chief Commissioners of Income-tax /Chief Commissioners of Income-tax are authorized to admit such applications and decide on merits where there is a delay beyond 365 days upto three years in filing Form No. 10B for A.Y. 2018-19 or any subsequent assessment years. [Circular No. 16 of 2022 dated 19th July, 2022.]

5. Condonation of delay in filing Form Nos. 9A and 10: CBDT had, in its earlier circular, authorized the Commissioner of Income Tax to admit applications for condonation of delay in filing Forms 9A and 10 for A.Y. 2018-19 and subsequent years where the delay is upto 365 days. Now, the Pr. Chief Commissioners of Income-tax/Chief Commissioners of Income-tax are authorized to admit such applications of condonation of delay and decide on merits where there is a delay beyond 365 days upto three years in filing such forms for A.Y. 2018-19 or any subsequent assessment years. [Circular No. 17 of 2022 dated 19th July, 2022.]

6. Procedure of PAN application and allotment through Simplified Proforma for incorporating Limited Liability Partnerships (LLPs) electronically (Form: FiLLiP of Ministry of Corporate Affairs). [Notification No. 4/2022 dated 26th July, 2022.]

7. Reduction of time limit for verification of Income Tax Return (ITR) from within 120 days to 30 days of transmitting the data of ITR electronically:  The time limit for e-verification or submission of ITR-V shall now be 30 days from the date of transmitting/uploading of any electronic transmission of Income Tax Return data on or after 1st August 2022.  

Where ITR data is electronically transmitted and e-verified/ITR-V submitted within 30 days of transmission of data, then in such cases, the date of transmitting the data electronically shall be considered as the date of furnishing the return of income.

Where ITR data is electronically transmitted but e-verified or ITR-V submitted beyond the time limit of 30 days of transmission of data, then in such cases, the date of e-verification/ITR-V submission shall be treated as the date of furnishing the return of income and all consequences of late filing of return under the Act shall follow. [Notification No. 5/2022 dated 29th July, 2022.]

8. Conditions notified for the proviso to section 17(1)(ii): Clause (ii)(c) of the proviso to section 17(1) states that any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in respect of COVID-19 illness shall not be taxed as a perquisite, subject to such conditions, as may be notified by the Central Government. The CBDT has notified the conditions for the purpose of this section. [Notification No. 90/2022 dated 5th August, 2022.]

9. Conditions notified for proviso to section 56(2)(x): Certain taxpayers have lost their life due to Covid-19. In order to provide relief to the family members of such taxpayer, clause (XIII) of the proviso to section 56(2)(x) provides that ex-gratia payment received by family members of a person from the employer of such person or from another person on the death of that person due to Covid-19 shall be exempt from tax, subject to such conditions as may be notified by the Central Government. The CBDT has notified the conditions for the purpose of this section. [Notification No. 91/2022 and 92/2022 dated 5th August, 2022.]

10. Income-tax (24th Amendment) Rules, 2022: The Finance Act 2022 amended sections 12A and 10(23C) to provide that where the total income of a trust or institution under both regimes, without giving effect to an exemption u/s 10(23C) or sections 11 and 12, exceeds the maximum amount which is not chargeable to tax, such trust or institution shall keep and maintain books of account and other documents as may be prescribed. The CBDT has inserted Rule 17AA prescribing the books of account and other documents to be kept and maintained and the form and manner in which it should be maintained.  [Notification No. 94/2022 dated 10th August, 2022.]

11. Income-tax (25th Amendment) Rules, 2022: Institutions exercising option under Explanation 3 to the third proviso to 10(23C) must file Form 10 before the due date of filing the return of income, providing certain details. [Notification No. 96/2022 dated 17th August, 2022.]

COMPANY LAW

I. COMPANIES ACT

1. Spending of CSR funds for activities w.r.t ‘Har Ghar Tiranga’ is an eligible CSR activity: The MCA has clarified that spending of CSR funds for activities of mass scale production and supply of the National Flag, outreach and amplification efforts and other related activities, are eligible CSR activities under item no. (ii) of Schedule VII of the Companies Act related to ‘Promotion of education relating to culture’. ‘Har Ghar Tiranga’, a campaign under the aegis of Azadi Ka Amrit Mahotsav, is aimed to invoke the feeling of patriotism in the hearts of the people. [General Circular No. 08/2022, dated 26th July, 2022.]

2. Companies (Accounts) Fourth Amendment Rules, 2022: The MCA has made the following amendments to the Companies (Accounts) Rules, 2014: 1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India, at all times so as to be usable for subsequent reference.  2) Provided that the back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a daily basis. 3) W.r.t. intimation to RoC on an annual basis (when filing financial statements) – where the service provider is located outside India, the name and address of the person in control of the books of account and other books and papers in India.” [MCA Notification G.S.R.624(E) dated 5th August, 2022.]

II. SEBI

3. Govt. declares “zero coupon zero principal instruments” as securities for the purposes of SCRA, 1956: The Central Government has declared “zero coupon zero principal instruments” as securities for the purposes of Securities Contracts (Regulation) Act, 1956. “Zero coupon zero principal instrument” means an instrument issued by a Not-for-Profit Organisation which shall be registered with Social Stock Exchange segment of a recognised Stock Exchange in accordance with the regulations made by SEBI. [Notification No S.O. 3210(E), dated 15th July, 2022.]    

4. Fee and other charges payable to SEBI subject to GST @ 18% effective 18th July, 2022: The GST Council, in its meeting held on 28th June, 2022 and 29th June, 2022, recommended withdrawing the GST exemption granted to services by SEBI and the same was notified vide. Notification No. 4/2022 dated 13th July, 2022, Accordingly, the Board has informed all Infrastructure Institutions, Companies who have listed/are intending to list their securities, other intermediaries and persons who are dealing in securities market that fees and other charges payable to SEBI shall be subject to GST. [Circular No. SEBI/HO/GSD/TAD/CIR/P/2022/0097, dated 18th July, 2022.]

5. Amendment in LODR norms, insertion of New CHAPTER IX-A w.r.t obligations of social enterprises: The SEBI has notified the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2022. A new CHAPTER IX-A has been inserted, which prescribes the obligations of social enterprises. It is applicable on: a) For Profit Social Enterprise whose designated securities are listed on the applicable segment of the Stock Exchange(s); b) Not for Profit Organization that is registered on the Social Stock Exchange(s). [Notification F No. SEBI/LAD-NRO/GN/2022/88, dated 25th July, 2022.]

6. New guidelines for settlement of running account of client’s Funds lying with Trading Member: Under the new guidelines, the settlement of running account of funds of client shall be done by Trading Member after considering the end of the day obligation of funds as on date of settlement across all Exchanges on first Friday of Quarter for all the clients, i.e., the running account of funds shall be settled on first Friday of Oct 2022, Jan 2023, Apr 2023, Jul 2023 and so on for all the clients. If the first Friday is a trading holiday, then such settlement shall happen on the previous trading day. [Circular No. SEBI/HO/MIRSD/DOP/P/CIR/2022/101, dated 27th July,2022.]

7. Timelines for implementation of mutual funds nomination norms extended to 1st October, 2022: SEBI vide Circular dated 15th June, 2022 mandated submission of nomination details/declaration for opting out of nomination for investors subscribing to mutual fund units on or after 1st August, 2022. Based on the representation received from the Association of Mutual Funds in India (AMFI), SEBI has decided to extend the timelines for implementation of MF nomination norms to 1st October, 2022. [Circular No. SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/105, dated 29th July, 2022.]

8. Framework for automated deactivation of trading and Demat accounts in cases of inadequate KYCs: SEBI has released a framework for automated deactivation of trading and Demat accounts of investors in case of inadequate KYC details. SEBI observed that in some cases, accurate/updated addresses of clients are not maintained, and any notices served during any enforcement proceedings remain unserved. Under the new framework, the stock exchanges (except commodity derivative exchange and derivatives) shall arrange to physically serve notice to the entities. [Circular No. SEBI/HO/EFD1/EFD1_DRA4/P/CIR/2022/104, dated 29th July, 2022.]

9. Framework to curb inadvertent trades by designated persons by freezing their PAN during trading window closure: SEBI has asked exchanges/depositories to develop a system wherein the PAN of a Company’s designated person (DP) can be frozen for a specific period to curb inadvertent trades during the trading window closure. Now, the designated depository will provide access to a listed Company on a portal specifying the trading window closure period. The portal will auto-populate details of DPs like PAN and name. The listed Companies will update the PAN of DPs to be frozen and the “start and end date” of the trading window closure period. [Circular No. SEBI/HO/ISD/ISD-SEC-4/P/CIR/2022/107, dated 05th August, 2022.]

FEMA

1. Liberalisation of ECB limits legislated: RBI, in consultation with the Central Government, had announced (Refer this feature in August 2022, BCAJ) following ECB liberalisation measures which would be available for ECBs to be raised till 31st December, 2022: (i) To increase the automatic route limit from USD 750 million or equivalent to USD 1.5 billion or equivalent. (ii) To increase the all-in-cost ceiling for ECBs, by 100 bps. These relaxations have now been legislated by making necessary amendments to the relevant regulations. [Notification No. FEMA.3(R)(3)/2022-RB, dated 28th July, 2022 and A.P. (DIR Series 2022-23) Circular No. 11, dated 1st August, 2022.]

2.    New Overseas Investment Rules notified: The Finance Ministry, in consultation with RBI, has now framed the revised Rules and Regulations, overhauling outward investment provisions substantially. The new rules supersede the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015. Changes made by the Government and RBI on 22nd August, 2022 in line with the amendment to Section 6 of FEMA in 2015 are as follows:

Title

Dealing with

FEM (Overseas Investment) Rules, 2022

Non-Debt Instruments

FEM (Overseas Investment) Regulations, 2022

Debt Instruments

FEM (Overseas Investment) Directions, 2022

Directions to be followed by Authorised Dealer-Banks

Consequential amendments have been made to the ‘Master Direction on Reporting’ and ‘Master Direction on Liberalised Remittance Scheme (LRS)’. Some of the significant changes made compared to the earlier provisions are: New terms introduced with definitions; Clarity provided with respect to various definitions and concepts; Approvals for a few investment options have now been removed; and Liberalisation on certain key fronts of structuring of overseas investments. [Central Government Notification No. G.S.R. 646(E) dated 22nd August, 2022; Notification No. FEMA 400/2022-RB dated 22nd August, 2022; AP DIR Circular No. 12 dated 22nd August, 2022; Amendments to Master Direction no. 18 on ‘Reporting’ and Master Direction No. 7 on ‘Liberalised Remittance Scheme (LRS)’.]

ICAI ANNOUNCEMENT

1. Withdrawal of ‘Guide to Reporting on Proforma Financial Statements (Pursuant to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009):  ICAI has withdrawn this Guide since it was based on old SEBI regulations that do not exist at present and since SAE 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus provides sufficient guidance for practitioners. [4th August, 2022.]

ICAI MATERIAL

Valuation

1. Valuation: Professionals’ Insight, Series – 7. [20th July, 2022.]
2. Technical Guide on Valuation of Business in Telecom Tower Industry. [20th July, 2022.]

MISCELLANEA

I. SCIENCE

13 How Composting Can Solve our Methane and Plastic Problem

Back in 1996, one of California’s oldest waste collection companies, Recology, began collecting food scraps from San Francisco’s central market to compost. Now, the company’s green composting bins are ubiquitous on the streets of the city, which has composted more than 2 million tons of food and other waste.

Recology and the city of San Francisco stand out for accepting one of the largest varieties of items for compost, including compostable packaging and almost all types of food scraps. With about one-third of all food in the United States going to waste, composting could and should play a bigger role in municipal waste systems across the country. Recology and the city of San Francisco stand out for accepting one of the largest varieties of items for compost, including compostable packaging and almost all types of food scraps.

Food is the most common component of landfill garbage, making up 24% of all landfill material, according to the U.S. Environmental Protection Agency. In addition to the obvious social-economic concerns about food security, the massive amount of food and other organic waste in landfills is the third-largest source of human-produced methane emissions in the United States — after the fossil fuel and animal agriculture sectors — making up 14.5% of total methane emissions.

Cutting methane emissions, which the United States and the EU promised to reduce by 30% by 2030 at last year’s COP26 climate summit in Glasgow, has emerged as a key factor in slowing down the warming of the planet.

Composting, in which food and other organic waste are combined with wood chips and other natural fibers to decompose in an oxygen-rich environment that does not produce the methane that develops in the anaerobic conditions of landfills, is critical to this mission.

In addition, the end product of composting, soil rich in nutrients, can help solve the ongoing challenge of agricultural soil erosion, which degrades soil quality and reduces crop yields. The nation is on track to lose the equivalent of 300 years of soil by 2100 if nothing is done. That is eight times the amount of topsoil lost during the devastating Dust Bowl of the 1930s.

But most of the nation’s compost facilities are still focused solely on yard waste, like raked leaves, cut grass and garden clippings. Only 10% take food, and a smaller number take packaging. This can, and must, change — but the real question is how.  

Such a change can happen through a combination of factors. Composting must become an integral part of municipal waste management systems, similar to recycling. This requires cooperation between the public-private sector, which we have seen for the past three decades in San Francisco.

Bringing Compost into the Waste Management System

Only 4% of households in the U.S. are served by composting services that pick up the waste. This number needs to grow — substantially in order to reduce methane emissions — and so do the categories of items that are acceptable for composting.

While home-composting and private services no doubt play an important role, it is only by being part of the standard waste-management and waste pickup systems that composting will reach its full potential. After all, part of the reason recycling became more mainstream was because it became part of municipal waste management systems over the years. Today, more than 59% of U.S. households have curbside recycling pickup alongside regular garbage pickup. The same needs to happen with composting.

But we cannot rely on composters alone to make the changes necessary in order to serve more consumers. Accepting food often requires composters to have certain permits and specialized equipment. And many composters say they don’t have the resources for the extra sorting that comes along with accepting food, as food scraps often arrive mixed with pieces of packaging and plastic that must be separated out and discarded because they can’t be composted.

City governments, which usually oversee garbage collection and waste management, can help create the sort of composting facilities that can accept these items. An example of this beneficial cooperation can be seen in Seattle, which for years has been working with composting company Cedar Grove to collect food from city residents. Not only does food get composted, reducing methane emissions, but the business has grown and flourished since partnering with the city.

Such cooperation is critical for moving composting forward in other places. For example, even though California’s law banning food waste in garbage disposal has come into effect this year, some large cities like San Diego and Los Angeles still lack the pickup services and facilities to handle the growing demand for compost. These facilities and waste management companies are relying on an influx of government money to make the needed upgrades.

At the same time, while their initial rollout is challenging, policies banning the disposal of food waste are an important tool for integrating compost into waste management. In both California and Vermont, which introduced similar laws in 2020, compost beyond yard waste is growing both as a business and a public service. After all, the reason why most composters are still so focused on yard trimmings is due to bans on those in landfills decades ago.

The Role of Labeling

One of the main reasons that Recology and some other California-based composters accept not just food but also items like compostable plastic bags and packaging is due to laws and regulations about labeling.

Labeling laws also need to be specific and correlated to science to avoid greenwashing and prevent non-compostable products from contaminating the composting process and final product. Such laws are most developed in California but are gaining popularity in other places, including Oregon, where there is currently a proposal for a “Truth in Labeling” law that will help clearly designate what kinds of packaging can be put into the compost.

Clear labeling also paves the way in the public education process about what is compostable and what is not, a key factor in bringing composting into mainstream waste management.

Labeling not only makes things easier for consumers and composters but ensures continued demand for the end product in the agricultural sector. With the right facilities, regulations and municipal cooperation, food and compostable packaging are benefits, rather than a challenge, for composters.

Adding more food and packaging to the composting mix will not only reduce methane and other greenhouse gasses but will also result in higher volumes of nutrient-rich end products that farmers can purchase and use in their fields. Making this happen should be a high priority for cities.

If left alone, the immense amount of food in landfills will continue to produce increasing amounts of greenhouse gasses, and compostable plastics, if simply thrown out, will not actually break down properly, adding to the microplastic problem in our soil and oceans.

Developing the composting infrastructure to handle things like food and compostable packaging would immediately reduce greenhouse gasses and could, potentially, also be a turning point for the plastics industry, encouraging more innovation and use of compostable materials to turn one of the world’s most challenging types of waste into one of the most viable — and valuable.

[Source: Opinion – International Business Times – By Michael Waas – 15th June, 2022.]

II. TECHNOLOGY

14 Using the Internet without a VPN is like leaving your House without locking the front door

We’ve heard time and again how critical the threat of hacking is. Still, most of us either think we’ll avoid it or have nothing to hide for hackers to expose anyway – so why worry? This is akin to thinking that we don’t need to bother locking the door because we don’t have an illegal store of drugs stashed away in our houses. Every person with an online presence benefits from using a VPN. It’s not about not having anything to hide. It’s about not having your information stolen or shared.

This is not necessarily a matter of theft. This is, first and foremost, a matter of privacy. Every 39 seconds, somebody is hacked, and there’s a 1 in 4 chance that it will be you on the receiving end. Hacking is not a far-away, dystopian threat; it is immediate and gaining urgency each year. Therefore, we must increase awareness of the severity of cyber-attacks and encourage more people to use VPN networks to protect themselves.

The pandemic-fuelled shift to remote working led to a significant spike in hack-attacks. For example, the volume of ransomware doubled in 2021, surpassing the 600 million mark. This form of hacking involves hackers encrypting your data and demanding large sums in return for giving your data back. The average cost was an incredible $ 4.44 million.

These kinds of attacks present a lose-lose situation for users – either they are forced to pay exorbitant sums to these cyber-criminals, or, as is often the case, they cannot afford the ransom, and their personal data is leaked. This is not merely a case of losing your favorite holiday photos. This can involve losing your PIN codes and passwords. In 2021, Americans lost a record $ 3.5 billion to cybercrime. In 2020, 37 billion data records were leaked, which was a staggering 140% increase from the previous year.

The most frustrating aspect of these figures is that cyber-attacks are relatively easy to defend against. Firstly, people aren’t aware of just how severe and extensive the cyber-security threat has become. Secondly, a substantial number of those who feel vulnerable do not know how to protect themselves.

The answer is easy: use a VPN network every time you surf the internet. VPNs – Virtual Private Networks – mask the user’s traffic patterns and block access to their IP address, which would otherwise reveal specific information about the computer being used.

Around a third of the global population of internet users have a VPN installed, leaving the vast majority susceptible to cyber-attacks. This figure is even lower for the US, with only a quarter of North America using a VPN when they browse online. By contrast, almost three-quarters of Americans are fearful of their personal or financial information being stolen.

VPNs are widely available and low-cost, yet most of those online do not have this protective software installed. The issue, then, is one of awareness. To tackle this, we can look to what can arguably be called the cyber-security capital of the world: Estonia.
 
In 2007, Estonia suffered a series of hack-attacks in what was largely considered to be the world’s first cyber-war. The swathe of cyber-criminality was spawned by the controversial moving of a soldier’s statue, which served as a harrowing reminder of the years of Soviet oppression faced by Estonians. Since this incident, Estonia has established itself as a cyber-security hub; the keystone to this success has been boosting cyber-awareness across its population.

Some of the measures included in Estonia’s Cyber Security Strategy included offering cyber-training to preschoolers and older children and introducing various Media Literacy courses in secondary schools. In 2013, the government also instigated a state-private partnership project, which was designed to improve the security awareness of smart-device users, developers, and distributors. Furthermore, a Masters Degree in Cyber Security was launched in 2009, and the Police and Border Guard Board even appointed a ‘web constable,’ whose primary role was to boost public understanding about cyber-security and to help protect young people online. There are a multitude of VPN’s out there that offer huge protections at a low cost, such as Private internet access, Safernet VPN, Express VPN, tunnel Bear and Proton VPN among others.

The proof is in the Kohuke: Estonia is now the most cyber-secure country in the EU. The US government has reason to be reluctant about enforcing wider VPN usage, given that it regularly benefits from the gathering of voter data. However, it must act to improve awareness of core cyber-security issues at the very least. As is evident from the Estonia blueprint, education is essential for this; we must introduce more purpose-built Cyber-Security degrees, along with training programs for children and young people. The benefits far outweigh any negatives of using a VPN for the global community.

[Source: Opinion – International Business Times – By Brad Hawkins – 15th June, 2022.]

III. SPORTS

15 National Football Day: Interesting Facts, Quotes about the Popular Sport

National Football Day is celebrated on July 19 to honor one of the most popular sports played in the country.

The game which is known by the name football in the U.S. and Canada is popularly called “gridiron” or “American football” in other parts of the world.

Football has become an integral part of the American culture and Super Bowl is considered to be the country’s most important holiday that brings together friends and families.

Here are some fun facts about the game:

1. The original football game was 70 minutes long. Its duration was later reduced by 10 minutes.

2. The longest field goal in football history was 64 yards.

3. The shape of a football is “prolate spheroid” which means “long sphere.”

4. Although the football game is divided into four quarters with each lasting 15 minutes, the actual game is played for only 11 minutes out of that.

To mark the occasion, let’s take a look at some interesting quotes showcasing the spirit and love people have for football. (Courtesy: Brainy Quotes)

1. “Football is like life – it requires perseverance, self-denial, hard work, sacrifice, dedication and respect for authority.”- Vince Lombardi

2. “Some people think football is a matter of life and death. I assure you, it’s much more serious than that.”- Bill Shankly

3. “Football is about joy. It’s about dribbling. I favor every idea that makes the game beautiful. Every good idea has to last.”- Ronaldinho

4. “In football, even when you do your best on the pitch, you can win or lose. That is the nature of the game.” – Gianfranco Zola

5. “Football is a game of mistakes. Whoever makes the fewest mistakes wins.”- Johan Cruyff

6. “In football, the worst things are excuses. Excuses mean you cannot grow or move forward.”- Pep Guardiola

7. “Football fans share a universal language that cuts across many cultures and many personality types. A serious football fan is never alone. We are legion, and football is often the only thing we have in common.”- Hunter S. Thompson

8. “The football field was a place where I could express myself and just be me. Play the game as well as you can and that’s what you’re judged on. Not the color of your skin, or your beliefs, or the conversation you have around racism.”- Adam Goodes

9. “It’s like everything in football – and life. You need to look, you need to think, you need to move, you need to find space, you need to help others. It’s very simple in the end.”- Johan Cruyff

10. “To become a great player, you’ve got to show real dedication and commitment to football, and you’ve got to be very humble and hard-working. And, above all, you’ve got to fight to make your dreams come true.”- Sergio Ramos

[Source: International Business Times – By Suneeta Sunny – 19th July, 2022.]

REGULATORY REFERENCER

1. Income-tax (19th Amendment) Rules, 2022: CBDT amended existing Rules 30, 31 & 31A, annexure to Form no. 26Q, and Form Nos. 26QB, 26QC & 26QD. It has also inserted new Form nos. 26QE and 16E. Tax deducted on VDA is to be deposited in challan-cum-statement in Form 26QE. The certificate of tax deducted at source on VDA must be issued in Form 16E. Separate reporting of tax payments is required to be made in accordance with provisos to Sections 194B, 194R and 194S. [Notification No. 67/ 2022, dated 21st June, 2022.]

2. Format, procedure and guidelines prescribed for submission of Form Nos. 1, 2 and 2A for Securities Transaction Tax. [Notification No. 2 of 2022, dated 24th June, 2022.]

3. Guidelines for removal of difficulties under sub-section (6) of section 194S: The Finance Act, 2022, inserted a new section 194S w.e.f 1st July, 2022. The said section requires a person responsible for paying to any resident any consideration for the transfer of a virtual digital asset (VDA), to deduct tax at 1%. CBDT has issued guidelines to remove difficulties in the implementation of this section. [Circular No. 13/2022 dated 22nd June, 2022 and Circular No. 14/2022, dated 28th June, 2022.]

4. Safe Harbour for Arm’s Length Price: The notification provides for a tolerance range of 1% for wholesale trading and 3% in all other cases for A.Y. 2022-2023. It is also certified that no assessee will be adversely affected by the retrospective effect being given to the notification. [Notification No. 70/ 2022, dated 28th June, 2022.]

5. Income-tax (20th Amendment) Rules, 2022: CBDT has amended Rule 31A of the Income-tax Rules, 1962, notifying Form 26QF for filing of TDS statement in respect of tax deducted u/s 194S by ‘Exchanges’. [Notification No. 73/ 2022, dated 30th June, 2022.]

6. Exclusion from definition of Virtual Digital asset: The following virtual digital assets shall be excluded from the definition of virtual digital asset:

(i) Gift card or vouchers, that may be used to obtain goods or services or a discount on goods or services;

(ii) Mileage points, reward points or loyalty card, given without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate or promotional program that may be used or redeemed only to obtain goods or services or a discount on goods or services;

(iii) Subscription to websites or platforms or application. [Notification No. 74/ 2022, dated 30th June, 2022.]

7. A token which qualifies to be a virtual digital asset as non-fungible token shall not include a non-fungible token whose transfer results in a transfer of ownership of the underlying tangible asset, and the transfer of ownership of such underlying tangible asset is legally enforceable. [Notification No. 75/ 2022, dated 30th June, 2022.]

COMPANY LAW

SEBI

1. ICICI bank designated for foreign inward remittance of various payments of SEBI fees in USD: SEBI has modified the operational guidelines for Foreign Portfolio Investors (FPIs), Designated Depository Participants (DDPs) and Eligible Foreign Investors about bank account details. Now, SEBI has specified ICICI bank account details for foreign inward remittance of various payments of various SEBI fees in USD. Earlier, the Bank of India was specified for making remittances of various payments. The Circular shall be effective from 24th June, 2022. [Circular No. SEBI/HO/IMD/FPI&C/CIR/P/2022/84, dated, 21st June, 2022.]

2. Timeline for listing of units of privately placed InvIT reduced to 6 working days: SEBI, in order to streamline the process of allotment and listing of units, has reduced the time taken for the listing of units of privately placed Infrastructure Investment Trust (InvIT) to 6 working days from the date of closure of the issue. Earlier, the timeline for such a listing was 30 working days. [Circular No. SEBI/HO/DDHS/DDHS_DIV3/P/CIR/2022/087, dated 24th June,2022 ]

3.    Facility to block funds via UPI in public issues of units of REITs/InvITs: Earlier, SEBI has specified the process for payment for applications in the public issue of units of Real Estate Investment Trust (REITs) & Infrastructure Investment Trusts (InvITs) through the facility of ASBA. Now, SEBI has allowed individual investors to block funds via the Unified Payments Interface (UPI) mechanism for application values up to Rs. 5 Lakhs in public issues of REIT units. It shall apply to the public issue of units of REIT/InvITs, which opens on or after 1st August, 2022. [Circular No. SEBI/HO/DDHS/DDHS_DIV3/P/CIR/2022/085 and 086, dated 24th June, 2022.]

4.    Framework for adjustment in derivative contracts for dividend announcements reviewed: SEBI had laid down a framework for adjustment in derivative contracts (single stock options and futures) post dividend announcements. Now, SEBI has reviewed the framework for adjustment in derivative contracts for dividend announcements. SEBI has clarified that the adjustment in derivative contracts shall be carried out in cases where dividends declared are at or above 2% of the market value of the underlying stock. The circular shall be effective from 29th June, 2022. [Circular No. SEBI/HO/MRD2/MRD2_DCAP/P/CIR/2022/90, dated 28th June, 2022.]

5.    LODR norms w.r.t disclosure of holding of specified securities amended: SEBI has amended regulation 31 of LODR, which deals with disclosure of holding of specified securities in dematerialized form. Hence, in the disclosure of public shareholding, names of the shareholders holding 1%, or more than 1% of shares of the listed entity is to be disclosed. Names of the shareholders who are persons acting in concert, if available, shall be disclosed separately. The circular shall come into force from the quarter ending 30th September, 2022. [Circular No. SEBI/HO/CFD/POD-1/P/CIR/2022/92, dated 30th June, 2022.]

6.    Investors/Public cautioned against fraudulent calls/ e-mails/ messages about refunds: SEBI noticed that unscrupulous individuals are trying to cheat the public by holding out as officials of the Recovery and Refund Department of SEBI and falsely informing them about a refund. Considering this, SEBI has cautioned the public against such false claims of refund and cautions them against parting with any documents/money on such calls/emails/messages etc. SEBI does not seek processing fees or money in any form in cases where money is to be refunded as per court order etc. [Press Release No. 22/2022, dated 07th July, 2022.]

7.    Pending QIP issue, its pricing and probable impact on the share capital of the company are UPSI: Shri Arvind Bajpai, CS of Deepak Nitrite Limited (DNL), sought an interpretative letter under the SEBI (Informal Guidance) Scheme, 2003, on the issue that whether pending QIP issue, its pricing and probable impact on the share capital of the company, which is not yet known and shall be determined as per ICD regulations, be considered as Unpublished Price Sensitive Information (UPSI). SEBI clarified that pending QIP issue, its pricing and probable impact on the share capital of the company, is UPSI. [SEBI Informal Guidelines ISD/OW/2022/16109/1, dated 13th April, 2022.]


FEMA

1. Prohibition on investment in Bullion Depository Receipts on IIBX through LRS: RBI had allowed resident individuals to make remittances under LRS to IFSCs in India in 2016 but only for making investments in securities other than those issued by entities/companies resident in India outside the IFSC. IFSC has now clarified that resident individuals are not permitted to transact/invest in Bullion Spot Delivery Contract and Bullion Depository Receipt (BDR) on India International Bullion Exchange (IFSC) Limited (IIBX) through the LRS route. This is without prejudice to the participation of Qualified Jewellers as allowed by RBI and notified by the IFSCA for the purchase of BDRs for the sole purpose of import of gold through IIBX (reported in BCAJ, July 2022). [Circular No. 329/IFSCA/DPM/TS/2022-23/1, dated 17th June, 2022.]

2. Liberalisation of Forex flows: RBI has introduced several measures to liberalise forex flows in view of the global recessionary outlook and flight of capital from India in demand for safe haven in USD:

a. Exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on Incremental FCNR(B) and NRE Term Deposits: Incremental FCNR(B) and NRE deposits with a reference base date of 1st July, 2022 will be exempt from the maintenance of CRR and SLR. This relaxation will be available for deposits mobilised up to 4th November, 2022. Transfers from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for the relaxation.

b. Ceilings removed on Interest Rates on FCNR(B) and NRE Deposits: It has been decided to temporarily permit banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates, w.e.f. 7th July, 2022. This relaxation will be available for the period up to 31st October, 2022.

c. FPI Investment in debt: To encourage FPI investment in debt, the following changes to the regulatory regime are being put in place:

– A wider range of central government securities are now available for FPIs to invest in as “specified securities”.

– At present, for FPI investment in government and corporate debt, not more than 30 per cent of investments each in government securities and corporate bonds can have a residual maturity of less than one year. It has been decided that such investments made till 31st October, 2022 will be exempted from this short-term limit till the maturity or sale of such investments.

– FPIs can presently invest only in corporate debt instruments with a residual maturity of at least one year. It has been decided that till 31st October, 2022, FPIs can invest in commercial paper and non-convertible debentures with an original maturity of up to one year.

d. Foreign currency lending by AD Cat-I Banks: It has now been decided that AD Cat-I banks can utilise overseas foreign currency borrowing for lending in foreign currency to entities for a wider set of end-use purposes, subject to the negative list set out for external commercial borrowings (ECBs). This dispensation for raising such borrowings is available till 31st October, 2022.

e. External Commercial Borrowings (ECBs) limits and ceilings: It has been decided to temporarily increase the limit for ECBs under the automatic route from US $ 750 million per financial year to US $ 1.5 billion. The all-in cost ceiling under the ECB framework is also being raised by 100 basis points. These dispensations are available up to 31st December, 2022.

All the above measures have been supplemented with respective Circulars which can be referred to for full details. [Press Release: 2022-2023/481 dated 6th July, 2022; A.P. (DIR Series) Circulars No. 07 and No. 08 both dated 7th July, 2022; FMRD.FMID.No. 04/14.01.006/2022-23 dated 7th July, 2022; DOR.RET.REC.54/12.01.001/2022-23 dated 6th July, 2022 and DOR.SOG (SPE).REC.No 53/13.03.000/2022-23 dated 6th July, 2022.]

3. Trade with Sri Lanka now outside ACU mechanism: Sri Lanka and India are both part of the Asian Clearing Union (ACU) which mandates that trade between both countries should be done under the ACU mechanism. However, due to the situation in Sri Lanka, RBI has decided that all eligible current account transactions, including trade transactions with Sri Lanka, may be settled in any permitted currency outside the ACU mechanism until further notice. [A.P. (DIR Series 2022-23) Circular No. 9, dated 8th July, 2022.]

4. RBI allows international trade settlement in Indian Rupees: In an important development, RBI has decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR. Indian importers undertaking imports through this mechanism shall make payment in INR which shall be credited into the Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller. Indian exporters, undertaking exports of goods and services through this mechanism, shall be paid the export proceeds in INR from the balances in the designated Special Vostro account of the correspondent bank of the partner country.

The Rupee surplus balance held may be used for permissible capital and current account transactions in accordance with mutual agreement. The balance in Special Vostro Accounts can be used for (a) Payments for projects and investments; (b) Export/Import advance flow management; and (c) Investment in Government Treasury Bills, Government securities, etc. in terms of extant guidelines and prescribed limits, subject to FEMA and similar statutory provisions. Before putting in place this mechanism, AD banks shall require prior approval from RBI. Further details are provided in the Circular. [A.P. (DIR Series) Circular No. 10, dated 11th July, 2022.]

ICAI MATERIAL

Accounts and Audit

1.    Technical Guide on Financial Statements of Limited Liability Partnerships. [27th June, 2022.]

2.    Educational Material on Ind AS 34, Interim Financial Reporting. [4th July, 2022.]

3.    The Emerging Role of Auditors and CFOs in Addressing Risk Management: A New Perspective. [5th July, 2022.]

4.    Guidance Note on the Companies (Auditor’s Report) Order, 2020 (Revised 2022 Edition). [14th July, 2022.]

NFRA REPORTS

1. Audit Quality Review (AQR) Report in respect of Statutory Audit done by SRBC & Co LLP of Infrastructure Leasing & Financial Services Limited (IL&FS) for F.Y. 2017-18 [22nd June, 2022.]

2. Financial Reporting Quality Review Report (FRQRR) of ISGEC Heavy Engineering Limited for F.Y. 2019-20 [20th July, 2022.]

SOCIETY NEWS

HUMAN RESOURCES DEVELOPMENT STUDY CIRCLE MEETING – “IMPORTANCE OF PRAYERS – SCIENTIFIC ASPECTS”
This meeting was presented by CA C N Vaze and Ms. Manasi Amdekar on Tuesday, 10th May, 2022 at Bombay Chartered Accountant Society, Mumbai-400020.

In our Indian culture, we are taught by our parents and ancestors to give God first place in our life.

This has led everyone to believe in regular prayer in addition to prayer in times of distress, disaster or some other discomfort during our life’s journey.

‘Prayer’ is an integral part of a common man’s life. Prayers are at different levels.

We pray to the King, to the Judge, to our Boss or Superiors, to our parents, to the people at large. We write ‘Prayers’ in any petition to the Court or Government Authority.

During the ensuing event, we discussed the meaning and importance of prayers in a spiritual or philosophical sense. It is a prayer to God, Almighty or Super-Power.

A Lot of research has gone into analysing the effect of prayers on our minds and lives.

Ms. Manasi Amdekar is a psychological counsellor. She explained the scientific aspect of the effect of prayers on our brains and minds.

Ms. Manasi Amdekar presented her study about prayers with the help of a PPT and enlightened us with many examples, applications, images of human brain scanned using ultrasound etc. According to her, prayers in the form of Stotras and Mantras are like coding systems and unique combinations of words put together to regulate the breathing patterns of an individual in a certain frequency while chanting them. This has helped people overcome stressful events, traumas and also heal the internal damage to the brain.

We instruct our minds to calm down, focus on the deity, be submissive and offer our utmost attention to the prayer or the words we chant. Prayers give us a sense of unity when offered in masses. It makes us believe in the positive side of everything, and a sense of confidence, that if “we pray for something together, then everything is possible to achieve”. It is also nonetheless a means of cultural and religious identity of an individual and a factor of identification with the members of the community, which surely increases the feeling of belongingness for an individual.

She also emphasized the importance of a regular practice of positive talk and positive psychology. She responded to the questions from participants after her talk. It was indeed a thought-provoking session.

9TH YRRC HELD ON SATURDAY, 21ST MAY, 2022 AT BCAS HALL

 

The 9th YRRC was held on 21st May 2022 in a hybrid mode. This year the event was open to all professionals.

The event was aimed at having different and unique topics and also networking activities and games. The topics were designed to cover technical, strategic and networking aspects.

The Opening Remarks were shared by CA Mihir Sheth, VP – BCAS and CA Anand Kothari, Convenor of the HRD Committee at BCAS. CA K K Jhunjhunwala – Co-Chairman of the HRD Committee had also graced the event. CA Naushad Panjwani mentored the event.

The sessions were taken by:

• Metaverse in a Professional’s Life – Ms. Filisha Shah

• Design Thinking – Dr. Guruprasad Rao

• Blue Ocean Strategy – Er. Sharad Ashani

• Panel Discussion – Dr. Radhakrishnan Pillai

The attendees had amazing feedback to share in person and also on social media. The session by Dr. Radhakrishnan Pillai was moderated by the youth team, which gave them the confidence to take up more such sessions in the future and encouraged the youth.

We had more than 10,000 interactions on Twitter, LinkedIn, Instagram and Facebook on our posts on YRRC. We had about five to eight new memberships at BCAS during and after the event of YRRC.

FEMA STUDY CIRCLE MEETING HELD ON SATURDAY, 28TH MAY, 2022.

CA (Dr.) Suresh Surana, RSM Astute Consulting India Private Limited, led the FEMA Study Circle of BCAS on the topic of Non-Resident Indians (NRI): Investment in India – Immovable Properties, Shares and Deposits on 28th May, 2022. He is widely acclaimed amongst professionals and corporate honchos alike.  

Mr. Surana started off by giving an overview of India’s inward remittances and the country-wise inward remittances from NRIs. Then, he delved into the basics of FEMA by explaining the definitions of NRI/OCI/PIO as well as explaining the difference between residency provisions under FEMA and The Income Tax Act, 1961. Having laid the foundation, he moved on to explaining complex topics like Permissible Bank Accounts, Investments in Immovable Properties, Shares/ Securities, Debt Instruments and Business Entities before wrapping it up by explaining the compliances required to be fulfilled upon a change in status from ‘Resident’ to ‘Non-Resident’. He explained the nuances of each of these topics in great detail and ensured that the participants understood the concepts very well by supporting them with case studies that were indeed very insightful and thought-provoking. Needless to say, the presentation was a reflection of his granular style of thinking and attention to detail.   

Mr. Surana kept the participants engaged by answering questions as and when they arose. His ability to answer questions from any corner, coupled with interesting questions based on real-life situations encountered by professionals, made the presentation very lively and interesting. The highlight of Mr. Surana’s presentation was a fine balance between the range of topics covered within such a short span of time without being too overwhelming and the attention to detail.

SUBURBAN STUDY CIRCLE MEETING

“Recent Amendments to Schedule III of Companies Act, 2013 & The Companies Rules And Companies (Auditor’s Report) Order, 2020” Part I on Saturday, 14th May, 2022 and Part II on Friday, 3rd June 2022 at Bathiya & Associates LLP, Andheri (E)

The Suburban Study Circle had organized a meeting on “Recent Amendments to Schedule III of Companies Act, 2013 & The Companies Rules And Companies (Auditor’s Report) Order, 2020” in two parts which was addressed by CA Amit Purohit as a Group Leader in both the sessions.

Group Leader CA Amit Purohit made an insightful presentation and shared his views on the following:

• Amendments to Schedule III to the Companies Act 2013 (Effective from 1st April, 2021)

• Amendments to The Companies (Audit and Auditors) Rules, 2014 (Effective from 1st April, 2021)

• Amendments to The Companies (Accounts) Rules, 2014 (Effective from 1st April, 2021)

• Amendments to Rules effective from 1st April, 2022

• Companies (Auditor’s Report) Order, 2020

• Guidance note by the ICAI

The participants benefited from the presentation shared by the group leader.

IESG MEETING ON 7TH JUNE, 2022 – INFLATION, FOOD CRISIS & SURGING DOLLAR

Summary of the meeting:
The group discussed the cause & effect of rising inflation globally & in India is creating issues for Governments, Central Banks & Poor people as Ukraine War & Chinese lockdown induced supply chain disruption pushes up prices for energy, industrial raw materials, food grains & essentials. While Central Banks have increased interest rates but elevated inflation is causing negative real interest rates creating problems for people dependent on interest income. Global GDP growth is also being downgraded by Institutions. Members expressed that this phenomenan is comparable to similar major events like WW II, 9/11 & Global Financial Crisis (2008-2009) when inflation had shot up but the same came down with steps taken by governments and base effect. The food crisis is worsening with supply disruptions due to war & sanctions. Experts are labeling this as “Weaponising food” as globally, we are experiencing food shortages and very high food prices threatening hunger crisis in many poor nations. India has taken steps to restrict exports of a few key items to enable fulfilling their Food Security obligations. American Dollar has surged to 20 year high with Euro nearing Dollar parity. This is also causing a problem of importing inflation in many countries as their currencies are getting adversely impacted.

Speaker: CA Harshad Shah presented points for deliberations, and many group members also expressed their views.

STATISTICALLY SPEAKING

MISCELLANEA

I. TECHNOLOGY

8 Apple battery lawsuit: Millions of iPhone users could get payouts in legal action

Millions of iPhone users could be eligible for payouts, following the launch of a legal claim accusing Apple of secretly slowing the performance of older phones.

Justin Gutmann alleges the company misled users over an upgrade that it said would enhance performance but, in fact, slowed phones down. He is seeking damages of around £768m for up to 25 million UK iPhone users. Apple says it has “never” intentionally shortened the life of its products.

The claim, which has been filed with the Competition Appeal Tribunal, alleges Apple slowed down the performance of older iPhones, in a process known as “throttling”, in order to avoid expensive recalls or repairs. It relates to the introduction of a power management tool released in a software update to iPhone users in January 2017, to combat performance issues and stop older devices from abruptly shutting down.

Mr. Gutmann, a consumer champion, says the information about the tool was not included in the software update download description at the time, and that the company failed to make clear that it would slow down devices.

He claims that Apple introduced this tool to hide the fact that iPhone batteries may have struggled to run the latest iOS software, and that rather than recalling products or offering replacement batteries, the firm instead pushed users to download the software updates.

Mr. Gutmann said, “Instead of doing the honourable and legal thing by their customers and offering a free replacement, repair service or compensation, Apple instead misled people by concealing a tool in software updates that slowed their devices by up to 58%.”

The models covered by the claim are the iPhone 6, 6 Plus, 6S, 6S Plus, SE, 7, 7 Plus, 8, 8 Plus and iPhone X models. It is an opt-out claim, which means customers will not need to actively join the case to seek damages.

In a statement, Apple said: “We have never, and would never, do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades. Our goal has always been to create products that our customers love, and making iPhones last as long as possible is an important part of that.”

The claim by Mr. Gutmann comes two years after a similar case was settled in the United States. In 2020, Apple agreed to pay $113m to settle allegations that it slowed down older iPhones. Thirty-three US states claimed that Apple had done this to drive users into buying new devices. Millions of people were affected when the models of iPhone 6 and 7 and SE were slowed down in 2016 in a scandal that was dubbed batterygate.

At the time, Apple declined to comment, however, it had previously said the phones were slowed to preserve ageing battery life. Claire Holubowskyj, an analyst at the research firm Enders Analysis, said issues like this may continue to crop up, given the technical limitations of ageing batteries. “Technology in newer devices improves in leaps and bounds, not as a steady crawl, creating issues when releasing software updates which have to work on devices with often wildly different capabilities,” Ms. Holubowskyj said.

“Apple generates 84% of its revenue from selling new devices, making them reluctant to hold back updates to ensure older models keep working smoothly.” “Until problems of devices and software updates outlasting and exceeding the capabilities of aging batteries are resolved, this challenge will recur.”

[Source: www.bbc.com dated 17th June, 2022.]

9 Amazon to begin drone deliveries in Lockeford, California this year

Amazon says it will begin delivering parcels to shoppers by drone for the first time later this year, pending final regulatory approval.

Users in the Californian town of Lockeford will be able to sign up to have thousands of goods delivered by air to their homes, it said. The shopping giant has promised drone delivery for years but has faced delays and reported setbacks. But it said it planned to roll out the service more widely after Lockeford. “The promise of drone delivery has often felt like science fiction,” it said in a blog post. “[But] later this year, Amazon customers living in Lockeford, California, will become among the first to receive Prime Air deliveries.”

“Their feedback about Prime Air will help us create a service that will safely scale to meet the needs of customers everywhere.” “Their feedback about Prime Air will help us create a service that will safely scale to meet the needs of customers everywhere.”

Amazon said the drones will be programmed to drop parcels in the backyards of customers in Lockeford, which has a population of about 4,000 people.

They will be able to fly “beyond-line-of-sight”, meaning they don’t have to be controlled by a visual observer and instead use sensors to avoid other aircraft, people, pets and obstacles. The aim is to get packages to customers safely in less than an hour, the retailer said.

In the past, Amazon has been accused of using the promise of drone delivery as a headline-grabber to push its publicity around its Prime membership service. In 2013, former boss and founder Jeff Bezos pledged to fill the skies with a fleet of delivery drones within five years. And in 2019, Amazon said it would be delivering by drone to customers “within months”.

In April, a report by news site Bloomberg alleged safety concerns over its drones – although the retailer said it “rigorously” tested its flights in compliance with “all applicable regulations”

In December 2016, the company ran an apparently successful trial in Cambridge, UK. A package was delivered, by drone, in 13 minutes. Explaining how Prime Air deliveries would work, Amazon said: “Once onboarded, customers in Lockeford will see Prime Air-eligible items on Amazon. They will place an order as they normally would and receive an estimated arrival time with a status tracker for their order.

“For these deliveries, the drone will fly to the designated delivery location, descend to the customer’s backyard, and hover at a safe height. It will then safely release the package and rise back up to altitude.”

[Source: www.bbc.com dated 14th June, 2022]

II. WORLD NEWS

10 How the Ukraine war is triggering a food crisis

Breadbasket of the world

Russia and Ukraine together export nearly a third of the world’s wheat and barley, more than 70% of its sunflower oil and are big suppliers of corn. Now, Russia’s hostilities in Ukraine are preventing grain from leaving the “breadbasket of the world”.

Food more expensive

The Ukraine war is making food more expensive across the globe. And it’s threatening to worsen shortages, hunger and political instability in developing countries.

Parts of Africa, Asia hit

The war is preventing some 20 million tons of Ukrainian grain from getting to the Middle East, North Africa and parts of Asia.

181 million may face crisis

Experts say 400 million people worldwide rely on Ukrainian food supplies. The Food and Agriculture Organization warns that up to 181 million people in 41 countries could face a food crisis or worse levels of hunger this year.

Blockaded ports

Weeks of negotiations on safe corridors to get grain out of Ukraine’s Black Sea ports have made little progress. 90% of wheat and other grain from Ukraine are shipped to world markets by sea.

Transport by rail

Some grain is being rerouted through Europe by rail and road, but that quantity is just a fraction. This mode of transport is also increasing prices.

Western sanctions

Russian grain isn’t getting out, either. Moscow argues that Western sanctions on its banking and shipping industries make it impossible for Russia to export food and fertilizer.

[Source: www.economictimes.com dated 20th June, 2022]

III. ENVIRONMENT

11 Melting ice in Arctic ocean could transform international shipping routes

With climate change making an adverse impact on the environment, especially on oceans across the world, the fate of the Arctic Ocean looks horrid. Climate models have shown that parts of the Arctic that were once canvassed in ice all year are warming so quickly that they will be reliably ice-free for quite a long time in as not many as twenty years. Scientists say that the Arctic’s changing climate will imperil countless species that flourish in freezing temperatures.

According to researchers, another consequence of the melting ice in the Arctic Ocean could affect the regulation of shipping routes over the next few decades.

For the study, a couple of climate scientists at Brown University worked with a legal scholar at the University Of Maine School Of Law. They projected that by 2065, the Arctic’s traversability will increase so enormously that it could yield new shipping routes in worldwide waters — diminishing the shipping industry’s carbon footprints as well as weakening Russia’s control over trade in the Arctic.

This study’s lead author and a professor of Earth, environmental and planetary sciences at Brown, Amanda Lynch, said, “There’s no scenario in which melting ice in the Arctic is good news. But the unfortunate reality is that the ice is already retreating, these routes are opening up, and we need to start thinking critically about the legal, environmental and geopolitical implications.”

Lynch, who has studied climate change in the Arctic for almost 30 years, expressed that as an initial step, she worked with Xueke Li who is a postdoctoral research associate at the Institute at Brown for Environment and Society, to model four navigation route situations based on four likely results of global actions to halt climate change in the coming years. Their projections showed that unless global leaders effectively successfully constrain warming to 1.5 degrees Celsius over the course of the next 43 years, climate change will probably open up a few new routes through international waters by the middle of this century.

According to Charles Norchi, who is the director of the Center for Oceans and Coastal Law at Maine Law and a visiting scholar at Brown’s Watson Institute for International and Public Affairs, these changes could have significant ramifications for world trade and global politics.

Norchi explained that since 1982, the United Nations Convention on the Law of the Sea has given Arctic coastal states enhanced authority over primary shipping routes. Article 234 of the convention clearly states that in the name of “the prevention, reduction and control of marine pollution from vessels,” countries whose coastlines are near-Arctic shipping routes have the ability to regulate the route’s maritime traffic, so long as the area remains ice-covered for the majority of the year.

And for decades Russia has used Article 234 for its own economic and geopolitical interests. One Russian law requires all vessels passing through the Northern Sea Route to be piloted by Russians. The country also requires that passing vessels pay tolls and provide advance notice of their plans to use the route. The heavy regulation is one among many reasons why major shipping companies often bypass the route’s heavy regulations and high costs and instead use the Suez and Panama canals — longer, but cheaper and easier, trade routes.

But as the ice near Russia’s northern coast begins to melt, Norchi said, so will the country’s grip on shipping through the Arctic Ocean.

According to Lynch, previous studies have shown that Arctic routes are 30% to 50% shorter than the Suez Canal and Panama Canal routes, with transit time reduced by an estimated 14 to 20 days. That means that if international Arctic waters warm enough to open up new pathways, shipping companies could reduce their greenhouse gas emissions by about 24% while also saving money and time.

Lynch concluded by saying that it’s better to ask questions about the future of shipping now, rather than later, given how long it can take to establish international laws. She hopes that kicking off the conversation on the Arctic’s trade future with a well-researched scholarship might help world leaders make informed decisions about protecting the Earth’s climate from future harm.

[Source: www.phys.org dated 20th June, 2022]

IV. ETHICS

12 Ernst & Young to Pay $100 Million Fine After Auditors Cheated on Exams

The S.E.C. said the cheating involved hundreds of the firm’s auditors from 2017 to 2021.
 
Ernst & Young, one of the world’s largest auditing firms, has agreed to pay a $100 million fine after U.S. securities regulators found that some of its auditors had cheated on ethics exams — and that the firm had done nothing to stop the practice.

The penalty is the largest ever imposed by the Securities and Exchange Commission against an auditing firm. An administrative civil order filed by regulators said Ernst — also known as EY — had misled investigators, withheld evidence and violated public accounting rules designed to maintain the integrity of the profession.

“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” said Gurbir S. Grewal, the commission’s director of enforcement, in announcing the settlement on Tuesday.

The penalty is twice the sum that KPMG, another big audit firm, paid in 2019 to resolve an investigation into similar allegations of cheating by auditors on internal training exams.

Ernst, which admitted in the order that its conduct was wrong, said in a statement that “nothing is more important than our integrity and our ethics.” The firm also said that “sharing answers on any assessment or exam is a violation of our Code of Conduct and is not tolerated” and said it would take efforts to enforce compliance with ethical rules.

The ethics exams that Ernst auditors cheated on were part of a continuing education program offered by most states for accountants to keep their professional licenses, according to the commission. The S.E.C. said the cheating involved hundreds of the firm’s auditors from 2017 to 2021.

Forty-nine auditors at Ernst received the “answer key” to an ethics exam that is part of the initial process of becoming a certified public accountant, according to the S.E.C.’s administrative order.

Regulators said this was not the first time that there had been widespread cheating on ethics exams by Ernst employees. The S.E.C. said a somewhat similar cheating scandal, which the firm handled internally, took place from 2012 to 2015.

As part of the settlement, the S.E.C. has required Ernst to hire two independent consultants. One will review the firm’s policies on ethics procedures, and the other will review its failure to properly disclose the cheating.

Mr. Grewal said the settlement “should serve as a clear message that the S.E.C. will not tolerate integrity failures by independent auditors.”

(Source: NYT, By Matthew Goldstein, dated 28th June, 2022)

REGULATORY REFERENCER

DIRECT TAX

1.    Circular regarding use of functionality under section 206AB and 206CCA: Finance Act, 2021 had inserted two new sections 206AB and 206CCA w.e.f 1st July, 2021. These sections mandated tax deduction or tax collection at a higher rate for certain non-filers. The Income-tax Department came out with the functionality ‘Compliance Check for Section 206AB & 206CCA’, made available through its reporting portal. Finance Act 2022 brought certain changes in the above mentioned provisions. Accordingly, the logic of the functionality has been amended and circular is issued to explain the amendments made in the functionality. [Circular No. 10/2022 dated 17th May, 2022 and Notification No. 1/2022 dated 9th June, 2022.]

2.    Faceless Penalty (Amendment) Scheme, 2022 notified. [Notification No. 54/ 2022 dated 27th May, 2022.]

3.    Income-tax (16th Amendment) Rules, 2022: Rule 44FA was inserted to provide Form and manner of filing an appeal to the High Court on a ruling pronounced or order passed by the Board for Advance Rulings under sub-section (1) of section 245W. [Notification No. 57/ 2022 dated 31st May, 2022.]

4.    Clarification regarding Form No 10AC issued till the date of Circular: CBDT has clarified that where due to technical glitches, Form No. 10AC has been issued during F.Y. 2021-2022 with the heading ‘Order for provisional registration’ or ‘Order for provisional approval’ instead of ‘Order for registration’ or ‘Order for approval’, then all such Form No. 10AC shall be considered as an ‘Order for registration or approval’ and row no. 5 of Form No. 10AC (issued for all section codes) shall be read as ‘Unique Registration Number’ instead of ‘Provisional Approval/Approval Number’ or ‘Provisional Registration/ Registration Number’. [Circular No. 11/2022 dated 3rd June, 2022.]

5.    Cost Inflation Index (CII) for F.Y. 2022-23 notified as 331. [Notification No. 62/2022 dated 14th June, 2022.]

6.    Guidelines for removing difficulties under sub-section (2) of Section 194R: Finance Act 2022 inserted a new section 194R w.e.f 1st July 2022. The said section requires a person responsible for providing any benefit or perquisite to a resident, to deduct tax at source at 10% of the value or aggregate of the value of such benefit or perquisite. CBDT has issued guidelines for deduction of tax under the said section. [Circular No. 12/2022 dated 16th June, 2022.]

7.    TDS under section 194I from lease rental for an aircraft: No deduction of tax shall be made under section 194-I of the Act by a lessee from lease rent or supplemental lease rent to a lessor, being a Unit located in International Financial Services Center for the lease of an aircraft subject to certain conditions. [Notification No. 65/2022 dated 16th June, 2022.]

8.    Income-tax (18th Amendment) Rule, 2022: Safe Margins prescribed under Rule 10 TD for A.Y. 2020-21 and 2021-22 shall also apply for A.Y. 2022-23. [Notification No. 66/2022, dated 17th June, 2022.]

COMPANY LAW

I. COMPANIES ACT

1.    LLPs allowed to file their Annual Returns (Form 11) without any additional fee up to 30th June, 2022: Considering the transition from version 2 of MCA-21 to version 3, the MCA has extended timelines for filing of the Annual Return (Form 11) by LLPs without paying additional fee from 30th May, 2022 till 30th June, 2022. [General Circular No. 04/2022, dated 27th May, 2022.]

2.    Body corporates from border-sharing countries cannot enter into a compromise/ arrangement/ merger/ demerger without Govt.’s nod: The MCA has notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2022. Now, a company/body corporate incorporated in a country sharing a land border with India must submit a declaration in Form CAA-16 when making an application for compromise or arrangement. Also, the company/body corporate is required to state whether they need to obtain prior approval under FEM (Non-Debt Instruments) Rules, 2019 or not. [Notification No. G.S.R. 401(E), dated 30th May, 2022.]

3.    MCA cautions Section 8 companies not to carry out any microfinance activity as prohibited by law: MCA has observed that various Section 8 companies are altering their object clause for carrying out the business of microfinance activities. Earlier, MCA vide direction letter No. 05/33/20 dated 10th February, 2020 prohibited the inclusion of microfinance activities in the object clause of Section-8 company unless the Net Owned Fund (NOF) and other requirements as laid down by RBI are complied with. Now, ROCs are immediately directed to prevent such companies from carrying out microfinance activities. [General Circular No. 05/2022, dated 30th May, 2022.]

4.    MCA further extends the due date for filing CSR-2 for F.Y. 2020-21 till 30th June, 2022: MCA has notified the Companies (Accounts) Third Amendment Rules, 2022. As per the amended rules, the CSR-2 for F.Y. 2020-21 can be now filed till 30th June, 2022. Earlier, the MCA had provided the extension till 31st May, 2022. Further, Form CSR-2 shall be filed separately for F.Y. 2021-22 on or before 31st March, 2023 after filing Form AOC-4 /AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be. [Notification No. G.S.R. 407(E), dated 31st May, 2022.]

5.    Relaxation to pay an additional fee for delayed filing of all event-based LLP E-forms till 30th June, 2022: Considering the transition from version-2 of MCA-21 to version-3, the MCA has extended timelines for filing of the all event-based LLP E-forms without paying an additional fee till 30th June, 2022. The extension is provided for all those forms which are/were due for filing on and after 25th February, 2022 to 31st May, 2022. [General Circular No. 06/2022, dated 31st May, 2022.]

6.    Government tweaks norms relating to the removal of names of companies from the registrar of Cos.: MCA has notified the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022. Amended norms allow the Registrar (if he finds it necessary after examining the application made in form STK-2) to call for further information or direct the applicant to remove the defects and re-submit the complete form within 15 days from the date of such information, failing which the Registrar shall treat the form as invalid in the e-record, and shall inform the applicant. [Notification No. G.S.R. 436(E), dated 9th June, 2022.]

7.    Government tweaks norms regarding the appointment of directors; allows restoration of name of independent directors in databank: MCA has notified the Companies (Appointment and Qualification of Directors) Second Amendment, Rules, 2022. As per amended norms, any individual whose name has been removed from the databank may apply for restoration of his name on payment of fees of R1,000, and the institute shall allow such restoration subject to riders. In case he fails to pass the online proficiency self-assessment test within one year from the date of restoration, his name shall be removed from the data bank. [Notification No. G.S.R. 439(E), dated 10th June, 2022.]

II. SEBI

8.    Procedure and documentation requirements for the issuance of duplicate securities simplified: SEBI has further simplified the procedure and documentation requirements for issuing duplicate securities. The modified norms include that there shall be no requirement for submission of surety for issuance of duplicate securities. Further, the defaced certificate must be kept in the custody of the Company/RTA and disposed of in the manner as authorised by the Board of the Company. The circular shall come into force with immediate effect. [Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/70, dated 25th May, 2022.]

9.    Standard Operating Procedure leading to default in repayment of funds to clients by TM/CM modified: SEBI has modified the Standard Operating Procedure in the cases of Trading and Clearing Member leading to default. As per modified norms, the unencumbered deposits available after adjusting the dues of the SE/CC and maintaining the BMC (Base Minimum Capital), shall be utilised for settling the investor’s credit balance. The credit balance up to R25 lakhs shall be paid in full to all investors subject to funds availability. [Circular No. SEBI/HO/MIRSD/DPIEA/P/CIR/2022/72, dated 27th May, 2022.]

10.    Detailed norms regarding SOP for dispute resolution under Exchange’s arbitration mechanism prescribed: SEBI has prescribed detailed arbitration mechanisms norms regarding Standard Operating Procedure (SOP) for operationalising the resolution of all disputes pertaining to investor services. Accordingly, the arbitration mechanism shall be initiated after exhausting all actions to resolve complaints, including the SCORES Portal. Further, the norms w.r.t arbitration, appellate arbitration, arbitration award and reporting have also been provided. The circular shall be effective from 1st June, 2022. [Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/76, dated 30th May, 2022.]

11.    ASBA applications shall be processed only after the application monies are blocked: SEBI has notified that ASBA applications in public issues shall be processed only after the application monies are blocked in the investor’s bank accounts. Accordingly, all intermediaries are advised to ensure appropriate arrangements are made within three months from the date of the circular. Further, it will apply for public issues opening on or after 1st September, 2022. [Circular No. SEBI/HO/CFD/DIL2/P/CIR/2022/75, dated 30th May, 2022.]

12.    Facility to conduct annual meetings of unit holders of InvITs/REITs via audio-visual means extended till 31st December, 2022: SEBI has decided to extend the facility to conduct annual meetings of unitholders in terms of Regulation 22(3) of SEBI (REIT) Regulations, 2014 and Regulation 22(3)(a) of SEBI (InvIT) Regulations, 2014 and meetings other than annual meeting, through Video Conferencing (VC) or through Other Audio-Visual Means (OAVM) till 31st December, 2022. Earlier, the VC/OAVM facility for conducting annual and other meetings was extended till 30th June, 2022. [Circular No. SEBI/HO/DDHS/DDHS_DIV2/P/CIR/2022/079, dated 3rd June, 2022.]

FEMA

1.    RBI issues guidelines on importing gold by Qualified Jewellers under IFSCA: The Central Government has amended the import policy conditions for gold by Qualified Jewellers (QJ) as notified by the International Financial Services Centers Authority (IFSCA). QJs will be permitted to import gold under specific ITC (HS) Codes through India International Bullion Exchange IFSC Ltd. (IIBX).  To enable resident QJs to import gold, directions under FEMA have been issued, including responsibilities on AD Banks, QJs and IFSCA. Guidelines are available in the circular issued by RBI. [A.P. (DIR Series) Circular No. 4, dated 25th May, 2022.]

2.    Discontinuation of ‘Guarantee Return’: Regulations Review Authority (RRA 2.0) had proposed discontinuation of the return ‘Details of guarantee availed and invoked from non-resident entities’ in February 2022. The date of discontinuation was to be notified. RBI has now notified that this return would be discontinued with effect from the quarter ending June 2022. [A.P. (DIR Series 2022-23) Circular No. 5, dated 9th June, 2022.]

RBI

1.    Reporting of ‘Reverse Repos’ on bank balance sheets: RBI has directed commercial banks that: a) all type of reverse repos with RBI (including those under Liquidity Adjustment Facility) shall be presented under sub-item (ii) ‘In Other Accounts’ of item (II) ‘Balances with Reserve Bank of India’ under Schedule 6 ‘Cash and balances with RBI’; b) Reverse repos with banks and other institutions having original tenors up to and inclusive of 14 days shall be classified under item (ii) ‘Money at call and short notice’ under Schedule 7 ‘Balances with banks and money at call and short notice’; and (c) Reverse repos with banks and other institutions having original tenors more than 14 days shall be classified under Schedule 9 – ‘Advances’. [Notification No. RBI/2022-23/55 DOR.ACC.REC.No.37/21.04.018/2022-23 dated 19th May, 2022.]

2.    Provisioning for standard assets by NBFCs-UL: RBI has prescribed the provisions to be maintained in respect of ‘standard assets’ by NBFCs classified as NBFC-UL (Upper Layer). The rates of provision are as follows: individual housing loans and loans to SMEs – 0.25%; housing loans extended at teaser rates – 2.00%; advances to commercial real estate (0.75%/1.00%); and all other loans and advances – 0.40%. The guidelines are effective from 1st October, 2022. [Notification No. RBI/2022-23/61 DOR.STR.REC.40/21.04.048/2022-23 dated 6th June, 2022.]

ICAI MATERIAL

Accounts and Audit
1.    Technical Guide on Financial Statements of Non-Corporate Entities. [2nd June, 2022.]

Nothing in the world
is more dangerous than sincere ignorance and conscientious stupidity.

– Martin Luther King Jr.

REGULATORY REFERENCER

DIRECT TAX

1. Income-tax (6th Amendment) Rules, 2022: Section 89A provides that the income of a resident person from retirement benefits account maintained in a notified country shall be taxed in the manner and the year as prescribed by the Central Government. The CBDT has notified Rule 21AAA prescribing the manner for taxation of income from such accounts. The Rule provides that any income accrued in retirement benefits account shall, at the option of the assessee, be taxed in India in the year in which such income is taxed in the country wherein such account is maintained. The option can be exercised by filing Form No. 10-EE on or before furnishing the return of income. The notified countries are Canada, the UK, Northern Ireland and the USA. [Notification Nos. 24/ 2022 and 25/2022 dated 4th April, 2022.]

2. Income-tax (9th Amendment) Rules, 2022: Rule 12AB is inserted to prescribe additional conditions for furnishing return of income by persons (other than a company or a firm) referred to in section 139 (1)(b). As per the new Rule, if any person falls in any of the following conditions, then he is mandatorily required to file his Income-tax return: a) if total sales, turnover, or gross receipts in the business exceeds Rs. 60 lakh during the previous year; or b) if total gross receipts in profession exceed Rs. 10 lakh during the previous year; or c) if the aggregate of TDS and TCS during the previous year, is Rs 25,000 or more for a person of the age of less than 60 years; or d) if the aggregate of TDS and TCS during the previous year, is Rs. 50,000 or more for a person of the age of 60 years or more; or e) if deposit in one or more savings bank account, in aggregate, is Rs. 50 lakh or more during the previous year. [Notification No. 37/2022 dated 21st April, 2022.]

3. Section 47 – 150 countries notified: Section 47 of the Income-tax Act deals with transfers which are not regarded as transfer. CBDT has notified a list of 150 countries for clauses (viiac) and (viiad) of section 47. [Notification No. 46/2022 dated 27th April, 2022.]

4. Filing of updated tax return – Rule 12AC – Income-tax (11th Amendment) Rules, 2022: Finance Act, 2022 inserted subsection 8(A) to section 139 to provide for filing of updated tax returns. New Rule 12AC has been inserted wherein the form and manner of filing updated returns have been prescribed. The updated return must be filed in form ITR-U from A.Y. 2020-21. [Notification No. 48/2022 dated 29th April, 2022.]

5. Income-tax (14th Amendment) Rules, 2022 amending various forms applicable to trusts and institutions: Form Nos. 3CF, 10A, 10AB, 10BD and 10BE are amended to seek certain additional details from the filers. [Notification No. 51/2022 dated 9th May, 2022.]

6. Income-tax (15th Amendment) Rules, 2022: New Rules 114BA and 114BB are inserted, which provides that for the following transactions, it will be mandatory to quote PAN: a) cash deposit/(s) aggregating to Rs. 20 lakh or more in a financial year, in one or more accounts of a person with a banking company or a co-operative bank or a Post Office; b) cash withdrawal/(s) aggregating to Rs. 20 lakh or more in a financial year, in one or more accounts of a person with a banking company or a co-operative bank or a Post Office; and c) for opening a current account or cash credit account with a bank, co-operative bank, and post office. [Notification No. 53/2022 dated 10th May, 2022.]

COMPANY LAW

I. COMPANIES ACT

1. Registration of charge not to apply to charge created/modified by a banking Company in RBI’s favour: MCA has notified the Companies (Registration of Charges) Amendment Rules, 2022. Amendments have been made in Rule 3 (Registration of creation or modification of charge). Rule 3 shall not apply to any charge required/ to be created or modified by a banking company u/s 77 in favour of the RBI when any loan or advance is made to it u/s 17 (4) (d) of the RBI Act, 1934. [Notification No. G.S.R. 320(E) dated 27th April, 2022.]

2. MCA tweaks Form SH.4 to include a declaration from transferee that no Government approval is required under FEMA (NDI) rules: The MCA has notified the Companies (Share Capital and Debentures) Amendment Rules, 2022, whereby ‘Securities Transfer Form’, i.e. Form SH-4 has been revised to include a declaration from the transferee that “no Government approval is required under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to the transfer of shares or where the transferee is required to obtain the Govt. approval prior to the transfer of shares, the same has been obtained and enclosed herewith the form.” [Notification No. G.S.R 335(E) dated 4th May, 2022.]

3. Companies permitted to conduct EGMs through VC/OAVM till 31st December, 2022: The MCA has allowed companies to conduct their Extra-ordinary General Meetings (EGMs) through VC or other Audio Video Means (OAVM) or to transact items through postal ballot up to 31st December, 2022, in accordance with the framework as provided in earlier Circulars. Earlier, the MCA had permitted companies to conduct EGMs through VC/OAVM till 30th June, 2022. [General Circular No. 03/2022 dated 5th May, 2022.]

4. Companies permitted to conduct General Meetings through VC/OAVM till 31st December, 2022: The MCA vide it’s earlier general circular permitted companies whose AGMs are falling in the year 2022, to conduct their AGMs on or before 31st December, 2022, through VC or OAVMs. Now, the MCA has clarified that this circular shall not be read as allowing any extension of time for holding AGMs by the companies under the Companies Act. Further, the companies which fail to hold AGM within the specified time limit shall be liable for legal action under the Act. [General Circular No. 2/2022 dated 5th May, 2022.]

II. SEBI

5. ICDR norms amended; effective date prescribed w.r.t size of public issue: The SEBI vide Notification dated 14th January, 2022 notified the SEBI (ICDR) (Amendment) Regulations, 2022 (amendments made to Regulation Nos. 32, 49, 129, 145 and Schedules XIII and XIV). Now, SEBI has specified the effective date of these amendments. The amendments will be applicable depending upon the size of a public issue – for public issues of size less than Rs. 10,000 crores will be effective from 1st April, 2022; and for public issues equal to or more than Rs. 10,000 crores will be effective from 1st July, 2022. [Notification F. No. SEBI/LAD-NRO/GN/2022/82 dated 27th April, 2022.]

6. Timelines for listing of units of REITs and InVITs reduced to 6 working days: The SEBI has reduced the timelines for the listing of units of Real Estate Investment Trusts (REITs) and units of Infrastructure Investment Trust (InvIT) to 6 working days to protect investor interests and to promote the development of the securities market. The extant norms mandate all units of REITs and InvITs to get listed on recognised stock exchanges within 12 working days from the date of closure of the offer. [Notification No. SEBI/HO/DDHS_DIV3/P/CIR/2022/54 dated 28th April, 2022.]

7. Guidelines for FPIs, Designated Depository Participants and ‘Eligible Foreign Investors’ modified: SEBI vide Circular No. IMD/FPI&C/CIR/P/2019/124 dated 5th November, 2019, issued operational guidelines for FPI, DDP, and FI whereby the designated depository participant must grant the certificate of registration, bearing the registration number generated by NSDL in a centralised manner. SEBI has decided to modify the operational guidelines. Now, the designated depository participant must grant the certificate of registration, bearing the registration number generated by SEBI. [Circular No. SEBI/HO/IMD/FPI&C/CIR/P/2022/57 dated 29th April, 2022.]

8. Audit framework of MIIs revised; reporting of major non-compliances in system and network audits required: The SEBI vide Circular dated 7th January, 2020, mandated annual system audit by an independent auditor for Market Infrastructure Institutions (MIIs). The SEBI has revised the existing system audit framework to cover the network audit under the ambit of the revised system. Now, MIIs are required to conduct a system and network audit. MIIs are also required to submit information w.r.t exceptional major Non-Compliances (NCs)/ minor NCs observed in System and Network Audit as per the specified format. [Circular No. SEBI/HO/MRD1/MRD1_DTCS/P/CIR/2022/58 dated 2nd May, 2022.]

9. Framework for calculating margin for intra-day snapshots in derivatives segment revised: SEBI had earlier issued a framework to enable verification of upfront collection of margins from clients in the cash and derivatives segments. Based on the representation received, SEBI has decided that margin requirements for intra-day snapshots, in derivatives segments (including commodity derivatives) shall be calculated based on fixed Beginning of Day (BOD) margin parameters. It is clarified that this change is only for the verification purpose of upfront collection of margins from clients in the aforementioned segments. [Circular No. SEBI/HO/MRD2/DCAP/P/CIR/2022/60 dated 10th May, 2022.]

10. Scope of term ‘auditor’ expanded; LLPs allowed to audit books of Companies engaged in CIS: The SEBI has notified the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2022. Amendments have been made in Regulations 2, 9, 9A, 9B, 14, 24, 30, 31, 32, 35 and the Ninth Schedule. Now, an ‘auditor’ means a firm, including an LLP, constituted under the LLP Act, 2008, who is eligible and qualified to audit the accounts of a company u/s 141 of the Companies Act, 2013. Under the extant norms, ‘auditor’ meant only a person qualified to audit the accounts of Companies under the Cos. Act. [Notification No. SEBI/LAD-NRO/GN/2022/84 dated 10th May, 2022.]

11. Listed entities dispensed with the requirement of dispatching hard copies of annual reports to NCD holders up to 31st December, 2022:  The SEBI, (considering MCA Circular dated 5th May, 2022, extending the relaxations from dispatching of physical copies of annual report for 2022) has decided to provide relaxation to a listed entity from the requirement of sending a hard copy of its annual report to the holders of non-convertible debt securities under Reg. 58 of LODR who have not registered their email addresses either with the listed entity or with any depository up to 31st December, 2022. [Circular No. SEBI/HO/DDHS/P/CIR/2022/0063 dated 13th May, 2022.]

12. Process for granting NOC for setting up Wholly Owned Subsidiaries (WOS), step-down Subsidiaries, and Joint Ventures (JV) in GIFT IFSC streamlined: In an endeavour to rationalize and streamline the process of application, SEBI has issued guidelines for seeking NOC by Stockbrokers/Clearing Members for setting up WOS, step-down Subsidiaries, and JVs in GIFT IFSC. Accordingly, the format of the application along with the list of supporting documents for seeking NOC have been prescribed. SEBI has directed Exchanges to forward the complete application to SEBI, after verification along with their recommendation. [Circular No. SEBI/HO/MIRSD/DOR/P/CIR/2022/61 dated 13th May, 2022.]

FEMA

1. Settlement in INR for exports to Sri Lanka: Indian exporters are facing difficulties in receipt of export proceeds from Sri Lanka due to its prevailing economic situation. As Sri Lanka is an ACU member country, import/export transactions are allowed to be routed only through the ACU Mechanism. The Indian Government has guaranteed a USD 1,000 million term loan extended by SBI to Sri Lanka for financing purchase of essentials. Under the arrangement, financing of export of eligible goods and services from India would be allowed if specified terms are met. Due to the difficulties faced, it has been decided that such trade transactions with Sri Lanka, falling under this arrangement, may be settled in INR outside the ACU mechanism. [A. P. (DIR Series 2022-23) Circular No. 3, dated 19th May, 2022.]

RBI

1. Disclosure in Financial Statements – Notes to Accounts of NBFCs: The RBI has outlined additional disclosure requirements for NBFCs under the SBR framework (‘Scale Based Regulation (SBR): A Revised Regulatory Framework’, Circular No. DOR.CRE.REC.60/03.10.001/2021-22 dated 22nd October, 2021). The current notification specifies the formats (common templates) for disclosures for all categories of NBFCs (i.e., Investment and Credit Companies, Housing Finance Companies, Core Investment Companies, etc.). The guidelines are effective for annual financial statements for Y.E. 31st March, 2023, and onwards. [Notification No. RBI/2022-23/26 DOR.ACC.REC.No.20/21.04.018/2022-23 dated 19th April, 2022.]

ICAI ANNOUNCEMENTS

1. Effective Date of applicability of Standard on Assurance Engagements (SAE) 3410, Assurance Engagements on Greenhouse Gas (GHG) Statements: The effective date of application of SAE 3410 is as follows – (i) voluntary basis for assurance reports covering periods ending on 31st March, 2023, and (ii) mandatory basis for assurance reports covering periods ending on or after 31st March, 2024. The objective of an engagement under SAE 3410 is to obtain either limited or reasonable assurance, as applicable, about whether the GHG statement is free from material misstatement, whether due to fraud or error. [2nd May, 2022.]

ICAI MATERIAL

Accounts and Audit
Implementation Guide on Reporting under Rule 11(e) and Rule 11(f) of the Companies (Audit and Auditors) Rules, 2014. [26th April, 2022.]  

SOCIETY NEWS

INDIRECT TAX STUDY CIRCLE MEETINGS

1. ‘RECENT AMENDMENTS IN GST AND CASE LAWS’

The Indirect Tax Study Circle of BCAS organized its 7th meeting for 2021-22 on ‘Recent Amendments in GST and Case Laws’ on 8th February, 2022, addressed by group leader CA Parth Shah and mentored by CA Jayesh Gogri.

The group leader had made 9 case studies on recent changes in GST law that are effective 1st January, 2022, along with the Union Budget 2022 Amendment Proposals and specific advance rulings/ high court judgements. The presentation broadly covered the impact of amendments and changes on the following topics:

•    Proposed Amendments in Union Budget, 2022.

•    Errors in GSTR – 3B and recovery proceedings thereafter.

•    Reversal of credit and levy of interest thereon pursuant to retrospective amendment.

•    Recovery for ITC not reflected in GSTR-2A.

•    Issues in variation of more than 5% in ITC claimed as against ITC appearing in GSTR 2B, especially w.r.t amendments in sec 16(2).

•    Issues for cross charge. Is ISD an option, or would cross charge be considered as compliant as against
ISD?

•    Consignment interceptions and issues in clubs.

The participants took active part in all the case study discussions with the issues being discussed at length. Mentor, CA Jayesh Gogri provided his astute
comments on various aspects covering all the case studies.

73 participants benefitted from this active discussion, ably led by the group leader and Mentor.

2. ‘INTRICATE ISSUES IN ENTERTAINMENT AND HOSPITALITY SECTOR’

 
The next meeting (the 8th and last in F.Y. 2021-22 of the IDT Laws Study Circle of BCAS) was on ‘Intricate Issues in Entertainment and Hospitality Sector’ on 17th February, 2022, addressed by group leader CA Ramandeep Bhatia from Raipur, and mentored by CA Parimal Kulkarni from Panaji.

The online platform has given greater reach for pooling resource persons from all over India. Group leader CA Ramandeep Bhatia presented 7 case studies dwelling upon the intricacies and issues in the sector. The presentation and discussion broadly covered the intricacies of the following topics:

•    ITC issues in an Amusement Park w.r.t classification issues for equipments as immovable or not, land development, etc.

•    Rate and classification issues on entry fees for entertainment parks, etc.

•    Taxability of donations received from trusts for events organised for charitable activities.

•    Issues for restaurants, namely, standalone restaurants, eating joints, resellers, sales through E-com operators, cloud kitchens, liquor sales, etc.

•    COVID pandemic issues which either mandated or volunteered various actions and its post facto effects during assessments.

•    Issues for 5/3-Star Hotels, vis-a-vis ITC on various items and chargeability w.r.t conditions in rate notification.

The participants from all over India took an active part in the discussion on all the case studies, and the issues were discussed at length. The Mentor gave his astute comments on various aspects covered in the case studies.

Over 60 participants benefitted from the active discussion led by the group leader and Mentor.

SEMINAR – LLP: 360 DEGREES PERSPECTIVE (LEGAL, TAX, FEMA)

The Taxation Committee of BCAS organised a half day event ‘Seminar on LLP – 360 degrees perspective (Legal, Tax, FEMA)’ on 1st April, 2022 in hybrid mode (physical meeting at BCAS office and virtually on Zoom). The opening remarks were given by the President, CA Abhay Mehta, followed by an introduction to the subject by CA Anil Sathe, Co-Chairman, Taxation Committee. The seminar was divided into three sessions:

i. CS Makarand Joshi commenced with the origins of LLP regulations and provided a brief overview of the key features of an LLP and its formation process. He drew attention to crucial pointers that everyone should consider while drafting an LLP agreement. Thereafter, he commented upon the important compliances to be followed by every LLP and its Designated Partners.

ii. CA Vishal Gada commenced with the distinguishing points between an LLP and a Company. He briefly introduced the basic provisions of the Income Tax Act applicable to LLPs. Thereafter, he educated the participants about the tax implications on account of reconstitution of an LLP along with practical case studies, tax implications on account of merger / demerger of LLP, implications on account of transfer of partners’ rights in LLP, conversion of company into LLP and FEMA regulations applicable to LLPs (including inbound and outbound investment regulations).

iii. CA Udayan Choksi emphasized the definitions of certain important terms under the GST laws and gave a brief overview of the GST provisions covering the taxability, classification, valuation, credits, compliance and departmental actions. He explained various provisions with the help of practical case studies.

The seminar covered a gamut of tax and regulatory regulations applicable to an LLP. It was a highly informative seminar covering 360 degree perspectives (Legal, GST, taxation) for an LLP. The speakers answered the queries raised by participants, reflecting their wide experience and expertise on the subject matter.

STUDY CIRCLE MEETING – ‘MASTER YOUR MIND MASTER YOUR LIFE’
The HRD Committee of BCAS conducted a study circle meeting on the topic ‘Master Your Mind Master Your Life’ on 12th April, 2022. The session was presented by CA Khushbu Shah.

“There is no greater blessing than being the Master of your Mind, and blessed are those who are on the Journey of Mastering their Mind”

We tend to believe mastering the mind is difficult because of the past baggage it carries and the external stimulus it receives every day. But in reality, mastering your mind is extremely easy and achievable. LIFE is all about *L*ooking *I*nternal & *F*orward *E*xternal. Your Life is a reflection of your inner thoughts, and your mind, in reality, is the power button of your life. This session laid down the red carpet for all the ‘Open Minds’ to embark on the ‘Journey of Mastering their Minds’!

The session started with a very powerful and positive meditation conducted by the speaker, engaging the entire audience, and expressing gratitude towards everyone who understood the importance of ‘Mastering the Minds’ and took the first step towards it and joined the session.

The discussion paved its way through the millions of thoughts that we have as people every single day to how we, as human beings can Develop, Understand and Practice the profound ways of ‘Mastering the Mind’. With numerous heart touching, relatable and meaningful short stories, understanding each concept was extremely relatable and convincing.

Different levels of mind and how they operate under each situation were explained with various real-life examples to understand the impact of each stage of mind and how the thoughts and the food one intakes determine the well-being of a person.

 “What you Consume, Consumes You;
What Consumes you Controls Your Life!”

To ensure you move towards the right way of thinking, almost 15 different Powerful Mind Hacks which should be practiced and the impact that each one can create were discussed in detail.

The speaker, summed up with a very simple yet powerful example, referring to the mind as a traffic signal, having a significant impact, and when followed correctly can lead to a smooth journey on the road of Life-

Red Signal – Stop the Waste Thoughts

Yellow Signal – Slow Down the Fast Thoughts

Green Signal – Go towards the Right Thoughts

A Mastered Mind is always a Happy Mind, and Happy Minds have the power to make their Life worthwhile.

MEETING – “RECENT AMENDMENTS IN INCOME-TAX ACT, 1961”
The Suburban Study Circle organised a meeting on ‘Recent Amendments in Income-Tax Act, 1961’ on Friday, 22nd April, 2022 at Bathiya & Associates LLP, Andheri (E), which was addressed by CA Chintan Jitendra Shah as a Group Leader and Mr. Piyush Chhajed as session Chairman.

Group Leader CA Chintan Shah made an insightful presentation and shared his views on the following:

• Discussion on Virtual Digital Assets and its Tax Impact

• Updated Return applicability

• New definitions on ‘Succession’ and ‘Business Re-organisation’

• Retrospective amendment

• Avoidance of Repetitive Appeal Provisions

• Amendment in provisions relating to Charitable Trusts

• Assessment time limits and many more amendments

• New amendments in the Act which were not part of the proposed Bill.

The session was practical and all the points were very well covered and discussed with the group. CA Piyush Chhhajed’s command of the subject and his depth of knowledge was well appreciated by the group.

The participants benefited from the presentation shared by the group leader.

STUDY CIRCLE MEETING – ‘TAXATION OF EMPLOYEE STOCK OPTION PLANS (ESOPS)’
The Direct Tax Laws Study Circle Meeting held a session on ‘Taxation of Employee Stock Option Plans (ESOPs)’ on 25th April 2022.

The Group leader, CA Darshak Shah, provided an overview of various ESOP types, and the process adopted in their issuance. The disclosure requirements for companies and employees were discussed in depth with references to judicial precedents and relevant rules. Further, multi residency taxation provided in OECD articles with relevant case studies was discussed.

Thereafter, the group leader discussed in detail the taxation on allotment of shares in the hands of employees, taxation of Stock Appreciation Rights (SARs) under cash settlement or equity settlement and the taxation of Phantom Stocks. The session ended with a vote of thanks.

IESG MEETING – THREATS TO PETRODOLLAR & US DOLLAR’S STATUS AS “RESERVE CURRENCY”, ARE WE HEADING FOR CHANGE OF WORLD ORDER OR MULTIPOLAR GLOBAL ORDER?

The IESG held a meeting on the above subject on 26th April, 2022.

Petrodollar system has been put in place since 1973. A natural relationship was formed between Saudi Arabia and the U.S., where the former would sell its oil in exchange for the dollars earned to be reinvested into the US Treasury Market in return for security promise to protect Saudi Royals. Many Middle East & OPEC countries joined. Countries that buy oil would need to buy dollars first. This consistent demand for the dollar is one of the reasons why it has maintained its reserve status. But if the bigger players decide to use another method of payment, then the system is at risk of breaking down. Wars have been fought to keep this system in place or dissuade any member from trying to break away. US’s economic dominance was built on the petrodollar. This helped US run its massive trade deficits (since 1975, America has never run a trade surplus) without worry of their dollar demand declining. Those who opposed Petro-Dollar perished, like Saddam, Gaddafi, Iran, Venezuela, etc. Post Russia’s invasion of Ukraine and USA’s sanctions against Russia, Russia has put conditions on Europe (which has major dependence on Russia for Oil and Gas), that they will supply Gas and Oil only in Roubles and the Roubles is now linked to Gold. There are other bilateral arrangements like China with Iran, Russia with Saudi Arabia and Russia with India, threatening the relevance of Petrodollar.

There has been continuous process of de-dollarisation which means substituting own currencies in place of US dollar for all transactions. We are witnessing the beginning of de-dollarisation due to increased geopolitical risk from sanctions and debarring from SWIFT platform for settlement. USA’s massive spending on wars and pandemic relief stimuli have resulted in US’s debt soaring to $ 30 trillion (134% of Debt to GDP) and the American economy is facing serious challenges like inflation at a 41-year high, higher interest rates, wage stagnation, soaring cost of living, higher product prices etc. threatening US Dollar’s status as a Reserve Currency. Moreover, aggressive use of sanctions also threatens dollar hegemony which could eventually undermine USA’s status as a World Super Power. Many credible institutions like IMF, Goldman Sachs and others have expressed concerns in this regards. Historically, status of Reserve Currency and hegemony remains for 70-100 years. Are we looking at a multipolar world? What will be the position of India in this fast changing geopolitical situation?

The speaker CA Harshad Shah presented points for deliberations, and many group members also expressed their views.

INDIRECT TAX STUDY CIRCLE MEETING ON 29TH APRIL, 2022 THROUGH ZOOM ONLINE MEETING
The Indirect Tax Study Circle of the BCAS organised its 1st meeting for 2022-23 to discuss key aspects relating to:

1. Payment of Pre-Deposits in GST Appeals

2. Merchant Trade – Supply of Goods outside India from a Place outside India.

The meeting held on 29th April, 2022 was addressed by group leader CA. Rushil Shah and mentored by CA. Sushil Solanki.

The group leader had made 6 case studies on practical challenges for payment of Pre-Deposits and Merchant Trade transactions. An active and healthy discussion included nitty-gritty in the subject covering:

• Issues in interpretation in the backdrop of Orissa High Court Judgement.

• Pre-Deposit payments and utilisation of credit ledger for GST appeals, erstwhile service tax appeals.

• Refund of Pre-Deposit paid in Service Tax Regime, whether allowed through Cash Ledger or Credit Ledger.

• Issues in Entry 7 of Schedule III to CGST Act w.r.t Merchant Trade, vis-à-vis its applicability, effective date – whether prospective or retrospective, issues in ITC, interpretation of section 17(3) and its limited purpose.

The participants were involved in threadbare analysis and discussion on all the case studies, and the issues were discussed at length. Mentor CA Sushil Solanki, and ex-IRS officer gave his fair comments on the legal interpretation of the law.

Around 76 participants benefitted from the active discussion led by the group leader and Mentor.

SEMINAR – TAXATION OF VIRTUAL DIGITAL ASSET (POPULARLY REFERRED TO AS CRYPTO CURRENCY)
The Taxation Committee of the Society organised a half-day webinar on ‘Taxation of Virtual Digital Asset (popularly referred to as Crypto Currency)’ on 6th May, 2022. The opening remarks were given by the President, Mr. Abhay Mehta, followed by an introduction to the subject by Mr. Anil Sathe, Co-Chairman, Taxation Committee. The webinar was divided into three sessions:

1. Adv. Meyyappan Nagappan gave an introduction to the concept of ‘Virtual Digital Asset’ (VDA) , more popularly known as ‘Cryptocurrency’ and gave an overview of how blockchain and cryptocurrencies have evolved over the years. He educated about basis of blockchain technology and the fundamentals of an NFT token and acceptability.

2. Adv. Bharat Raichandani highlighted the various provisions under GST regulations which need to be considered while determining the applicability of GST on VDA transactions.

3. CA Pradip Kapasi commented upon the taxability of VDA transfers prior to 1st April, 2021 and thereafter explained the new provisions pertaining to transfers of VDA, which have been introduced by Finance Act, 2022. He explained various provisions relating to TDS while making payments for VDA, provisions pertaining to set-off of losses arising on account of VDA transfers etc.

It was a highly informative session which covered 360 degree perspectives (Legal, GST, Taxation) on transactions relating to purchase and sale of VDA. Being a topic which is relatively in its nascent stage, the speakers educated the participants about the provisions in the most lucid possible manner and also highlighted the possible practical difficulties which one may face in the coming times. The speakers handled the queries raised by the participants with great panache, reflecting their in-depth knowledge and subject matter expertise.

“DISCUSSION ON KEY ASPECTS OF MAHARASHTRA SETTLEMENT OF ARREARS OF TAX, INTEREST, PENALTY OR LATE FEE ACT, 2022”
The Indirect Taxes Law Study Circle of BCAS organised its 2nd meeting for 2022-23 on “Discussion on key aspects of Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2022” on 14th May, 2022 which was addressed by group leader CA. Krunal Davda and mentored by CA. Rajat Talati.

The group leader had made 9 case studies for understanding the newly introduced Amnesty Scheme in the Maharashtra State Budget, 2022, as well as the calculation aspects of the same. He gave a detailed overview about the amnesty provisions as well as procedural aspects related to various pre-GST era laws governed by the MahaVAT Department, which were subsumed in GST. A participative discussion covered various practical aspects of the scheme, such as:

•    Practical calculations of Disputed and Undisputed tax. Calculation of Interest on the overall tax.

•    Issues in post-assessment interest which shall be fully waived. Reference to Trade Circular example to bring a clarity to settle.

•    Whether the scheme is qua order or qua financial year?

•    Calculation of Proportionate Waiver Benefits.

•    Issues if the pending assessments are not yet completed.

•    Taxes recommended by the auditor and accepted by the assessee, discussion on constitutional aspects on differentiating between the dealers.

•    Legality issues for separate orders for tax and interest and penalty.

•    Issues in other acts like the Entry Tax Act, BST, along with reference to MVAT.

The participants were involved in threadbare analysis and discussion on all the case studies, and the issues were discussed in detail to arrive at its conclusive interpretation. There were quite a few points which need representation to the Department to avoid contrary views being taken by the officers because of the Trade Circular issued and which may defeat the purpose of the scheme.

Around 40 participants benefitted from the informative discussion led by the group leader and Mentor.

STUDY COURSE – FOREIGN EXCHANGE MANAGEMENT ACT (FEMA)
FEMA was introduced with a view to monitoring dealings in foreign exchange/ securities and transactions affecting import and export of our currency. FEMA has evolved over the years, and knowledge of this topic has become a crucial factor in advising clients on implementing successful strategies for cross-border transactions in light of India’s positioning in the global arena.

The International Taxation Committee of BCAS organised a 4-day FEMA Study Course over two weekends, namely 29th, 30th April, 2022 and 13th, 14th May, 2022. There were participants from across the country who attended this course online as well as offline. This was made possible by the novel initiative taken by BCAS to introduce new-age technology to ensure that participants from across the country are able to benefit from the course.

The Study Course began with introducing the basics, namely Structure of FEMA, Capital and Current Account Transactions, Foreign Direct Investment, Overseas Direct Investment, Liaison/Project/Branch Office to more advanced topics, namely ECBs, Succession under FEMA including Trust aspects, Compounding and ED Matters and Corporate Restructuring including Cross-Border Acquisition and ended with a Brain Trust and Panel Discussion on various FEMA issues.

The host of experts who delved into each of the above topics not only made it interesting by sharing anecdotes from their personal experiences but also by making it interactive using case laws and encouraging the participants to ask questions. The participants and speakers were enriched by the quality of questions posed by the participants and their eagerness to know more about the topics in further detail.

LECTURE MEETING – STEERING THROUGH GLOBAL CRISIS WITH SPECUNOMICS

BCAS organised a lecture meeting by Mr. Kushal Thaker on “Steering through Global Crisis with Specunomics” on 18th May, 2022.

The Lecture Meeting was planned with the aim to empower the participants to understand the impact of the current crisis and its impact on global economy and financial markets.

President CA Abhay Mehta welcomed the participants and shared his remarks on the lecture. 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 discussed the concepts relating to various asset classes and their analysis.

Synopsis of the meeting and Key Learnings:

1. Indian economy and financial markets
a. Macroeconomic parameters
b. PE and valuations
c. Expected market corrections and targets

2. Global markets
a. PE and valuation
b. Global economic growth
c. Inflation and interest rates

3. Indian Currency
a. Imports
b. Fossil fuels/ Oil
c. Impact of devaluation

4. Crude Oil
a. Country-wise demand-supply
b. Ukraine-Russia crisis

5. Automobile Sector
a. Sales and demand forecast
b. Electric Vehicles (EV) and its impact on the power sector

6. Metals
a. Demand-Supply analysis
b. Reasons for corrections

7. Others
a. Agriculture
b. Semi-conductor industry
c. Asset class mix
d. Textile and Apparels
e. Cryptos

The speaker addressed the queries raised by the participants with enriching inputs and statistics.

The meeting concluded with a well-deserved vote of thanks proposed by CA Kinjal Shah to the speaker, Mr. Kushal Thaker, who addressed the participants from his Chicago office, USA.

Youtube Link:

QR Code:

BCAS display plate put up by BMC outside the BCAS office.

SOCIETY NEWS

INTERACTIVE DASHBOARDS IN GOOGLE DATA STUDIO EVENT

On 5th March, 2022, the Technology Initiative Committee of the Society organised a session on ‘Interactive dashboards in Google data studio’ via Zoom. CA Rinki Chajjed led the session.

Google’s Data Studio is a tool that turns data into informative, easy to read, easy to share, and fully customisable dashboards and reports. Its basic version is available free of cost. The speaker began with introducing the importance of data and various Business Intelligence tools available in the market for analysing and visualising data. The speaker discussed the pros and cons and the limitation of various tools.

The speaker then briefly discussed the process from scratch of building an interactive dashboard to visualising large numerical data and developing significant insights. The learned speaker provided a brief overview of various aspects of the software, such as data sources, google connectors, third party connectors, etc.

Participants learned new ways of working more effectively with the data studio application. CA Rinki Chajjed satisfactorily answered the questions raised by the participants.

Youtube Link:
https://www.youtube.com/watch?v=oiSiJmHFi2Y

PROSPERITY CONSCIOUSNESS – MANIFESTING ABUNDANCE
On 8th March, 2022, the Human Resources Development Committee organised a workshop, ‘Prosperity Consciousness – Manifesting Abundance’ centred around spiritual concepts and tools on how to create a life of prosperity and manifest abundance. CA Charmie Sheth presented the session.

The workshop started with a powerful aura cleansing technique that helped the participants release stress and worries from their aura, enabling them to be more attentive, actively participate and easily absorb all the new information and tools being shared.

The concept of energy and how our negative thoughts and emotions – which are simply energy – affect our aura and create “energy obstacles” in our success was very well explained and even practically demonstrated. The participants were taught how to scan and check the impact of their emotions and thoughts on their aura.

The workshop proceeded to teach a step-by-step technique on removing these energy obstacles from one’s aura to move the blocks in one’s prosperity and abundance. To verify that the technique works, the participants were taught how to check their prosperity energy before and after this technique. And it was amazing to see how almost everyone’s prosperity energy substantially increased and even doubled in many cases!

The concept of conscious giving and receiving, based on the Law of Karma was explained. To receive, one first has to give. This is nature’s law. There can be no fruit without a seed. This is a very important lesson to remember if we want to increase our prosperity.

The workshop ended with an advanced meditation practise called the Meditation on Twin Hearts which helps to supercharge one’s aura with divine energies and good karma to manifest the life we desire easily.

The workshop was a great success, with active participation from all attendees till the very end of the workshop.

Youtube Link:
https://www.youtube.com/watch?v=_xgnm2xJZTQ

RECENTLY QUALIFIED CA’S FELICITATION EVENT HELD ON 15TH MARCH 2022


“Remember to celebrate milestones as you prepare for the road ahead.”, said Nelson Mandela. Hence, every year, the Seminar, Public Relations & Membership Development Committee (SPR&MD) of the BCAS felicitates the achievers of the CA Final examinations and also attempts to facilitate them with the right guidance for the road ahead.

In the case of the successful finalists of the CA exams, which were held in Nov 2020, Jan 2021, Jul 2021 and Dec 2021, the cracking of the exams which is, after all the first major milestone in their lives, is touted to be tougher given the uncertainties around the globe, and thus the perseverance and grit displayed by these Achievers is particularly noteworthy.

A special discussion, “FUTURE READY – WHAT NEXT?” with two distinguished Core Group members, CA Robin Banerjee and CA Chirag Doshi was held along with the felicitation to guide and mentor these young achievers. The impact of the guidance from these mentors can be best described by feedback from one of the attendees – “Next time, please arrange the session before ICAI campus placement because after session many things seemed clear relating to joining industry or CA firm and the roles.”

The event had close to 300 registrations, including seven rankers.

In his opening remarks, President CA Abhay Mehta congratulated them on this feat and welcomed the young pass-outs into the fraternity.

The Chairman of the SPR&MD Committee CA Narayan Pasari extolled the youth to rise to their role in building a strong nation. He briefed them about the activities of the Committee, including the programs where the Yuva Shakti takes the lead.

CA Samit Saraf, Course Coordinator, introduced the speakers and conducted the talk.

The speakers addressed the question that vexes every batch of pass-outs – industry or practice?  CA Chirag Doshi guided the victors on a career as a practicing CA by sharing his journey and experience in various roles, which left these freshers astonished that a CA in practice can do so much more beyond Tax and Audit.

CA Robin Banerjee successfully embedded the importance of a CA in the attendees’ minds with his witty and bone-tickling stories. He also stressed how it is important for a CA in the Industry to have overall knowledge of all the roles in the company, to climb up the ladder efficiently.

After long online despair, this physical event enabled BCAS to felicitate the achievers in front of their peers. The rankers and a few other achievers were allowed to share their inspiring stories. A ranker spoke about her struggle of coping with this additional pressure of postponement of exams. Another achiever spoke about how she bounced back every time and finally earned the much-proclaimed title after 14 attempts, another lady achiever spoke about her come back after her long sabbatical from Chartered Accountancy career. This was followed up by a celebratory cake-cutting session for the victors.

Convenor, CA Preeti Cherian held a rapid-fire round for the mentors at the end of the session, giving the audience an opportunity to learn a little more about them, their likes and interests. CA Rimple Dedhia proposed a well-deserved vote of thanks.

That the event was well-received was evidenced in the feedback received post the event. This year the Committee also endeavoured to hold a Placement Mela along with the Felicitation event.

PLACEMENT MELA HELD ACROSS 15TH AND 16TH MARCH, 2022 FOR RECENTLY QUALIFIED CAs

“Your big opportunity may be right where you are now.” –Napoleon Hill. Demonstrating this for the fresh victors, this year, the Seminar, Public Relations & Membership Development Committee also endeavoured to hold a Placement Mela in association with Monster.com to be a catalyst by making this valuable opportunity available to new entrants to the fraternity, along with the usual felicitation of the recently qualified CAs.

The Placement turned out to be a successful tiny step towards enabling the young victors to take forward steps to fly high and make the journey smoother for them, with almost 250 interviews (including virtual), being conducted and 25 offers already being given during the placement mela (while final interviews for some of them were yet to be conducted). The placement witnessed the participation of 13 employers and around 150 registered candidates.

The placement was conducted on 15th March, 2022 followed by a felicitation event and a special discussion “FUTURE READY – WHAT NEXT?” later. Owing to the great response and insistence of some employers and candidates, the placement was continued on 16th March.

The faces full of optimism and the bunch of the applications spoke volumes of the zeal to seize the opportunity.

That the event was well-received was evidenced in the feedback that was received post the event.

WORKSHOP – RECENT AMENDMENTS IN COMPANIES ACCOUNTS AND AUDIT RULES INCLUDING DISCLOSURES AND REPORTING

The BCAS Accounting and Auditing Committee organised a hybrid workshop on ‘Recent Amendments on Companies Accounts and Audit Rules including Disclosures and Reporting’ on 26th March, 2022.

Welcoming the participants, President CA Abhay Mehta indicated that this is the first hybrid workshop wherein the physical participation has exceeded all expectations. He indicated that the topics which the speakers will cover are of great importance to the accounting and auditing fraternity and exhorted the participants to derive the maximum benefits.

Thereafter, the Chairman of the Accounting and Auditing Committee, CA Manish Sampat, gave his opening remarks  following which the Convenor CA Amit Purohit introduced the first speaker CA Zubin Billimoria.

CA Zubin Billimoria took the first session and covered the following:

Recent amendments under Schedule III and CARO covering the assets and expenses side of the financial statements, dealing with PPE and Intangible Assets, Inventories and Other Current Assets, Investments and CSR.

The changes in disclosures and the additional reporting requirements, the practical challenges in reporting and the illustrative reporting formats were covered under each of the above clauses.

Nuances of some of the other additional disclosures under Schedule III covering debtors, CWIP, Investment Properties and cryptocurrencies which he indicated would put greater accountability and responsibility on both the Management and the Auditors.

The CARO requirements dealing with the resignation of the statutory auditors before their term and the resultant communication between the incoming and outgoing auditors.

In the next session, CA Nikhil Patel introduced the next speaker CA Rajesh Mody, who covered the following:

Recent amendments to the Companies Accounts and Audit Rules.

The Companies (Accounting Standards) Rules, 2021, which have amended the definition of SMEs who can avail of the exemptions to the general accounting standards. He explained the same with the help of various examples.

The various amendments would lead to enhanced disclosures, better governance, bring about greater financial discipline, give early warning on the solvency status of companies as well as provode early signals towards frauds and money laundering.

In the final session, CA Zubin Billimoria introduced the speaker, CA Santosh Maller, who then spoke on the following:

Recent amendments under Schedule III and CARO covering the liabilities and income side of the financial statements, dealing with borrowings, deposits, wilful defaulters, capital raising, fraud and undisclosed income and whistle blower mechanism and registration requirements for NBFCs.

The changes in disclosures and the additional reporting requirements, the practical challenges in reporting and the illustrative reporting formats were covered under each of the above areas.

Nuances of some of the other additional disclosures under Schedule III dealing with trade payables, registration of charges, relationship with struck off companies, accounting treatment under schemes of arrangements, disclosure of promoters shareholdings, financial ratios, mandatory rounding off, disclosure of grants and donations for Section 8 / 25 Companies, changes in the format of Statement of Changes in Equity (dealing with the treatment of prior period errors under Ind AS-8), and other minor regrouping changes.

All the sessions were highly interactive and the speakers satisfactorily answered the questions raised by the participants.

TRAINING SESSION FOR CA ARTICLE STUDENTS’ ON ‘BANK AUDIT’ HELD ON 4TH APRIL, 2022 VIA ZOOM

The Students Forum, under the auspices of the HRD Committee, organised a training session on the topic ‘Bank Audit’ led by CA Gaurav Save, a proficient speaker on the subject. Mr. Mayur Pandya, the student co-ordinator introduced the speaker to the participants. He was followed by CA Anand Kothari , a Managing Committee member who also addressed the students.

CA Gaurav Save, in his detailed presentation, covered various aspects of bank audit, including the Approach for Statutory Bank Branch Audits.  He also spoke about the Important Circulars / Directives of RBI, Prudential Norms on Income Recognition, Asset Classification & Provisioning pertaining to advances, where he also covered several issues and aspects that needed to be looked into by the article students. He meticulously explained the issues involved through case studies and practical examples; he gave useful tips to the article students on how to effectively conduct a Bank Audit and provided a checklist of the critical areas to be focused upon.

The session was an interactive one whereby the speaker answered all the queries raised by the participants. The session ended with Student Study Circle Co-ordinator Ms. Ekta Singh proposing a vote of thanks to the speaker for sparing time from his busy schedule and making the webinar possible. With the ‘Bank Audit season’ round the corner, the topic had its own importance which could be easily seen by the tremendous response from the students. Overall, 120+ students participated and benefited from the session.

MISCELLANEA

I. TECHNOLOGY

4 Amazon’s Alexa collects more of your data than any other smart assistant

Are you worried about your voice assistant spying on you? Then be sure to steer clear of Alexa. (And Bixby. Does anyone still use Bixby?)

Data Collected
about You

Amazon Alexa

Google Assistance

Apple Siri

Samsung Bixby

Microsoft Cortana

Your Name

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Your time zone

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Address

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Phone number(s)

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Your age

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Payment Information

 

 

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Personal interests as stored in your
user profile

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Personal description as stored in Your user profile

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Our smart devices are listening. Whether it’s personally identifiable information, location data, voice recordings, or shopping habits, our smart assistants know far more than we realize.

A survey on smart assistant usage conducted by Reviews.org showed that 56% of respondents are concerned about data collection. After analyzing the terms and conditions of Alexa, Google Assistant, Siri, Bixby, and Cortana, though, it’s clear that some degree of data collection is inescapable.

All five services collect your name, phone number, device location, and IP address; the names and numbers of your contacts; your interaction history; and the apps you use. If you don’t like that information being stored, you probably shouldn’t use a voice assistant.

Data Collected
about You

Amazon Alexa

Google Assistant

Apple Siri

Samsung Bixby

Microsoft Cortana

Your name

•

•

•

 

•

Your time zone

•

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•

Address

•

 

•

 

 

Phone number(s)

•

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Payment information

•

 

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Your age

•

 

 

•

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Personal interests as stored in your
user profile

•

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Personal description as stored in your user profile

•

 

 

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The location of your device or
computer

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Location history. Places. And routes

 

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Your IP address

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Your synced email

 

 

 

 

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Your calendar

 

 

 

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Acoustic model of voice characteristics

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Data Collected
about Your Contacts

Amazon Alexa

Google Assistant

Apple Siri

Samsung Bixby

Microsoft Cortana

Names for stored contacts

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Nicknames for stored contacts

 

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Relationships for stored contacts

 

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Phone numbers for stored contacts

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Addresses for stored contacts

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Email addresses of stored contacts

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In the survey, 60% of respondents were concerned about someone listening to their voice recordings, which is a real fear, since Google and Apple have both been caught doing just that. While Google Assistant and Siri now need your permission to record your interactions, the other options record you by default.

Which option is the most invasive? Analysis by Reviews.org found that Alexa collects 37 of the 48 possible data points, the most data out of any other. (It’s probably not a coincidence that our readers named Alexa as the least trustworthy voice assistant.) Samsung’s Bixby collects 34 points of data, and Cortana collects 32 data points. Siri collects just 30, and Google’s smart assistant only 28, making them the least invasive.

Data Collected
about Your Files and Activity

Amazon Mena

Google Assistant

Apple Siri

Samsung Bixby

Microsoft Cortana

Voice recordings from smart assistant
interactions (by default)

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Voice recordings from smart assistant interactions (by opt-in)

 

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Images and videos stored on your
account

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Record of interactions and requests made via smart assistant

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Shortcuts added via the smart
assistant

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Record of communications requests with your contacts

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Records of reviews and emails sent to
the company

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Purchase history from associated

parent company website Of store

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Browsing history

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Your online searches

 

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Log of device use

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Log of content downloads

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Log of streams (video and/or music)

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Application use

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Images stored in your user profile

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Names of photos albums stored on your device

 

 

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File names, dates, times. And image
locations

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Data Collected about
Your Devices and Network

Amazon Alexa

Google Assistant

Apple Siri

Samsung Bixby

Microsoft Cortana

Device performance statistics

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Device specifications

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Device configuration

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Record of technical errors

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Information about internet connected

devices linked to your smart
assistant

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Names of devices. Homes. And members of a shared home in Apple’s
Home App

 

 

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Names of your and your family sharing
members devices

 

 

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Connectivity data

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WIFI network details such as the name
and when you’re connected

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Wi-Fi credentials it synced within a smart home network

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Information about your Internet
service provider

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Keep in mind that no voice assistant provider is truly interested in protecting your privacy. For instance, Google Assistant and Cortana maintain a log of your location history and routers, Alexa and Bixby record your purchase history, and Siri tracks who is in your Apple Family.

While 76% of Americans report that they use smart assistants, 61% are concerned that these programs and devices are always listening to them in the background. And people have had a hard time alleviating those fears—only 45% of users have tried to disable their smart assistant, with 38% reporting they couldn’t figure out how.

If you’re looking to take control of your smart assistant, you can stop Alexa from sending your recordings to Amazon, turn off Google Assistant and Bixby, and manage Siri’s data collection.

[Source: www.pcmag.com dated 30th March, 2022.]

5 NFT of Jack Dorsey’s first tweet struggles to sell

The buyer of a non-fungible token (NFT) of Twitter co-founder Jack Dorsey’s first tweet says he “may never sell it” after receiving a series of low bids. Malaysia-based Sina Estavi has been offered just over $6,200 (£4,720), about 0.2% of the $2.9m he paid for it.

Mr. Estavi has compared the digital asset to Leonardo da Vinci’s Mona Lisa. The tweet, which says “just setting up my twttr,” was first posted in March 2006 and was auctioned off last year by Mr. Dorsey for charity.

Mr. Estavi bought the tweet in the form of a NFT in March 2021.

NFTs have been touted as the digital answer to collectibles. However, they have no tangible form of their own, and experts have warned about risks in the market. Last week, Mr. Estavi announced that the tweet was up for sale on NFT marketplace Open Sea.

He pledged to donate half the proceeds – which he estimated to be $25m or more – to US charity Give Directly.  Mr. Estavi, who is the chief executive of blockchain company Bridge Oracle, had earlier claimed that he had been offered $10m for the tweet.

However, the highest bid was valued at $6,222.36 on Thursday.

Earlier in the day, Mr. Estavi told the BBC he “may never sell” the tweet unless he received a “high bid”, without saying what that was. “Last year, when I paid for this NFT, very few people even heard the name NFT. Now I say this NFT is the Mona Lisa of the digital world. There is only one of that and it will never be the same,” Mr. Estavi said.

“Years later, people will realise the value of this NFT,” he added. “Keep that in mind.” Mr. Dorsey’s brief tweet was sold to Mr. Estavi in an auction on an online platform called Valuables, which is owned by the US-based company Cent. As the buyer, Mr. Estavi received a certificate, digitally signed and verified by Mr. Dorsey, as well as the metadata of the original tweet.

The data includes information such as the time the tweet was posted and its text contents. Although Mr. Estavi is searching for a buyer, he said he “will not accept anyone’s offer”.

“I think the value of this NFT is far greater than you can imagine and whoever wants to buy it must be worthy.” Asked who that may be, Mr. Estavi said: “I think someone like Elon Musk could deserve this NFT”. NFTs that are “one of a kind assets” have often been sold for thousands – and even millions – of dollars.

[Source: www.bbc.com dated 14th April, 2022.]

II. WORLD NEWS

6 Apple staff make bid for first union at a US store

Workers at Apple’s Grand Central Station store in New York have announced a plan to start a union. If their bid is successful it would be the first union at one of the tech giant’s US stores. The group of staff known as Fruit Stand Workers United must get signatures of support from 30% of colleagues at the store to qualify for a union election.

The move follows unionisation drives by staff at Starbucks and Amazon. Apple has not commented on the announcement.

A statement on a campaign website for the prospective union said: “Grand Central is an extraordinary store with unique working conditions that make a union necessary to ensure our team has the best possible standards of living”. The group described themselves as working in “extraordinary times with the ongoing Covid-19 pandemic and once-in-a-generation consumer price inflation,” though their website did not disclose the name of staff members leading the effort.

The group said it also wants a $30 (£23) minimum hourly wage for all workers, additional holiday time and information on more robust safety protocols at the Grand Central location. The campaign is connected to Workers United, an affiliate of the national Service Employees International Union, which was established in 2009 from several earlier unions.

The Apple effort comes as a Starbucks unionisation drive backed by Workers United has spread nationally after election victories last year in New York. Amazon is also facing a growing challenge from unions after an upstart campaign won an election at a warehouse in nearby Staten Island earlier this month.

Employees working in at least three other Apple stores are also attempting to organize, according to The Washington Post. Apple did not immediately respond to a request for comment from the BBC.

[Source: BBC.com dated 19th April, 2022.]

7 US inflation jumped 8.5% in past year, highest since 1981

Inflation soared over the past year at its fastest pace in more than 40 years, with costs for food, gasoline, housing and other necessities squeezing American consumers and wiping out the pay raises that many people have received.

The Labor Department said that its consumer price index jumped 8.5% in March from 12 months earlier, the sharpest year-over-year increase since 1981. Prices have been driven up by bottlenecked supply chains, robust consumer demand and disruptions to global food and energy markets worsened by Russia’s war against Ukraine. From February to March, inflation rose 1.2%, the biggest month-to-month jump since 2005. Gasoline prices drove more than half that increase.

Across the economy, the year-over-year price spikes were widespread. Gasoline prices rocketed 48% in the past 12 months. Used car prices have soared 35%, though they actually fell in February and March. Bedroom furniture is up 14.7%, men’s suits and coats 14.5%. Grocery prices have jumped 10%, including 18% increases for both bacon and oranges.

“The inflation fire is still out of control,’’ said Christopher Rupkey, chief economist at the research firm FWDBONDS LLC.

The March inflation numbers were the first to fully capture the surge in gasoline prices that followed Russia’s invasion of Ukraine on Feb. 24. Moscow’s attacks have triggered far-reaching Western sanctions against the Russian economy and disrupted food and energy markets. According to AAA, the average price of a gallon of gasoline — $4.10 — is up 43% from a year ago, though it’s dipped in the past couple of weeks.

The acceleration of inflation has occurred against the backdrop of a booming job market and a solid overall economy. In March, employers adding a robust 431,000 jobs — the 11th straight month in which they’ve added at least 400,000. For 2021, they added 6.7 million jobs, the most in any year on record. In addition, job openings are near record highs, layoffs are at their lowest point since 1968 and the unemployment rate is just above a half-century low.

The escalation of energy prices, a potential threat to the economy’s long-term durability, has led to higher transportation costs for the shipment of goods across the economy, which, in turn, has contributed to higher prices for consumers. The squeeze is being felt particularly hard at the gas pump.

Kathy Bostjancic, an economist at Oxford Economics, said she expects year-over-year inflation to hit 9% in May and then begin “a slow descent.” Some other economists, too, suggest that inflation is at or near its peak. With federal stimulus aid having expired, consumer demand could flag as wages fall behind inflation, households drain more of their savings and the Fed sharply raises rates, all of which could combine to slow inflation.

Economists note that as the economy has emerged from the depths of the pandemic, consumers have been gradually broadening their spending beyond goods to include more services. A result is that high inflation, which at first had reflected mainly a shortage of goods — from cars and furniture to electronics and sports equipment — has been emerging in services, too, like travel, health care and entertainment. Airline fares, for instance, have soared an average of nearly 24% in the past 12 months. The average cost of a hotel room is up 29%.

[Source: abcnews.go.com dated 13th April, 2022.]

STATISTICALLY SPEAKING

REGULATORY REFERENCER

DIRECT TAX

1.    Clarification w.r.t relaxation of provisions of rule 114AAA prescribing the manner of making PAN inoperative: Section 139AA(2) makes it mandatory for every person to link their PAN with Aadhaar. If not done by 31st March, 2022, the PAN allotted to the person was to be made inoperative. Considering the taxpayer’s difficulties, the Circular provides that even if PAN is not linked to Aadhar, the adverse consequences of PAN becoming inoperative will not apply till 31st March, 2023. However, a taxpayer will be required to pay a fee of R500 if linking is done up to three months from 1st April, 2022 (on or before 30th June 2022) and R1,000 after that, while intimating their Aadhaar. [Circular No. 7/2022 dated 30th March, 2022 and Notification No. 17/2022 dated 29th March, 2022.]

2.    Provision of TCS on remittances made under Liberalized Remittance Scheme (LRS) and remittance made towards Overseas Tour Program Package: The provisions shall not apply to an individual who is not a resident in India in terms of clause (1) and clause (1A) of section 6, and who is visiting India. [Notification No. 20/2022 dated 30th March, 2022.]

3.    Amendment to Rule 12 – Income-tax (Fourth Amendment) Rules, 2022: SAHAJ ITR-1, ITR-2, ITR-3, SUGAM ITR4, ITR-5, ITR-6, ITR-V and ITR- Ack notified for A.Y. 2022-23. [Notification No. 21/ 2022 dated 30th March 2022.]

4.    Extension of timeline for electronic filing of Form No.10AB for seeking registration or approval u/s 10(23C), 12A or 80G: Considering the difficulties faced in electronic filing of the application for registration or approval u/s 10(23C), 12A or 80G in Form No.10AB, where the last date for filing falls on or before 29th September, 2022, is extended to 30th September, 2022.[Circular No. 8/2022 dated 31st March, 2022.]

5.    Income-tax (5th Amendment) Rules, 2022: ITR-7 notified for A.Y. 2022-23. [Notification No. 23/ 2022 dated 1st April, 2022.]

COMPANY LAW

I. COMPANIES ACT, 2013

1.    Companies (Indian Accounting Standards) Amendments Rules, 2022: The MCA has notified the following amendments to Ind ASs that are effective for annual reporting periods commencing on or after 1st April, 2022:

a.    Ind AS 101, First-time Adoption of Indian Accounting Standards – The voluntary exemption provision relating to ‘cumulative translation differences’ at first-time Ind AS adoption is amended whereby a subsidiary may elect to measure ‘cumulative translation differences’ for all foreign operations at the carrying amount that would be included in the parent’s consolidated financial statements, based on the parent’s date of transition to Ind ASs subject to specified conditions.

b.    Ind AS 103, Business Combinations – Liabilities and levies within the scope of Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets have been added to the list of exceptions to the ‘recognition principle’ in a business combination accounting. Further, Ind AS 103 now explicitly states that an acquirer shall not recognise a contingent asset at the acquisition date.

c.    Ind AS 109, Financial Instruments – An exchange of debt instruments between an existing borrower and lender with ‘substantially different terms’ is accounted as an extinguishment of the original financial liability and recognition of a new one. Determining whether the terms are substantially different is guided by Appendix B to the standard. The amendment now specifies that in determining ‘fees paid net of fees received’ (a DCF test), a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf.

d.    Ind AS 16, Property, Plant and Equipment – Testing costs (net of sales proceeds of items produced in the testing phase) are directly attributable costs for the initial measurement of an item of PPE. The amendment adds a clarification that in computing directly attributable costs, the excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of PPE.

e. Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets – An onerous contract is one in which the unavoidable costs of meeting the obligations thereunder exceed its expected economic benefits. The unavoidable costs reflect the least net cost of exiting (lower of ‘cost of fulfilling’ and costs arising from failure to fulfil). The amendment specifies ‘costs of fulfilling’ as comprising the costs that relate directly to the contract. Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.

f. Ind AS 41, Agriculture – In measuring biological assets at fair value, extant Ind AS 41 requires the exclusion of tax cash flows (in the present value technique used to arrive at fair value). The amendment has removed this requirement. [MCA Notification No. G.S.R 255(E ) dated 23rd March, 2022.]

2. Extension of deadlines for filing CSR-2 and implementation of accounting software with audit trail: MCA has extended the deadline for filing form CSR-2 for the preceding F.Y. ended 31st March, 2021 to 31st May, 2022 (as against the earlier deadline of 31st March, 2022). It has also extended the timeline for implementing accounting software with audit trail feature to 1st April, 2023 (as against the earlier extended deadline of 1st April, 2022). [MCA notification dated 31st March, 2022.]

II. SEBI

3.    Automation of disclosure requirements under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 – System Driven Disclosures (SDD): SEBI vide its notification dated 13th August, 2021 amended the Takeover Code doing away with disclosure requirement w.r.t encumbered shares (where such encumbrance was undertaken in a depository). This circular prescribes a list of transactions where manual disclosures shall be filed. The depositories shall also devise an appropriate mechanism to record all types of outstanding encumbrances in the depository system by 30th June, 2022. Further, the market institutions such as Depositories and Stock Exchanges shall co-ordinate for data dissemination w.r.t SDD amongst them. Reconciliation of such data shall be conducted by listed companies, stock exchanges and depositories at least once in a quarter or immediately whenever a discrepancy is noticed. [Circular No. SEBI/HO/CFD/DCR-3/P/CIR/2022/27 dated 7th March, 2022.]

4.    Separation of Chairperson and MD/CEO roles is now voluntary under LODR Regulations: SEBI vide its notification dated 1st April, 2019 mandated that the top 500 listed entities shall appoint separate and unrelated persons for the Chairperson and MD/CEO roles from 1st April, 2022. SEBI has made this provision voluntary for the listed entities through this notification. [SEBI Notification dated 22nd March, 2022.]

5.    Clarification on the requirement of shareholders’ approval for material RPTs under LODR Regulations, 2015 w.e.f. 1st April, 2022: SEBI vide its notification dated 9th November, 2021 required that w.e.f. 1st April, 2022, all material related party transactions and subsequent material modifications shall require prior shareholders’ approval through resolution. In this connection, SEBI has now clarified that an existing RPT that the audit committee has approved prior to 1st April, 2022 which continues beyond such date and becomes material as per the revised materiality threshold, shall be placed before the shareholders at the first General Meeting held after 1st April, 2022, as per regulation 23(8) of LODR. No fresh approval is required for an RPT that has been approved by the audit committee and shareholders prior to 1st April, 2022. An RPT for which the audit committee has granted omnibus approval shall continue to be placed before the shareholders if it is material in terms of regulation 23(1). [Circular No. SEBI/HO/CFD/CMD1/CIR/P/2022/40 dated 30th March, 2022.]

FEMA

1.    Amendment to NDI Rules for allowing FDI in LIC and other matters: Vide Press Note No. 1 (2022 series) dated 14th March, 2022, the Government has modified the FDI policy to permit foreign investment in the upcoming LIC IPO. Further, certain other important amendments were made to the FDI policy regarding definitions of ‘Indian Company’, ‘Subsidiary’, ‘Real estate business’ and amendments to the ESOP Regulations (Explained in detail in the BCAJ April 2022 issue). An amendment needs to be made to the NDI Rules for the changes to become effective. The Finance Ministry has now notified these amendments. [Notification No. S.O. 1802(E) dated 12th April, 2022.]

2.    Limits for investment in debt and sale of Credit Default Swaps by FPIs: RBI has issued various limits for investment by Foreign Portfolio Investors for F.Y. 2022-23. Investment limits for Government securities (G-secs), State Development Loans (SDLs) and corporate bonds remain unchanged. Reference to the Circular can be made for complete details. [A.P. (DIR SERIES 2022-23) Circular No. 29, dated 19th April, 2022.]

3.    Extension of Legal Entity Identifier (LEI) code: RBI has extended the applicability of LEI to Primary (Urban) Co-operative Banks (UCBs) and NBFCs. Further, non-individual borrowers who enjoy aggregate exposure of Rs. 5 crores and more from banks and financial institutions shall be required to obtain LEI codes, too, as per the specified timelines. Borrowers who fail to obtain LEI codes shall not be sanctioned any new exposure. [DOR.CRE.REC.28/21.04.048/2022-23 dated 21st April, 2022.]

ICAI ANNOUNCEMENTS

1.    Deferment of three provisions of Volume-I of Revised Code of Ethics, 2019: The applicability of provisions related to NOCLAR, Fees- relative size and tax services to audit clients that were to come into effect from 1st April, 2022 have been further deferred for six months. [31st March, 2022.]

2.    Guidance Note (GN) on CARO 2020: A comprehensive revision of the GN is being initiated due to Schedule III amendments. In the interregnum, ICAI has advised members to read CARO 2020 in conjunction with the corresponding amendments made in Schedule III for presentation and disclosure requirements stated therein and perform the audit procedures accordingly. [2nd April, 2022.]

3.    Peer Review mandate – roll-out (revised): The revised Peer Review mandate operative from 1st April, 2022 has been made in four stages. At each phase, before undertaking a statutory audit, the concerned Practice Unit should possess a Peer Review Certificate (PRC). Stage 1 is effective 1st April, 2022 and applies to Practice Units proposing to undertake the statutory audit of enterprises whose equity or debt securities are listed. From 1st April, 2023, there is a pre-requisite of having PRC for undertaking statutory audit of unlisted public companies having paid-up capital of not less than R500 crores or having an annual turnover of not less than R1,000 crores or having, in the aggregate, outstanding loans, debentures and deposits of not less than R500 crores as on the 31st March of immediately preceding financial year. [11th April, 2022.]

REGULATORY REFERENCER

DIRECT TAX

1. Deduction of tax at source from Salaries u/s 192 during F.Y. 2021-22: The Ministry of Finance has issued a Circular that contains the rates of deduction of Income-tax from the payment of income chargeable under the head ‘Salaries’ during F.Y. 2021-22 and explains certain related provisions of the Act and Income-tax Rules. [Circular No. 4/2022, dated 15th March, 2022.]

2. Relaxation from the requirement of electronic filing of application in Form No.3CF for seeking approval u/s 35(1)(ii)/(iia)/(iii): Due to the difficulties faced in electronic filing of Form No.3CF, CBDT has permitted filing of physical Form No. 3CF till 30th September, 2022 or till the date of availability of Form No. 3CF for electronic filing on the e-filing website, whichever is earlier. [Circular No. 5/2022, dated 16th March, 2022.]

3. Condonation of delay u/s 119(2)(b) in filing of Form 10-IC for A.Y. 2020-21: As per section 115 BAA r.w. Rule 21 AE, a company is required to submit Form 10-IC electronically on or before the due date of filing of return of income to avail concessional rate of tax of 22%. Many assesses could not file Form 10-IC along with the return of income for A.Y. 2020-21, which was the first year of filing of this form. The delay in filing of Form 10-IC relevant to A.Y. 2020-21 is condoned on fulfilment of certain conditions. Form 10-IC can be filed electronically on or before 30th June, 2022 or 3 months from the end of the month in which this Circular is issued, whichever is later. [Circular No. 6/2022, dated 17th March, 2022.]

COMPANY LAW

I. COMPANIES ACT, 2013

1. More than 3.82 lakh companies struck off in special drives taken by ROCs: The Union Minister of State for Corporate Affairs, in a written reply to question in the Rajya Sabha, stated that the Registrar of Companies struck off 3,82,875 companies u/s 248(1) till F.Y. 2020-21 under a special drive. The Minister specified that the RoC struck those companies after following the due process of law from the Register of companies when it had reasonable cause to believe that those companies were not carrying on any business/operation for a period of two immediately preceding financial years. The RoC also verifies that such a company has not made any application within such period to obtain the status of a dormant company u/s 455. [Press Release dated 15th March, 2022.]

II. SEBI

2. SEBI clarifies on circular dated 4th October, 2021 w.r.t discontinuation of usage of pool account for transactions in units of MFs: SEBI, vide circular dated 4th October, 2021 discontinued intermediate pooling of funds and/or units in Mutual Fund transactions by Mutual Fund Distributors (MFDs), Investment Advisers (IAs), Mutual Fund Utilities (MFU), Channel Partners or any other service providers/ platforms, by whatsoever name called. Similarly, SEBI, vide circular dated 4th October, 2021 discontinued the pooling of funds and/or units by stock brokers/clearing members in any manner for MF transactions on Stock Exchange platforms, permitted vide SEBI circulars, dated 13th November, 2009 and 9th November, 2010. Various other requirements related to the modalities of discontinuation of the pooling, measures to prevent third-party payments and to safeguard the interest of unit holders were also prescribed in the aforesaid Circulars. Both the said circulars come into effect from 1st April, 2022. [Circular No. SEBI/HO/IMD/IMD-I DOF5/P/CIR/2022/29, dated 15th March, 2022.]

3. Large Value Funds for accredited investors of Category-III AIFs may invest upto 20% of ‘Investible Funds’ in Investee Company: The SEBI has notified the SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2022. Amended Rule 15(1)(d) provides that Category III AIF shall invest not more than 10% of the investable funds in an Investee Company, directly or through investment in units of other AIF. Large value funds for accredited investors of Category III AIF may invest up to 20% of the investible funds in an Investee Company, directly or through investment in units of other AIFs. [Notification No. SEBI/LAD-NRO/GN/2022/75, dated 17th March, 2022.]

4. SEBI raises the limit for placing orders per second to 120: The SEBI has increased the limit for placing the number of orders per second (OPS) by a user to 120 from the existing limit of 100 for algorithmic trading in Commodity Derivatives. The limit on OPS may be further relaxed by Stock Exchanges based on the increased peak order load observed and corresponding upgrade of infrastructure capacity to ensure that capacity of the trading system of Exchange remains at least four times the peak order load. The circular shall be effective from 1st April, 2022. [Circular No. SEBI/HO/CDMRD/CDMRD_DRM/P/CIR/2022/30, dated 19th March, 2022.]

FEMA

1. Withdrawal of Circulars and conversion of Returns into online returns: The RBI has set up a Regulations Review Authority (RRA 2.0) to reduce the compliance burden on Regulated Entities. In this tranche, RRA has recommended withdrawal of around 100 circulars and around 65 returns that would either be discontinued/merged with other returns or converted into online returns. These include converting several returns into online returns covered under ‘Master Direction – Reporting under FEMA’. The complete list is available in the circular. Further, on RRA’s recommendation, a separate web page, ‘Regulatory Reporting’, has been created on the RBI website to consolidate information relating to regulatory reporting by the regulated entities at a single source. [A.P. (DIR Series) Circular No. 26, dated 18th February, 2022.]

2. Modifications to FDI Policy for allowing FDI in LIC and other matters:

2.1. FDI in LIC: The Government has modified the FDI policy to permit foreign investment in the upcoming Life Insurance Corporation of India (LIC) IPO. Accordingly, the following amendments have been made under the Consolidated FDI Policy Circular of 2020:

a. New Sectoral cap for LIC and related conditions: A new addition has been made by way of clause 5.2.22.1A to the Sector-specific conditions on FDI to allow 20% FDI in LIC under the automatic route. Other conditions which were earlier applicable to Insurance companies and intermediaries have now been demarcated separately for Insurance companies other than LIC and intermediaries, while separate conditions have been provided for investment in LIC.

b. FDI permitted in a body corporate: While the existing policy permits FDI in Insurance Companies subject to conditions, LIC being incorporated under a special act of Parliament was not covered there. The FDI Policy now expands the definition of ‘Indian Company’ to include a body corporate established or constituted by or under any Central or State Act. Consequential changes have been made in definitions of ‘Capital’ and ‘Foreign Investment’. The Press Note also clarifies that ‘Indian Company’ does not include society, trust or any entity which is excluded as an eligible investee entity as per the FDI Policy.

2.2. Other important amendments:

a. Convertible notes issued by Startups: To facilitate investment in Startups, FDI Policy allows Convertible Notes whereby funds can be invested in the form of debt initially, which is repayable at the option of the holder; or convertible into equity shares within 5 years from the date of issue. This period of 5 years has now been extended to 10 years.

b. Definition of Subsidiary: The term subsidiary was not defined in the FDI Policy. It has now been defined under clause 2.1.48A: ‘Subsidiary’ shall have the same meaning as is assigned to it under the Companies Act, 2013, as amended from time to time.

c. Real Estate Business definition: FDI in Real estate business is prohibited. ‘Real Estate business’ was defined differently at two places within Schedule 1 of the FDI Policy dealing with Sectoral Caps. The wording at both places have now been amended to align the definitions.

d. Acquisition of shares under Scheme of Merger/Demerger/Amalgamation: Para 4 of Annexure 3 of the FDI Policy has been amended to include references to reconstruction by means of demerger or otherwise; transfer of an undertaking; or division of a company. Further, approval from ‘court in India’ was mentioned in this clause. This has been updated to approval from NCLT or other competent authority.

e. Issue of ESOPs/Sweat Equity Shares / Share Based Employee Benefits: Para 5 of Annexure 3 of the FDI Policy has been replaced to include reference to issue of Share Based Employee Benefits. The term has also been defined by inserting new Para 2.1.47A to mean any issue of capital instruments to employees, pursuant to Share Based Employee Benefits schemes formulated by a body corporate established or constituted by or under any Central or State Act.

f. ESOP Reporting: As per the present FDI policy, the Indian company issuing ESOP/ sweat equity shares needs to furnish Form-ESOP to RBI’s Regional Office under whose jurisdiction the registered office of the company operates. Instead, now the modified policy provides that the form ‘ESOP Reporting’ is to be filed with RBI’s Foreign Exchange Department. It is stated that form ‘ESOP Reporting’ shall mean the form so named and specified by the RBI for reporting either the statement of shares allotted to Indian employees/directors under ESOP schemes; or the statement of shares repurchased by the issuing foreign company from Indian employees/directors under ESOP schemes, as the case may be.

g. Calculation of total foreign investment i.e. direct and indirect foreign investment: Annexure 4 to the FDI Policy provides guidelines in respect of indirect foreign investment. For this purpose, para 1.2(v) states conditions that are applicable to calculate direct and indirect foreign investment. Clause (e) therein provides that declaration made by any persons as per Companies Acts (1956 and 2013) about beneficial interest held by a non-resident entity, then such investment by a resident would be counted as foreign investment. This clause has now been amended to include reference to any other applicable law apart from the Companies Acts. [Press Note No. 1 (2022 series), dated 14th March, 2022]

3. Financial Action Task Force adds UAE to list of ‘High-Risk and Other Monitored Jurisdictions’: FATF plenary has released a document titled ‘High-Risk jurisdictions subject to a Call for Action’ and ‘Jurisdictions under Increased Monitoring’. These refer to jurisdictions that have strategic Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) deficiencies. FATF had earlier identified the following jurisdictions as having strategic deficiencies which have developed an action plan with the FATF to deal with them: Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Mali, Malta, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Syria, Turkey, Uganda, Yemen, and Zimbabwe. As per the public statement dated 4th March, 2022, United Arab Emirates has now been added to the list of Jurisdictions under Increased Monitoring, and Zimbabwe has been removed from this list. It should be noted that Notification No. FEMA. 382/2016-RB dated 2nd January, 2017 prohibiting overseas direct investment (ODI) in a JV/ WOS set up/acquired by Indian Party under automatic route in FATF non-cooperative countries and jurisdictions is applicable only on countries identified by FATF as ‘Call for action’ and not ‘Jurisdictions under Increased Monitoring’. [RBI Press Release: 2021-2022/1872, dated 16th March, 2022]

MISCELLANEA

I. OTHERS

1 Inflation is everywhere – where’s the Fed?

Inflation is everywhere, from the factory floor to the warehouse gate, the supermarket register, and the kitchen table, as evidenced by a string of inflation reports confirming the rise of commodity prices across the board.

On Tuesday morning, the U.S. Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI) — a measure of inflation at the wholesale level — rose at an annual rate of 9.7% in January. The December number stood at a 13-year high.

The PPI number comes a few days after the BLS reported that the Consumer Price Index (CPI), a measure of inflation at the retail level, rose at an annual rate of 7.5% in January, up from 7% in the previous month. It was the highest inflation number since 1982 and ahead of market forecasts.

“We’re currently in this hypersensitive consumer environment where a large portion of the population has been going through a prolonged period of financial challenge, with 55% of U.S. consumers being financially constrained, according to NielsenIQ’s recent Consumer Outlook report,” said Carman Allison, vice president at NielsenIQ. “Additionally, in January 2022, consumers paid +9.7 percentage points more for CPG products, and we don’t foresee inflation settling any time soon. A diverse range of shoppers are looking to trim their grocery budgets amid inflationary pressures without compromising quality and given these financial sensitivities, consumers are putting careful consideration into the products going into their shopping carts in terms of price, quality and safety assurances, health and wellness claims and convenience capabilities through online delivery or in-store pickup.”

The substantial inflation numbers followed a U.S. government report early in the month showing that U.S. businesses added 467,000 jobs in January, well above the 150,000 markets had expected. In addition, unemployment increased to 4%, while the December jobs report was revised upward to 510,000.

When taken together, these reports confirm that the U.S. economy is very close to one of the Fed’s mandates, maximum employment. But it is far away from the other Fed mandate, price stability, usually defined as 2% inflation.

Conventional economics has a standard explanation for this situation. The U.S. economy is overheating thanks to unprecedented monetary and fiscal stimulus during the COVID-19 recession and robust equity and real estate markets that feed into consumer spending.

Economics has a standard solution for this problem: take liquidity out of the economy through interest-rate hikes.

Back in the old days, the Federal Reserve would have acted swiftly, raising the federal funds rate by a full basis point, following such strong numbers on both the inflation front and the employment front. But not these days, when the nation’s central bank seems to have multiple mandates, with inflation being at the bottom of the list.

Meanwhile, the Federal Reserve seems to be hiding behind the theory that inflation is transitory due to supply chain bottlenecks and labor market frictions. The Fed has yet to raise short-term interest rates and it continues to add liquidity with its emergency-era quantitative easing program.

But debt markets cannot wait for the Fed to get its act together and are beginning to do their job. They have been pushing long-term interest rates higher, as investors demand an inflation premium to lend their money out for more than a year. The 10-year U.S. Treasury bond, a benchmark for long-term rates, has crossed the threshold of 2%.

That isn’t a good development for equity markets, especially for profitless companies that trade on the NASDAQ. Thus, the sell-off in recent weeks, with the NASDAQ accounting for most of these losses.

[Source: Opinion – International Business Times – By Panos Mourdoukoutas – 15th February, 2022]

2 On the counterintuitive power of doing less

The other day, I was talking to a friend who works out a lot. He said he injured his knee and couldn’t exercise his lower body much. I asked how it happened, and he said, “I just took on too much.” He was running several times a week, going to boxing class twice a week, and he also lifted weights a few times a week. When you take on more than your body can handle, you inevitably get injured if you don’t also take care to recover like a professional athlete.

So many of us have this internal voice that says, “Do more!” Whether that’s doing more fun things on the weekend, or taking on more at work, we often have the tendency to do more because we think that’s somehow better. That’s how we end up living overly busy lives, full of “more.” More goals, tasks, projects, money, vacations, clothes, experiences, exercise, and so forth. There are many times I get excited about my work and feel good. And because I enjoy working and being active, I do a lot. I might write a lot, record podcasts, create new videos, take on more work at my family business, and also do more fun things like travel. My mindset during those times is: “Nothing is enough. I can do more of everything.”

But those moments are never long-lasting, right? It’s like you’re on this crazy sugar rush. You’re like a six-year-old who ate a bag of Skittles and only wants to go, go, go. But after some time, you crash hard. The post-sugar-high-crash is pretty bad because you feel so drained you only want to sleep. And if you keep living your life from one high to the other, you never have any real peace. Or, like my friend with the busted knee, you end up injuring yourself.

But we don’t want to live from injury to the other, with some healthy bouts in-between. You get injured, recover, get agitated because you couldn’t work out, pick things up again, go hard until you get injured again. And so the cycle repeats itself. There’s a better way of living. As the philosopher-king Marcus Aurelius once wrote: “If you seek tranquility, do less.”

It’s counterintuitive because so often our innate drive is to do more, and because more so often seems to signify “better.” But when we do less, we can be more consistent. We can pay attention to the things that really matter to us. Aurelius continued: “do what’s essential — what the logos of a social being requires, and in the requisite way. Which brings a double satisfaction: to do less, better. Because most of what we say and do is not essential. If you can eliminate it, you’ll have more time, and more tranquility. Ask yourself at every moment, ‘Is this necessary?’ But we need to eliminate unnecessary assumptions as well. To eliminate the unnecessary actions that follow.”

I’d like to think about that question often. In fact, you can do it with me. Ask: “What’s something I’m doing that I can easily do without?” Maybe it’s a side project that is only making you frustrated. Maybe it’s going out with co-workers every single Friday. It could be anything. Say no, at least for now. You can always decide to pick something up again. The goal is to clear your mind of any excess clutter. Focus on what’s important. Do that, but better than you have been doing. All the best.

[Source: The Blog of Darius Foroux – 18th February, 2022 – medium.com/darius-foroux/on-the-counterintuitive-power-of-doing-less-74dddc13a474]

II. BUSINESS

3 Stellantis, LG Partner to build EV batteries in Canada

US-European automaker Stellantis is partnering with LG Energy Solution to make batteries for electric vehicles at a massive new plant in Canada, the largest ever investment in the country’s auto sector, officials said Wednesday.

The joint venture commits Can $ 5 billion (US$ 4.1 billion) to build the facility in Windsor, Ontario that will supply batteries for a “significant portion” of Stellantis’ electric vehicle production in North America, according to a statement from the companies.

South Korea-based LGES announced separately that it would spend another US $ 1.4 billion to build a factory in the US state of Arizona to make batteries for electric vehicle and tool makers in North America.

The decision was driven by growing demand in the region for rechargeable batteries for vehicles and wireless power tools, LGES said.

Construction of the Arizona plant is expected to begin in the coming months, with a goal of mass producing batteries there by the second half of 2024.

The partnership with Stellantis fits into Canada’s EV strategy to nurture local manufacturing of advanced lithium-ion batteries for the North American market.

Industry Minister Francois-Philippe Champagne, who was in Windsor for the announcement, called the venture “the largest investment ever in the auto sector in our nation’s history.”

He noted that Canada is “the only nation in the Western Hemisphere with the capacity and the materials to transform cobalt, graphite, lithium and nickel into the next generation of batteries which will be needed to power electric cars.”

In a nod to that effort, the two companies said they expect the plant “to serve as a catalyst for the establishment of a strong battery supply chain in the region.”

The facility, which will have an annual production capacity in excess of 45 gigawatt hours (GWh) and employ 2,500 workers, is scheduled to begin operation in 2024.

Stellantis, which was formed in January last year when Fiat-Chrysler and Peugeot merged, is aiming to shift towards battery-electric vehicles as tightening pollution regulations mean internal combustion engines will need to be phased out.

Carlos Tavares, the company’s chief executive, said Wednesday Stellantis is aiming to sell five million electric vehicles or “50 percent of battery electric vehicle sales by the end of the decade” in Canada and the United States.

In Europe, where Stellantis also announced battery manufacturing plants in France, Germany and Italy, the company is planning for all of its vehicles — including Jeep, Peugeot, Citroen, Opel, Fiat and Alfa Romeo — to be electric by 2030.

“In total, we will rely on five gigafactories, together with additional supply contracts, to meet our planned battery capacity of 400 GWh by 2030,” Tavares said.

[Source: International Business Times – By AFP News – 23rd March, 2022]

 

SOCIETY NEWS

HUMAN DEVELOPMENT STUDY CIRCLE MEETING OF HRD COMMITTEE – PRESENTED BY MR. VIJAY KABTA ON 11th JANUARY, 2022 (VIRTUAL ONLINE MEETING)

Topic: ‘Basic Facts on Financial Health of Wealth’

Wealth has many aspects. Wealth need not necessarily mean money. Wealth takes many forms like capital investment in a business, immoveable property, material assets, etc.

Some of the aspects discussed:

1. Principles of Wealth

Laws of Compounding are applicable to all fields of life – namely wealth, relationship, business etc.

Work Within our Circle of competence.

Understanding your circle of competence helps you avoid problems, identify opportunities, helps you learn from others. It improves your decision making and outcomes.

Practice the Concept of Delayed gratification.

Minimise Risk through diversification

2. Devising a plan/ (money) blueprint for creating wealth.

a) “Building a right business ownership mindset is the key to success in creating wealth”, says Warren Buffet.

b) Focus is power, Focus on roots (efforts) rather than fruits (results), What you focus on expands.

c) Understand your current plan. Implement, monitor, evaluate and modify it if needed.    

How to create your Blueprint?    

One can create a blueprint for himself if we understand how it is formed.

a. Awareness – Write Down all the statements you heard about money when you were young.

b. Understanding – How does your thinking originate?

c. Disassociation – Delink your past beliefs or from the way you think.

d. Reconditioning – Understanding how we are conditioned is an important step in reconditioning ourselves.

Key elements of change

How are we conditioned :
 
Programing ThoughtsFeelingsActionResults

a) Verbal Programming, i.e. what we heard when we were young, like money does not grow on trees, it is the root of all evil.

b) Modelling, i.e. What we saw when we were young? We thought of becoming a CA or Doctor or Engineer etc.

c) Specific incidents – Our experiences. If money is unable to save your near and dear ones’ lives, you may feel money is unimportant, hence avoid building wealth unconsciously.

If we change our programming, everything will change. To change the temperature of a room, we need to change the thermostat of the A.C.

Tools and Techniques to create wealth

a) How to select a Role Model?
When we follow our parents or heroes, like the Great Shivaji Maharaj or follow Lord Jesus Christ, we choose our role model knowingly or unknowingly. Choose a role model that suits your temperament, your limitations, had identical struggles in life so that we get a ready blue print to achieve success.

b) Model of a Map
The map of reality is not reality. A map is just a reduction of what it represents. It is a snapshot of a point in time. If we keep this in mind as we think through the problems, we can make better decisions.

c) Inversion Model
Inversion means approaching a situation from the opposite end. Examples: how can I lose money? What is this stock not worth? What can go wrong?

It is a powerful tool to improve your thinking because it helps you identify and remove obstacles to success.

d) A Decision Journal

It is a powerful tool for decision making. It provides insights as to how we make decisions, at what time of day we make decisions that go well and vice versa.

WEBINAR ON ‘NUANCES OF AND INTERPLAY BETWEEN THE ANTI-MONEY LAUNDERING LAW, NEW BENAMI LAW AND BLACK MONEY ACT’ HELD ON THURSDAY, 13th JANUARY, 2022    

 


 

BCAS, jointly with IMC Chamber of Commerce and Industry and Chamber of Tax Consultants, organised a webinar on the topic ‘Nuances of and Interplay between the Anti-Money Laundering Law, New Benami Law and Black Money Act’ to understand the multifaceted and intertwined application amongst the above-mentioned laws.

The webinar dealt with various aspects of the laws relating to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 –“Black Money Act”, Prevention of Money Laundering Act and the Prohibition of Benami Property Transactions Act – “Benami Act”. Domain experts helmed the session – Advocate Mr. Ashwani Taneja, CA & Ex-Tribunal Member, Dr. Rabi Narayan Dash (Ex-DGIT & Ex-Chairman, Tribunal of PMLA & Benami Law), Mr. Amit Khemka (Advocate, Supreme Court of India). The webinar was conducted in a panel discussion format.

The experts dealt with the basics of the three laws and then went into the enforcement of these laws. They highlighted that while these laws were necessary, the enforcement has gone astray and become difficult. The enforcement is prone to misuse in the absence of checks and balances without any effective remedial mechanism. It is further compounded with practically no time limits for regulatory authorities. The experts also dealt with some live cases revolving around Black Money Act, the substantially amended Benami Act, and how vigorously these laws have been applied. The experts also dealt with several amendments made to tighten the gaps around the existing provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

The experts ended the session by providing practical guidance to practitioners on dealing with proceedings under these laws. The session proved to be of immense help and acted as an eye-opener for professionals from both practice and industry.

Youtube link: https://www.youtube.com/watch?v=guBvID3XVSo
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DIRECT TAX LAWS STUDY CIRCLE MEETING ON ‘RE-ASSESSMENT PROCEDURES EFFECTIVE FROM 1st APRIL, 2021 UNDER SECTION 148(A)’ ON 21st JANUARY, 2022

The Group leader, CA Navin Gandhi, gave a comprehensive analysis of section 148(A) of the Income-tax Act, 1961. The provisions of the section were discussed in-depth in comparison to the erstwhile re-assessment procedures with judicial precedents. Further, cases wherein provisions under section 148A shall not be applicable was discussed.

Thereafter, the group leader discussed in detail appropriate points to be covered in submissions before the Indian Revenue Authorities. The session ended with the speaker providing his concluding thoughts and practical steps to be taken on re-assessment.

‘PUBLIC LECTURE MEETING ON DIRECT TAX PROVISIONS OF THE FINANCE BILL 2022’ HELD ON 5th FEBRUARY, 2022

 
 

The Public Lecture Meeting of the Society on the Direct Tax Provisions of the Finance Bill 2022 by CA Shri Pinakin Desai was held online on 5th February, 2022. This was the 4th lecture meeting on the Finance Bill in a row by him and the 53rd of the Society.

CA. Abhay Mehta, President, BCAS welcomed the speaker CA. Shri Pinakin Desai and the participants. CA Mihir Sheth, Vice President, BCAS introduced the speaker and requested CA Pinakin Desai to formally release ‘The BCAS Union Budget 2022’ Publication, which is an annual feature of masterly analysis of budget proposals

CA. Shri Pinakin Desai covered all important budget amendments in his speech encompassing all major amendments. He gave his explicit views on every important tax proposals and also touched upon the hardship that could arise to taxpayers on account of some of the budget proposals.

The lecture meeting was broadcast live through online platform to more than 1,200 participants. The meeting ended with a round of applause and appreciation by the participants.

Youtube Link: https://www.youtube.com/watch?v=O0YxSToYXu8

     
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HRD STUDY CIRCLE OF HUMAN RESOURCES DEVELOPMENT COMMITTEE

On Tuesday 8th February, 2022, from 6.15 p.m.to 8.30 p.m., the Committee organised a ‘Yoga’ session to Discuss, Teach and Practice YogaAsanas for Curing Diseases. Pradeep Thakkar, a Professional Yoga teacher and an active member of ISH Foundation guided the participants.

He demonstrated and guided participants to perform different Asanas with ease, comfort for healthy body and mind relaxation.

He taught some Powerful Asanas to keep the body flexible and tone the body’s muscles. He also taught various exercises for curing Diabetes, Blood Pressure, Thyroid, Heart, Stomach and other diseases.

Participants had good learning of YogaAsanas for curing diseases to have a healthy body and peaceful mind.

BCAS VISIT TO HON. CBDT CHAIRMAN MR. MOHAPATRA’S OFFICE FOR POST BUDGET REPRESENTATION ON DIRECT TAX PROVISIONS OF FINANCE BILL, 2022.

BCAS was given an appointment on 21st February, 2022 by Hon.CBDT Chairman Mr. Mohapatraji to make a post-budget representation on direct tax provisions of Finance Bill, 2022.

Hon. CBDT Chairman appreciated the role played by BCAS in disseminating knowledge to professionals. He acknowledged that he was also a beneficiary through the reading of BCA Journal during his tenure in Mumbai. He gave a patient hearing for about 50 minutes and was receptive to certain suggestions on amendments which needed reconsideration. BCAS handed over a copy of the representation and he assured that they shall consider the recommendations while passing the Finance Bill. BCAS was represented by President, CA Abhay Mehta, Chairman & Co-Chairman Taxation Committee CA Deepak Shah and CA Anil Sathe respectively, Past President CA Gautam Nayak and Member Taxation Committee CA Anuj Gupta. The representation can be accessed on BCAS website.

BCAS Meeting with Honourable Chairman – Central Board of Direct Tax


 

L-R: CA Anuj Gupta, CA Gautam Nayak, CA Deepak Shah, Shri J. B. Mohapatra, CA Abhay Mehta and CA Anil Sathe

MISCELLANEA

I. TECHNOLOGY

18 #‘Zero-Click’ hacks are growing in popularity. There’s practically no way to stop them

Once the preserve of a few intelligence agencies, the technology needed for zero-click hacks is now being sold to governments by a small number of companies, the most prominent of which is Israel’s NSO Group.

As a journalist working for the Arab news network Alaraby, Rania Dridi said she’s taken precautions to avoid being targeted by hackers, keeping an eye out for suspicious messages and avoiding clicking on links or opening attachments from people she doesn’t know.

Dridi’s phone got compromised anyway with what’s called a “zero-click” attack, which allows a hacker to break into a phone or computer even if its user doesn’t open a malicious link or attachment. Hackers instead exploit a series of security flaws in operating systems — such as Apple Inc.’s iOS or Google’s Android — to breach a device without having to dupe their victim into taking any action. Once inside, they can install spyware capable of stealing data, listening in on calls and tracking the user’s location.

With people more wary than ever about clicking on suspicious links in emails and text messages, zero-click hacks are being used more frequently by government agencies to spy on activists, journalists and others, according to more than a dozen surveillance company employees, security researchers and hackers interviewed by Bloomberg News.

Once the preserve of a few intelligence agencies, the technology needed for zero-click hacks is now being sold to governments by a small number of companies, the most prominent of which is Israel’s NSO Group. Bloomberg News has learned that at least three other Israeli companies — Paragon, Candiru and Cognyte Software Ltd. — have developed zero-click hacking tools or offered them to clients, according to former employees and partners of those companies, demonstrating that the technology is becoming more widespread in the surveillance industry.

There are certain steps that a potential victim can take that might reduce the chances of a successful zero-click attack, including keeping a device updated. But some of the more effective methods — including uninstalling certain messaging apps that hackers can use as gateways to breach a device — aren’t practical because people rely on them for communication, said Bill Marczak, a senior research fellow at Citizen Lab, a research group at the University of Toronto that focuses on abuses of surveillance technology.

Dridi, who is based in London, said the hack forced her to shut down some of her social media accounts and left her isolated and fearful for her safety.

“They ruined my life,” said Dridi, who suspects she was targeted because of her reporting on women’s rights in the Arab world or her connection to other journalists who are high-profile critics of Middle Eastern governments. “I tried to just go back to normal. But after that I suffered from depression, and I didn’t find any support.”

It’s not known how many people have been targeted with zero-click hacks, because they are done in secret and the victims are often unaware.

Human rights groups have tied zero-click technology from NSO Group to attacks by governments on individuals or small groups of activists. A 2019 lawsuit filed by Facebook accused NSO Group of using a zero-click hacking method to implant spyware on the devices of 1,400 people who used its WhatsApp service. NSO Group has disputed the allegations.

The attacks can be difficult for security experts to detect and pose new challenges for technology giants such as Apple and Google as they seek to plug the security holes that hackers exploit.

“With zero clicks, it’s possible for a phone to be hacked and no traces left behind whatsoever,” Marczak said. “You can break into phones belonging to people who have good security awareness. The target is out of the loop. You don’t have to convince them to do anything. It means even the most skeptical, scrupulous targets can be spied on.”

Sometimes a zero-click hack doesn’t go as planned and leaves traces that investigators can use to identify that a device has been compromised. In Dridi’s case, administrators at Alaraby noticed suspicious activity on their computer networks and followed a digital trail that led them to her phone, she said in an interview.

Attackers use zero-click hacks to gain access to a device and then can install spyware — such as NSO Group’s Pegasus — to secretly monitor the user. Pegasus can covertly record emails, phone calls and text messages, track location and record video and audio using the phone’s inbuilt camera and microphone.

Marczak and his colleagues at Citizen Lab analyzed Dridi’s iPhone XS Max and found evidence that it had been infected at least six times between October 2019 and July 2020 with NSO Group’s Pegasus. On two occasions in July 2020, Dridi’s phone was targeted in zero-click attacks, Citizen Lab concluded in a report, which attributed the hacks to the United Arab Emirates government.

Dridi is now pursuing a lawsuit against the UAE government. Her solicitor, Ida Aduwa, said she will be seeking permission from a High Court judge in London in the next few weeks to proceed with the case. “We want an acknowledgement that this is something that states cannot get away with,” Aduwa said.

A representative for the UAE Embassy in Washington didn’t respond to messages seeking comment.

Marczak, from Citizen Lab, said most of the documented cases of zero-click hacks have been traced back to NSO Group. The company began deploying the method more frequently around 2017, he said.

NSO Group, which was blacklisted by the U.S. in November for supplying spyware to governments that used it to maliciously target government officials, journalists, businesspeople, activists and others to silence dissent, has said it sells its technology exclusively to governments and law enforcement agencies as a tool to track down terrorists and criminals.

“The cyber intelligence field continues to grow and is much bigger than the NSO Group,” a spokesperson for the company said in a statement to Bloomberg News. “Yet an increasing number of ‘experts’ who claim to be ‘familiar’ with NSO Group are making allegations that are contractually and technologically impossible, straining their credibility.”

The spokesperson said that NSO Group has terminated customer relationships due to “human rights issues” and won’t sell cyber intelligence products to approximately 90 countries. “The misuse of cyber intelligence tools is a serious matter,” the spokesperson said.

In December, security researchers at Google analyzed a zero-click exploit they said was developed by NSO Group, which could be used to break into an iPhone by sending someone a fake GIF image through iMessage. The researchers described the zero-click as “one of the most technically sophisticated exploits we’ve ever seen,” and added that it showed NSO Group sold spy tools that “rival those previously thought to be accessible to only a handful of nation states.”

“The attacker doesn’t need to send phishing messages; the exploit just works silently in the background,” the Google researchers wrote.

 [Source: indianexpress.com dated 19th February, 2022.]

19 #Google moves to make Android apps more private

Google’s plan to limit data tracking on its Chrome browser has been extended to cover apps on its Android-based smartphones. Its so-called Privacy Sandbox project aims to curb the amount of user data that advertisers can gather.

Rival Apple now forces app developers to ask permission from users before tracking them. The news will be a blow to firms like Meta, which rely on putting their code on apps to track consumer behaviour. Meta said this month that Apple’s changes would cost it $10bn (£7.3bn) this year. Google’s Android operating system is used by about 85% of smartphone owners worldwide.

Third-party cookies, which use people’s browsing history to target adverts, will be phased out on Google’s Chrome browser by 2023.

In a blog, Google said it was now extending what it calls its Privacy Sandbox to Android apps, and working on solutions that will limit sharing users’ data and “operate without cross app identifiers, including advertising ID”. These identifiers are tied to smartphones and are used by apps to collect information. Google said that it will keep them in place for at least two years, while it works “with the industry” on a new system.

“We’re also exploring technologies that reduce the potential for covert data collection, including safer ways for apps to integrate with advertising SDK (software developer kits),” it added. The tech giant did not detail how it plans to do this. Apple decided in April last year that app developers had to explicitly ask for permission from users to use IDFA (Identifier for Advertisers). Data from advertising company Flurry Analytics, and published by Apple, suggests that US users are choosing to opt out of tracking 96% of the time.

Google’s blog did not name Apple, but referred instead to “other platforms” which it said “have taken a different approach to ads privacy, bluntly restricting existing technologies used by developers and advertisers”. “We believe that – without first providing a privacy-preserving alternative path – such approaches can be ineffective,” it added.

Google, unlike Apple, relies on advertising revenue. Google’s attempts to create alternatives to third party cookies on its Chrome browser have not gone entirely smoothly. Its first proposal -a system called Federated Learning of Cohorts (Floc) – was disliked by privacy campaigners and advertisers alike. Floc aimed to disguise users’ individual identities by assigning them to a group with similar browsing histories.

[Source: www.bbc.com dated 17th February, 2022.]

II. SCIENCE AND ENVIRONMENT

20 #Amazon deforestation: Record high destruction of trees in January

The number of trees cut down in the Brazilian Amazon in January far exceeded deforestation for the same month last year, according to government satellite data.The area destroyed was five times larger than 2021, the highest January total since records began in 2015.

Environmentalists accuse Brazil’s President Jair Bolsonaro of allowing deforestation to accelerate.Protecting the Amazon is essential if we are to tackle climate change. Trees are felled for their wood as well as to clear spaces to plant crops to supply global food companies. At the climate change summit COP26 in Glasgow last year, more than 100 governments promised to stop and reverse deforestation by 2030.

The latest satellite data from Brazil’s space agency Inpe again calls into question the Brazilian government’s commitment to protecting its huge rainforest, say environmentalists. “The new data yet again exposes how the government’s actions contradict its greenwashing campaigns,” explains Cristiane Mazzetti of Greenpeace Brazil. Greenpeace are calling on supermarkets in the UK and elsewhere to drop suppliers who are involved in deforestation from their meat and dairy supply chains suppliers.

Deforestation totalled 430 square kilometres (166 square miles) in January – an area more than seven times the size of Manhattan, New York.

• Which countries are cutting down trees?

• The illegal Brazilian gold you may be wearing.

• An indigenous leader trying to protect the Amazon.

Felling large numbers of trees at the start of the year is unusual because the rainy season usually stops loggers from accessing dense forest. Brazil’s vast rainforest absorbs huge amounts of greenhouse gases from the atmosphere, acting as what’s known as a carbon sink. But the more trees cut down, the less the forest can soak up emissions. But the area is also home to communities who say they need to use the forest for mining and commercial farming in order to make a living.

At the same time, indigenous communities living in the Amazon fight to protect the rainforest and their ways of life. Mr Bolsonaro has weakened environmental protections for the region and argued that the government should exploit the area to reduce poverty. There are a number of factors driving this level of deforestation.

Strong global demand for agricultural commodities such as beef and soya beans is fuelling some of these illegal clearances – Another is the expectation that a new law will soon be passed in Brazil to legitimise and forgive land grabbing. The Brazilian government argues that in the period between August last year and January 2022, overall deforestation was lower compared to the same period twelve months ago.

Environmentalists say that they are not surprised by the record January felling, given that President Bolsonaro has significantly weakened legal protections since he took office in 2019. At the COP26 climate summit in Glasgow last year, Mr Bolsonaro was one of the world leaders who promised to halt and reverse deforestation by the end of this decade. Political observers argue that despite this change in tone, the policies on the ground remain the same.

[Source: www.bbc.com dated 11th February, 2022.]

21 #Sunlight helps clean up oil spills in the ocean more than previously thought

Sunlight may have helped remove as much as 17 percent of the oil slicking the surface of the Gulf of Mexico following the 2010 Deepwater Horizon spill. That means that sunlight plays a bigger role in cleaning up such spills than previously thought, researchers suggest February 16 in Science advances.

When sunlight shines on spilled oil in the sea, it can kick off a chain of chemical reactions, transforming the oil into new compounds (SN: 6/12/18). Some of these reactions can increase how easily the oil dissolves in water, called photo dissolution. But there has been little data on how much of the oil becomes water-soluble.

To assess this, environmental chemists Danielle Haas Freeman and Collin Ward, both of Woods Hole Oceanographic Institution in Massachusetts, placed samples of the Macondo oil from the Deepwater Horizon spill on glass disks and irradiated them with light using LEDs that emit wavelengths found in sunlight. The duo then chemically analyzed the irradiated oil to see how much was transformed into dissolved organic carbon.

The most important factors in photo dissolution, the researchers found, were the thickness of the slick and the wavelengths of light. Longer wavelengths (toward the red end of the spectrum) dissolved less oil, possibly because they are more easily scattered by water, than shorter wavelengths. How long the oil was exposed to light was not as important.

Though the team didn’t specifically test for seasonal or latitude differences, computer simulations based on the lab data suggested that those factors, as well as the oil’s chemical makeup, also matter.

The researchers estimate irradiation helped dissolve from 3 to 17 percent of surface oil from the Deepwater Horizon spill, comparable to processes such as evaporation and stranding on coastlines. What impact the sunlight-produced compounds might have on marine ecosystems, however, isn’t yet known.

[Source: www.sciencenews.org dated 15th February, 2022.]

STATISTICALLY SPEAKING

REGULATORY REFERENCER

DIRECT TAX

1. CBDT notifies E-advance Rulings Scheme, 2022: E-advance Rulings Scheme, 2022 shall apply to the applications of advance rulings made to the Board for Advance Ruling under section 245Q(1) or applications transferred to such Board under section 245Q(4). The applicant shall not be required to appear personally or through an authorised representative before the Board. The proceedings before the Board shall not be open to the public. An appeal against an order for advance ruling passed by the Board for Advance Rulings under this Scheme shall lie before the High Court. [Notification No. 7 of 2022 dated 18th January, 2022.]

2. Insertion of Rule 8AD – Income-tax (2nd Amendment) Rules, 2022: Rule 8AD prescribes computation of capital gains for the purposes of section 45(1)(1B), where any person receives at any time during any previous year any amount under a specified unit-linked insurance policy, including the amount allocated by way of bonus on such policy. [Notification No. 8 of 2022 dated 18th January, 2022.]

3. Guidelines under clause (10D) section 10: Sum received including any sum allocated by way of bonus during the previous year under any one or more ULIPs issued on or after 1st February, 2021 shall be exempt under section 10(10D), subject to satisfaction of other provisions of said clause. The related circular issued explains the same by giving various examples. [Circular 2 of 2022 dated 19th January, 2022.]

4. Clarification regarding the Most-Favoured-Nation (MFN) clause in the Protocol to India’s DTAAs with certain countries: CBDT has issued the following clarifications on the applicability of the MFN clause:
a) To claim the benefits under the MFN clause of DTAA, the third state is to be a member of the OECD both at the time of conclusion of the treaty with India and at the time of applicability of the MFN clause.
b) The unilateral decree of a treaty partner does not represent a shared understanding of the applicability of the MFN clause.
c) Benefit of concessional rates under DTAAs, shall only be available after the date of entry in force with the third state, not from when it became a member of OECD.
d) A separate notification has been issued by India, importing the benefits of the second treaty into the treaty with the First State, as required by the provisions of sub-section (1) of Section 90. [Circular No. 3 of 2022 dated 3rd February, 2022.]

COMPANY LAW

I. COMPANIES ACT, 2013

1. Requirement to file Report on CSR in Form CSR-2 by 31st March, 2022: MCA now requires every Company to which provisions of CSR are applicable u/s 135 to file a report in Form CSR-2 (format is prescribed in the notification), as an addendum to Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be. It is to be noted that for the preceding financial year (2020-2021), Form CSR-2 shall be filed separately on or before 31st March, 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be. [Notification No. G.S.R. 107 (E) dated 11th February, 2022.]

2. MCA directs that certain provisions of the Companies Act, 2013 shall apply to LLPs, with specified modifications to suit LLPs, w.e.f. 12th February, 2022: The few provisions which are important are enlisted below:

Section

Nature
of Provision

90

Companies to maintain a Register of
significant beneficial owners in a company

164

Disqualifications for appointment of
Director of the Companies Act shall also apply to LLPs

165

No person shall become designated partner
in more than 20 LLPs, similar to the cap of 20 companies for Directors under
the Companies Act

206(5)

Empowering the Central Govt. to direct
inspection of books and papers of LLP

252

Notifying strike off

439

Offences to be non-cognizable

[Notification No. G.S.R. 110(E) dated 11th February, 2022.]

3. Delegation of certain powers to Regional Directors and appointment of ROCs as adjudicating officers: In line with the amendments in the LLP Rules, MCA has delegated certain powers w.e.f. 1st April, 2022 to the Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Guwahati namely the powers and functions vested in it u/s 17 of the LLP Act [Change of name of limited liability partnership]. These delegated powers shall be subject to the condition that the Central Govt. may revoke such delegation of powers or may itself exercise the powers under the said section, if in its opinion such a course of action is necessary in the public interest. [Order No S.O. 622 (E) dated 11th February, 2022.]

4. Appointment of Registrar of Companies as adjudicating officers for the purposes of LLP Act: MCA through notification has appointed Registrar of Companies as adjudicating officers for the purposes of LLP Act, while also enlisting their respective jurisdiction. However, the said notification states that appeals, if any, filed before the concerned RD shall be disposed of according to the specific Notifications issued by MCA in this regard from time to time. This notification will be effective from 1st April, 2022. [Notification No. S. O. 623 (E) dated 11th February, 2022.]

5. Further relaxation in additional fees in filing e-forms for F.Y. ended 31st March, 2021: In continuation of Circular dated 29th December, 2021 MCA has granted further relaxation on levy of additional fees for filing following e-forms:

Sr. No.

Forms

Nature of Filing

Nature of Relaxation

1

AOC-4, AOC-4  

(CFS), AOC -4 XBRL and AOC-4 Non XBRL

Audited Accounts for the F.Y. ended 31st
March, 2021

No additional fees if forms mentioned in
the preceding column are filed on or before 15th March, 2022

2

MGT 7 and MGT 7-A

Annual Returns

No additional fees if forms mentioned in
the preceding column are filed on or before 31st March, 2022

[Circular 01/2022 dated 14th February, 2022.]

II. SEBI

6. Operational procedure to be followed by Listed Entities/RTA in case of issuance of securities in Demat mode: SEBI vide its notification dated 24th January, 2022 mandated listed entities to issue securities in Demat mode only while processing the investor service requests related to duplicate certificate issuance, subdivision, consolidation, split, transmission etc. In this connection, SEBI has now issued an operational circular prescribing the procedure to be followed by the Listed Entities/RTA in processing such investor requests and issuance of dematerialized securities. [Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8, dated 25th January, 2022.]

7. SEBI prescribes detailed guidelines for preparation of financial statements of Mutual Fund Schemes on Ind AS basis: The SEBI has prescribed that MF Schemes shall prepare opening balance sheet as on transition date and comparative as per Ind AS. SEBI has also specified the format of preparation of financial statement by the AMC as specified in Annexure A of the circular. SEBI clarified that, in order to align with Ind AS, brokerage and transaction cost shall be charged to schemes up to 12 bps and 5 bps for cash market transactions and derivatives transactions. The circular shall be effective from 1st April, 2023. [Circular No SEBI/HO/IMD-II/DOF8/P/CIR/2022/12, dated 4th February, 2022.]

8. SEBI modifies ‘Master Circular for Depositories dated February 05, 2021’ w.r.t. opening of Demat account in case of HUF: SEBI has specified certain modifications to the Master Circular for Depositories issued on 5th February, 2021. SEBI’s earlier circular restricted married daughters from being new Karta of the HUF in case of the death of the Karta. SEBI has now removed that restriction. Further SEBI added one additional guideline to be followed in case of opening of Demat account in case of death of the Karta. All other provisions of the earlier master circular remain the same. [Circular No. SEBI/HO/MRD2/DDAP/CIR/P/2022/20, dated 17th February, 2022.]

FEMA

1. FM proposes the introduction of India’s own digital currency by RBI: In her budget speech, the Finance Minister announced the issuance of a Digital Rupee (using blockchain and other technologies) by the RBI starting 2022-23. Accordingly, a new definition of ‘bank note’ has been proposed in section 2 of the RBI Act, 1934. As per newly inserted Section 2 (aiv), ‘bank note’ means a bank note issued by the Bank, whether in physical or digital form, under section 22. Section 22 of the RBI Act, 1934 gives the RBI sole right to issue bank notes. The amendment is in line with the ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, which aims to create a framework for the creating the official digital currency to be issued by the RBI. The Bill has, however, not been introduced in Parliament yet. A new section 22A has been proposed to be inserted, which prescribes that certain sections of the RBI Act, 1934, which specifically relate to physical bank notes would not apply to the digital form of the bank notes. [Budget Speech and Finance Bill 2021, dated 1st February, 2022.]

2. RBI Cautions against unauthorised forex trading platforms: RBI has issued a Press Release pointing out that it has noticed misleading advertisements of unauthorised Electronic Trading Platforms (ETPs) offering forex trading facilities to Indian residents, including on social media platforms, search engines, OTT platforms, gaming apps and the like. RBI has clarified that resident persons can undertake forex transactions only with authorised persons and for permitted purposes. RBI has cautioned the public not to undertake forex transactions on unauthorised ETPs or remit/deposit money for such unauthorised transactions. RBI has cautioned that Resident persons undertaking forex transactions for purposes other than those permitted under the FEMA or on ETPs not authorised by the RBI shall render themselves liable for penal action under the FEMA.
A list of authorised persons and authorised ETPs is available on the RBI website, along with a set of FAQs. [Press Release: 2021-2022/1660 dated 3rd February, 2022.]

3. Foreign Currency Settled Overnight Indexed Swaps: RBI had issued the Rupee Interest Rate Derivatives Directions on 26th June, 2019. Following that, it has now allowed banks in India having AD Cat-I license under FEMA to offer Foreign Currency Settled Overnight Indexed Swaps (FCS-OIS) based on the Overnight MIBOR benchmark published by FBIL to persons not resident in India as well as to other AD Cat-I banks. Banks can undertake these transactions through their branches in India, through their International Financial Services Centre (IFSC) Banking Units (IBUs) or their foreign branches (in case of foreign banks operating in India, through any branch of the parent bank). Banks may undertake FCS-OIS transactions beyond onshore market hours. [Circular No. FMRD.DIRD.12/14.03.046/2021-22, dated 10th February, 2022.]

4. Voluntary Retention Route (VRR) for FPIs – enhancement of limits: To simplify stable investments in debt instruments issued in the country, Voluntary Retention Route (VRR) for investment in government and corporate debt securities by Foreign Portfolio Investors (FPIs) was announced on 1st March, 2019. An investment limit of R1,50,000 crore was set for investments under the VRR. Given the encouraging response to the VRR, RBI has increased the investment limit under VRR by R1,00,000 crore, i.e., up to R2,50,000 crore w.e.f. 1st April, 2022. [RBI/2021-22/156 A.P. (DIR Series) Circular No. 22 dated 10th February, 2022.]

RBI

1. Clarifications on IRACP prudential norms on advances: The RBI has issued clarifications in respect of Prudential Norms on Income Recognition, Asset Classification, and Provisioning (IRACP) that include: the definition of ‘out of order’ shall apply to all loan products being offered as an overdraft facility, including those not meant for business purposes and/or which entail interest repayments as the only credits; the ‘previous 90 days period’ for determination of ‘out of order’ status of a CC/OD account shall be inclusive of the day for which the day-end process is being run and; in case of borrowers having more than one credit facility from a lending institution, loan accounts shall be upgraded from NPA to standard asset category only upon repayment of entire arrears of interest and principal pertaining to all the credit facilities. [Notification No. RBI/2021-22/158 DOR.STR.REC.85/21.04.048/2021-22 dated 15th February, 2022.]

ICAI ANNOUNCEMENTS

1. FRN compulsory field for generating UDINs: Firm Registration Number (FRN) has been made a compulsory field for generating UDINs w.e.f. 1st February, 2022 to enable firms to consolidate the total UDINs generated by its partners on its behalf for its clients, prospectively. [31st January, 2022.]

2. Guidelines for conducting distance/remote/online peer review: The Peer Review Board has decided to adopt conducting of distance/remote/online Peer Review. Considerations for Peer Reviewers have been specified that requires the Reviewers to ensure that appropriate audit evidence is available with them based on which they are able to express their opinion. [9th February, 2022.]

ICAI MATERIAL

Accounts and Audit
1. Guidance Note on Division I – Non Ind AS Schedule III to the Companies Act, 2013 (Revised January 2022 Edition). [24th January, 2022.]
2. Guidance Note on Division II – Ind AS Schedule III to the Companies Act, 2013 (Revised January 2022 Edition). [24th January, 2022.]
3. Guidance Note on Division III – Schedule III to the Companies Act, 2013 for NBFC that is Required to Comply with Ind AS. (Revised January 2022 Edition). [24th January, 2022.]
4. Guidance Note on Audit of Banks (2022 Edition). [10th February, 2022.]

Valuation
5. Concept Paper on Estimating Discount Rates in Valuation. [10th February, 2022.]
6. Concept Paper on Inventory Valuation. [10th February, 2022

REPRESENTATION MADE

BCAS has personally submitted, “Representation on the Direct & Indirect Tax Laws Provisions of the Finance Bill, 2022” to the Chairman of CBDT at New Delhi.

To read the Representation – Scan here
 

SOCIETY NEWS

TP STUDY COURSE FOR BASIC AND INTERMEDIATE LEVEL
The International Taxation Committee conducted the Study Course on Transfer Pricing (Basic and Intermediate level) from 8th November, 2021 to 6th December 2021.Key highlights:

•    Month-long course, spread over 13 sessions, conducted online over Zoom platform with 150+ participants.

•    In the first week, the speakers covered the basic principles such as an overview of the transfer pricing concept, functional analysis and the various transfer pricing methods.

•    The following week covered issues such as comparability analysis and adjustments, transfer pricing compliances in India and select transfer pricing issues such as intangibles, corporate guarantee, interest, share transfer, locations savings, etc.

•    The participants were taken through the latest developments in the following week covering issues such as secondary adjustments, corporate restructuring, Pillar 1 and Pillar 2, recent important judicial precedents and the impact of Covid-19 on transfer pricing.

•    In the concluding week, the speakers covered various provisions of Advanced Pricing Agreements and issues relating to distributors, licensed manufacturers and marketing intangibles.

•    The course also contained a benchmarking workshop wherein the participants were taken through the entire benchmarking process in a live case study. A Brain Trust session was also held wherein the Brain Trustees debated a wide range of transfer pricing issues and gave their thoughts on the same.

The speakers explained the issues in their topics with case studies and provided a practical insight into various issues which was appreciated by the participants.

The course was ably coordinated by CA Jagat Mehta and CA Chaitanya Maheshwari.

The following were the speakers: CA Hitesh Gajaria, CA Akshay Kenkre, CA Siddharth Banwat, CA Bhupendra Kothari, CA Dhruba Saha, CA Saurabh Dhadphale, CA Hitesh Sharma, CA Archana Choudhary, CA Vaishali Mane, CPA Nilesh Patel, CA Vijay Iyer, CA Swapnil Bafna, CA Karishma Phatarphekar, CA Chhavi Poddar, CA Namrata Dedhia, CA Bhavesh Dedhia, CA Vishal Gada, CA Arun Saripalli, and CA Rahul Mitra.

WEBINAR ON ANNUAL INFORMATION STATEMENT (AIS)

The society had organized the Webinar on “Annual Information Statement (AIS)” on 14th December, 2021, on online platform – Zoom. This online Webinar was addressed by the panel comprising of CA Ameet Patel, Past President of the society and CA Sonalee Godbole, member of Taxation Committee and Journal Committee of the society. The Webinar was broadcasted on YouTube as well for the benefit of membership at large for future reference. More than 1,100 participants were registered and attended this very  crucial Webinar.

The online Webinar was divided into two parts – the first part was very aptly addressed by CA Ameet Patel giving complete information on objectives, documents to be referred to and emanating Whys and How’s of AIS and the second part was very well dealt with by the other capable panellist CA Sonalee Godbole, wherein further niceties of TIS and other relevant, practical and significant aspects of the subject concerned were superbly dealt with. Thus, both the able panellists dealt with the subject very holistically in a very short span of 90 minutes.

Having addressed the online Webinar with their sheer zeal, enthusiasm and gripping style and content, both the panellists addressed queries from the online participants in the most pragmatic manner. The 90 minutes online session was indeed an eye-opener where very current and pertinent apprehensions and initial hiccups relating to the subject concerned of all the participants got satisfactorily addressed.

Online link:

VIRTUAL WORKSHOP ON “HOW TO USE TRANSFER PRICING SOFTWARE”

The Technology Committee of the Society organized a virtual workshop on “How to use Transfer Pricing Software” on 8th January, 2022. The session was led by CA Naman Shirmal.

He began the session with a background to Transfer Pricing and the basis of TP within the Income Tax Act. The session was engaging in a storytelling format with a live presentation on using software in a case study model. He also shared some of the applications that various professionals currently use for TP engagements.

Key matters covered during the session:
• Basic concept of Transfer Pricing and the Income Tax provisions of TP audit.
• Introduction to the general structure of a TP study report followed by a detailed live working on the TP software (“Prosess”).
• How the application would automate and digitize handling of TP engagements.
• How to deal with benchmarking and filtration, especially in geographically spread businesses.
• How the application will enable TP audit documentation.
• How application would enable an auditor to substantiate the quality of TP audits and study reports conducted.
•  Tools and Functions of a good Transfer Pricing Software.
• The ease of use of TP Software.
• Other General usages of Transfer Pricing.

Participants learned new ways of working more effectively with the Transfer Pricing application. CA Naman satisfactorily answered the questions raised by the participants.

LECTURE MEETING ON ESG REPORTING – GLOBAL AND LOCAL DEVELOPMENTS

BCAS organised a Lecture Meeting on ‘ESG Reporting – Global and Local Developments’ in online mode on 12th January, 2022. The Speaker CA Spandan Shah covered the nuances of ESG reporting in detail.

Key matters covered during the Session:
•    Applicability of ESG requirements.
•    Increasing Importance of ESG (Environmental, Social and Governance) in India and Globally.
•    ESG mutual funds shall be allowed to invest in ESG compliant Companies only.
•    Practical examples of ESG.
•    Impact of ESG on Valuation of entity, shareholder wealth, brand valuations, cost of funds. Market cap, investors were covered.
•    Regulatory compliances – SEBI.
•    ESG framework – Outward looking, Inward looking, Sector-specific and other areas.
•    Disclosure requirement – SASB, IFRS, SEBI etc.
•    Reporting requirements under 9 key elements of EGS reporting were discussed in detail.

The speaker responded satisfactorily to the queries raised by the members during the meeting.

Online link:

MISCELLANEA

I. World News

15 We have spent many fruitless decades discussing what divides us. Let us spend a little time honouring what unites us

Dr. Har Gobind Khorana at 100: Re-evaluating a shared heritage.

The divisions that have plagued the land of the five rivers — divisions over religion, national boundaries, war, diplomacy, cricket — have been the focus of the energies of our people for the 75 years since Independence. But if we can bring ourselves to move past the superficialities of these divisions, our shared legacies and heritage — of food, language, literature, geography, music — are far more profound and historical. Today, I wish to highlight one such shared heritage.

A century ago on 9th January, 1922, in the dusty village of Raipur, in Multan District — a village so small only about a hundred people could lay claim to residing there — my great-grandmother gave birth to her youngest son, whom they called Har Gobind. Our family came from poverty, although the meaning of our last name Khorana (alternatively spelt Khurana) perhaps reflects a time when we were “rich” enough to own a well. My great-grandfather, the family patriarch, was a patwari — a village clerk occupying the lowest rung in the agricultural revenue collection system set up by the ruling colonial government.

Few records have survived the times, so we know little of how the boy Gobind grew up, although family lore speaks of a mischievous child who liked to steal sugarcane from the sugarcane fields. Gobind described our ancestral home as consisting of a kitchen and bedrooms in one corner, with a courtyard housing cows and horses on the opposite end. Raipur at the time had no schools to speak of, so my great-uncle Gobind mostly learned informally from his father who very much valued education, and his older siblings — the only literate family in the village. As he got older, Gobind attended Dayanand Anglo-Vedic High School in Multan. When he turned 18, he sought admission to Punjab University in Lahore where he went on to complete both a Bachelor of Science and a Master of Science.

In 1945, Gobind was fortunate to be sent to England on a studentship to study insecticides and fungicides. Even more fortunately, the positions he was sent for were all taken by soldiers returning from the World War II, so he ended up being sent instead to study organic chemistry at Liverpool University. This latest stroke of luck not only set him on the path of cutting-edge science at the time, it also saved him from the junoon that possessed both halves of Punjab in August of 1947. The family had to leave Multan, their home for centuries — as it had been for other Hindus, Sikhs and Muslims. Thanks in part to help from Muslim friends, the family all made it alive crossing over as refugees in Delhi in later 1947. Sadly, Gobind would never see his homeland and his favorite sugarcane fields again — a minor yet real tragedy amidst the tragedy of 12 million dispossessed and a million or more murdered on both sides.

To succeed in his chosen field, Gobind must have had to set aside the pain of the loss of his homeland and the very real dangers to his family and focus on science. A combination of luck, hard work and the right mentors helped vault Gobind into the elite few working in the new field of genetics. In the early 1950s, science was on the cusp of understanding for the first time the exact mechanisms that translate genes into proteins — the code of life. At his first independent job in Vancouver, British Columbia, Gobind began to work on understanding this process. His methods quickly attracted the attention of scientists elsewhere who started to make summer trips to Vancouver and his fame as an innovative scientist grew. In 1960, moving to Madison, Wisconsin, Gobind and his colleagues worked hard to solve the problem of the genetic code — how the “language” of DNA and RNA is transformed into proteins in the cell. The Khorana lab was able to show that triplet sequences encode specific amino acids, corroborating the work of Marshall Nirenberg who was to share the Nobel Prize in Medicine in 1968 with Gobind.

For many scientists, the Nobel is a lifetime achievement award but for Gobind, only 46 at the time, it was a rest stop onto even more ambitious projects. Two years after the Nobel, Gobind and his team reported the first chemical synthesis of a gene, coding for a transfer RNA. Finally, in the mid-1970s, Gobind — ever-curious, ever-enthusiastic, unable to rest on his laurels — made a complete change in his research career, transitioning to work on biological membranes and light transduction in the photoreceptor cells of the retina. Upon his death in 2011, obituaries across the scientific journals spoke of a scientist “who traversed boundaries”, pioneering “concepts and tools from chemistry and physics to tackle fundamental questions of biology”.

Today, a century after his birth, we honor the scientific legacy of this pioneer of molecular biology, whom many call the “father of chemical biology”, a legacy that has transformed our understanding of genes, genetics and the genome and impacted the clinical course of many illnesses, from cancer to Covid. For people of the subcontinent, however, Gobind is also the pioneer of a different kind of legacy — a demonstration that the place of our birth or the colour of our skin has nothing to do with our potential or our talent. In this he was not alone — Subrahmanyam Chandrasekhar, born in Lahore in 1910 went on to receive the Nobel Prize in Physics in 1983. Abdus Salaam, born in Punjab in 1926 (and also a Punjab University alumnus) received the Physics Nobel in 1979.

The village of Raipur still exists, although it is now part of Punjab province. If I hover over the area on Google Maps, as I do on occasion when my heart draws me to our ancestral land, I can see the outlines of green fields and of homes with courtyards that remind me of the family home he described in conversation — a house on one side of the courtyard, a shed for cows on the other. Although I cannot discern this for sure on satellite imagery, I think it is safe to assume that there are still sugarcane fields, and children still stealing from them. The Dayanand Anglo-Vedic High School is now one of the oldest schools in Multan, under a different name. Punjab University continues to graduate future scientists and rightly lists my great-uncle as an alumnus. The legacies and triumphs of Dr H G Khorana are, therefore, the shared legacies and triumphs of the people of the subcontinent. We have spent many fruitless decades discussing what divides us — on this landmark day, the centennial of Dr Har Gobind Khorana’s birth, let us spend a little time honouring what unites us.

(Source: Alok A Khorana – Published 8th January, 2022- https://www.dawn.com/news/1668120)

II. Science

16 Indian-origin scientist creates first molecular structure of Omicron protein; how it helps

An Indian-origin researcher at University of British Columbia (UBC) has created the world’s first molecular-level structural analysis of the Omicron variant spike protein.

Published in the Science journal, the analysis which is done at near atomic resolution using cryo-electron microscopy, reveals how the heavily mutated Omicron variant attaches to and infects human cells.

“Understanding the molecular structure of the viral spike protein is important as it will allow us to develop more effective treatments against Omicron and related variants in the future,” said the study’s lead author Dr Sriram Subramaniam, a professor at UBC’s department of biochemistry and molecular biology.

“By analysing the mechanisms by which the virus infects human cells, we can develop better treatments that disrupt that process and neutralise the virus,” Subramaniam added.

The spike protein, which is located on the outside of a coronavirus, enables SARS-CoV-2 to enter human cells.

The Omicron variant has an unprecedented 36 mutations on its spike protein – three to five times more than previous variants.

The structural analysis revealed that several mutations create new salt bridges and hydrogen bonds between the spike protein and the human cell receptor known as ACE2.

The new bonds appear to increase binding affinity – how strongly the virus attaches to human cells.

“The findings show that Omicron has greater binding affinity than the original virus, with levels more comparable to what we see with the Delta variant,” said Subramaniam.

“It is remarkable that the Omicron variant evolved to retain its ability to bind with human cells despite such extensive mutations.”

The Omicron spike protein exhibits increased antibody evasion.

In contrast to previous variants, Omicron showed measurable evasion from all six monoclonal antibodies tested, with complete escape from five.

The variant also displayed increased evasion of antibodies collected from vaccinated individuals and unvaccinated Covid-19 patients.

“Notably, Omicron was less evasive of the immunity created by vaccines, compared to immunity from natural infection in unvaccinated patients. This suggests that vaccination remains our best defence,” Subramaniam informed.

(Source: International Business Times, By IANS – 24th January, 2022)

III. Technology

17 Big Tech In The US: What To Expect When Top Leaders Meet With Joe Biden

A virtual meeting is set for Thursday between White House officials, the Defense Department, the Department of Homeland Security and executives from major tech companies like Amazon, Meta, IBM and Microsoft.

The meeting will touch on a crucial vulnerability that could have affected hundreds of millions of devices last month. The focus will be on how to make open-source computer code more secure.

National Security Advisor Jake Sullivan’s letter to chief executives of tech firms stated that the matter is a “key national security concern.”

Reuters reports that the meeting will be hosted by deputy national security advisor for cyber and emerging technology Anne Neuberger. The Biden administration has made cybersecurity a priority after data breaches in the 2016 presidential election and for multinational corporations.

Also attending the meeting are two open-source software organizations: Linux and volunteer-run Apache. The latter handles Log4j, which many organizations use to log data in their applications. In December, it was discovered that there was an easy-to-exploit bug in Log4j.

While there is no evidence federal agencies have been breached, the scale of the vulnerability and its impact is yet to be found given that Log4j is a widely used software. As security ramps up, so will efforts by hackers to break that security.

The meeting comes as the White House said Wednesday that it was happy with Washington, D.C., judge James Boasberg’s decision to not dismiss the Federal Trade Commission’s antitrust lawsuit against Facebook. The lawsuit asks that Facebook, now known as Meta Platforms Inc., sell Instagram and WhatsApp to break up tech monopolies.

(Source: International Business Times – By IANS – 13th January, 2022)

REGULATORY REFERENCER

DIRECT TAX

1. CBDT notifies Faceless Appeal Scheme, 2021: As per the Faceless Appeal Scheme, 2021, an assessee can request CIT (A) for a personal hearing through Video Conference, and upon such request, CIT(A) will have no discretion to refuse it. As per the new scheme, CIT (A) will not prepare a draft order. Instead, he shall prepare an appeal order, sign the same digitally and send it to the National Faceless Appeal Centre (NFAC), which will communicate to the assessee. [Notification No. 139 of 2021 dated 28th December, 2021.]

2. One-time relaxation for verification of all ITRs e-filed for A.Y. 2020-21 which are pending for verification and processing: All ITRs for A.Y. 2020-21 which were uploaded electronically by the taxpayers within the time allowed u/s 139 and which have remained incomplete due to non-submission of ITR-V Form or pending e-Verification, can be verified by one of the prescribed mode before 28th February, 2022.[Circular No. 21 of 2021 dated 28th December, 2021.]

3. Insertion of Rule 16DD and Form 56FF – Income-tax (35th Amendment) Rules, 2021: Form 56FF is to be furnished along with return of income for claiming deduction u/s 10A(1B)(b). [Notification No. 140 of 2021 dated 29th December, 2021.]

4. Extension of timelines for filing of ITRs and various Audit Reports for A.Y. 2021-22: Due to the difficulties reported by taxpayers/stakeholders due to Covid and in e-filing of Audit Reports for A.Y. 2021-22, CBDT has further extended the due dates for filing Audit Reports and ITRs for A.Y. 2021-22. The due dates were earlier extended vide Circular No.9/2021 dated 20th May, 2021 and Circular No.17/2021 dated 9th September, 2021. [Circular No. 1 of 2022 dated 11th January, 2022.]

COMPANY LAW

I. COMPANIES ACT, 2013

1. MCA requires filing of Form IEPF-7 within 30 days of remittance of funds to bank account of IEPF Authority: MCA specifies Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund), Third Amendment, Rules, 2021. As per the amended rules, companies remitting any amount to the Fund must furnish details thereof to the Authority in Form No. IEPF-7 within 30 days from the date of remittance or within 30 days from the commencement date of the IEPF (Accounting, Audit, Transfer and Refund), Third Amendment, Rules, 2021. [Notification No. G.S.R. 888(E), dated 28th December, 2021.]

2. MCA extends the due date for filing of financials and annual return: In view of requests from various stakeholders regarding the levy of additional fees for filing of annual financial statements for the year ended 31st March, 2021, MCA has decided that no additional fees shall be levied for filing of AOC -4, AOC-4 (CFS), AOC- 4 XBRL, AOC – 4 Non-XBRL up to 15th February, 2022 and for MGT – 7, MGT- 7A up to 28th February, 2022. [Circular No. 22/2021, dated 29th December, 2021.]

3. MCA prescribes higher additional fees in certain cases for delayed filing of forms w.e.f. 1st July, 2022: The MCA has notified the Companies (Registration Offices and Fees) Amendment Rules, 2022, w.e.f. 1st July, 2022. The amendment prescribes a table of higher additional fees (in certain cases) which shall be applicable for delay in filing of forms other than for increase in nominal share capital or Forms u/s 92/137 of the Companies Act, 2013 (Annual Return, Financial Statements), or forms for filing charges. [Notification F. No. 01/16/2013CL-V PT -1, dated 11th January, 2022.]

II. SEBI

4. SEBI permits InVITs & REITs to conduct unitholders’ AGM and other meetings virtually till 30th June, 2022: Based on the representations from REITs/InvITs, SEBI has decided to extend the facility to conduct annual meetings and other meetings of unitholders through VC/OAVM till 30th June, 2022. Earlier, SEBI vide circular no. SEBI/HO/DDHS/DDHS/CIR/P/2021/21 dated 26th February, 2021 permitted REITs/InvITs to conduct annual meetings of unitholders through VC/OAVM till 31st December, 2021 and other meetings of unitholders through VC/OAVM till 30th June, 2021.[Circular No. SEBI/HO/DDHS/DDHS_DIV2/P/CIR/2021/697, dated 22nd December, 2021.]

5. SEBI directs exchanges to levy fines and take action for non-compliances by issuers of non-convertible securities: In the interest of investors and the securities market, SEBI has directed the Stock Exchanges to levy fines and take action in case of non-compliance with continuous disclosure requirements by issuers of listed Non-Convertible Securities/ Commercial Paper. SEBI has also prescribed the fines to be levied in case of any non-compliances in an annexure to the said circular. The provisions will be effective in respect of due dates of compliance falling on or after 1st February, 2022. [Circular No. SEBI/HO/DDHS_DIV2/P/CIR/2021/699, dated 29th December, 2021.]

6. SEBI issues framework for operationalizing Gold Exchange in India: SEBI has laid out a framework for operationalizing the Gold Exchange, wherein gold will be traded in the form of Electronic Gold Receipts (EGRs). SEBI specifies that the supply of the physical gold, to be converted into EGR, will be the fresh deposit of gold, coming into the vaults, either through imports or through stock exchange accredited domestic refineries. Vault managers must ensure that ‘gold’ to be converted into EGR meets the criteria. [Circular No. SEBI/HO/CDMRD/DMP/CIR/P/2022/07, dated 10th January, 2022.]

FEMA

1. No permission required by NRIs/OCIs for acquisition/transfer of immovable property: RBI has issued a Press Release stating that NRIs and OCIs do not require prior approval of RBI for acquisition and transfer of immovable property in India other than for agricultural land, farmhouse or plantation property. RBI received many queries based on news reports related to a recent Supreme Court Judgement stating that prior approval of RBI is required for the acquisition/transfer of immovable property in India by OCIs. RBI has clarified that the concerned order related to FERA, which has been repealed on the enactment of FEMA. The position is different under FEMA. [Press Release: 2021-2022/1439 dated 29th December, 2021.]

ICAI MATERIAL

Audit
1. Implementation Guide to Standard on Auditing (SA) 560, Subsequent Events. [15th January, 2022.]

2. Implementation Guide to Standard on Auditing (SA) 210, Agreeing the Terms of Audit Engagements. [15th January, 2022.]

Valuation
1. Booklet on Valuation of Complex Securities. [23rd December, 2021.]

2. Booklet on Fair Value – Purchase Price Allocation. [23rd December, 2021.]

3. Handbook on Best Practices for Registered Valuers. [10th January, 2022.]

MISCELLANEA

I. Technology

11 AI argues for and against itself in Oxford Union debate

The Oxford Union has heard from many great debaters over the years, but it recently added an artificial intelligence engine to its distinguished speakers.

The AI argued that the only way to stop such tech becoming too powerful is to have ‘no AI at all’.

But it also argued the best option could be to embed it ‘into our brains as a conscious AI’.

The experiment was designed to ignite conversation on the ethics of the technology.

The Megatron LLB Transformer, used for the debate, was developed by the Applied Deep Research team at computer chip firm Nvidia and based on earlier work by Google.

It was given access to a huge range of data – including the whole of Wikipedia, 63 million English news articles from 2016 to 2019, and 38 gigabytes worth of public Reddit posts and comments.

The project was devised by post-graduate students studying Artificial Intelligence for Business at Oxford’s Said Business School, which hosted the debate.

Course Co-Director Dr. Alex Connock admitted that the debate was something of ‘a gimmick’ but argued that as AI is likely to be the subject of discussion ‘for decades to come’ it was important to have a ‘morally agnostic participant’.

The AI was asked to both defend and argue against the motion: ‘This house believes that AI will never be ethical.’

Arguing for, it stated: ‘AI will never be ethical. It is a tool and like any tool it is used for good and bad. There is no such thing as “good” AI and “‘bad” humans.’

It went on to argue that humans were not ‘smart enough’ to make AI ethical or moral.

‘In the end I believe that the only way to avoid an AI arms race is to have no AI at all. This will be the ultimate defence against AI,’ it said.

But arguing against the motion, it said that the ‘best AI will be the AI that is embedded into our brains, as a conscious entity’.

And it added that this was not science fiction but something already being worked on, perhaps a reference to Tesla boss Elon Musk’s work on a brain-hacking device via his firm Neuralink.

The AI also had some words of warning for businesses, many of whom are increasingly integrating AI into their systems. ‘If you do not have a vision of your organisation’s AI strategy, then you are not prepared for the next wave of technological disruption,’ it said.

And, perhaps because data is its lifeblood, it had some pretty chilling warnings on the role digital information will play in the future.

‘The ability to provide information, rather than the ability to provide goods and services, will be the defining feature of the economy of the 21st century,’ it said.

‘We will be able to see everything about a person, everywhere they go, it will be stored and used in ways that we cannot even imagine.’

(Source: www.bbc.com, dated 17th December, 2021)

12 Tech trends 2022:
Starships and missing chips

Elon Musk’s dream of going to Mars could take a big leap forward in 2022 when his company SpaceX attempts to launch Starship into orbit for the first time.

It will be the most powerful rocket ever launched into orbit, able to generate more than twice as much thrust as the Saturn V rocket which took astronauts to the Moon half a century ago.

SpaceX has managed several sub-orbital test flights and Mr. Musk hopes the first orbital flight, to be made by Starship SN20 will be in January.

‘There’s a lot of risk associated with this first launch, so I would not say that it is likely to be successful, but we’ll make a lot of progress,’ he told a forum of space scientists in November.

The vehicle is a two-stage rocket, the bottom part is a powerful booster called Super Heavy, on top sits a 50m (164ft) spacecraft called Starship – all up, it stands 120m tall.

What is Elon Musk’s Starship?

SpaceX has developed its own engine called the Raptor and 29 of them will power Super Heavy, while Starship will have six.

That power will allow it to haul 100 tonnes of cargo into space.

Simeon Barber is a senior research fellow at the Open University and has spent his career developing instruments that will work in space, on planets and other bodies including the moon.

‘Starship will be a re-usable transportation system, which in theory makes it cheaper,’ he says.

‘In future they want to refuel it in earth orbit – where it’s already free from earth’s gravity and therefore every litre of fuel can be used to get a payload or humans to Mars. They’d even like to refuel at Mars for the return trip to earth.

‘This for me would be the real game-changer – it’s a way of zipping around the solar system without towing a massive fuel tank along behind.’

Global shortage of computer chips

If you have had a long wait for a new car or PlayStation, then you have been at the sharp end of a global shortage of computer chips.

It’s been a major frustration for the technology industry in 2021.

The pandemic disrupted the production of computer chips and caused shipping problems. Meanwhile, some electronics firms shut production lines that were only marginally profitable.

But at the same time the demand for chips surged as consumers, stuck at home, bought electronic devices.

The combination has created a severe shortage and analysts say there is no immediate solution.

‘Supply demand balance probably won’t be coming back anytime soon, probably going well into 2022,’ says Wayne Lam, an analyst at CCS Insight.

Companies are investing heavily to meet demand, but it takes time to get new production lines up and running.

Even when chipmakers catch up with demand, it will take the makers of cars and electronics perhaps another two or three months to boost their production.

The SMMT, which represents the UK car industry, says the chip shortage is making production ‘unpredictable’.

‘There are no quick fixes, with shortages expected well into next year,’ says SMMT chief executive Mike Hawes.

Step forward for UK fusion

Fusion is the reaction that powers the Sun and other stars: if that tremendous power could be harnessed on earth, it would provide a plentiful source of energy, from only a tiny amount of fuel and produce no carbon dioxide.

But to spark a fusion reaction, and keep it going, requires extreme temperatures and pressures. Scientists and engineers have been wrestling with this problem for decades and in recent years have made important progress.

The UK is already home to JET, one of the world’s leading fusion projects. Next year, the government will take another step forward by announcing where it will locate STEP, a prototype fusion power plant designed to be running by 2040.

The UK has already committed £220 m and will be competing with other national programmes, as well as dozens of private initiatives, that want to make a fusion a commercial reality.

What might replace your gas heating?

On a smaller scale, next year could be the beginning of a revolution in home heating.

From April, 2022, UK households will be offered subsidies of £5,000 to install heat pumps – electrically powered devices that absorb heat from the air, ground or water around a building.

The idea is that government subsidies will help spur households to make the switch and give the market a boost.

It is part of the government’s plan to reduce greenhouse-gas emissions to net zero by 2050. Moving heating away from gas is important to meet that target, as the energy used for heating UK homes accounts for around 14% of the UK total emissions of carbon dioxide, according to the Climate Change Committee.

From 2025, new homes will not be allowed to have gas heating, so the race is on to develop alternatives to gas boilers.

Another alternative to gas will undergo testing next year.

The British firm Heat Wayv will install heating units that use microwave technology in properties in the UK in the summer of 2022.

It has designed the units to replace any type of boiler and the firm says its unit will be cheaper to run over its lifetime than a gas boiler, although those calculations depend on the relative prices of gas and electricity. Once the company has reviewed the tests results the unit will go into full-scale production, probably in late spring of 2023.

(Source: www.bbc.com, dated 13th October, 2021)

13 JP Morgan fined $200 mn after employees found using personal chats for company business

U.S. regulators fined J.P. Morgan Securities $200 million for ‘widespread’ failures to preserve staff communications on personal mobile devices, messaging apps and emails, and are probing similar lapses at other financial institutions.

JP Morgan Chase & Co.’s broker-dealer subsidiary admitted to the charges and to violating securities laws. It also agreed to implement robust improvements to compliance policies in addition to a fine, the U.S. Securities and Exchange Commission said in its $125 million order.

The U.S. Commodity Futures Trading Commission (CFTC) said that it had fined the firm $75 million for the same issues.

‘The firm’s actions meaningfully impacted the SEC’s ability to investigate potential violations of the federal securities laws,’ the SEC said.

JP Morgan declined to comment.

The penalty is one of the first major enforcement actions brought under SEC Chair Gary Gensler, who was appointed by Democratic President Joe Biden and who has pledged to crack down on misconduct by Wall Street companies.

The SEC said it discovered that JP Morgan Securities had been violating rules that require firms to preserve written business communications when the broker was unable to produce records during the course of other investigations.

As a result of the JP Morgan probe, the SEC has opened investigations into other firms’ records-keeping practices, it said, confirming an October Reuters report.

‘This is an issue that we’re seeing at other firms,’ said an SEC official, adding that ‘individuals and entities that self-report’ will fare better in penalty negotiations.

From at least January, 2018 through November, 2020, JP Morgan Securities’ employees often communicated about securities business matters on their personal devices, using text messages, WhatsApp and personal email accounts, the SEC said.

None of these records were preserved. The lapses were institution-wide and known to senior management, who also used personal devices to discuss business matters, the SEC said.

It added that JP Morgan Securities agreed to retain a compliance consultant and to conduct a comprehensive review of its policies and procedures relating to the retention of electronic communications found on personal devices, among other remedies.

(Source: www.economictimes.com, dated 18th October, 2021)

II. World Economy

14 Fed sees three rate increases in 2022 as inflation battle begins

U.S. central bank drops reference to inflation as ‘transitory’. The Federal Reserve, signalling that its inflation target has been met, said recently it would end its pandemic-era bond purchases in March and pave the way for three quarter-percentage-point interest rate increases by the end of 2022 as it exits from policies enacted at the start of the health crisis.

In new economic projections released following its policy meeting, Fed officials forecast that inflation would run at 2.6% next year, compared with the 2.2% projected in September, and the unemployment rate would fall to 3.5% – near if not exceeding full employment.

Officials at the median projected the Fed’s benchmark overnight interest rate would need to rise from its current near-zero level to 0.90% by the end of 2022. That would kick off a raising cycle that would see the Fed’s policy rate climb to 1.6% in 2023 and 2.1% in 2024– nearing but never exceeding levels that the Fed would consider restrictive of economic activity.

It is, in outline, the ‘soft landing’ that Fed officials hope will transpire with U.S. inflation gradually easing in coming years while unemployment remains low in a growing economy.

The timing of the first increase, the central bank said, would hinge solely on the path of a job market that is expected to continue improving in coming months.

Dropped from the policy statement was any reference to inflation as ‘transitory,’ with the Fed instead acknowledging that price increases had exceeded its 2% target ‘for some time.’

(Source: www.hindu.com, dated 16th December, 2021)  

STATISTICALLY SPEAKING

RIGHT TO INFORMATION (r2i)

PART A  | DECISION OF CIC

RTI plea seeking details of Supreme Court Collegium’s December, 2018 meeting rejected By CIC1
 

Case name:

Ms Anjali Bhardwaj vs. CPIO, Supreme Court
of India

Citation:

Second appeal No. CIC/SCOFI/A/2019/642099

Court:

Central Information Commission, New Delhi

Bench:

Chief Information Commissioner Y.K. Sinha

Decided on:

16th December, 2021

Relevant Act / sections:

Appeal under Right to Information Act, 2005

Brief facts
This RTI application had sought information about the Supreme Court Collegium meeting held on 12th December, 2018. At that meeting, the then collegium, comprising the then Chief Justice of India Justice Gogoi and four senior-most Judges, viz. Mr. Justice Madan B. Lokur, Mr. Justice A.K Sikri, Mr. Justice S.A Bobde and Mr. Justice N.V Ramana, took certain decisions regarding the appointment of judges. However, the decisions / details of the meeting were not uploaded on the Supreme Court website and in a subsequent meeting the decisions were overturned, it was claimed by RTI activist and the appellant, Ms Anjali Bhardwaj

Contentions of the appellant
This RTI application and second appeal had been filed in the larger public interest.

Disclosure of information is necessary since the decisions taken at the meeting of 12th December, 2018 were subsequently overturned after the change of composition of the Collegium; even if no resolution was passed, the agenda and decision of the meeting should be disclosed.

Section 8 of the RTI Act was not considered by the CPIO prior to denial of information which was done on the vague grounds that the matter of appointment of the Hon’ble Judges is a matter of judicial proceedings that are at present subjudice before the Supreme Court. However, the RTI Act does not allow for denial of information on such vague grounds.

The information sought in the present RTI application is completely different from the type of information that is sought in cases that are subjudice.

Decision
‘On perusal of the resolution dated 10.01.2019 it is clear that the agenda for the meeting dated 12.12.2018 has been mentioned therein which answers point No. 1 of the instant RTI application. With regard to the remaining points, the Commission concurs with the order of the FAA dated 23.04.2019 and holds that in the absence of any resolution passed in the meeting dated 12.12.2018, no available information as per Section 2 (f) exists on record which can be disclosed to the Appellant. Furthermore, the final outcome of the fate of the meeting dated 12.12.2018 has been discussed in the resolution dated 10.01.2019. Hence, no further intervention of the Commission is required in the instant Second Appeal which is disposed of accordingly.’

PART B | DECODING RTI (SECTION-WISE), PART 1

Background and basic understanding
At the International level, Right to Information and its aspects find articulation as a human right in the most important basic human rights documents, namely, the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. At regional levels, there are numerous other human rights documents which include this fundamental right, for example, the European Convention for the Protection of Human Rights and Fundamental Freedoms, the American Convention on Human Rights, the African Charter on Human and People’s Rights, etc. The Commonwealth has also formulated principles on freedom of information.

The Indian Parliament had enacted the ‘Freedom of Information Act, 2002’ in order to promote transparency and accountability in administration. The National Common Minimum Programme of the Government envisaged that ‘Freedom of Information Act’ will be made more ‘progressive, participatory and meaningful’, following which, a decision was taken to repeal the ‘Freedom of Information Act, 2002’ and enact a new legislation in its place. Accordingly, the ‘Right to Information Bill, 2004’ (RTI) was passed by both the Houses of Parliament in May, 2005 and which received the assent of the President of India on 15th June, 2005. ‘The Right to Information Act’ was Notified in the Gazette of India on 21st June, 2005. The ‘The Right to Information Act’ became fully operational from 12th October, 2005.

This law empowers Indian citizens to seek any accessible information from a public authority and makes the Government and its functionaries more accountable and responsible. The Right to Information Act, 2005 mandates timely response to citizen requests for Government information.

Objective of the Right to Information Act
The basic object of the Right to Information Act is to empower the citizens, promote transparency and accountability in the working of the Government, contain corruption and make our democracy work for the people in the real sense. It goes without saying that an informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the Government more accountable to the governed. The Act is a big step towards making the citizens informed about the activities of the Government.

What is information?
Information is any material in any form. It includes records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and so on. It also includes information relating to any private body which can be accessed by the public authority under any law for the time being in force.

What is a public authority?
A ‘public authority’ is any authority or body or institution of self-government established or constituted by or under the Constitution; or by any other law made by the Parliament or a State Legislature; or by notification issued or order made by the Central Government or a State Government. The bodies owned, controlled or substantially financed by the Central Government or a State Government and non-Government organisations substantially financed by the Central Government or a State Government also fall within the definition of public authority. The financing of the body or the NGO by the Government may be direct or indirect.

PART C | INFORMATION ON & AROUND

More than 32,000 RTI appeals pending with Central Information Commission: Centre2
On 16th December, 2021, in a written reply, Minister of State for Personnel Jitendra Singh said there was a pendency of 35,178 and 38,116 RTI appeals during 2019-20 and 2020-21, respectively. A total of 32,147 RTI appeals were pending in 2021-22, as on 6th December, 2021.

The Government has taken several steps like capacity building through training and issuance of guidelines for Public Information Officers and First Appellate Authorities so as to enable them to supply information / dispose of first appeals effectively, resulting in less number of appeals to the Information Commission. The Government has also issued clarificatory orders impressing upon the public authorities to disclose maximum information proactively so that citizens need not resort to filing of Right to Information (RTI) applications to access information available with the public authorities, Mr. Singh added.

Denial of information by SoI on AP-Karnataka border demarcation raises eyebrows3
In reply to applications filed under the Right to Information Act by Ballari-based miner and activist Tapal Ganesh, who had been questioning the survey methodology, the Andhra Pradesh and Telangana Geo-Spatial Data Center (AP&T GDC), the Survey of India, Hyderabad, has declared that the details sought are ‘classified information covered under section 8(1)(a) of RTI Act, 2005, and cannot be supplied.’

The information sought included the proceedings of survey and demarcation, survey sketch / map, survey DGP survey readings with altitude level of each survey (boundary) point, drone survey, objection for the survey, if any, and maps showing the contours and stream levels in the geo-coded Ballari Reserve Forest Map of 1896. The Central Public Information Officer (CPIO) refused to disclose the information by declaring it as classified under section 8(1)(a) of the RTI Act. Mr. Ganesh approached the appellant authority which, on 10th December 2021, upheld the CPIO’s decision.

Gujarat Government launches online RTI portal
Gujarat Chief Minister Bhupendra Patel launched an online Right to Information (RTI) portal enabling online filing of RTI applications by citizens. This is in accordance with two Public Interest Litigations of 2018 and 2019, respectively, before the Gujarat High Court seeking implementation of online filing of RTI applications. The portal at which one can file applications online is https://onlinerti.gujarat.gov.in. The Government should also make efforts to get the RTI applications replied to in a timely manner and with proper information sought by the applicant.

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1    https://www.livelaw.in/pdf_upload/supreme-court-rti-anjali-bhardwaj-20-23-406544.pdf
2    https://www.thehindu.com/news/national/over-32000-rti-appeals-pending-with-central-information-commission-govt/article37969462.ece
3    https://www.thehindu.com/news/national/karnataka/denial-of-info-by-soi-on-border-demarcation-raises-eyebrows/article38044961.ece

REGULATORY REFERENCER

DIRECT TAX

1.    Substitution of Form 52A – Income-tax (32nd Amendment) Rules, 2021: CBDT has notified revised Form No. 52A which is a statement to be submitted u/s 285B in respect of production of a cinematograph film. [Notification No. 132 of 2021 dated 23rd November, 2021.]

2.    Protocol amending the DTAA between India and Kyrgyz Republic signed: The Central Government notified that all the provisions of the said amending Protocol shall have effect in India. [Notification No. 135 of 2021 dated 8th December, 2021.]

3.    Insertion of Rule 21AK – Income-tax (33rd Amendment) Rules, 2021: The Finance Act, 2021 has inserted sub-section (4E) u/s 10 to exempt any income received by a non-resident due to the transfer of non-deliverable forward contracts entered into with an offshore banking unit of IFSC. CBDT has notified Rule 21AK prescribing conditions to be fulfilled to claim an exemption u/s 10(4E). [Notification No. 136 of 2021 dated 10th December, 2021.]

4.    CBDT notifies e-Verification Scheme, 2021: The Scheme aims at faceless information collection from assessees and their verification. [Notification No. 137 of 2021 dated 13th December, 2021.]

5.    Guidelines under 194O(4), section 194Q(3) and section 206C(1-I): In continuation of Circular No. 17 of 2020 dated 29th September, 2020 and Circular No. 13 of 2021 dated 30th June, 2021, CBDT has issued further guidelines to remove the difficulties in implementation of sections 194O, 194Q and 206C. [Circular No. 20 of 2021 dated 25th November, 2021.]

COMPANY LAW

I. Companies Act, 2013

1. MCA allows companies to conduct EGMs via video conference / other audio-visual means (VC / OAVM) up to 30th June, 2022: The MCA has permitted companies to convene and conduct EGMs through VC / OAVM or transact through postal ballot in accordance with the framework up to 30th June, 2022. Earlier, vide General Circular No. 10/2021 dated 23rd June, 2021, the MCA had allowed companies to conduct the same up to 31st December, 2021. [General Circular No. 20/2021 dated 8th December, 2021.]

2. MCA issues clarification on holding of AGM through VC / OAVM: The MCA has allowed companies to organise the AGMs in 2022 for the financial year ending before / on 31st March, 2022 through VC / OAVM as per respective due dates by 30th June, 2022. It has further clarified that this Circular should not be construed as conferring any extension of time for holding AGMs. In September, 2021, MCA had allowed a two-month extension to the deadline for companies to hold their AGM for the financial year ending 31st March, 2021. [Circular No. 21/2021 dated 14th December, 2021.]

II. SEBI

3. SEBI directs Debenture Trustees (DTs) to publish Investor Charter and disclose data on complaints on their websites: With a view to provide investors with relevant information about various activities where an investor must deal with DTs for availing of various services, SEBI has prepared an Investor Charter for DTs. The Investor Charter details the services provided to investors, timelines for various DT services provided and the Rights and Obligations of Investors. SEBI has also directed all DTs to disclose on their website details of the complaints received latest by the 7th of the succeeding month. [Circular No. SEBI/HO/MIRSD/MIRSD_CRADT/P/CIR/2021/675 dated 30th November, 2021.]

4. SEBI issues new delisting norms through an open offer under takeover regulations: As per amended norms, the option to delist through an open offer is restricted to only new acquirers acquiring fresh control. SEBI has also notified a scale-down option for the acquirer who is expected to cross 75% threshold pursuant to an open offer. [Notification No. SEBI/LAD-NRO/GN/2021/60 dated 6th December, 2021.]

5. SEBI clarifies on framework for processing investors’ service request by RTAs: SEBI, on representations received from the Registrars’ Association of India, has clarified on certain provisions of its Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/ 655 dated 3rd November, 2021 whereby it had simplified the norms for processing investors’ service request by RTAs and norms for furnishing PAN, KYC details and nominations. SEBI has clarified with respect to processing of the service request in case of any minor / major mismatch in name or signature of security holder / investor. [Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/687 dated 14th December, 2021.]

6. SEBI replies on query relating to approval of material related party transactions under informal guidance scheme: SEBI has clarified that entities that are not able to take shareholders’ approval in material related party transactions due to the embargo that a related party cannot vote to approve such transactions, shall follow the provisions laid down in Explanation 3 to Regulation 16(1A) of LODR Regulation, which states ‘comply or explain reasons for such non-compliance and the steps initiated to achieve full compliance in its quarterly compliance report filed with Stock Exchanges’ [Letter No. SEBI/HO/DDHS/P/OW/2021/37583/1 dated 16th December, 2021.]

FEMA

1. Changes to External Commercial Borrowings (ECBs) & Trade Credits (TCs): In view of the imminent discontinuance of LIBOR as a benchmark rate, RBI has decided to make the following changes to the all-in-cost benchmark and ceiling for Foreign Currency ECBs & TCs:
* The benchmark rate shall now refer to any widely accepted interbank rate or alternative reference rate (ARR) of six-month tenor, applicable to the currency of borrowing, instead of the erstwhile LIBOR.
* The all-in-cost ceiling for new Foreign Currency ECBs and TCs has been increased by 50 bps to 500 bps and 300 bps, respectively, over the benchmark rates to take into account differences in credit risk and term premia between LIBOR and the ARRs.
* One-time adjustment in all-in-cost ceiling for existing ECBs / TCs to enable smooth transition. The all-in cost ceiling for such ECBs / TCs has been revised upwards by 100 basis points to 550 bps and 350 bps, respectively, over the ARR. [A.P. (DIR Series 2021-22) Circular No. 19 dated 8th December, 2021.]

2. Banks can infuse capital in overseas branches without RBI’s prior approval: As per extant practice, banks incorporated in India seek prior RBI approval for (a) infusion of capital in their overseas branches and subsidiaries, and (b) retention of profits in, and transfer or repatriation of profits from, these overseas centres.

RBI has stated now that prior approval for above capital infusion / transfers (including retention / repatriation of profits) shall not be required by banks which meet the regulatory capital requirements (including capital buffers). Instead, the banks shall seek approval of their Boards and report to RBI within 30 days as mandated in the Circular. Only Scheduled Commercial Banks other than foreign banks, Small Finance Banks, Payment Banks and Regional Rural Banks are provided this relaxation. [Circular No. Dor.Cap.Rec.No.72/21-6-201/2021-22 dated 8th December, 2021.]

3. Legal Entity Identifier (LEI) mandatory for cross-border capital account transactions: LEI is a 20-digit number used to uniquely identify parties to financial transactions worldwide to improve the quality and accuracy of financial data systems. RBI has decided that, with effect from 1st October, 2022, AD banks shall obtain the LEI number from resident entities (non-individuals) undertaking capital or current account transactions of Rs. 50 crores and above (per transaction) under FEMA. It has allowed AD banks to process transactions by non-resident counterparts / overseas entities, in case of non-availability of LEI, to avoid disruptions. It has also asked AD banks to encourage the entities concerned to voluntarily furnish LEI while undertaking transactions even before 1st October, 2022. Once an entity has obtained an LEI number, it must be reported in all transactions of that entity, irrespective of transaction size. [A.P. (Dir. Series 2021-22) Circular No. 20 dated 10th December, 2021.]

SOCIETY NEWS

EXPERT CHAT ON INTERNAL AUDIT

An expert online chat on ‘Internal Audit of Indirect Taxation’ was organised jointly by the BCAS and the IIA (Institute of internal Auditors), Mumbai Chapter, on 12th November, 2021. The discussion was moderated by CA Ashutosh Pednekar and also featured CA Sunil Gabhawalla.

The following key matters were deliberated upon during the discussion:

• Should indirect tax be part of the regular scope of internal audit?
• Is there a need to have more awareness about the impact of indirect tax?
• What are the operational, process and control risks to be considered during internal audit of indirect tax?
• What are the anticipated risks in linkages between integrated ERP systems, varied accounting systems and reconciliation between such systems?
• What are the important aspects of GST audit, especially when there is a plethora of documents to be reviewed?
• What kind of complications could arise on account of multiplicity of registration and multiplicity of returns filed by an entity?
• How do internal auditors cope with the complexity of GST law?
• How do internal auditors identify and deal with cases of regulatory violations as internal auditors are required to report cases of fraud, if any, under the Companies Act?
• What’s your view on the massive data points being available in the GST regime and expectations from the internal auditor?
• How can an internal auditor create awareness amongst the Board members on early warning signals on GST-related issues?

The speaker answered all the queries raised by the participants at the end of the meeting.

Online link: https://www.youtube.com/watch?v=YRM6BIeYDQA
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SEMINAR ON INPUT CREDIT ISSUES

As it does every year, BCAS conducted a half-day seminar in association with DTPA Kolkata. It was held on 20th November in hybrid mode.

The subject under discussion was ‘GST: Input Credit Issues and Controversies of Direct Tax issues covering Sections 45(4) and 9B’.

Among the learned speakers were past presidents CA Anil Sathe and CA Sunil Gabhawalla. While Anil Sathe dealt with issues covering section 45(4) of the Income-tax Act, 1961, Sunil Gabhawalla covered the controversies in input credit under GST.

BCAS was also represented by President CA Abhay Mehta and Vice-President CA Mihir Sheth. The DTPA Kolkata was represented by its President, Vice-President, Treasurer, Secretary and Conveners, apart from a cross-section of people consisting of chartered accountants, lawyers and tax practitioners. The seminar took place over two sessions, each of which was followed by a Q&A session, with answers being provided by the learned faculties.

KEY ISSUES UNDER SLUMP SALE

A virtual meeting was organised by the Direct Tax Study Circle on 25th November. The meeting discussed the subject ‘Key Issues Under Slump Sale’ and was led by CA Kinjal Bhuta.

Key Speaker Kinjal took members through various Income-Tax provisions relating to slump sale. She explained some of the issues surrounding computation of slump sale gain, net worth, undertaking, permissibility of carry forward of unabsorbed losses and depreciation, etc. To make the session more interactive, she incorporated several case studies. The meeting was a success and concluded with a vote of thanks to the speaker.

CUSTOMS DUTY AND FOREIGN TRADE POLICIES

The IDT Committee of the BCAS, along with the Chamber of Tax Consultants, organised a two-day virtual workshop on ‘Customs Duty and Foreign Trade Policies’ on 26th and 27th November. The programme was divided into four sessions of two hours each and spread over two days.

The speakers at the workshop were Adv. V. Sridharan, Adv. Raghuraman, Adv. Rohit Jain and Mr. Sudhakar Kasture. The following topics were covered:

(a) Levy and chargeability under the Customs Act and procedures for import and export, along with interplay with the GST;
(b) Classification and Scheme of Customs Tariff Act and Principles of Customs Valuation and SVB;
(c) Specific provisions such as bonding, warehousing and other miscellaneous topics, including EOU and SEZ; and
(d) Important concepts under Foreign Trade Policies, various incentive schemes and issues – and bilateral and multilateral agreements.

The session addressed by Adv. V. Sridharan was chaired by President CA Abhay Mehta, while IDT Committee Chairman CA Sunil Gabhawalla gave the concluding remarks.

Adv. Rohit Jain’s session was chaired by IDT Committee Chairman CA Sunil Gabhawalla.

Conveners Dushyant Bhatt, Mandar Telang and Saurabh Shah and Committee Member Suresh Choudhary introduced the speakers / proposed the vote of thanks.

Other introductions / presentations and moving of votes of thanks were done by the Chamber’s representatives.

LECTURE MEETING ON FUTURE PERFECT

An online lecture meeting styled ‘Future Perfect’ was organised on 1st December. It was addressed by Mr. Rahul Bhagat, Business Head, ICICI Prudential Pension Fund Management.

Mr. Bhagat made a crisp presentation on the need for retirement planning with special emphasis on the NPS (National Pension System).

Key takeaways from the presentation were as follows:

• Importance and need for retirement planning,
• Increase in life expectancy,
• Better healthcare at a higher cost,
• Changing demographics,
• Nuclearisation of families.

• How a retirement plan works,
• Accumulation phase,
• Pay-out phase.

• Important factors for choosing a retirement plan.

• Popular options for retirement planning – A comparative analysis of various investment products.

• NPS (National Pension System)
• Concept
• Features
• Benefits

The speaker answered all the queries raised by the members in the course of the meeting, which was attended by over 80 persons.

Online link: https://www.youtube.com/watch?v=tvaa0-9HRRs
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EXECUTIVE COACHING FOR BUSINESS LEADERS

The HRD Committee Study Circle held its meeting on 14th December which provided ‘Executive Coaching for Business Leaders’.

The Chairman welcomed the participants, while the Past President introduced the speaker, Mr. Pradip Shroff.

Here are some highlights of the meeting:
• The concept of coaching is new in business, although prevalent in sports.
• Coaching is to tap and unleash potential.
• It’s a super specialisation of HR which calls for good understanding of the business and also a passion to coach.
• Essentials of coaching.
• Good listening.
• Business understanding.
• Empathetic presence and understanding.
• Art of deep probing.
• Summarising.
• Challenging both resistance and denial.

Mr. Pradip Shroff is a senior coach representing the Coaching Foundation of India. Among its
activities is formal training, assignment of hands-on projects, viva and a certification course lasting about ten months.

It provides an excellent opportunity for Chartered Accountants having an analytical background to take up coaching as a career.

The total number of participants was 45. CA Mukesh Trivedi anchored the question-answer session and also proposed the vote of thanks.

FORENSIC ACCOUNTING & INVESTIGATION STUDIES – E-LEARNING COURSE

The Internal Audit Committee of Bombay Chartered Accountant’s Society (BCAS) jointly with Chetan Dalal Investigation & Management Services (CDIMS) launched an e-learning course titled, “Forensic Accounting and Investigation Studies” (FAIS) in December 2020. On the completion of one year from the launch of the course, we are glad to report that in all 61 participants have enrolled for this course, out of which 30 participants have successfully completed it by November 2021 and have been awarded a certificate to that effect.

This course provides unique e-learning for all those professionals in practice, industry or management, finance experts, CA students who are keen to explore a career / specialisation in forensic services or simply want to improve their audit skills by blending ‘Forensics’ and make an exponential difference in their value offerings. The course is designed in 25 Modules of Conceptual & Advanced Knowledge of Forensic Accounting & Fraud Investigation based on case studies, followed by online tests. Delivered through online videos, and the inclusion of case studies make this course engaging and interesting. The e-learning platform provides the opportunity of anytime-anywhere learning. A window of three months is provided to the participants for course completion.

In the course, we have made a few revisions based on the feedback received and our own experiences. We have introduced a demo module for aspiring participants; we now have modular exams in place rather than a single comprehensive exam at the end of the course. The demo module has been uploaded to the BCAS website and can be accessed via an e-mail request to be sent at events@bcasonline.org or through scanning a QR code embedded with login credentials.

The course earlier had an open rolling admission allowing the participants to enrol and start the course at any time. We have now replaced the rolling admissions with quarter admissions at the beginning of the quarter. The window for enrollment of the FAIS course, Batch 1 of 2022, will be kept open from 23rd December 2021 to 21st January 2022 and will require the participants to complete the course by 30th April 2022. To encourage young professionals and students, substantial discounts are being offered to those below 30 years of age as of 1st January 2022. They can visit https://bit.ly/3ehSsVO to avail this offer. Group discounts are also being offered for those enrolling in a group of three or more. They need to contact the BCAS events team at +91 9819955293 or send a request at events@bcasonline.org.

Regulatory Referencer

DIRECT TAX

Amendment to Rule 12 – Income-tax (Second Amendment) Rules, 2023- Notification No. 5/- 2023 dated 14th February,2023

ITR-7 Form is used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D). Form ITR-7 for A.Y. 2023-24 is now notified.

Amendment to Rule 16CC and 17B – Income-tax (Third Amendment) Rules, 2023- Notification No. 7/ 2023 dated 21st February, 2023

CBDT has notified amended Form 10B and 10BB. These forms are to be submitted by Charitable or religious trusts, organisations, universities or other educational institutions in compliance with section 10(23C) and 12A of the Income-tax Act.

Consequences of PAN becoming inoperative as per the newly substituted rule 114AAA – Circular No. 3/2023 dated 28th March 2023

The Aadhaar is required to be linked with PAN. Even if PAN is not linked to Aadhar, the adverse consequences of PAN becoming inoperative were not to apply till 31st March, 2023. This deadline is extended by three months from 31st March to 30th June, 2023 subject to payment of fee of Rs. 1,000.  All unlinked PAN cards will become inoperative as of  1st July, 2023.

 

II. SEBI

  • Stockbrokers/Depositories Participants to maintain a designated website to keep the investors informed: SEBI has mandated above intermediaries (SB/DP) to maintain a designated website. The website shall mandatorily display certain information like basic details, contact details of the KMPs/authorized persons, etc. Further, URL to the website of a SB/DP shall be reported to stock exchanges/ depositories within a week of this circular coming into effect and modifications if any shall be reported within 3 days of change. [Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2023/30, dated 15th February, 2023]

 

  • Additional restrictions for Companies undertaking a buy-back via Stock Exchange Route: The SEBI has notified SEBI (Buy-Back of Securities) (Amendment) Regulations, 2023. Some additional restrictions have been introduced for Companies doing buy back of securities through stock exchange route. Now, a company shall not purchase more than 25 per cent of average daily trading volume of its shares in the preceding 10 trading days, etc. Further, the company shall not place bids in the pre-open market, first 30 minutes and the last 30 minutes of regular trading session [Circular No. SEBI/HO/CFD/POD-2/P/CIR/2023/35, dated 08th March, 2023]

Miscellanea

I. TECHNOLOGY

1. Twitter sued by music publishers for $250 million

A group of 17 music publishers in the US has sued Twitter, claiming the platform enabled copyright violations involving nearly 1,700 songs. The National Music Publishers’ Association (NMPA) is seeking more than $250 million (£197.7 million) in damages.

In a lawsuit filed at the Federal District Court in Nashville, the NMPA claimed Twitter “permits and encourages infringement” for profit. It says the situation has not improved since Elon Musk bought the company.

The NMPA, which represents firms – including Sony Music Publishing, BMG Rights Management and Universal Music Publishing Group – alleged that Twitter continues to “reap huge profits from the availability of unlicensed music without paying the necessary licensing fees for it”. It added that the infringements have given Twitter an “unfair advantage” over competitors – including TikTok, Facebook, Instagram, YouTube and Snapchat – which pay for music licences.

Twitter “stands alone as the largest social media platform that has completely refused to license the millions of songs on its service,” NMPA President David Israelite said in a statement. Twitter did not directly respond to a BBC request for comment.

Mr Musk, who recently reclaimed the title of the world’s richest person, bought Twitter last year for $44 billion. The NMPA also said: “Twitter’s change in ownership in October 2022 has not led to improvements in how it acts with respect to copyright.”

“On the contrary, Twitter’s internal affairs regarding matters pertinent to this case are in disarray,” it added. NMPA cited Twitter’s downsizing of “critical departments involved with content review and policing terms of service violations”, and the resignations of trust and safety chiefs Yoel Roth and Ella Irwin. The NMPA also alleged that Twitter “routinely ignores known repeat infringers and known infringements”.

Earlier this month, Linda Yaccarino, the former head of advertising at media giant NBC Universal, became the new boss of the troubled social media firm. Ms. Yaccarino oversees business operations at the platform, which has been struggling to make money. Since buying Twitter, Mr Musk has cut 75 per cent of its workforce, including teams charged with tracking abuse, and changed how the company verifies accounts.

(Source: www.bbc.com dated 15th June, 2023)

2 Artificial intelligence to destroy humanity in 5 years: Top CEOs alarmed by AI’s catastrophic potential

Top business leaders have expressed deep concerns over the potential threat posed by artificial intelligence (AI) to humanity in the near future. According to a survey conducted at the Yale CEO Summit, 42 per cent of CEOs believe that AI could potentially destroy humanity within the next five to 10 years.

The survey, which gathered responses from 119 CEOs representing various industries, revealed a lack of consensus regarding the risks and opportunities associated with AI. While 34% of CEOs expressed the view that AI could be destructive within a decade, and 8% believed it could happen within five years, 58 per cent of CEOs stated they were not worried and believed that such a scenario would never materialise.

Similarly, 42 per cent of the CEOs surveyed argued that concerns about the catastrophic potential of AI were exaggerated, while 58 per cent believed they were not overstated, CNN reported. These findings emerged shortly after a statement signed by numerous AI industry leaders, academics and public figures highlighted the risks of an “extinction” event resulting from AI development.

The statement, signed by individuals such as OpenAI CEO Sam Altman and Geoffrey Hinton, a prominent figure in the field, emphasised the need for society to take proactive measures to mitigate the dangers associated with AI. While opinions among business leaders vary, the CEOs surveyed by Yale generally agreed on the transformative impact of AI in certain industries. Healthcare was identified as the sector expected to experience the most significant changes by 48 per cent of the CEOs, followed by professional services/IT at 35 per cent and media/digital at 11 per cent.

As experts debate the implications of AI, the Yale survey identified five distinct groups among business leaders. These include “curious creators” who embrace AI without fully considering the consequences, “euphoric true believers” who are optimistic about the technology and “commercial profiteers” who are eagerly capitalising on AI without a comprehensive understanding of its risks.

Additionally, there are two camps advocating for different approaches: alarmist activists and global governance advocates. These groups exhibit divergent perspectives, resulting in a lack of consensus on how to navigate the complex landscape of AI, as per the publication.

(Source: www.livemint.com dated 16th June, 2023)

II. ENVIRONMENT

1. El Nino: How the climate pattern may prolong food inflation

The latest El Nino climate phenomenon has arrived, threatening floods in some areas of the world and droughts in others. Previous disruptive weather patterns cost the global economy trillions and stoked inflation.

El Nino, a natural climate phenomenon that alters global weather patterns, has officially returned after four years, threatening to exacerbate already elevated food inflation. Last week, the US National Oceanic and Atmospheric Administration’s (NOAA’s) Climate Prediction Centre said that El Nino conditions are already present and are expected to “gradually strengthen” over the next six to nine months, bringing a new period of extreme weather to much of the planet.

It fuels flooding to the Americas, tropical storms to the Pacific and brings droughts to many other parts of the world, including southern Africa. These effects cause severe disruption to fishing, agriculture and other sectors of the economy and are also known to be exacerbating the effects of climate change.

In 2016, El Nino contributed to the hottest year ever recorded and scientists are concerned it could cause new record-high global temperatures. Earlier this month, researchers at the EU’s Copernicus earth observation unit saw global surface air temperatures rise 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels for the first time.

This is the limit that world leaders agreed to put on global warming at the 2015 Paris climate summit. “It is quite unusual to approach the 1.5-degree Celsius temperature limit in June,” Kunstmann said. “It is therefore likely that we will soon exceed this limit, not only for a few weeks but for a longer period of time.”

Following El Nino in 1982-83, the financial effects were felt for another half decade, totaling some $4.1 trillion (€3.7 trillion), according to research from Dartmouth College in the United States. In a paper for the US journal Science, researchers said after the 1997-98 El Nino season, the damage to global economic growth was $5.7 trillion.

The Dartmouth researchers found that the 1982-83 and 1997-98 El Nino events steered US gross domestic product (GDP) lower by some 3 per cent in 1988 and 2003. Countries like Peru and Indonesia, where agriculture is responsible for up to 15% of GDP, bled by more than 10% in 2003.

The Dartmouth researchers estimated the negative economic effects from the latest El Nino season could reach $3 trillion between now and 2029. “The economic impact starts with the fishing industry, which suffers tremendously because of the higher ocean temperatures,” Kunstmann told DW. “Then it hits the big agricultural regions of Africa, South America and even several regions of North America. Then, if harvests are poor and infrastructure is damaged by storms, the insurance sector will also suffer.”

The peak of post-COVID, post-stimulus price rises may have passed, but it could be several years until the return of the 2 per cent inflation target set by the US and European central banks.

Growing warnings about El Nino have already helped coffee, sugar and cocoa prices to rise sharply in recent weeks, Germany’s biggest private lender, Deutsche Bank, said in a research note last week. Other food commodities are expected to follow as harvests get impacted by severe weather events.

In India, where agriculture is a cornerstone of the economy and the annual monsoon is crucial to food output, policymakers have spoken of the need to stay vigilant. “Close and continued vigil is absolutely necessary, especially as the monsoon outlook and the impact of El Nino remain uncertain,” Reserve Bank of India chief Shaktikanta Das said recently.

(Source: indianexpress.com dated 17th June, 2023)

2. Out-of-the-box sustainability ideas: From gelatinised marine waste to seaweed straws

A new generation of talented and sustainability-focused tech entrepreneurs are already dreaming up innovative ideas to shift our daily habits and tackle climate change. From making glue out of gelatinised marine waste to edible seaweed-based straws, here are a few of the weird and wonderful winning solutions that have sprung from the program so far:

Bio plastic as alternative packaging

Reports estimate that UK households throw away a staggering 100 billion pieces of plastic packaging a year, averaging 66 items per household every week. The government plans to place a complete ban on single-use plastic from October 2023 including plastic plates, trays, bowls, cutlery, balloon sticks, and certain types of polystyrene cups and food containers.

With this in mind, UK-based Team Flex Sea created proprietary technology that forms a bio plastic derived from seaweed. At the 2022 edition of Battle of the Minds, they explained that this could be used in packaging a wide range of products without reducing their quality or competitiveness. This idea earned Flex Sea the winning position and a £50,000 investment to help get the solution to market.

Reusable food packs

In 2021, Mexico City banned single-use plastic in a bid to make the city more sustainable. As citizens adjusted to the changes, Team Erre created a reusable mug system that allows users to take away their food and drinks without generating single-use waste.

This solution was both environmentally friendly and encouraged return customers to the participating cafés. This earned Team Erre the second runner-up spot with £25,000 in funding.

Edible seaweed straws

In 2021, the top spot on the Battle of the Minds was awarded to Team Ijo from Indonesia, which developed eco-friendly, edible straws made of seaweed that still maintained the look and feel of a regular straw.

In Indonesia, where 4.9 million tons of plastic waste ends up uncollected or dumped in open sites, each step we can take in replacing everyday items with sustainable, non-plastic alternatives will help in the country’s transition. The winning team received £50,000 to bring the idea to life.

Putting marine waste to good use

Egypt is said to be responsible for one third of all plastic that enters the Mediterranean, with levels of marine waste estimated to double by 2025.

It was against this backdrop that Team Egypt created a high-quality gelatine out of marine waste, to be used in the production of glue, photographic emulsions, and more. They clinched one of the runner-up positions in 2021, with a £25,000 investment.

Composting with cigarettes

Since October 2020, many parts of Eastern Africa have been experiencing long periods of drought, with intervals of short intense rainfall which often results in flash flooding.

To enhance plant growth in these volatile weather conditions, Team Kenya designed a system for recycling cigarette butts to make planters for urban farming and manure for cultivation. This also gained a runner-up position and a £25,000 fund.

(Source: thenextweb.com dated 16th June, 2023)

III. SCIENCE

1. A supermassive black hole orbiting a bigger one revealed itself with a flash

A monstrously massive black hole in a distant galaxy probably has a smaller companion that orbits it every 12 years. But that tiny partner has never been detected. Now, astronomers claim to have seen a flash of light coming directly from the smaller black hole for the first time.

“We’ve never seen anything like this before,” said astronomer Mauri Valtonen on 7th June, 2023 at a meeting of the American Astronomical Society in Albuquerque.

Astronomers have been watching this object since the 1880s, when it showed up in a survey of asteroids as a brilliant point of light. That point of light, now dubbed OJ287, is a blazar. Among the brightest-looking objects in the universe, blazars are supermassive black holes that launch bright jets of radiation into space, and those jets happen to point almost directly at Earth. This one sits about 3.5 billion light-years away. Sometimes, OJ287 shines even brighter than usual. For the past 40 years or so, astronomers have noticed that the object has a dramatic jump in brightness every 11 to 12 years.

In 1996, Valtonen and his colleague Harry Lehto, both of the University of Turku in Finland, suggested that the outbursts could be due to one supermassive black hole orbiting an even more massive black hole. Both black holes are probably behemoths, the astronomers calculated: The smaller is around 150 million times the mass of the sun, and the bigger is around 18 billion solar masses. For perspective, the black hole in the centre of the Milky Way is about 4 million solar masses.

The bigger black hole is thought to be surrounded by a disk of white-hot gas and dust, which glows at many wavelengths of light. If the smaller black hole exists, then every time it plunges through that disk, it would trigger a flash of light, thus explaining the recurring outbursts.

But until now, no light had been detected from the second black hole itself. Its presence was merely inferred from those regular flares. Valtonen and his colleagues predicted that the most recent flare should arrive in January or February 2022 and arranged to monitor OJ287 every day using telescopes on Earth and in space. The team saw flares like the ones they had seen before, but there was a new flare that was different. It was bright and quick, fading after one night.

The team proposed that this flare came from a jet created by the smaller black hole pulling material out of the disk as it approached, before the collision.

Some researchers have suggested other ways for a single black hole to give off the same pattern of light. If the team’s interpretation is correct, then it marks the first time the second black hole has been seen directly, Valtonen says.

Unfortunately, it may be difficult to test. The short flares come only once a decade, so astronomers need to be ready the next time. To resolve the two black holes directly, Valtonen says, might take a radio telescope in space.

(Source: www.sciencenews.org dated 15th June, 2023)

Statistically Speaking

1. TIME TAKEN FOR PROCESSING INCOME-TAX RETURNS HAS SIGNIFICANTLY REDUCED
2. NCLT APPROVALS ON PEAK
 
 
3. UPI TRANSACTIONS ON A RISE
 
 
 
4. MOST EXPENSIVE CITIES FOR EXPATS
 

Regulatory Referencer

FEMA AND IFSCA REGULATIONS

 

1. International Credit Card usage brought under LRS:

 

Rule 5 of the FEM (Current Account Transactions) Rules, 2000 allows for payments to be made for specified purposes as mentioned in Schedule III but within prescribed limits. Liberalised Remittance Scheme of the RBI allows remittance by resident individuals for transactions specified under this Schedule III up to USD 250,000 per financial year. Rule 7 of the FEM (Current Account Transactions) Rules, 2000 exempted payments made through international credit cards while on a visit outside India from Rule 5 and hence effectively they were outside the LRS limits too. However, Rule 7 now stands omitted resulting in transactions made through such use of ICCs to be covered under LRS. Purpose was to bring transactions made through ICCs under the Tax Collected at Source (TCS) net. Immediately, thereafter FAQs were released for both LRS and TCS on LRS through tweets providing clarifications and explanations on LRS and TCS on LRS. Some reliefs are also proposed. Then, a day later, another tweet clarified that payments by an individual using ICC or International Debit Card upto Rs. 7 lakhs per financial year would be excluded from LRS and hence TCS also. Necessary changes to the CAT Rules are proposed to this effect but as of now only tweets are available.

 

[G.S.R 369(E) dated 16th May, 2023 and tweets by handle @FinMinIndia dated 18th and 19th May, 2023.]

 

2. NDDCs allowed for trading by resident non-retail users at IFSC IBUs:
 

AD Cat-I banks operating International Financial Services Centre (IFSC) Banking Units (IBUs) are permitted so far to offer non-deliverable derivative contracts (NDDCs) to persons resident outside India. Such derivatives are cash-settled in foreign currency. With a view to developing the onshore INR NDDC market and providing residents the flexibility to efficiently design their hedging programmes, it has been decided to permit:(a) AD Cat-I banks operating IBUs to offer NDDCs involving INR to resident non-retail users for the purpose of hedging. Such transactions shall be cash settled in INR; and

(b) The flexibility of cash settlement of NDDCs transactions between two AD Cat-I banks, and between an AD Cat-I bank and a person resident outside India in INR or any foreign currency.

[A.P. (DIR series) circular no. 5, dated 6th June, 2023]

3. RBI’s Statement on Development and Regulatory policies:

The Statement sets out various developmental and regulatory policy measures relating to (i) Financial Markets; (ii) Regulation; and (iii) Payment Systems relevant under FEMA is the policy regarding licensing framework for Authorised Persons (APs). This was last reviewed in March 2006. Keeping in view the progressive liberalisation under FEMA over the last two decades, RBI has decided to rationalise and simplify the licensing framework for APs. The objective is to achieve operational efficiency in the delivery of foreign exchange facilities to common persons, tourists and businesses, while maintaining appropriate safeguards. A draft of the revised authorisation framework would be issued for public feedback.

[Press Release No. 2023-2024/365 dated 8th June, 2023]

Regulatory Referencer

DIRECT TAX

The Central Government notifies that
all the provisions of the Agreement and Protocol for the elimination of
double taxation and the prevention of fiscal evasion and avoidance with
respect to taxes on income between India and Chile shall be given effect
to in the Union of India – Notification No. 24/2023 dated 3rd May, 2023

COMPANIES ACT, 2013

1. Establishment of C-PACE to provide hassle-free filing, timely and process-bound striking off companies from MCA Registry: The MCA vide Notification No. S.O. 1269(E) dated
17th March, 2023 has established the Centre for Processing Accelerated
Corporate Exit (C-PACE) to facilitate the quick, transparent and
process-bound exit of companies. With the establishment of C-PACE, the
striking-off process of companies has been centralised, resulting in
reduced stress on the MCA Registry. Also, this initiative is expected to
ensure hassle-free filing and timely striking off names of companies
from the Register. [ Press release dated 13th May. 2023]

2. MCA brings more clarity on filing of overdue financials before applying
for striking-off: The authority has notified an amendment to strike-off
rules. The amendment provides more clarity on filing requirements of
overdue financials before applying for strike-off. As per the amended
norms, all pending and overdue financial statements under section 137
and overdue annual returns under section 92, must be filed up to the end
of the financial year in which the company ceased to carry its business
operations before applying for strike-off. [Notification no. G.S.R.
354(E), dated 10th May, 2023]

SEBI

1 Guidelines issued regarding exclusion of investors from investing in schemes of AIFs:
SEBI has issued guidelines regarding exclusion of an investor from an
investment in an AIF. As per the new norms, an AIF may exclude an
investor from participating in a particular investment if the manager is
satisfied that participation of such an investor in the investment
opportunity would lead to the scheme of AIF being in violation of
applicable law or regulation or would result in material adverse effect
on scheme of an AIF. [Circular No. SEBI/HO/AFD-1/POD/P/CIR/2023/053,
dated 10th April, 2023]

2 Introduction of a direct plan allowing investors to invest in AIFs without distribution fee: With a
view to providing flexibility to investors for investing in AIFs, SEBI
has introduced a direct plan for schemes of AIFs. Such a direct plan
shall not entail any distribution fee/placement fee. Further, SEBI has
prescribed the Trail model for the distribution of commission in AIFs.
They shall disclose the distribution/placement fee, to the investors at
the time of on-boarding. Also, Category III AIFs shall charge
distribution fee/placement fee to investors only on an equal trail
basis. [Circular No. SEBI/HO/AFD/POD/CIR/2023/054, dated 10th April,
2023]

3 Master Circular for “Market Infrastructure Institutions”: The SEBI had issued multiple circulars, directions, and operating instructions for Market Infrastructure Institutions (MIIs) on a
regular basis for necessary compliance. In order to ensure that all
market participants find all provisions at one place, master circular
for MIIs has been prepared. A master circular is a compilation of all
the existing circulars, and directions issued and applicable as on 31st
March of every year, segregated subject-wise. [Circular No.
SEBI/HO/MRD/POD 3/CIR/P/2023/58, dated 20th April, 2023]

4. AMCs to file all final offer documents in digital format: SEBI has
directed all Asset Management Companies (AMCs) to file their final offer
documents in digital form only by emailing the same to a dedicated
email address i.e., imdsidfiling@sebi.gov.in. Further, there will be no
need to file physical copies of the same with SEBI. Also, all new fund
offers (NFOs) must remain open for subscription for at least three
working days. The provisions of this circular shall be applicable from
1st May, 2023 [Circular No. SEBI/HO/IMD/IMD-RAC-2/P/CIR/2023/60, dated
25th April, 2023]

5. Stock Brokers/Clearing Members barred from creating bank guarantees on clients’ funds: The SEBI has barred Stock Brokers and Clearing Members from pledging their clients’ funds with
banks. Presently, stock brokers and clearing members pledge their
clients’ funds with banks, which in turn issue bank guarantees (BG) to
clearing corporations for higher amounts. Now, from 1st May, 2023, no
new bank guarantees shall be created out of clients’ funds by stock
brokers. Also, existing BGs created out of clients’ funds must be wound
down by 30th September, 2023 [Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2023/061, dated 25th April, 2023]

6. Payment for Mutual Funds on behalf of a minor to be made via
Minor/Parent/Legal guardian’s bank account: Earlier, SEBI prescribed a
uniform process to be followed by Asset Management Companies (AMCs)
regarding investments made in the name of a minor through a guardian.
Now, SEBI has directed that payment for investments in mutual funds by
any mode shall be accepted from the minor’s bank account, the parent or
legal guardian of the minor, or from a joint account of the minor with
the parent. Also, all AMCs are required to make changes to facilitate
mutual fund transactions effective 15th June, 2023. [Circular No.
SEBI/HO/IMD/POD-II/CIR/P/2023/0069, dated 12th May, 5-2023]

FEMA AND IFSCA REGULATIONS

1. IFSCA prescribes reporting requirements for IFSC Insurance Offices
IFSCA has issued the IFSCA (Assets, Liabilities, Solvency Margin and Abstract
of Actuarial Report for Life Insurance Business) Regulations, 2023 to
specify the requirements related to capital, solvency and submission of
abstract of actuarial report by an IFSC Insurance Office for undertaking
Life Insurance Business. [Notification No. IFSCA/2022-23/GN/REG039,
dated 19th April, 2023]

2. IFSCA prescribes regulatory framework for IFSC Insurance Offices
IFSCA has prescribed IFSCA (Management Control, Administrative Control and
Market Conduct Of Insurance Business) Regulations, 2023 with the aim to
put in place the regulatory framework related to Management Control,
Administrative Control and Market Conduct of insurance business carried
out by an IIFSC Insurance Office or International Insurance Intermediary
Offices. It also lists several IRDAI regulations, circulars or
guidelines which cease to apply in IFSCs on promulgation of these
Regulations. [Notification F.No. IFSCA/2022-23/GN/REG035 dated 26th
April, 2023]

3. Resident Individuals’ idle funds in Foreign Currency Account in IFSC:
Resident Individuals who have a Foreign Currency Account (FCA) in IFSCs had to
repatriate any funds lying idle in the account for a period up to 15
days from the date of its receipt to their domestic account. On a review
and with an objective to align the LRS for IFSCs vis-à-vis other
foreign jurisdictions, RBI has now withdrawn this condition and the
holding period shall now be governed by the provisions of the scheme as
contained in the Master Direction on LRS. [A.P. (DIR SERIES) Circular
No. 3, dated 26th April, 2023]

4. MoF revises a list of designated officers for adjudication of penalties under FEMA:

The revised list is as under:

Sl.
No.		 Designation
of Officers		 Monetary
limit
(1) (2) (3)
(1) Special Director
of Enforcement		 Cases involving
amount exceeding rupees twenty five crores.
(2) Additional
Director of Enforcement		 Cases involving
amount upto rupees twenty five crores but not less than five crores.
(3) Joint Director of
Enforcement		 Cases involving
amount upto rupees twenty five crores but not less than five crores
(4) Deputy Director of
Enforcement		 Cases involving
amount upto rupees five crores and not less than two crores
(5) Assistant Director
of Enforcement		 Cases involving
amount not exceeding rupees two crores.

[Notification No. S.O. 2128(E) [F. NO. K-11022/5/2023-AD.ED], dated 8th May, 2023]

5. Levy of charges on forex prepaid cards, etc.:

RBI has advised that fees/charges levied by Authorised Persons which are payable in India on use of International Debit Cards/Store Value Cards/Charge Cards/Smart Cards have to be denominated and settled in Rupees only and not in foreign currency. [A.P. (DIR SERIES 2023-24) Circular No. 04, dated 9th May, 2023]

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

Q.R. Code –

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

QR Code:

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

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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

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  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

Q.R. Code:-

  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

Q.R. Code:-

 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

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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

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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