PROFESSIONALS...

Supplement on ‘Due Diligence and Corporate Compliances Management’ (Module –IV Paper -7)

2010-12-14T09:35:00.001+05:30

Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009 are applicable for December 2010 Examination. A Softcopy of the supplement in this regard is attached.

Supplement (Click Here)

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Common Proficiency Test - Proposed amendment in the Chartered Accountants Regulations, 1988 - (30-11-2010)

2010-12-01T11:44:00.000+05:30

Common Proficiency Test - Proposed amendment in the Chartered Accountants Regulations, 1988

The President in his column (President's page) in the December, 2010 issue of the Journal, `The Chartered Accountant' has inter-alia conveyed the decision of the Council as under:

Common Proficiency Test: The Council at its 300th meeting reviewed the requirement for passing the Common Proficiency Test and decided that a candidate shall have to obtain at one sitting, a minimum of 30 per cent marks (out of maximum marks specified by the Council for each Section) and a minimum of 50 per cent marks in the aggregate of all the Sections, subject to the principle of negative marking, in a manner as may be specified by the Council from time to time subject to proposed amendments in the regulations approved by the Central Government.

Upon reading the above write-up, the Institute has been receiving telephone calls from anxious students, their parents and members. It has been brought to our knowledge that SMS/email chain have started circulating giving some misinformation about the applicability of the proposal for December, 2010 CPT examination.

It is hereby clarified that as mentioned in the above write-up, the decision of the Council will be made applicable only after the Chartered Accountants Regulations, 1988 are amended by the Central Government, for which a proposal will be sent to the Central Government shortly.

It is further clarified that the process of Central Government's approval includes consideration by the Ministry of Corporate Affairs and Law Ministry, consideration by the Council of ICAI of public comments on the draft amended Regulations, final approval of the proposed amendments by the Central Government and publication of the same in the Gazette of India.

As such, the above decision taken by the Council, as rightly conveyed by the President, cannot and will not be made applicable for the CPT examination scheduled for 19th December, 2010.

It is once again reiterated that the students and other stakeholders should take cognizance of the official announcements only (published in the Chartered Accountants Journal, CA Students newsletter and www.icai.org)

EXAMINATION DEPARTMENT

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

ICWAI Rank List for JUNE 2010 Examination

2010-12-01T11:01:00.000+05:30

Dear ICWAI students,

Click the below category to Check your Rank for JUNE 2010 Examination: -

Best Wishes !!

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Solutions of CA Final (New Course) Strategic Financial Management

2010-11-14T19:59:00.000+05:30

Dear CA Finals students (New Course),

Solutions of CA Final (New Course) Strategic Financial Management by Tarun Mahajan Sir,

Download

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Important topics for CA Final Law paper Nov, 2010

2010-11-13T09:01:00.001+05:30

Dear SMS Subscribers,

Due to Message limitation per day, I am unable to send all the important of CA Final Law paper, to be held on 14-11-2010, to you via. Message. Hence forth I am posting the rest of messages here for your ready reference which need a quick view for exam.

Click the below link to download the file.

DOWNLOAD

For those who want to receive the previous message, Join our SMS Channel "SidRutiya".
To Join our FREE SMS Channel Type following-

ON<space>SIDRUTIYA

and send it on 9870807070

SidRutiya Team Wishes all the Best to all candidates appearing in CA Exams !!

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Happy Diwali !!

2010-11-04T18:39:00.002+05:30

Dear Friends,

SidRutiya Team Wishes you and your family a very prosperous Diwali and New Year !!!

Have loads of fun and loads of masti!! Happy Diwali!!

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

President's Message - November 2010 - (27-10-2010)

2010-10-27T19:42:00.002+05:30

Dear All,

"India stands at a crucial stage. All across the globe there is interest in India as an emerging global power… We have to be able to compete with the finest minds in the world. In this, education occupies a crucial position," so said Hon'ble President of India Smt. Pratibha Devisingh Patil recently. I am delighted to inform you that we had the honour to meet this visionary and inspiring first woman President of the country at the Rashtrapati Bhawan recently. During the meeting, the undersigned, along with Vice President CA. G Ramaswamy, Council Member CA. S.B. Zaware and a member from Pune CA. M.S. Jadhav updated her about our Institute and our contribution as an important partner in Nation Building. We also requested her to be the Chief Guest at the mega high-profile International Conference being organised by us on 4-6 January 2011, details of which have been published elsewhere in the journal. Her Excellency Smt. Patil showed keen interest in the activities and role of the Institute in the growth and development of national economy in particular and society in general. We fervently hope that she will kindly give her consent to grace our International Conference.

Meanwhile, as readers will recall, we basked in the glory of Commonwealth Games 2010 by winning a record number of medals. We got medals in events we were not hopeful at all. We did not mind being at second position, but we rejoiced performing better than England. Reasons for celebrations were many. There is a remarkable trend emerging slowly but distinctly, which is very keen on engulfing all spheres of human existence: our female sportspersons have performed unexpectedly better in many events of the Commonwealth Games. Ironically, Haryana having the lowest sex ratio probably has the largest share of medals earned by female sportspersons. We personally have observed that, of late, female students have been performing better in CA examinations too. In fact, they have been doing better in all other fields of education. Anyway heroes, philosophers, or great men can exist, if we have intelligent and educated women in society.

It is time to learn a lesson, as it is never too late to do so: women deserve equal treatment and respect from our society. Initially, we may have to start with some adjustment in order to accommodate them with equality. Let us take a pledge to respect them in our family, first, as we know: charity begins at home. This will bring a sea change in not just the form and composition of our society but also in the quality of our own existence. To quote our adorable President of India Hon'ble Pratibha Devisingh Patil: "Empowerment of women is particularly important to me as I believe this leads to the empowerment of the nation". American lawyer and political activist Bella Abzug rightly observed: Women are changing the stream, making it clean and green, and safe for all. There is a definitive connection between women's rights and development, and socio-economic development and peace of a state.

Now let you be updated on some important developments over the last month.

MCA Delegation to Moscow

ICAI Vice-President CA. G. Ramaswamy with the Director, Board of Studies, Shri Vijay Kapur was in Moscow recently as part of the MCA delegation led by the MCA Secretary Shri R. Bandyopadhyay. Other members of the Indian delegation were ICWAI President Shri B. M. Sharma and ICWAI Central Council member
Shri A. N. Raman. Agenda of the delegation was to interact with the government functionaries and accounting professionals in Moscow. The Institute of Professional Accountants of Russia (IPAR) showed keen interest in our activities. On the initiatives of our Vice-President, the IPAR responded positively by coming forward with a proposal for mutual areas of cooperation regarding implementing IFRS, auditing and quality control standards, and internal audit standards, etc. We have invited the IPAR President Mr. Vyacheslav V. Skobara and Chair of the IPAR International Affairs Ms. Svetlana M. Bychkova to attend our International Conference to be held in January 2011. The delegation also met Mr. Sergey D. Shabalov, State Secretary, Deputy Finance Minister of Russian Federation.

Roundtable Conference on Commerce and Accountancy Education in India

We recently organised ICAI's first ever Roundtable Conference on Commerce and Accountancy Education System in India in New Delhi to exchange thoughts on various areas of academic and practical interest in the field of commerce and accountancy education in India. It was inaugurated by Shri Jitesh Khosla, Additional Secretary and Officer on Special Duty, Indian Institute of Corporate Affairs, who was keen on us leading in enhancing the financial literacy and the basic knowledge of the accountancy amongst the people of India. Eight Vice-Chancellors, namely Prof. Manoj K. Mishra of University of Lucknow, Prof. K. K. Deka of Dibrugarh University, Prof. A. D. Sawant of University of Rajasthan, Prof. Binayak Rath of Utkal University, Prof. R. Venkata Rao of National Law School, Bangalore, Prof. I. V. Trivedi of Mohanlal Sukhadia University, and Prof. J. L. Gupta (former Vice-Chancellor) of Bilaspur University, attended the Conference. More than 55 Heads, Deans of Commerce and Management Department, and faculty members representing various management institutions and universities of India also participated. The undersigned also participated in the Conference with Central Council colleagues CA. Vinod Jain, Chairman, Board of Studies, CA. Jaydeep N. Shah, CA. Bhavna Doshi, CA. Rajkumar S. Adukia and CA. S. B. Zaware. Presentations were made by Prof. Ashish Bhattacharyya from IIM, Kolkata, Dr. Avinash Chander, Technical Director of ICAI and Shri Vijay Kapur, Director, Board of Studies of ICAI.

We wish to inform that the discussions held provided a good platform for exchange of views amongst the leading accounting educators of India. Quite rightfully, everybody requested us to bring out uniform reading material on Indian Accounting Standards converged with IFRS in a simplified and illustrative manner for university students. They also desired that the Institute could frame model course curriculum meant for the Indian universities. Representatives of some universities even offered us the space for building up reference libraries and classrooms for imparting education through e-learning mode. During the discussions, the participants also stressed the need to bring transparency and accountability in examination system. We are very confident that a synergy between the Institute and the universities can produce better results.

ICAI Offers Support to Shri Nandan Nilekani for UID Project

During the meeting recently held with Shri Nandan Nilekani, Chairman of the Unique Identification Authority of India (UIDAI), the undersigned, on behalf of the Institute, extended a promise of complete support to the ambitious UID project of our country with all possible resources of the Institute. We suggested to him that ICAI can play important role in development and implementation of this project, while actively working with the Government. We showed our willingness to offer the manpower of vast base of ICAI members located across the country to be used in the implementation of the project, which will result in the issuance of Unique IDs to all citizens of India. We also informed Shri Nilekani that our members having experience in endeavours such as PAN card, e-governance and facilitation centres for sales tax and excise could be well-suited to be a part of this project. During the meeting, we also discussed the use of IT system in Goods and Service Tax among other issues of our mutual interest. Mr. Nilekani promised to utilise the services of Chartered Accountants in the GST project.

ICAI Briefs Media on IFRS Convergence

We would like to remind our members that we are committed to meet our deadline of the convergence of the Indian Accounting Standards with the International Financial Reporting Standards (IFRSs) effective April, 2011 in select entities as per the roadmap laid down by the Government. Let us also recall that, to spread awareness and popularise the convergence of our accounting standards with the IFRSs, we have launched a nationwide campaign. As part of this very initiative, we recently organised an interactive session with the representatives of Indian media, basically to brief them on the IFRSs-related developments and convergence, and to help them print objective and authentic information in this regard in the media. This whole exercise was aimed at encouraging and helping the media in supporting our efforts to spread mass awareness about IFRSs and to highlight the comprehensive benefits that convergence is going to provide to society in general and our economy in particular.

Draft of ASLB on Presentation of Financial Statements Ready

In the direction of establishing a single set of high quality financial reporting standards for Local Bodies further, the Committee on Accounting Standards for Local Bodies (CASLB) has recently finalised the draft of ASLB on 'Presentation of Financial Statements' to prescribe the manner in which general purpose financial statements should be presented. This would help the Local Bodies immensely in presenting their financial statements in a comparable and consistent manner. Also, drafts of Standards on 'Inventories' and 'Segment Reporting' will soon be finalised.

New Group to Respond to Parliamentary Standing Committee

A Special Group was constituted for formulating ICAI's views/response to the various recommendations made by the Parliamentary Standing Committee on Finance on Companies Bill 2009. The Group has met and deliberated on the Report in detail. The views/ suggestions as formulated are getting finalised for sending our response.

ICAI Probe into Auditing/ Accounting Violations in IPL

We are planning to send notices to six IPL franchisees seeking more information from the companies owning the teams. These franchisees are – Kings XI Punjab, Delhi Daredevils, Rajasthan Royals, Chennai Super Kings and Deccan Chargers. The investigations into alleged violations of auditing and accounting norms by the auditors are not yet complete due to the non-availability of the required information in these companies. This investigation is part of a multi-agency probe launched by the Government of India, e.g. I-T Department is probing tax evasion, ED money laundering, MCA sources of funding and shareholders' patterns, etc. Surprisingly, there is no published financial information with Kolkata Knight Riders and Royal Challengers.

Project Parivartan

Project Parivartan, a journey embarked on to bring about a paradigm shift in the working of our Institute and conceived with an idea of taking the Institute to a qualitatively new way of working, aims to create a single tightly-integrated system for catering to the entire community of chartered accountants and students, irrespective of their geographical locations, through the Internet. It also aims to create a truly next-generation Institute through IT-revolution. The journey so far in this direction has been quite successful and the Project is at the execution of next level of IT maturity. The ground covered so far includes the EoI for infrastructure and software applications, to onboard our IT partners. We have witnessed good traction and interest from major players in the market. The Project Management Office is working on closely with all other departments to complete our requirements for the tenders that we plan to float towards the end of this month. Despite the tedious process, we assure everybody that our institute is committed to transformation. We will keep you updated of the progress as we make from time to time.

CBDT Takes Positive Action Following ICAI Representaion

As you will be aware, an amendment to Rule 12 of the Income-tax Rules, 1962 vide notification no. 49 dated 9th July, 2010 made it mandatory for all Companies (including foreign companies) filing ITR-6 to digitally sign the Income-tax return for the AY 2010-11. Thereafter, certain procedural changes were effected. The Institute was given to understand that as per the changed requirements made applicable w.e.f. 1.08.2010, where the signatory to the return is not the same as the signatory in the immediately preceding year, the system required that the DSC also contains the PAN encryption therein. The said revised procedure was creating practical difficulties in case of Foreign Companies whose directors being non-residents were not required to obtain a Permanent Account Number in India due to which a PAN encrypted DSC could not be immediately available. Hence, a representation posing the difficulty being faced by Foreign Companies was made by the Institute to the Central Board of Direct Taxes. In view of the same the Central Board of Direct Taxes has relaxed the requirement of using encrypted PAN on DSC for non-resident signatories of Foreign Companies. Accordingly, the signatory may register with a non-PAN DSC from CCA, India and use the same jurisdiction while uploading the return. This facility is available only for all foreign Companies under the jurisdiction of respective International Taxation wards or circles of Income Tax Department.

ICAI Wants Power to Act Against Erring Firms

It is quite affirmative now for the Institute to be ready for seeking power from the law to take action against erring CA firms. In this light, as per the Act, the Institute can take disciplinary action against its members but not against the firms. At the same time, it is becoming extremely important to curb the wrongful and illegal acts committed by the firms. So, for the first time, the ICAI has decided to recommend to the Government of India that power to act against an erring firms be given to the Institute after necessary amendments in the Act. Action against the firms are proposed to be initiated in rarest of rare circumstances and in the cases in which there are continuous and repetitive acts of negligence, jeopardising of public interest or proved collusion in perpetration of fraud. Generally the action is contemplated only against individual members. We definitely need more powers to ensure that big corporate scandals do not occur in future.

International Competition Law Conference

The Institute played a crucial role as Knowledge Partner for a highprofile International Competition Law Conference organised by Competition Law Bar Association in national capital recently. Corporate Affairs Minister Mr. Salman Khurshid was the Chief Guest while Union Minister of Law and Justice Mr. M Veerappa Moily was the Guest of Honour at the well-attended conference. Other speakers included Chief Justice of India Mr. Justice S.H Kapadia, Chairman Competition Appellate Tribunal Dr. Justice Arijit Pasayat and Competition Commission chairman Mr. Dhanendra Kumar. The undersigned also addressed the conference from professional perspective. The global competition law scenario vis-à-vis India, and various aspects of newly enforced Competition Law were discussed in the conference.

Asia-Oceania Standard Setters Group Meeting

We recently attended the second annual meeting of the Asia-Oceania Standard Setters Group (AOSSG), which was formed last year as a forum for the countries in the region to exchange their ideas and have a joint voice in matters relating to IFRSs. The undersigned, along with Council Member and the Chairman, Accounting Standards Board, CA. Manoj Fadnis and the Technical Director, Dr. Avinash Chander, put forth India's approach and perspective on various issues of mutual interest that were discussed and decided at the meeting in Tokyo. We are happy to inform you that at the meeting it was decided to establish a new working group for IAS 41, Agriculture, which will be led by the ICAI. The meeting was attended by 24 accounting standard setting bodies from countries and jurisdictions in the Asian-Oceania region, representatives from the International Accounting Standards Board (IASB) and a Trustee of the IFRS Foundation.

Initiatives for Members
Unique Code (UCD) for Members in Practice Soon:

We are planning to introduce a unique code numbers to check the increasing instances of fraudulent practices including forged attestations, as part of our ongoing Project Parivartan initiated to change our operational processes to meet global benchmarks. Modalities are being worked out. We are being assisted by the software giant Infosys in this endeavour. Then, we would like our banks to insist upon this UCD, as people file different balance sheets for different purposes without the knowledge/approval of our members. Similarly, there are instances when financial statements filed in the tax department are different from the ones sent to banks or registrar of companies. Since the CA membership numbers are in public domain, introduction of UCD will certainly help in protection of our members.

Special Loan Scheme of Corporation Bank for CAs:

We take pleasure to inform our members that the Committee for Capacity Building of CA Firms and Small & Medium Practitioners has helped the Institute in going into an MoU with the Corporation Bank for providing financial assistance in form of liberalised loan scheme called Corp CA for our members and firms. Comptroller and Auditor General of India Shri Vinod Rai, Chairman & Managing Director of Corporation Bank Shri Ramnath Pradeep and Executive Director of Corporation Bank Shri Asit Pal were present on the occasion. This scheme will cater to various financial needs of members of the CA profession including cost of furniture/fixture/office equipments contributing in the working capital for building their profession. We sincerely hope that a large number of members would be benefited by this landmark scheme. We must acknowledge the hard work of the Committee Chairman, CA. Sanjeev Maheshwari behind this accomplishment. The details of the scheme have been hosted on our website and also published elsewhere in the journal.

New Group to Consider Provisions for Physically Challenged CAs:

We are happy to inform you that a Group has been constituted to consider and prepare a draft paper on the various concessions that one can have for physically challenged Chartered Accountants vis-à-vis the openings available in PSUs or in the private sector. The Group shall comprise CA. Vinod Jain, Chairman, Board of Studies (Convenor) and CA. Pankaj I. Jain, Chairman, Professional Development Committee. The said Group will submit as early as possible the aforestated draft paper to the Professional Development Committee and Board of Studies for consideration and making recommendations to the Council. The members of the Council may also be requested to give their suggestions/inputs for consideration by the Professional Development Committee/Board of Studies.

Tie-Up with United Stock Exchange for Currency Derivatives Awareness:

It is quite satisfying to inform you that we have operationalised the MoU signed last year with the United Stock Exchange (USE) of India Limited, newest stock exchange for currency derivatives, to impart comprehensive knowledge of financial markets to our members. Following this, the USE will sponsor our members by organising seminars, paneldiscussions, workshops on financial markets and corporate governance. We would provide institutional support and facilitate interactions with our members. At least two such programmes are proposed to be organised with them before the end of this year. On this occasion, Managing Director and CEO of the USE Shri T. S. Narayanasami expressed his 'pleasure to be associated with ICAI' and desired 'to build knowledge about financial markets especially sophisticated instruments like currency derivatives in India.' We are sure that this would be enriching experience for both the organisations.

IICA-ICAI Joint Workshop on IFRS:

We recently organised a special workshop on 'IFRS – Issues in Transition' jointly with Indian Institute of Corporate Affairs (IICA). The workshop dwelt on managing transition to IFRS that poses a great challenge to the makers and users of financial statements and to the reporting authorities, i.e., the practical implication of IFRS. Prominent personalities who shared their views in the workshop included Secretary, MCA Shri R. Bandyopadhyay, Shri Jitesh Khosla, Additional Secretary to the Government of India and Officer on Special Duty (OSD), IICA, Ms. Renuka Kumar, Joint Secretary MCA, Shri Pawan Kumar, Director (Tax Policy), Department of Revenue, Ministry of Finance, Ms. Gargi Ray of Infosys technologies, Past Presidents of ICAI CA. N. P. Sarda and CA. Ved Jain and Council members CA. Jayant P. Gokhale and CA. Bhawana Doshi. The undersigned highlighted the various steps taken by the ICAI in the process of convergence of Indian Accounting Standards with IFRS including the capacity building and other related initiatives. About 70 CEOs, Directors, CFOs, Auditors, representatives from regulatory bodies, fellow members of the ICAI and ICAI's CA employees attended the workshop.

Four-Day Training Workshops on Audit Excellence:

Auditing standards issued by our Institute are both best practices and performance benchmarks for our profession, and the quintessential features of our very existence and supremacy in the auditing profession. To give an impetus to our awareness creation initiatives, four-day Training Workshops on Audit Excellence will be launched soon by the Auditing and Assurance Standards Board (AASB) of ICAI for imparting training on implementation of the Standards on Auditing issued under the Clarity Project. The details are available elsewhere in the Journal.

Resources on Auditing Standards:

A Guide containing practical guidance and ready-to-use templates on application of auditing standards to audits of small entities will soon be published to help with the understanding of auditing standards and promoting implementation of Standards. As another measure to promote the understanding of auditing standards, the AASB is also developing a Manual of Presentations on Standards on Auditing & Other Engagement Standards that will act as a quick reference for an overview of the requirements of auditing standards. This can be effectively used by the audit firms as well in training their audit staff on auditing standards.

Convocation Ceremony in Jaipur:

The convocation programme for the newly enrolled Associate Members of the Institute from Central Region (covering the states of Rajasthan and Madhya Pradesh) was successfully held at Jaipur on October 5, 2010. It was a time of celebration and of acknowledgement of our students' hard work. The undersigned inaugurated the function and conferred the certificates of merit to the deserving and newlyenrolled members in the presence of Past President CA. Sunil Goyal, Central Council colleague CA. Anuj Goyal, past Central Council colleague CA. P. P. Pareek and Jaipur Branch Chairman CA. C. L. Yadav among others. While stressing the need of having effective communication skills, the undersigned informed the members about the growing recognition of Indian CAs internationally, and noted with appreciation the rising ratio of female members.

Certified Filing Centre Registration till November 2010:

We want to inform all members of our community that the registration process under the Certified Filing Centre (CFC) scheme is valid till November 30, 2010. We have received 271 CFC applications (88 new application and 183 applications for renewal of existing CFCs) from the members till date.

Students' Initiatives
Residential Programme on Professional Skills & Development:

A six-week residential programme on Professional Skills and Development has been conceived by the Board of Studies for the benefit of our students and newly-qualified chartered accountants. All students who have passed PCC/IPCC/PE-II examinations and who are pursuing last year of the article training or those who are newly-qualified chartered accountants will be eligible for the programme and, therefore, are invited to join it. This will offer a unique opportunity to develop skills in communication, leadership and personality in general including the technical skills for effective functioning in profession. The programme will start on December 1, 2010, at the Centre of Excellence of ICAI in Hyderabad. In fact, more than 50 students have already been enrolled for this programme. In the meantime, a three-month residential programme shall commence from December 6, 2010, at National Institute of Financial Management in Faridabad. We sincerely hope to witness a large number of participants and we are sure they will use this opportunity to become better professionals. Such an active participation will encourage us further to hold similar and better programmes for them in future.

Online Articles Placement Portal:

We are glad to inform that the Board of Studies has introduced an optional Campus Placement Scheme for selection of Articled Assistants by CA Firms. The Pilot Campus Placement Programme was held at Delhi in August 2010 for the CA firms having their HOs/ Branch Offices in Delhi/New Delhi and for eligible students who would like to service their articles in the CA Firms in Delhi/New Delhi. Considering the good response, positive feedback and requests received from both CA Firms and Students, it has been decided to start an Online Articles Placement Portal - http://bosapp.icai.org from 5th October, 2010 to facilitate placement of Articles in CA Firms on pan India basis. We request both eligible candidates and CA firms to avail of this facility and register themselves online through the portal. The candidates shortlisted by CA Firms would be informed by e-mail through the Portal, to appear for interviews/interactions at their respective Offices, at the designated date and time.

CPT Online Examination results:

The results of CPT online examinations held on 18th and 19th September this year were declared recently and we are happy to inform you that the results (28.40 per cent) have been satisfactory. What is more satisfying is that our online examinations are slowly-but-steadily gaining popularity among new-age students and this portends well for our vision to make our examination system hi-tech and futuristic.

New Members Nominated on 21st Council of ICAI

We welcome Dr. T. V. Somanathan, Joint Secretary, Ministry of Corporate Affairs, New Delhi, and Ms. Usha Sankar, Director General (Commercial), Office of the Comptroller & Auditor General of India, New Delhi, as nominated members on the 21st Council of our Institute for the remaining term of the Council or till further orders. They have replaced Ms. Renuka Kumar and Shri K. P. Sasidharan respectively. We sincerely hope to get their complete help and support in all endeavours for progress of our Institute. We also place on record the valuable contributions made by Ms. Kumar and Mr. Sasidharan in the Council.

Meanwhile, we have submitted our comments/suggestions on Draft International Standard ISO 26000 (Guidance on Social Responsibility) and on Applicability of Foreign Direct Investments in LLP to the Ministry of Corporate Affairs (MCA).

Happy Deepawali

Deepawali, the pious festival of lights, is the celebration of the victory of good over evil. The underlining message of this festival is that the evil and falsehood may appear to be mightier and more resourceful but it is only the truth and good that prevails in the end. Let's imbibe the spirit of this festival and take a vow to lead the world from darkness to light, from falsehood to truth, and from wrong to right. Let us vow to live each day in the most pious, God-conscious way. This Deepawali let us give thanks for all we hold dear: Our health, our family, our friends and to the grace of God which never ends. May this Deepawali fill your life with prosperity and peace, and love and joy which doesn't cease. May the festival of lights be the harbinger of growth of our profession.

Wish you all a very happy Deepawali.

CA. AMARJIT CHOPRA
President, ICAI
October 25, 2010

Please Post Your Views Here

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Contribution to the Question Bank of CPT - (27-10-2010)

2010-10-27T19:40:00.000+05:30

The Common Proficiency Test (CPT) is an entry level test meant for 10+2 students to the Chartered Accountancy Profession having multiple choice objective questions. The level of knowledge expected is basic knowledge with the objective to develop conceptual understanding of the subject concerned.

With a view to augment the Question Bank in the Subjects of Accounting/Mercantile Laws/General Economics/Quantitative Aptitude of Common Proficiency Test, it has been decided to invite questions from Chartered Accountants/Subject experts working in various Colleges/Universities/Public/Students pursuing Chartered Accountancy Course etc.

The contributor can contribute as many questions as he/she can, but in a lot of minimum of 20 questions in the subjects of Accounting/Mercantile Laws/General Economics/Quantitative Aptitude in the following manner:-

The questions should be of objective with four probable answers for each question. The correct answer for each question is also required to be given.
Fill in the blanks having four alternative answers.
Small paragraph containing two to three lines followed by a question having four alternative answers.
Numerical having four alternative answers (in Fundamentals of Accounting, Mathematics and Statistics).
Simply worded Case studies involving multiple concepts be also prepared. The case study could be something like a practical situation described in 3-4 lines in simple language with application of single/multiple concepts and requiring students to choose one answer from amongst four answers whereby the analytical/logical ability and intelligence of the students is tested.

Since the CPT is an entry level Test meant for 10+2 students, the level of knowledge expected is basic knowledge and the questions should be aimed at testing the conceptual understanding and fundamentals of the subject than merely testing the memory of candidates. The difficulty level of the questions should be of 10+2 level and capable of being answered/solved in less than one minute.

While framing the questions, the questions be framed in such a manner that each one of the four answers given for a particular question, per se, appear to be the right answer thereby requiring the candidate to use his analytical ability to find the correct answer.

The language of the questions to be sent should be English only and is clear, correct, unambiguous and free from any doubt. The language conveys the same meaning as was intended by you.
The copyrights of the questions so submitted shall vest with the Council of the Institute. The contributor of the questions shall ensure that the questions so submitted to the Institute are not parted with by him/her to any other Body/Person and shall be meant only for the exclusive use by the Council of the Institute.
It may please be noted that the questions framed by you should be original and not already published in some books or journals or study material of the Institute or reference/text books available in the market or also from question papers of any other examinations or material distributed by any coaching institution. The requirement is the questions that are original and framed with the meticulous care and genuinely.
For each question framed and forwarded and accepted by the Council of the Institute for augmentation of the Question Bank of CPT, Rs.100/- per question selected/accepted will be paid as honorarium. In addition to honorarium payable towards questions selected, Rs.100/- (fixed) will be paid for other services also. The questions may be sent in a sealed envelope superscribed "Question Bank – CPT" to Dr.T.Paramasivan,Sr.Deputy Director(Exams),The Institute of Chartered Accountants of India, Indraprastha Marg, New Delhi – 110002 by name or by e-mail to tparamasivan@icai.in While sending the questions by post/mail, please mention your name and complete postal address alongwith contact details including mobile number. All correspondence on the subject should be treated as secret.

Interested persons may kindly contribute to the Question Bank of CPT.

(Dr. T. PARMASIVAN)
SR.DEPUTY DIRECTOR (EXAMS.)

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Three Months Residential Programme for PCC/IPCC/PE-II Students/ Newly Qualified Chartered Accountants - (21-10-2010)

2010-10-22T08:59:00.001+05:30

Three Months Residential Programme on Professional Skills and Development has been initiated by Board of Studies, ICAI for the benefit of Chartered Accountancy Students and newly qualified Chartered Accountants. All the students who have passed PCC/IPCC/PE- II examination and pursuing last year of article training or newly qualified Chartered Accountants are invited to join the course. This programme offers an unique opportunity and would focus on development of communication skills, leadership skills, personal traits as well as technical skills for effective functioning in business organization and profession.

This Programme shall commence from December 6, 2010 at National Institute of Financial Management, Faridabad. Some of the salient features are:

An unique blend of Communication and Technical Skills;
An integral part of Articleship Training;
Exemption from 15 days GMCS course;
Subsidised Fee Structure.

In view of the fact that there are limited seats, the registration will be done on First -come-First-serve basis.

Students interested to pursue this programme may click for details of programme and registration form.

October 20, 2010

Director, Board of Studies

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Announcement - Availability of CPT-December 2010 PP Mode Application Form - (20-10-2010)

2010-10-20T14:04:00.000+05:30

The application form for admission to Common Proficiency Test – December 2010 (Paper-Pencil Mode) is available in all the Regional and all Branch Offices of the Institute.

Applications for admission to Common Proficiency Test is required to be made in the relevant prescribed form as contained in the Information Brochure, which may be obtained from the Senior Deputy Director (Examinations), The Institute of Chartered Accountants of India, ICAI Bhawan, Indraprastha Marg, New Delhi – 110 002 on payment of Rs. 600/-(Rs.500/- towards examination fee and Rs. 100/- towards cost of application form and Information brochure) per application form. The fee for candidates opting for Abu Dhabi , Dubai, Doha and Bahrain centres will be US $160 ( US $ 150 towards examination fee and US $ 10 towards cost of application form and information brochure) or its equivalent Indian Currency. The fee for the candidates opting for Kathmandu centre is INR.950/-(INR 850/- towards examination fee and INR 100/- towards the cost of application form and information brochure) or its equivalent foreign Currency.

Since the cost of Information brochure containing Common Proficiency Test application form includes the examination fee , no separate fee is required to be remitted at the time of submitting the filled in application form. The Information brochure containing Common Proficiency Test application form will also be available in the Regional and all Branch Offices of the Institute and can be obtained there from on cash payment till 27^th October, 2010. The forms will not be available in any branches of the banks.

Common Proficiency Test application forms duly filled in may be sent so as to reach the Senior Deputy Director (Examinations) at New Delhi not later than 27^thOctober,2010 . Applications received after 27^th October, 2010 shall not be entertained under any circumstances.

Applications duly filled in will be received by hand delivery at the offices of Institute at New Delhi and at the Decentralised Offices of the Institute at Mumbai, Chennai, Kolkata, Kanpur, Ahmedabad, Bangalore, Hyderabad, Jaipur and Pune upto 27^th October ,2010. Candidates residing in these cities are advised to take advantage of this facility. It may be noted that there is no provision for acceptance of application forms after 27^th October, 2010 with late fee.

Alternatively the candidate may fill up the examination application form online at http://icaiexam.icai.org from 6^th October ,2010 ( 10:00 hrs) to 27^th October ,2010 ( 17:30hrs) and remit the fee online by using credit card, either VISA or Master Card. The Institute with a view to popularize hassle free online registration of CPT - December PP Mode application form is pleased to announce a concession of Rs 100/- (Rupees hundred only) to those who are filling up and submitting the application form for CPT- December 2010 (PP Mode).

Accordingly, the examination fee for those who apply online opting centres in India will be Rs. 500/- (Rupees five hundred only) instead of Rs. 600/- (Rupees six hundred only) and Rs. 850/- (Rupees eight hundred fifty only) instead of Rs. 950/- (Rupees nine hundred fifty only) for those who opt for Kathmandu centre.

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Announcement - November 2010 Examination Zone Shifting - (19-10-2010)

2010-10-19T20:30:00.001+05:30

October 19, 2010

Subject: Change of Examination Centers for November 2010 CA Exams

Due to paucity of accommodation in some Zones opted by the candidates in the cities of Bangalore, Chennai , Delhi, Indore and Kolkata, some of the candidates have been allotted examinations centres in other zones of the said cities where the accommodation is available. In view of this, it is not possible to accede to the requests of the candidates for transfer to an examination centre in a particular zone of the city opted by them.

While inconvenience caused in the mater is deeply regretted, we seek the valuable cooperation from the ICAI students and their stakeholders in the regard.

(Dr. T. Paramasivan)
Sr. Deputy Director (Exams)

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Admit Card Help Line Desk - November 2010 Examinations - (18-10-2010)

2010-10-19T15:52:00.000+05:30

Help Line Desk - Admit Card

Do you have any query about NOVEMBER, 2010 examination?

The Help Line Desk will be functional from 18th October to 16th NOVEMBER, 2010 for 24 hours on all days (inclusive of holidays and Sundays) to attend to any query relating to the ensuing Chartered Accountant Examinations to be held from 8th to 16th NOVEMBER, 2010. The telephone Numbers of Help Line Desk are:

3054851
3054852
3054853
3054835

(0120) 3054843 (FAX)
STD Code 0120

Students having any query with regard to their appearance in the ensuing examination are welcome to contact the Help Line Desk on the above telephone numbers. The query could be non-receipt of Admit Card or any other matter related thereto.

Students who have not received their admit cards can download it from website www.icai.nic.in

Separate e-mail IDs have been created to cater to the needs of the students. The student can contact at:

pce_examhelpline@icai.in for Professional Competence Examination

ipce_examhelpline@icai.in for Integrated Professional Competence examination/Accounting Technician Examination

final_examhelpline@icai.in for Final Examination

Students who have not received their Admit Cards or could not download the same from the Website and desirous of getting information regarding appearance in the examinations may utilise this facility for prompt response from 'help-line desk' of Examination Department of ICAI.

(Dr.T. Parmasivan)
Sr. Dy. Director (Exam.)

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

PCC & IPCC: Summarized and Fast Track Notes of STRATEGIC MANAGEMENT

2010-10-16T09:09:00.000+05:30

Dear Visitors/ PCC & IPCC students,

Download Summarized and Fast Track Notes of STRATEGIC MANAGEMENT.....

DOWNLOAD

My Special Thanks to VAMSI KRISHNA for sharing these notes. You can also share any information on sidsharth@gmail.com.

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Next ISA ET November 2010 to be conducted on 13th November 2010, Saturday, from 08.00 a.m. to 12.00 p.m.

2010-10-14T19:45:00.000+05:30

Notification for Eligibility Test (ET) for Post Qualification Course on Information Systems Audit (ISA) on Saturday the 13^th November, 2010 Last Date for Online Form Submission 31^st October, 2010 till 5:30 PM
1. The next Eligibility Test for ISA PQC is scheduled to be held on Saturday the 13^th November, 2010 from 08.00 a.m. to 12.00 p.m. A detailed notification giving list of centers would be hosted on Committee Portal at http://cit.icai.org by 15th October, 2010.
2. A list of candidates, who have completed ISA Professional Training from 1^st July 2010 to 30^th September 2010, would also be hosted by 15^th October 2010. In case you do not find your name in the list, kindly forward your request giving requisite details (ISA No, Membership No., Name, ISA PT Date and City) to isa@icai.org, by October 20, 2010.
3. Candidates desirous of taking this ISA ET have to submit the Online ISA ET Form (by giving their ISA No. and password) that would be available on the Committee Portal at http://cit.icai.org from 15^th to 31^st October, 2010.
4. ISA Eligibility Test November 2010 will be conducted with both revised (as effective from 1^st April 2010) and old syllabus. Members will be required to choose the version of the syllabus which should be considered for their exam.
5. Candidates filling form B or C (2nd or subsequent attempt) have to ensure that their ISA ET Fee of Rs. 500/- (Rupees five hundred only) reaches the following address by the aforementioned last date through Demand Draft/ Pay Order in favour of "The Secretary, ICAI", payable at Delhi.
The Secretary Committee on Information Technology The Institute of Chartered Accountants of India ICAI Bhawan Plot Nos. 52-54, Vishwas Nagar Shahadra, Delhi - 110 032 (Near Karkardooma Court)	Phone: PABX: 011-39893990 Extn. 619/ 621 Direct: 011 - 30210619/ 621 Fax: 011-30210681/ 680 E-mail ID: isa@icai.org
6. Applications received after the aforementioned last date would not be entertained under any circumstances and candidates would have to take the ISA ET in May, 2011 attempt.
7. Result of ISA Eligibility Test on 13^th November, 2010 would be announced by 5.00 P.M. on Saturday the 20^th November, 2010.

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Clarification Regarding Unauthentic E-mail/SMS Chains - (13-10-2010)

2010-10-14T19:44:00.000+05:30

EXAMINATION DEPARTMENT

ANNOUNCEMENT

13th October, 2010

Clarification regarding unauthentic e-mail/SMS chains

It has been brought to our knowledge that certain SMSs/e-mail chains have been generated claiming that the Institute has changed the passing requirements of its various examinations w.e.f. November, 2010 examinations.

It may be clarified that the said SMSs/e-mails are baseless and the existing requirements as per the relevant CA Regulations will continue to apply for November, 2010 examinations as well.

Students of ICAI and their stakeholders are advised not to be carried away by these sorts of unfounded/non-authentic messages. They are requested to rely on the Announcements hosted on the Institute's website www.icai.org or `The Chartered Accountant Student' the Students Newsletter of ICAI

Examination Department

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Some Q & A for revising in last days of exam by CA. RAJAT MOHAN

2010-10-12T19:43:00.000+05:30

Dear Student,

These are important questions for revising again in last days.

Please do complete course and then refer these Q & A.

Don't take this as a short-cut.

Although I promise you, these questions are picked after much research and thought. These would be of great assistance.

SERVICE TAX

Q) Is service Tax levied under authority of Constitution of India? If yes, then explain it.

A) Article 265 of the Constitution of India read this as:

"No tax shall be levied or collected except by authority of law."

This implies Government (whether Central or State) can levy tax only when it has power to levy such tax in Constitution.

Powers of Government to make laws are divided in 3 categories:

(a) List – I : Also known as Union List - It contains the matters in respect of which only the Central Government has the power to make laws.

(b) List – II : Also known as State List - It contains the matters in respect of which only the State Government has the power to make laws.

(c) List – III : Also known as Concurrent List - It contains the matters in respect of which both the Central and the State Governments have power to make laws.

Entry 92C of Union List read as" Taxes on services", thereby Central Government has power to levy Tax on Services (i.e. Service Tax can be imposed by Central Government only.).

Q) When was service tax introduced? What is the Structure of Service tax law?

A) Service tax was introduced in 1994. Provisions of Service tax are mentioned in Chapter V of the Finance Act, 1994. There is no separate legislation for Service Tax.

Rules on service tax

Section 94 of Chapter V and section 96 -I of Chapter VA of the Finance Act, 1994 grants power to the Central Government to make rules for carrying out the provisions of these Chapters. Using these powers, the Central Government has issued several rules, some of which are as follows:

(a) Services Tax Rules 1994

(b) Service Tax (Advance Rulings) Rules, 2003

(d) Export of Service Rules, 2005

(e) Service Tax (Registration of Special Category of Persons) Rules, 2005

(f) Service Tax (Determination of Value) Rules, 2006; and

(g) Taxation of Services (Provided from Outside India and Received in India) Rules, 2006

Notifications on service tax

Sections 93 and 94 of Chapter V, and section 96-I of Chapter VA of the Finance Act, 1994 empower the Central Government to issue notifications to exempt any service from service tax.

Accordingly, notifications on service tax have been issued by the Central Government from time to time.

Circulars or Office Letters (Instructions) on service tax

The Central Board of Excise and Customs issues departmental circulars or instruction letters from time to time to explain the scope of taxable services and the scheme of service tax administration etc.

The circulars clarify the provisions of the Act and thus, bring out the real intention of the legislature. However, the provisions of Act cannot be changed by the departmental circulars.

Trade Notices on service tax:

Trade Notices are issued by the Service Tax Commissionerates.

The trade notice define the jurisdiction; identify the banks in which service tax can be deposited; give clarifications regarding service tax matters, etc.

When these Commissionerates receive various instructions from the Ministry of Finance or Central Board of Excise & Customs for effective implementation and administration of the various provisions of service tax law. The same are circulated among the field office Rs. and the instructions which pertain to trade are communicated to them in the form of trade notices. Trade Associations are supplied with the copies of these trade notices. Individual assesses may also apply for copies of trade notices.

Q) Explain the applicability of Service tax?

A) As per section 64 of Finance Act, 1994 states Service Tax extends to the whole of India except the State of Jammu and Kashmir.

Place of business of service provider does not matter for the levy of service tax.

Services provided by a person having his business premises in Jammu & Kashmir and providing taxable services to his clients in other parts of India would be liable for payment of service tax. In other words, office of service provider does not matter for determining liability to pay service tax.

Example

S. no.	Office of Service Provider.	Office of Service Receiver	Taxability
1.	Delhi	Delhi	Service tax would be applicable.
2.	Jammu and Kashmir	Any place other than J&K	Service tax would be applicable.
3.	Any place other than J&K	Jammu and Kashmir	Service tax would NOT be applicable.

Notification No. 14/2010-ST., Dated: February 27, 2010

Central Government extends the provisions of Chapter V of the Finance Act, 1994, to the areas specified in column (2) of the Table below, in the continental shelf and exclusive economic zone of India for the purposes as mentioned in column (3) of the said Table:-

Sl. No.	The areas in the Continental Shelf and the Exclusive Economic Zone of India	Purpose
(1)	(2)	(3)
1	Whole of continental shelf and exclusive economic zone of India	Any service provided for all activities pertaining to construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply there of.
2.	The installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas	Any service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity.

Q) What is the rate at which service tax is to be charged?

A) As per section 66 Service tax shall be levied at the rate of 12% on value of taxable services referred to in section 65(105).

However, vide Notification No. 8/2009 ST dated 24.02.2009 rate of tax has been changed from 12% to 10%. Therefore, new tax rate is 10%.

Education Cess: With effect from 10.09.2004, an education cess has been levied @ 2%, calculated on the service tax on all taxable services.

Secondary and Higher Education Cess: With effect from 11.05.2007, a secondary and higher education cess @ 1% has been imposed on services liable to service tax.

Effective rate of service tax is 10.30% [10% + 2% of 10 + 1% of 10 = 10.30%].

Q) Notes – Some exemptions in brief.

A) For detailed exemptions, please refer Service tax & VAT noted by CA. Rajat Mohan.

Exemption

All the taxable services provided by any person to the United Nations or an International Organisation, are exempt from levy of service tax.

All taxable services to any person, by the Reserve Bank of India are exempt from levy of service tax.

Taxable services provided or to be provided by any person, to the Reserve Bank of India when the service tax for such services is liable to be paid by the Reserve Bank of India under section 68(2) read with rule 2 of the Service Tax Rules, 1994 are exempt from levy of service tax.

Taxable services received in India from outside India by the Reserve Bank of India under section 66A of the Finance Act, 1994 are exempt from levy of service tax.

All taxable services provided or to be provided by Technology Business Incubators (TBI)/Science and Technology Entrepreneurship Parks (STEP) have been exempted are exempt from levy of service tax.

All taxable services provided or to be provided by an (incubatee) entrepreneur located within the premises of TBI/ STEP have been exempted from the levy of the service tax.

All taxable services provided by any person, for the official use of a foreign diplomatic mission or consular post in India are exempt from levy of service tax.

Service tax shall not be leviable on fee collected by public authorities while performing statutory functions/duties under the provisions of a law.

However, if such authority performs a service, which is not in the nature of statutory activity and the same is undertaken for a consideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of taxable services.

Q) Explain Exemption for small service providers?

A) Service tax is fully exempt in respect of the taxable services of aggregate value not exceeding Rs. 10,00,000 in any financial year.

Conditions for claiming this exemption

This exemption would not apply in relation services provided by person using the brand name or trade marks of another person.
This exemption would not apply in case where the service tax is paid by persons specified under section 68(2).
Service provider has the option not to avail the exemption contained in this notification. Such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year.
Service provider shall not avail the CENVAT credit of service tax paid on any input services used for providing the taxable service, for which exemption is availed of.
Service provider shall not avail the CENVAT credit on capital goods received in the premises of provider of such taxable service during the period in which the service provider avails exemption from payment of service tax under this notification.
Service provider shall avail the CENVAT credit only on such inputs or input services
1. Which are received, on or after the date on which the service provider starts paying service tax; and
2. Which are used for the providing taxable services for which service tax is payable;
Where Service provider provides one or more taxable services from one or more premises, the exemption under this notification shall apply to the aggregate value of all such taxable services and from all such premises and not separately for each premises or each services; and
Aggregate value of taxable services rendered by Service provider shall not exceed Rs. 10 Lacs in the preceding financial year.

Q) Explain Exemption of specified services received by an exporter and used for export of goods under Notification No. 17/2009 dated 07.07.2009.

A) Taxable services specified in column (3) ('specified services') received by an exporter and used for export of goods ('said goods'), are exempt from payment of service tax levied under section 66 and section 66A.

Sr. No.	Classification	Taxable Services which are exempt	Conditions
1.	General insurance business- 65(105)(d)	Service provided to an exporter by an insurer (including a reinsurer) carrying on general insurance business in relation to insurance of said goods.	Exporter shall submit document issued by the insurer, including reinsurer, for payment of insurance premium and the document shall be specific to export goods and shall be in the name of the exporter.
2.	Port Services- 65(105)(zn)	Service provided by a port(or any person authorised by the port) in respect of the export of said goods.
3.	Technical testing and analysis services- 65(105)(zzh)	Service provided by a technical testing and analysis agency, in relation to technical testing and analysis of said goods.
4.	Technical inspection and certification services- 65(105)(zzi)	Service provided by a technical inspection and certification agency in relation to inspection and certification of export goods.
5.	Other Port Services- 65(105)(zzl)	Service provided by other port(or any person authorised by that port) in respect for export of said goods.
6.	Transport of goods by road in a goods carriage- 65(105)(zzp)	(i) Service provided for transport of said goods from the inland container depot to the port of export; (ii) Service provided to an exporter in relation to transport of export goods directly from the place of removal, to inland container depot or port or airport, as the case may be, from where the goods are exported.	(i) Exporter shall certify that the benefit of exemption provided vide notification number 18/ 2009 - S.T. has not been claimed; and (ii) details, those are specified in the invoice of exporter relating to export goods, are specifically mentioned in the lorry receipt and the corresponding shipping bill.
7.	Transport of goods in containers by rail- 65(105)(zzzp)	(i) Service provided for transport of said goods from the inland container depot to the port of export, and (ii) services provided to an exporter in relation to transport of export goods directly from the place of removal to inland container depot or port or airport, as the case may be, from where the goods are exported.	Invoice issued by the exporter in relation to export goods shall indicate the inland container depot or port or airport from where the goods are exported.
8.	Cleaning activity services- 65(105)(zzzd)	Specialized cleaning services namely disinfecting, exterminating, sterilizing or fumigating of containers used for export of said goods provided to an exporter.
9.	Storage or warehouse keeper services- 65(105)(zza)	Service provided for storage and warehousing of said goods.
10.	Courier agency services- 65(105)(f)	Service provided by a courier agency to an exporter in relation to transportation of time sensitive documents, goods or articles relating to export, to a destination outside India.	(i) The receipt issued by the courier agency shall specify the importer-exporter code (IEC) number of the exporter, export invoice number, nature of courier, destination of the courier including name and address of the recipient of the courier; and (ii) exporter produces documents relating to the use of courier service to export goods.
11.	Custom house agent services- 65(105)(h)	Service provided by a custom house agent in relation to export goods exported by the exporter.	Exporter shall produce,- (i) invoice issued by custom house agent which specifies: (a) number and date of shipping bill; (b) number and date of the invoice issued by the exporter relating to export goods; (c) details of all the charges, whether or not reimbursable, collected by the custom house agent from the exporter in relation to export goods; (ii) details of other taxable services provided by the said custom house agent and received by the exporter, whether or not relatable to export goods.
12.	Banking and other financial services rendered by a banking company or a financial institution- 65(105)(zm)	(i) Service provided in relation to collection of export bills; (ii) Service provided in relation to advising export letters of credit such as advising commission, confirmation charges; amendment, (iii) Service of purchase or sale of foreign currency, including money changing provided to an exporter in relation to export goods.
13.	Foreign exchange broker- 65(105)(zzk)	Service of purchase or sale of foreign currency provided to an exporter in relation to export goods.
14.	supply of tangible goods for use services- 65(105)(zzzzj)	Service of supply of tangible goods for use, without transferring right of possession and effective control of tangible goods, provided to an exporter in relation to goods exported by the exporter.
15.	Clearing and forwarding agent services- 65(105)(j)	Service provided by a clearing and forwarding agent in relation to export goods exported by the exporter.	Exporter shall produce,- (i) Invoice issued by clearing and forwarding agent for providing services specified in column (3) specifying,- (a) number and date of shipping bill; (b) description of export goods; (c) number and date of the invoice issued by the exporter relating to export goods; (d) details of all the charges, whether or not reimbursable, collected by the clearing and forwarding agent from the exporter in relation to export goods; (ii) details of other taxable services provided by the said clearing and forwarding agent and received by the exporter, whether or not relatable to export goods.
16.	Classified under any sub-clause of clause (105) of section 65.	Payment of service tax paid on services commonly known as terminal handling charges.
17.	Services of transport of coastal goods, goods through national waterway or inland water. 65(105)(zzzzl)	Services provided for transport of export goods through national waterway, inland water and coastal shipping.	The exporter shall:

A. General points to be noted for all the above exemptions:

1. The exemption shall be claimed by the exporter for the specified service received and USED BY HIM FOR EXPORT OF THE SAID GOODS.

2. The exemption claimed by the exporter shall be provided by way of REFUND of service tax paid.

3. The exporter claiming the exemption has actually PAID the service tax on the specified service to its provider.

4. No CENVAT credit of service tax paid has been taken under the CENVAT Credit Rules, 2004.

5. The person liable to pay service tax under section 68 of the Finance Act, 1994 shall not be eligible to claim exemption for the specified service.

6. The manufacturer-exporter, who is registered as an assessee under the Central Excise Act, 1944 or the rules made thereunder, shall claim the exemption by filing a claim for refund of service tax paid on specified service to the Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of manufacture, in Form A-l.

7. The exporter who is not so registered under the provisions referred to in point (6) above, shall before filing a claim for refund of service tax, file a declaration in Form A-2 with the Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, having the jurisdiction over the registered office or the head office, as the case may be, of such exporter.

8. The Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, shall, after due verification, allot a service tax code (STC) number to the exporter [referred to in point (7) above] within seven days from the date of receipt of the said Form A-2.

9. The exporter, referred to in point (6) or (7) , shall file the claim for refund of service tax to the Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of manufacture, registered office or the head office, as the case may be, of such exporter in Form A-l.

10. The claim for refund shall be filed within one year from the date of export of the said goods.

11.For each taxable service specified in column(3) of the Schedule above, the exporter shall enclose all the documents specified in corresponding entry in column (4) of the said Schedule and the Form A-l with the claim of refund.

12. No refund claim shall be allowed if the same is for an amount less than Rs. 500.

13. Where -

(a) Total amount of refund sought under a claim is upto 0.25% of the total declared free on board value of export;

(b) The exporter is registered with Export Promotion Council sponsored by the Ministry of Commerce or the Ministry of Textiles;

(c) Subject to the provisions of (a) and (b) above, each document specified in clause (b) and in column (4) of the said Table shall be enclosed with the claim;

(d) invoice, bill or challan, or any other document issued in the name of the exporter, showing payment for such service availed and the service tax payable shall be submitted in original after being certified in the manner specified in sub-clauses (e) and (f);

(e) the exporter is a proprietorship concern or partnership firm, the documents enclosed with the claim shall be certified by the exporter himself and where the exporter is a limited company, the documents enclosed with the claim shall be certified by the person authorised by the Board of Directors;

(f) the documents enclosed with the claim shall contain a certificate from the exporter or the authorised person to the effect that specified service, to which the document pertains, has been received, the service tax payable thereon has been paid and the specified service has been used for export of goods under the shipping bill number;

14. Where the amount of refund sought under a claim is more than 0.25% of the declared free on board value of export, such certification, shall be done by the Chartered Accountant who audits the annual accounts of the exporter for the purposes of the Companies Act, 1956 or the Income Tax Act, 1961, as the case may be.

B. How will Assistant Commissioner/Deputy Commissioner of Central Excise check the accuracy of refund claimed by Exporter?

The Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, shall, after satisfying himself, -

(i) that the claim filed is complete in every respect;

(ii) that all the documents requiring certification have been filed after due certification; and

(iii) about the arithmetical accuracy of the claim,

shall refund the service tax paid on the specified service within a period of 1 month from the receipt of said claim.

However, where the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise has reason to believe that the claim, or the enclosed documents are not in order or that there is a reason to deny such refund, he may, after recording the reasons in writing, take action, in accordance with the provisions of the said Act and the rules made there under.

C. In what circumstances would refund of service tax be demanded back by service tax authorities?

Where any refund of service tax paid to an exporter but the sale proceeds in respect of the said goods have not been realised by or on behalf of the exporter in India within the period allowed under the Foreign Exchange Management Act, 1999, such service tax refunded shall be recoverable under the provisions of the said Act and the rules made thereunder, as if it is a recovery of service tax erroneously refunded.

Q) Explain exemption for Services in relation to 'transport of goods by road' and 'commission paid to foreign agents' exempted from service tax subject to certain conditions under Notification No. 18/2009 – ST dated 07.07.2009?

A) All taxable services specified in column (3) ('specified services') received by an exporter and used for export of goods ('said goods'), shall be exempt from levy of service tax under section 66 and section 66A.

Serial

No.

Classification

Description of the taxable service

Conditions

Transport of goods by road in a goods carriage- 65(105)(zzp)

Service provided to an exporter for transport of the said goods by road from any container freight station or inland container depot to the port or airport, as the case may be, from where the goods are exported; or

Service provided to an exporter in relation to transport of said goods by road directly from their place of removal, to an inland container depot, a container freight station, a port or airport, as the case may be, from where the goods are exported.

The exporter shall have to produce the consignment note, by whatever name called, issued in his name.

commission paid to foreign agents -65(105)(zzb)

Service provided by a commission agent located outside India and engaged under a contract or agreement or any other document by the exporter in India, to act on behalf of the exporter, to cause sale of goods exported by him.

(1) The exporter shall declare the amount of commission paid or payable to the commission agent in the shipping bill or bill of export, as the case may be.

(2)The exemption shall be limited to one per cent of the free on board value of export goods for which the said service has been used.-

(3) The exemption shall not be available on the export of canalized item, project export, or export financed under lines of credit extended by Government of India or EXIM Bank, or export made by Indian partner in a company with equity participation in an overseas joint venture or wholly owned subsidiary.

(4) The exporter shall submit with the half yearly return after certification of the same as specified in clause (g) of the proviso -

(i) the original documents showing actual payment of commission to the commission agent; and

(ii) a copy of the agreement or contract entered into between the commission agent located outside India and the exporter in relation to sale of export goods, outside India.

General conditions to be satisfied for availing the above exemption:

(a) Exemption shall be available to an exporter who,-

(i) informs the Assistant Commissioner/Deputy Commissioner of Central Excise, having jurisdiction over the factory or the regional office or the head office, as the case may be, in Form EXP1, before availing the said exemption;

(ii) is registered with an export promotion council sponsored by the Ministry of Commerce or the Ministry of Textiles, as the case may be;

(iii)is a holder of Import-Export Code Number;

(iv)is registered under section 69 of the said Act;

(v) is liable to pay service tax under section 68(2), read rule 2(1)(d)(iv) or rule 2(1)(d)(v) of the Service Tax Rules, 1994, for the specified service;

(b) the invoice, bill or challan, or any other document issued by the service provider to the exporter, on which the exporter intend to avail exemption, shall be issued in the name of the exporter, showing that the exporter is liable to pay the service tax in terms of item (v) of clause (a);

(c) the exporter availing the exemption shall file the return in Form EXP2 every six months of the financial year, within fifteen days of the completion of the said six months;

(d) the exporter shall submit with the half yearly return, after certification, the documents in original specified in clause (b) and the certified copies of the documents specified in column (4) of the said Schedule;

(e) the documents enclosed with the return shall contain a certification from the exporter or the authorised person, to the effect that taxable service to which the document pertains, has been received and used for export of goods by mentioning the specific shipping bill number on the said document.

(f) where the exporter is a proprietorship concern or partnership firm, the documents enclosed with the return shall be certified by the exporter himself and where the exporter is a limited company, the documents enclosed with the return shall be certified by the person authorised by the Board of Directors;

(g) where the amount of service tax in respect of the service specified against serial No. 2 of the Schedule exceeds 1% of the free on board value of the export then, the amount in excess of the said 1% shall be paid within the period specified under rule 6 of the Service Tax Rules, 1994.

Q) Explain exemption and refund scheme applicable to developer of SEZ and/or unit of SEZ under notification 9/2009?

A) I have converted this notification into an easier format so that it could be easily understood. In exam do write in tabular form.

Notification No. 9/2009

Exemption by way of Refund

Exemption

All taxable services

à specified in section 65(105) of Finance Act, 1944; and

à Which are provided in relation to the authorised operations in a Special Economic Zone; and

à Such services are received by developer or units of SEZ, whether or not the said taxable services are provided inside the Special Economic Zone.

Would be exempt from service tax.

Conditions

(a) Developer of SEZ or units of SEZ shall get the list of services required in relation to the authorised operations approved from the Approval Committee ('specified services'); - [Operations are authorized and services used in relation to these authorized operations should be approved.]

(b) Actual use - Developer of SEZ or units of SEZ claiming the exemption actually uses the specified services in relation to the authorised operations in the SEZ.

(c) Specified services are USED in relation to the authorised operations IN THE SPECIAL ECONOMIC ZONE except for the services consumed wholly within the SEZ.

(d) Developer or units of Special Economic Zone claiming the refund has ACTUALLY PAID the service tax on the specified services;

(d) No such requirement.

(e) No CENVAT credit of service tax paid on the specified services used in relation to the authorized operations in the Special Economic Zone has been taken under the CENVAT Credit Rules, 2004;

(f) Double benefit will not be available- exemption or refund of service tax paid on the specified services used in relation to the authorized operations in the Special Economic Zone shall not be claimed except under this notification.

(g) Proper accounts - Developer or unit of SEZ shall maintain proper accounts of receipt and utilization of the taxable services for which exemption is claimed.

Other Conditions/ Procedure

(a) Person liable to pay service tax shall pay service tax as applicable on the services provided to developer or units of SEZ.

(b) Developer or units of SEZ shall claim the exemption by filing a claim for refund;

(c) Claim for refund shall be filed to jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise(A.C./D.C.), as the case may be;

(d) Developer or units of SEZ who is not registered under Central Excise Act, 1944 or the Service tax legislation shall, prior to filing a refund claim under this notification, file a declaration in the specified Form(annexed in the notification) with the respective jurisdictional AC/DC of Central Excise; Such AC/DC shall, after due verification, allot a service tax code (STC) number to the developer or units of SEZ within 7 days from the date of receipt of the said Form;

(f) Time-limit for filing refund - Claim for refund shall be filed, within 6 months or such extended period as the AC/DC shall permit, from the date of actual payment of service tax by such developer or unit to service provider;

(g) the refund claim shall be accompanied by the following documents, namely:

(i) Copy of the list of specified services as approved by the Approval Committee;

(ii) documents for having paid service tax;

(iii) a declaration by Developer or unit, that "such service is received by him in relation to authorised operation in Special Economic Zone".

(h) AC/DC after satisfying himself that the said services have been actually used in relation to the authorised operations in the Special Economic Zone, refund the service tax paid;

(i) where any refund of service tax paid on specified services is erroneously refunded for any reasons whatsoever, such service tax refunded shall be recoverable under the provisions of service tax legislation.

Q) When was Legal consultancy services introduced? Explain it.

A) Legal consultancy services - This service is new service introduced w.e.f. 1st September, 2009.

65(105) "taxable service" means any service provided or to be provided:

(zzzzm) to a business entity, by any other business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner.

Provided that any service provided by way of appearance before any court, tribunal or authority shall not amount to taxable service.

Explanation. — For the purposes of this sub-clause, "business entity" includes an association of persons, body of individuals, company or firm, but does not include an individual.

No service tax shall be levied in all of the following cases:

(a) Service provided by way of appearance before any court, tribunal or authority.

(b) Service provider is an individual.

Q) Is service tax chargeable on specified Modular Employable Skill courses ?

A) As per Notification No. 23/2010 - Service Tax, dated 29^th April,2010 Central Government, exempts the taxable service referred to in section 65(105)(zzc) when provided in relation to 'Modular Employable Skill courses' approved by the National Council of Vocational Training, by a Vocational Training Provider registered under the Skill Development Initiative Scheme with the Directorate General of Employment and Training, Ministry of Labour and Employment, Government of India, from the whole of the service tax leviable thereon under section 66 of the Finance Act.

Q) What is the status of exemption available to canned software?

A) As per Notification No. 02/2010 - Service Tax, dated 27 February, 2010 exemption has been granted from the levy of service tax Under the category of Information Technology Software Services for packaged or canned software, intended for single use and packed accordingly, from the whole of service tax, subject to the following conditions, namely:

(i) the document providing the right to use such software, is packed along with the software;

(ii) the manufacturer, duplicator, or the person holding the copyright to software has paid the appropriate duties of excise on the entire amount received from the buyer; and

(iii) the benefit under notification No. 17/2010– Central Excise, dated the 27th February ,2010 is not availed of by the manufacturer, duplicator or the person holding the copyright to software.

Q) Is service tax liable to be paid on services provided or to be provided by following:

à Electronics and Computer Software Export Promotion Council.

à Indian Oilseeds & Produce Export Association Export Promotion Council.

à Jute Manufacturers Development Council.

à Services Export Promotion Council.

à Wool Industry Export Promotion Council.

A) As Notification No. 35/2009-ST all the above councils have been exempted from levy of service tax. However this exemption shall remain in force till 31.03.2010.

Q) What are the due dates for payment of service tax?

A) Rule 6 of Service Tax Rules, 1994 states the provision of payment of service tax which are as given in tables below:

A. In case assessee is an Individuals, proprietary concerns and partnership firms

Quarters	Due Dates when it paid electronically	Due Dates when paid through other modes
1st April - 30th June	6th July	5th July
1st July - 30thSeptember	6th October	5th October
1st October - 31st December	6th January	5th January
1st January to 31st March	31st March	31st March

B. In case other assessees

Quarters	Due Dates when it paid electronically	Due Dates when paid through other modes
April	6^th May	5^th May
May	6^th June	5^th June
June	6^th July	5^th July
July	6^th August	5^th August
August	6^th September	5^th September
September	6^th October	5^th October
October	6^th November	5^th November
November	6^th December	5^th December
December	6^th January	5^th January
January	6^th February	5^th February
February	6^th March	5^th March
March	31st March	31st March

Q) Is E-payment and E-filing necessary under service tax law.

A) E-payment: Vide Notification no. 1/2010 proviso to Rule 6(2) has been altered to provide that an assessee shall be required to deposit the service tax electronically through internet banking if he has paid the total service tax of Rs. 10 Lacs or more (including the amount of service tax paid by utilization of CENAT credit) in the preceding financial year. This is made applicable from 1^st April, 2010.

E-filing: E-filing was earlier optional for assessees. Vide Notification no. 1/2010 proviso has been inserted in rule 7(2), which has now made electronic filing of returns compulsory for assessees who has paid total service tax of Rs. 10 lacs or more(including the amount of service tax paid by utilization of CENAT credit) in the preceding financial year. This is made applicable from 1^st April, 2010.

Q) Define Vocational Training institute?

A) vocational training institute" means an Industrial Training Institute or an Industrial Training Centre affiliated to the National Council for Vocational Training, offering courses in designated trades as notified under the Apprentices Act, 1961.

Practical Question)

Virat Kohli & Co., a partnership firm, is providing taxable legal consultancy services, for the second consecutive assessment year. The turn furnishes the following information relating to the services rendered, bills raised, amounts received relating to this service, for the year ended 31.3.2010:

(i)	Free services rendered to poor people (Value of the services computed on comparative basis)	40,000
(ii)	Advances received from clients for which no taxable service has been rendered so far	5,00,000
(iii)	Services billed to clients — Gross amount (Service fax has been charged separately in all the bills; the firm follows mercantile system of accounting).	12,00,000
(iv)	The firm has received the following amounts during the year: Relating to taxable services rendered in March. 2009 (excluding service tax at applicable rates and TDS under section 194-J of the IT Act, 1961 to the tune of Rs. 45,320)	5,44,680
	Relating to taxable services rendered in current year 2009 (excluding service tax at applicable rates and TDS under section 194-Jof the IT Act, 1961 to the tune of Rs. 1,20,000) (includes Rs. 50, 000 as appearance fee before Labour Court received from another firm) Service tax has been separately received for applicable items in (iv) above.	9,80,000

You are required to compute the value of taxable services for the year ended 31.3.2010 and the service tax payable.

Answer)

Legal consultancy services were brought under service tax net only with effect from 01.09.20O9. Thus, service tax would be leviable only on the services rendered on or after 01.09.2009. All services rendered before 01.09.2009 would be tax neutral as well as all receipts before 01.09.2009 would be tax neutral.

As no dates are mentioned we shall assume all receipts and rendering of services are evenly distributed throughout the year, the calculations have been made on pro-rata basis.

Computation of receipts from September, 2009 to March, 2010
Particulars	Receipts during April 09 to August 09 (5 Months)	Receipts during September 09 to March 10 (7 Months)	Total (Rs.)
Free services rendered to poor people	NOT TAXABLE
Advances received from clients	2,08,333	2,91,667	5,00,000
Consideration received for services rendered in earlier year [Rs.5,44,680 + Rs. 45,320]	2,45,833	3,44,167	5,90,000
Consideration received for services rendered in current year excluding fee for appearing before Labour Courts [(Rs.9,80,000 — Rs. 1,20,000 Rs. 50,000)	4,37,500	6,12,500	10,50,000
Fee for appearing before Labour Courts Total	NOT TAXABLE
Total	9,12,499	12,77,501	21,90,000

(i) Computation of value of taxable services and service tax payable thereon:

Particulars	Rs.
Particulars	Rs.
Free services rendered to poor people	NOT TAXABLE
Taxable advances received from clients during September 09 to March 10	2,91,667
Consideration received for services rendered in earlier year	NOT TAXABLE
Consideration received for taxable services rendered during current year	6,12,500
Fee for appearing before Labour Courts	NOT TAXABLE
Total value of taxable services	9,04,167
Exemption available to Small scale service provider upto Rs. 10 Lacs	(9,04,167)
Value of services on which service tax is payable	Nil

VALUE ADDED TAXES

Q) Explain the 3 variants of Value Added Tax?

A) VAT has 3variants:

(i) Gross product variant - The gross product variant allows deductions for taxes on all purchases of raw materials and components, but no deduction is allowed for taxes on capital inputs. That is, taxes on capital goods such as plant and machinery are not deductible from the tax base in the year of purchase and tax on the depreciated part of the plant and machinery is not deductible in the subsequent years. Capital goods carry a heavier tax burden as they are taxed twice. Modernization and upgrading of plant and machinery is delayed due to this double tax treatment.

(ii) Income variant – The income variant of VAT on the other hand allows for deductions on purchases of raw materials and components as well as depreciation on capital goods. This method provides incentives to classify purchases as current expenditure to claim set-off. In practice, however, there are many difficulties connected with the specification of any method of measuring depreciation, which basically depends on the life of an asset as well as on the rate of inflation.

(iii) Consumption variant - Consumption variant of VAT allows for deduction on all business purchases including capital assets. Thus, gross investment is deductible in calculating value added. It neither distinguishes between capital and current expenditures nor specifies the life of assets or depreciation allowances for different assets. This form is neutral between the methods of production; there will be no effect on tax liability due to the method of production (i.e. substituting capital for labour or vice versa). The tax is also neutral between the decision to save or consume.

Among the three variants of VAT, the consumption variant is widely used. reasons for preference of this variant are:

Firstly, it does not affect decisions regarding investment because the tax on capital goods is also set-off against the VAT liability. Hence, the system is tax neutral in respect of techniques of production (labour or capital-intensive).

Secondly, the consumption variant is convenient from the point of administrative expediency as it simplifies tax administration by obviating the need to distinguish between purchases of intermediate and capital goods on the one hand and consumption goods on the other hand.

Q) Explain the methods of Computation of VAT?

There are several methods to calculate the 'value added' to the goods for levy of tax. The

three commonly used methods are:

(a) Addition method,

(b) Invoice method and

(a) Addition method,

This method aggregates all the factor payments including profits to arrive at the total value addition on which the rate is applied to calculate the tax. This type of calculation is mainly used with income variant of VAT.

A drawback of this method is that it does not facilitate matching of invoices for detecting evasion.

(b) Invoice method

Under this method, tax is imposed at each stage of sales on the entire sale value, and tax paid at the earlier stage(i.e., at the stage of purchases) allowed as set-off. Thereby at every stage the differential tax is being paid.

At each stage, tax is to be charged separately in the invoice.

In India under the VAT law and under the Central Excise Law this method is followed. This method is also called the 'Tax Credit Method' or 'Voucher Method'.

This is the most common and popular method for computing the tax liability under 'VAT' system.

(c) Subtraction method.

This is a very simple method.

Under this method, the tax is charged only on the value added at each stage of the sale of goods. Under this method for imposing tax, 'value added' is simply taken as the difference between sales and purchases.

Q) Explain Merits and demerits of VAT scenario?

A) MERITS OF VAT

1. No tax evasion - It is said that VAT is a logical beauty. Under VAT, credit of duty paid is allowed against the liability on the final product manufactured or sold. Therefore, unless proper records are kept in respect of various inputs, it is not possible to claim credit. Hence, suppression of purchases or production will be difficult because it will lead to loss of revenue. A perfect system of VAT will be a perfect chain where tax evasion is difficult.

2. Neutrality - How much value is added and at what stage it is added in the system of production/distribution is of no consequence. The system is neutral with regard to choice of production technique, as well as business organisation. In short, the allocation of resources is left to be decided by the free play of market forces and competition.

3. Certainty - The VAT is a system based simply on transactions. Thus there is no need to go through complicated definitions like sales, sales price, turnover of purchases and turnover of sales. The tax is also broad-based and applicable to all sales in business leaving little room for different interpretations. Thus, this system brings certainty to a great extent.

4. Transparency - Under a VAT system, the buyer knows, out of the total consideration paid for purchase of material, what is tax component. Thus, the system ensures transparency also.

5. Better revenue collection and stability - There will be a minimum possibility of revenue leakage, since the tax credit will be given only if the proof of tax paid at an earlier stage is produced. This means that if the tax is evaded at one stage, full tax will be recoverable from the person at the subsequent stage or from a person unable to produce proof of such tax payment.

6. Better accounting systems - Since the tax paid on an earlier stage is to be received back, the system will promote better accounting systems.

DEMERITS OF VAT

1. Differential rates, exemptions will bring in distortions - The merits accrue in full measure only under a situation where there is only one rate of VAT and VAT applies to all commodities without any question of exemptions whatsoever. Once concessions like differential rates of VAT, composition schemes, exemption schemes, exempted category of goods etc. are built into the system, distortions are bound to occur and the fundamental principle that VAT will totally eliminate cascading effects of taxes will also be subject to qualifications.

2. Accounting cost will increase - For complying with the VAT provisions, the accounting cost will increase. The burden of this increase may not be commensurate with the benefit to traders and small firms.

3. Increase the working capital requirements - Since the tax is to be imposed or paid at various stages and not on last stage, it would increase the working capital requirements and the interest burden on the same. In this way it is considered to be non -beneficial as compared to the single stage-last point taxation system.

4. VAT is a form of consumption tax. Since, the proportion of income spent on

consumption is larger for the poor than for the rich, thereby VAT would impose higher burden on poor.

5. Administration cost to the State - As a result of introduction of VAT, the administration cost to the State can increase as the number of dealers to be administered will go up significantly.

Q) What are the different stages of VAT ? Can it be said that entire burden falls on the final consumer ?

A) VAT is collected at different stage of sale which are as follows :

Stage I : Sale of raw material to manufacturer

Stage II : Manufacturer sells to wholesaler

Stage III : Wholesaler / Trader sells to consumer.

VAT is paid at different stage and finally collected from ultimate consumer hence it can be said that burden of VAT fall on ultimate consumer.

Q) Discuss filing of Return under VAT.

The respective State-VAT laws require every registered dealer to file VAT-returns periodically (monthly / quarterly / annually). The returns are to be filed in prescribed form within the prescribed time from the end of the period concerned (i.e. within specified days from the end of the month / quarter / year).

The returns are to be accompanied with the challan evidencing payment of VAT. In some states, the return forms are inclusive of challan, in which case, the returns can be filed along with the payment of challan with the treasury. The VAT returns contains requisite details such as details of dealer, details of input-VAT and output VAT, payment of VAT, inventory details etc.

Q) List out six purchases which are not eligible for input tax credit.

Following are the purchases which are not eligible for input tax credit :-

• Purchase from unregistered dealers.

• Purchases of goods from other states i.e. inter state purchases.

• Import of goods from outside the territory of India (commonly known as high seas purchases)

• Purchases from registered dealer who has opted for composition scheme.

• Purchase of non-credible goods as may be notified by the state government.

• Purchases of goods in cases where the selling dealer's invoice does not show the amount of tax charged separately by such selling dealer.

Q) Explain the concept of input tax credit on capital goods.

A) Capital goods, may include plant and machinery, furniture, fixture, electrical installations, vehicles etc. A dealer may be creating capital assets himself by purchasing materials for capital assets like, building materials etc. Normally all the above items are taxable and the dealer has to pay sales -tax on purchase of the above goods. Each State-VAT legislations may define 'capital goods' differently.

Procedural requirements for claiming set off of capital goods credit

Barring the items covered by the negative list and subject to retention rules, the dealers are entitled to set off on capital goods like any other purchases. Thus, the dealer will have to bifurcate their purchase into capital goods eligible for set off and capital goods not so eligible.

Dealers will be required to support purchase of capital goods with tax invoice. In the absence of such tax invoice set off will be disallowed. Once a dealer is entitled to set off he has to further comply with the relevant provisions in respect of allowability. If it is subject to certain installments, the dealer will be required to claim set off accordingly in his returns. If the set off is subject to prior permission, the same should be duly obtained.

Q) Explain the composition scheme.

A) White Paper in relation to composition scheme read as under:

"Small dealers with annual gross turnover not exceeding Rs. 50 lakhs who are otherwise liable to pay VAT, shall however have the option for a composition scheme with payment of tax at a small percentage of gross turnover. The dealers opting for this composition scheme will not be entitled to input tax credit."

The Empowered Committee has permitted the States to reduce the rate of composition tax to as low as 0.25 %.

Features

(i) a very small tax will be payable;

(ii) there will be a simple return form to cover longer return period.

Advantage

It saves a lot of labour and effort in keeping records.

It also simplifies calculation of tax liability of a dealer.

Disadvantage

Ineligibility of the dealer to avail input tax credit and issue tax invoices in order to pass on tax credit.

Hence, the dealers desirous of availing input tax credit on their purchases may not prefer to buy from composition dealers.

Loss to the seller - If the composition scheme is availed by a dealer then such dealer cannot avail input tax credit in respect of input tax paid. Hence the dealer will be loosing the input tax credit on purchases made by him. He will not be able to pass on the benefit of input tax credit, which will add to the cost of the goods.

Loss to the purchaser - The purchaser shall not get any tax credit for the purchases made by him from the dealer operating under the composition scheme. Therefore, as soon as a dealer opts for the composition scheme, the VAT chain will be broken, and the benefit of tax paid earlier will not be passed on to the subsequent buyers.

It is generally optional for a dealer to opt for this composition scheme. A dealer who intends to avail such composition scheme shall exercise the option in writing for a year or a part of the year in which he gets himself registered. For this the dealer has to intimate to the Commissioner.

If a dealer avails this scheme, he need not maintain any statutory records as prescribed under the Act. Only the records for purchase, sales, inventory should be maintained.

The dealer should not have any stock of goods which were brought from outside the State on the day he exercises his option to pay tax by way of composition and shall not use any goods brought from outside the State after such date. The dealer should also not claim input tax credit on the inventory available on the date on which he opts for composition scheme.

Q) Explain the concept of Goods and Service Tax (GST)?[1]

A) The Union Finance Minister in his Budget speech for the year 2006-07 has announced 1st April, 2010 as the target date to introduce goods and service tax. But it was delayed and 1st April, 2011 was announced as the new implementation date. Recently Finance Minister has stated that GST would be further delayed in light of no consensus among states.

The ultimate system of indirect taxes in India will be of goods and service tax. Under such a system there will be one central authority administering a uniform goods and service tax. GST would subsume almost all indirect taxes i.e. Excise, Customs and VAT. Input tax credit will be available between goods and services throughout the country. However, such a development will require constitutional amendment. Under such a uniform tax system, there will be no trade barriers like octroi and entry tax. There will be a free flow of trade and commerce through out the length and breadth of the country.

Q) What are the different tax rates under VAT regime?

A) Categories of tax rates under VAT scenario:

A. Exempted category – There are about 50 commodities comprising of natural and unprocessed products in unorganised sector, items which are legally barred from taxation and items which have social implications. Included in this exempted category is a set of maximum of 10 commodities flexibly chosen by individual States from a list of goods (finalised by the Empowered Committee) which are of local social importance for the individual States without having any inter-State implication. The rest of the commodities in the list will be common for all the States.

B. 4% VAT category - Under 4% VAT rate category, there are largest number of goods, common for all the States, comprising of items of basic necessities such as medicines and drugs, all agricultural and industrial inputs, capital goods and declared goods.

C. 12.5% category - The remaining commodities, common for all the States, fall under the general VAT rate of 12.5%.

D. 1% Category - The special rate of 1% is meant for precious stones, bullion, gold and silver ornaments etc.

E. Non-VAT goods - Petrol, diesel, ATF, other motor spirit, liquor and lottery tickets are kept outside VAT. The States may or may not bring these commodities under VAT laws. However, it is agreed that all these commodities will be subjected to 20% floor rate of tax.

Illustration on VAT[2]

A is a trader selling raw materials to a manufacturer of finished products. He imports his stock-in-trade as well as purchases the same in the local markets. If the rate of VAT is assumed to be 12.50% ad valorem, he will pay VAT as under:

Particulars	(Rs.)
A's cost of imported materials (from other State)	10,000
A will deposit Rs. 1250 duty on the above. Since, this is not a State VAT it will form a cost of input	1250
A's cost of local materials (VAT charged by local suppliers Rs. 2,500. Since the credit of this would be available it will not be included in cost of input)	20,000
Other expenditure (such as for storage, transport, interest, etc.) incurred and profit earned by A.	8,750
Sales price of goods	40,000
VAT on the above @ 12.50%	5,000
Invoice value charged by A to the manufacturer, B	45,000

I . A's liability for VAT

Particulars	Rs.
VAT on the sales price (Output tax)	5,000
Less: Set-off of VAT paid on purchases (Input Tax)
On imported goods Nil
On local goods 2,500	2,500
Net Tax Payable	2,500

Note: In the above illustration (as well as in illustrations that follows) it is assumed that set off of VAT paid on imported goods from outside countries or other States is not allowed.

II. Now B manufactures finished products from the raw materials purchased from A and other materials purchased from other suppliers. His liability would be as under:

Particulars	(Rs.)
B's cost of raw materials (VAT recovered by A Rs.5,000)	40,000
B's cost of other materials (i). Local Purchases (VAT charged on the above Rs. 2,500) (ii). Inter- State Purchases[3] (CST paid Rs. 400 on purchase value of Rs. 10000. Toal cost 10400)	20,000 10,400
Manufacturing and other expenses incurred and profit earned by B	29,600
Sale price of finished product	1,00,000
VAT @ 12.5%	12,500
Invoice value charged by B to the wholesaler, C	1,12,500

B's liability for VAT

Tax on the sales price (Output tax)	12,500
Less: Set-off of VAT on Purchases (Input tax)
To A 5,000
To other suppliers 2,500	7,500
Net Tax Payable	5,000

III. C, after repacking the goods into other packing, sells the finished product to a retailer. The following would be the position:

Particulars	(Rs.)
C's cost of goods (VAT recovered by B Rs. 12, 500)	1,00,000
Cost of packing material (VAT charged on the above Rs. 250)	2,000
Expenses incurred and profit earned by C	18,000
Sale price of goods	1,20,000
VAT on the above	15,000
Invoice value charged by C to D, a retailer	1,35,000

C's liability for VAT

Tax on the sales price (Output tax)	15,000
Less: set-off of VAT paid (Input tax)
To B 12,500
To other suppliers 250	12,750
Net Tax payable	2,250

THE LAST WORD

Hello Students,

Friends you must be feeling very tense. This tension is created by the institute to develop more capabilities in you, so that you are prepared for the future challenges.

It is said that the maximum development of the world took place during two world wars. Because it is only during challenges that our mind becomes creative and our capabilities increase.

Before the examination day

1. Don't waste any time on checking the paper of Cost & FM. Just think what next.

2. Keep in mind that the person who starts early always stays ahead. So don't get relaxed. Don't think you have two days and you will work slowly. Don't unduly stick to one topic.

3. Allocate time for each and every topic before starting the revision and don't at all exceed those limits. Following should be a tentative time plan for revision:[4]

Service Tax & VAT 4 hr

Residential Status 30 minutes

Salary 3 hr

House Property 1 hr

Capital Gain 4 hr

PGBP 5 hr

Other Sources 30 minutes

Clubbing & C/f 30 minutes

Deductions 2 hr

Trust and Agricultural 30 minutes

Other Miscellaneous 1 hr

Total 22 hrs q

4. Don't try to recall the things; just try to read the topic. Just keep on reading, don't think whether you will be able to recall or not in the examination hall. You will be definitely able to recall the topics provided you have gone through that topic before examination day.

5. Don't at all compromise on your sleep. If you are fresh then you will solve even the most difficult questions. If you are not then GOD HELP YOU.

So, please, take proper sleep and not only in this paper but in all the papers.

In the examination hall:-

(i) Don't rush to attempt the question paper. First go through the entire question paper and select your best and shortest possible question. (5-7 min.)

(ii) Even in the most difficult papers, there are always few questions which are very easy. If you once start doing easy questions, your confidence boosts up and you are able to do even the difficult ones. Therefore, instead getting demoralized from difficult questions, try to search for the easier ones.

(iii) Allocate time for each question and don't exceed the limits.

(iv) Don't leave numerical questions for the end, try to attempt them somewhere in the middle.

And finally friends, it is said that great battles are always won at the end. You still have lots of time. If you work with regularity and discipline then your success is definite. Relax and work hard.

Feel Free to Contact me anytime, if you think I could be of any Help on any matter.

Best wishes,

Cheers

RAJAT MOHAN AGGARWAL

Ph: 9910044223

[1] It gives me immense pleasure to GST would be a new tax which would change the face of India in global market. I have written a book on this topic 'Illustrated guide to Goods and Service Tax', it is one of the best available books on GST in India.

[2] This is not a question. It is just a complete illustration. This will develop you for practical questions in exams.

[3] Credit / set off for tax paid on inter-State purchases (inputs) is not allowed.

[4] Assumed 1 day leave is available between exams.

[Source: CAclubindia]

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

DISCONTINUATION OF ISSUE OF PASS CERTIFICATES TO FOUNDATION/ EXECUTIVE PROGRAMME PASS STUDENTS

2010-10-12T19:04:00.000+05:30

ATTENTION STUDENTS !!

DISCONTINUATION OF ISSUE OF PASS CERTIFICATES TO FOUNDATION/ EXECUTIVE PROGRAMME PASS STUDENTS

In accordance with the decision taken by the Council of the Institute recently, it is brought to the notice of the student community that henceforth (i.e. from June, 2010 Examination Session onwards), Pass Certificates will be issued only to such students who pass Final Course/ Professional Programme. However, Mark Sheets will continue to be issued to students of all stages viz. Foundation, Executive and Professional Programmes as per existing practice.

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Six Weeks Residential Programme for PCC/IPCC/PE-II Students/ Newly Qualified Chartered Accountants at COE, Hyderabad - (08-10-2010)

2010-10-08T18:51:00.002+05:30

Six Weeks Residential Programme on Professional Skills and Development has been initiated by Board of Studies, ICAI for the benefit of Chartered Accountancy Students and newly qualified Chartered Accountants. All the students who have passed PCC/IPCC/PE- II examination and pursuing last year of article training or newly qualified Chartered Accountants are invited to join the course. This programme offers an unique opportunity and would focus on development of communication skills, leadership skills, personal traits as well as technical skills for effective functioning in business organization and profession.

This Programme shall commence from December 1, 2010 at Centre of Excellence, ICAI, Hyderabad. Some of the salient features are:

An unique blend of Communication and Technical Skills;
An integral part of Articleship Training;
Exemption from 15 days GMCS course;
Subsidised Fee Structure.

In view of the fact that there are limited seats, the registration will be done on First -come-First-serve basis.

Students interested to pursue this programme may click for details of programme and registration form.

October 5, 2010

Director, Board of Studies

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Result of CPT Online Examination held on 18th & 19th September, 2010 has been declared. - (08-10-2010)

2010-10-08T18:51:00.001+05:30

The result of CPT Online Examination held on 18th & 19th September, 2010 has been declared.

Please click here for results.

Examination Department

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

ICWAI : - Download RTPs FOR DEC 2010 TERM OF EXAMINATION

2010-10-05T19:03:00.001+05:30

REVISIONARY TEST PAPER(RTP) for INTERMEDIATE DECEMBER 2010 TERM OF EXAMINATION
REVISIONARY TEST PAPER(RTP) for FINAL DECEMBER 2010 TERM OF EXAMINATION

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Campus Placement programme-August-September, 2010

2010-10-02T13:28:00.000+05:30

September 29, 2010

Press Release

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 (Act No. XXXVIII of 1949) for the regulation of the profession of Chartered Accountants in India. During its nearly six decades of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. ICAI now is the second largest accounting body in the whole world.

The Institute through its Committee for Members in Industry (CMII) organizes campus placement programme for the benefit of newly qualified chartered accountants twice every year. The CMII provides opportunity to the employers to interact with newly qualified Chartered Accountants and makes all arrangements at its centres, thereby providing a cost effective mode of recruiting newly qualified Chartered Accountants. Organisation and firms of Chartered Accountants can participate in one or more centres.

The placement programme was successfully conducted in the months of August-September, 2010. The programme was organized in 16 cities across the country and got concluded on September 25, 2010. It was organized in different phases in Ahmedabad, Bangalore, Bhubaneswar, Chennai, Coimbatore, Ernakulam, Hyderabad, Indore, Jaipur, Kanpur, Kolkata, Ludhiana, Mumbai, Nagpur, New Delhi and Pune

In all 155 interview teams representing 87 companies participated in the programme seeking chartered accountants for jobs. Overwhelming response was received from all the centres. The entities selected Chartered Accountants and made lucrative offers. More than 1300 candidates got job offers.

Prominent organizations from diverse array of industries like Manufacturing organizations, Public Sector Undertakings, Banks, Software, Consultancy, financial services, etc. participated in this mega event. There was heterogeneous mix of recruiting entities both from India and abroad representing wide range of industries and sectors

The best offer of Rs. 21 lacs per annum was made by Tolaram Corporation Pvt. Ltd. to 3 candidates for international posting. For a domestic posting best offer of Rs. 15 lacs per annum was made by Abhishek Industries. Organisations such as Britania, ITC and Bharat Petroleum Corpoartion Ltd. have offered the salary of more than Rs. 10 lacs per annum to newly qualified Chartered Accountants. The responses given by the entities willing to participate at these centres for recruitments has been very encouraging. The minimum salary that was offered was Rs. 3.25 lacs per annum.

The growing popularity and success of the institution is drawing more and more students across the country and the big companies for the placement programme. Candidates are very satisfied with the placement programme. The future of the profession envisages the amalgamation of the present knowledge economy and the expectations of the stakeholders. The ICAI is striving to develop its professionals to aquire skill sets as required by the emerging economy.

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Services of SidRutiya and other SMS channels will be resumed by 04/10/2010

2010-10-01T20:07:00.001+05:30

Ban on Bulk Sms and MMS Extended till October 04

The Ministry of Communications and Information Technology has today issued orders in consultation with the Ministry of Home Affairs to all Mobile Telecom Service Providers in the country that all bulk SMS and all bulk MMS messages shall remain banned in all service areas till October 04, 2010.

This is the third extension since the ban was imposed on 22.9.2010.

SP/AT/AS

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

President's Message - October 2010 - (01-10-2010)

2010-10-01T19:02:00.001+05:30

Dear All,

Water, water, everywhere, And all the boards did shrink; Water, water, everywhere, Nor any drop to drink.

18th century English poet S. T. Coleridge, in the above lines, has represented the current situation in some of the densely-populated regions of our country. It has rained more than our needs this year. Hundreds of acres of land across our country have got submerged under water. Hundreds of kilometers of our roads have been washed away. Hundreds of people have been displaced, stuck and stranded, and rendered helpless. No real data is available on the destruction of human life. Immediate concern at present is to safeguard our human resources. Let us accept that we have added to the misery by eroding our own earth and destroying its vegetation on a mass scale. Actually, we have grown high in number. Couldn't we have controlled this eventuality? Our world is small and round: our irresponsibility comes back to us.

What can we do when things go out of our hands? No, nothing goes out of our hands ever. Therefore, time is always right to take a corrective measure. Let us deliberate, share our ideas and concerns, and cooperate towards the welfare of state.

International Initiatives and Concerns

MRA with CPA, Ireland: We are delighted to inform that our Institute has signed recently its fourth membership recognition MRA with CPA Ireland for reciprocal recognition of each other's qualification on a variable bridging mechanism. The agreement was signed on the sidelines of the IFAC Board meeting which took place in Paris. The MRA was signed in the presence of Mr. Robert Bunting, President, IFAC and CA. Ved Jain, Past President, ICAI and IFAC Board Member. The agreement will come into force w.e.f. October 1, 2010. We sincerely hope that our members would be benefited from this MRA. We have also initiated steps for having similar arrangements with the accountancy institutes of other countries like Canada, New Zealand and South Africa.

MoU with Higher Colleges of Technology, UAE: We would like to inform that the MoU with the Higher Colleges of Technology, UAE, pending on account of clearance from the Government authorities, has now got the clearance. The formal signing of the MoU is awaited.

New ICAI Chapter in UAE: We are very pleased to share that the 22nd Chapter of the Institute at Ras Al Khaimah in the Middle East has been added in the list of existing international Chapters. The formal inauguration ceremony of the Chapter would be held after the completion of procedural formalities at their end.

International Seminar on CSR in Dubai: The undersigned attended a seminar in Dubai on Corporate Social Responsibility for Finance and Accounting Professionals on September 5, 2010, organised by Dubai Chapter of the ICAI in partnership with the Dubai Chamber Centre for Responsible Business as an effort towards raising awareness on responsible business practices, and shared the ICAI's commitment towards CSR with the participants. The seminar was attended by Shri M. K. Lokesh, Ambassador of India to UAE, Mr Hassan Al Hashemi, Director, External Relations, Dubai Chamber, Padamshree Dr. B. R. Shetty, Managing Director and CEO, NMC Group and Dr. Belaid Rettab, Sr. Director, Dubai Chamber of Commerce and Industry. The undersigned informed the participants about the ICAI's CSR initiatives like Go-Green campaign and Carbon Credit Accounting Sustainability Reporting, and mentioned that the ICAI endeavours to help its members maintain and adhere to its Ethical Standards, and also shared cases of some Indian Companies like WIPRO, Tata, Birla, etc., who have been committed to CSR even before they became global.

ICAI Participation in IFAC Board Meeting: The undersigned attended the IFAC Board meeting along with ICAI past-President and Member IFAC Board CA. Ved Jain, during September 8-10, 2010. We discussed the strategic plans of the IFAC focusing on quality and development. During the meeting, the Exposure Draft on Public Interest framework was discussed. While expressing the Indian concerns, we expressed our interest in becoming the associate member of International Valuation Standard Council (IVSC) particularly in view of the IFRS implementation. The undersigned, in response to the presentation made by the Forum of Firms, raised the issue of monitoring by the Forum with respect to the firms that were involved in the audit of an entity involved in scam. It was clarified that the Forum does not have any mechanism for policing or taking action against a firm or its partners. This position raises concerns and needs to be re-looked by the Forum.

ICAI Representation in Working Group on PAIB Review: The undersigned also attended the Edinburgh Group meeting coinciding with the IFAC Board meeting, where, besides the key issues of SMPs, communication strategy paper for the Group was discussed. The Group also met the IFAC leadership to discuss the SMP Task Force Report and other operational issues. It set up a Working Group on PAIB (Professional Accountants in Business) Review to develop agenda items on the PAIB issues. Ms. Marta Rejman, Member of IFAC Board, Ingrid Doegra and the undersigned would be the members of the said Working Group.

ICAI Meets ICAEW: The undersigned along with the Vice-President CA. G. Ramaswamy met the President, ICAEW, on September 14, 2010, in London to augment and further strengthen the MRA between the two Institutes. Acting Chairman of the London Chapter of ICAI was also present. We discussed our interest in ICAEW's IFRS certificate course, e-learning modules on IFRS, the literature on Strategic Finance. We clarified that we can not recognise the members of ICAEW through the route of ACCA till the said body stops setting up its shops in India. Issue of equivalence of qualifications amongst the six accounting bodies in Great Britain, e.g. ICAS, ICAI, CIPFA, CIMA, etc., who are authorised to carry out the public accountancy function was discussed. The same aspect was also conveyed to the Indo-UK Accountancy Task Force authorities afterwards. We informed them that Indian students are being tested under case study situation and that papers on case study to be undertaken by our CAs should be reviewed. The two sides agreed in principle to encourage the members of respective institute to take a membership under the existing MRA.

Auditing and Accounting History Conference in Turkey: The undersigned along with the Vice-President CA. G. Ramaswamy and Director, Board of Studies, Shri Vijay Kapur participated in the 2nd Balkans and Middle East Countries Auditing and Accounting History Conference held in Istanbul from September 15-18, 2010. The undersigned also had the privilege to Chair one of the sessions on Internal Auditing. Approximately 600 academics from 55 countries participated and contributed 240 papers for discussion. We could showcase our country, particularly with regard to our Accountancy Museum of India. The same was well-covered in the media.

ICAI Helps CPA Mongolia: Council Members, CA. Charanjot Singh Nanda and CA. Vijay Garg have been deputed to visit Mangolia shortly for an interaction with CPA Mongolia. As CPA Mangolia is aspiring for attaining IFAC membership which would involve technical cooperation in making them compliant with IFAC SMOs, the assistance of ICAI has been sought in this matter.

International Conference on Accountancy in January 2011: We are pleased to share with you that we will organise an international conference during January 4-6, 2011, in New Delhi, to be attended by prominent personalities from accountancy profession of different parts of the world. Over 1500 stakeholders, specifically from Asia-Pacific region, will participate in it. The Conference will facilitate an assimilation of resources in areas of financial reengineering, governance, harmonization of standards, SMP context, accountants and millennium developmental goals and so on, in the emerging context. The schedule of the conference will soon be finalised.

ICAI in WTO Public Forum: Our Central Council colleague CA. Raj Kumar Adukia with Shri Rakesh Sehgal, Secretary, Committee on Economic & Commercial Laws and Trade & WTO, represented us in the WTO Public Forum, The Forces Shaping World Trade held in Geneva from September 15 to 17, 2010. The Forum was attended by nearly 800 international delegates and this provided an opportunity to discuss the emerging paradigm of world trade and, inter alia, dwelt on issues faced by services sector, trade and inclusive growth and alike.

Report on Companies Bill, 2009: Need to Reconsider

The Parliamentary Standing Committee on Finance, through its 21st report on the Companies Bill, 2009, has sought to bring significant changes in the Bill. Certain aspects of the Report need a thorough re-look. Clause 118 of the Bill deals with the Constitution of National Advisory Committee on Accounting and Auditing Standards (NACAAS). Introduction of Auditing Standards in the Companies Act in this clause will lead to duplication and delays without any gains. We would be left with the role of drafting the accounting and auditing standards and to assist the NACAAS, which will depend on us for preparing the original material. It is but logical that, having the expertise, we should continue with our role of framing the auditing standards and other authoritative literature for compliance. We issue Auditing Standards complying with the standards issued by the International Auditing and Assurance Standards Board (IAASB), a body constituted under the aegis of the IFAC. Observation by the MCA that Auditing Standards are issued by a 'single institute' is, in our opinion, misconceived. We issue the standards after the consideration of the comments received from various interest groups by the Auditing and Assurance Standards Board which consists of our Council members and representatives of the RBI, the SEBI, the C&AG, etc. Then, the vetting of these Standards by a body with no experience in the conduct of audit is not desirable. This issue needs a serious consideration, as this is a matter of our losing control over the area of expertise. Otherwise, the very purpose of bringing the Act of 1949 to create an autonomous body under an Act of Parliament would be lost.

Clause 123 dealing with the appointment of auditors, Clause 124 Eligibility, qualifications and disqualification of auditors, Clause 125 Remuneration of auditors, Clause 126 Powers and duties of auditors and auditing standards and Clause 130 Punishment for contravention also need to be further deliberated and given due consideration. Therefore, it has been decided to form a group at all-India level for drafting our response to various recommendations of the Report.

IFRS Convergence Status: NACAS Acceptance

The Draft of Ind-AS 41 (Corresponding to IFRS 1), first-time adoption of the Indian Accounting Standards, was considered by us recently. Meanwhile, National Advisory Committee on Accounting Standards (NACAS) has agreed to our view that, out of AS 30 (corresponding to IAS 39) or AS 40 (corresponding to IFRS 9), only AS 30 should be made applicable. It has approved Accounting Standards on Financial Instruments, i.e. AS 30, 31 and 32 with certain changes in AS 30 and AS 31. NACAS has also decided not to include IFRIC 15 on accounting of agreements for the construction of real estates in AS 9, Revenue Recognition, keeping in view the conflict displayed by us. The scope of AS 7, Construction Contracts, has been modified to the effect that accounting for real estate developers would be in the scope of AS 7. By implication, the real estate developers have to follow Percentage completion method rather than completion method, once the change is notified by the Government NACAS has approved the revised Schedule VI to the Companies Act, 1956, for recommending the same to the Ministry of Corporate Affairs for notification.

Regarding AS 18 (corresponding to IAS 24), Related Party Disclosures, NACAS has suggested that the term 'Domestic Partner' should not be removed. With regard to our suggestion to recognise gain on bargain purchase in case of business combinations in 'Capital Reserve' instead of 'Profit and Loss', NACAS has suggested to recognise the same in 'Other Comprehensive Income'. With regard to recognition of actuarial gains and losses arising on defined benefit obligation and related defined benefit plan, draft of AS 15 (Revised 20XX), Employee Benefits, requires the same to be recognised immediately in profit or loss. NACAS has suggested that the entire amount of actuarial gains or losses should be recognised immediately in 'Other comprehensive income', keeping in view the suggestions of industry representatives on NACAS and principles given in this regard in the Exposure Draft on IAS 19 issued in April 2010 by the IASB. We have agreed with their suggestions.

Revised Practitioners' Guide for SMPs

We have come across a lot of apprehensions with respect to the number of auditing standards being issued by us and the difficulties faced in their implementation in audit of smaller audit clients. In an increasingly qualityconscious world, application of the Standards is not just our obligation but a rightful demand of our clients that we pledge to serve. We have taken strong and proactive confidence-building measures to help our SMPs in joining the mainstream of the profession and grow, e.g. Revised Practitioner's Guide to Audit of Smaller Entities that takes a very comprehensive approach to implementation of all the auditing standards in case of audit of small clients. We urge our members too to come forward and accept the challenges that necessarily appear in any growth story. In addition, we are organising many awareness programmes in this regard.

Implementation Guide to SAs 700, 705 and 706

Reporting is the culmination of the auditor's work. As the members would be aware, the Institute has issued three critical Standards on Auditing to deal with different aspects of reporting. To help our members understand and implement these Standards in actual audit situations, we will bring out an Implementation Guide to the three reporting Standards, i.e. SA 700, SA 705 and SA 706, issued under the Clarity Project. The Implementation Guide will be in an FAQ form and will contain many illustrative situations requiring various types of audit opinions.

Technical Guide on Internal Audit for BPOs

The Internal Audit Standards Board of the ICAI has finalised and issued the Technical Guide on Internal Audit of BPO Industry to deal with the complexity of processes which give rise to a spectrum of strategic and operational risks. With sound domain knowledge, good analytical skills, and process understanding, chartered accountants would be able to plug into the position of the internal auditor of this (BPO) industry.

Consideration of Drafts on ASLB

The Council recently considered and approved the draft of ASLB (Accounting Standards for Local Bodies) 1 Presentation of Financial Statements. The draft will be circulated among our Council colleagues and other external specified bodies for comments. The IPSAS 24 on Presentation of Budget Information in the Financial Statements is relevant to this Standard. Accordingly, it was decided to take up a project for formulation of the corresponding ASLB. We also considered the basic draft of the proposed ASLB on 'Inventories' and proposed certain changes in it.

MCA Requests ICAI to Develop Uniform Accounting/Reporting Fabric

Another Group was formed, at the request of the MCA, for developing uniform accounting/reporting framework for NGOs under the convenership of our Central Council colleague CA. S. B. Zaware. The Group would suggest and recommend an appropriate format of financial statements and financial control guidelines, and methods of accounting to be followed by NGOs governed by Societies Registration Act, 1860. It would examine the laws to monitor the fundflow to NGOs under extant laws, e.g. FEMA, Income-tax Act, etc., and suggest a framework considering the features of all these Acts for proposing a regulatory model for monitoring the fund-flow. Committee on Economic & Commercial Laws and WTO has been instructed to deal with rest of the concerns arising out of the MCA communication to us.

SEBI Amendments in Listing Agreement and Draft Certifcates

Securities and Exchange Board of India had recently amended clause 24 of the Listing Agreement, requiring the auditors to certify that the scheme of merger/ acquisition are in accordance with the applicable accounting standards. The Institute has already developed the draft formats of such certificate to be issued by the auditor. These draft formats will be available soon for the guidance of the members.

Roundtable on Commerce and Accountancy Education

We are happy to inform all our members and students that, to increase the scope of accountancy education, we are organising a roundtable conference on Commerce and Accountancy Education in India: Issues and Challenges on September 26, 2010, in New Delhi. Vice- Chancellors, heads of department and senior professors of commerce and finance of all established and recognised universities of the country have been invited to participate in the conference, which will provide a platform to discuss the new paradigms for commerce and professional accountancy education in India. This conference will help the academic foresee the bigger picture of accountancy and commerce education, and help us to rebuild our further strategies accordingly.

Assurance of Land to Bhopal Branch of ICAI

ICAI Vice-President CA. G. Ramaswamy and the undersigned attended the 31st Regional Conference of the CIRC, hosted by Bhopal Branch on August 28, 2010. CA. Shri Rameshwar Thakur, Hon'ble Governor of Madhya Pradesh and our Past President inaugurated the Conference. Shri Thakur assured us to allot land for the premises of Bhopal Branch of CIRC of the ICAI. Later, we also met the Hon'ble Chief Minister of the State, Shri Shivraj Singh Chouhan, and discussed the services that chartered accountants render to the State.

Project Parivartan

This Project was conceived with an idea of taking ICAI to a qualitatively new way of working which would bring together both aspiring and existing chartered accountants in the country. The project took a comprehensive 360 degree view of the existing processes and benchmarked them with the global best practices. Accordingly, a need to change the current operational processes of the Institute to meet global benchmarks has been made and a roadmap evolved for the adoption of a Unified Digital Technology Platform that will be used to transform ICAI into a truly efficient, transparent and global organisation. Infosys Technologies has partnered with us to help in formulating our vision, roadmap and an 18-month plan for Project Parivartan. Infosys will also help us in running the Program Management Office towards our dream of Parivartan.

Status of Disciplinary Cases

As regards the status of Disciplinary cases, we would like to inform that, under the old disciplinary mechanism, hearing in 58 cases has been concluded by the Disciplinary Committee of the Institute. In the Council Meeting recently, 55 reports were included and 10 more reports are ready for inclusion. Under the new mechanism, the Board of Discipline and Disciplinary Committee have completed hearing in 54 cases. The Board of Discipline/Disciplinary Committee has also considered primafacie opinion of the Director (Disc.) in 33 cases. In addition to the above, prima facie opinion of the Director (Discipline) in approx. 75 complaint and information cases would be considered by the Board of Discipline or Disciplinary Committee as the case may be. All efforts are being taken to complete the public interest cases on priority, irrespective of the mechanism in which they are falling.

Concerns for Members

Banks to Open List of Auditors in 2:1 Ratio: We are happy to inform that the persistent efforts of Professional Development Committee with regards to the appointment of auditors for the banks have paid off. We have successfully convinced both the Ministry of Finance and the RBI not to open the complete list of eligible central statutory auditors for banks to select their auditors. Accordingly, the list of auditors has been released in the ratio of 2:1, i.e. names of two auditors will be given against one vacancy. Next year, we would try for the 1:1 ratio. We deeply appreciate the efforts made by our Central Council colleague CA. Pankaj I. C. Jain, Chairman, Professional Development Committee in this regard.

Seeking Data on Tax Audit from CBDT: We have sent a letter of request to the Central Board of Direct Taxes (CBDT) asking them to provide the number of tax audit reports filed with them during 2009-10, e.g. data on tax audit based on fields like name and membership number of the auditor, assessment year, PAN of the auditee, etc., which would enable us to review the ceiling on the number of tax audit assignments that a chartered accountant can accept in a financial year, either as a partner or a proprietor.

ICAI Recommendations of Amendments in the CA Act, 1949: Our Council had constituted a Group on Amendments in the Chartered Accountants Act, 1949, under the convenership of ICAI Vice-President, CA. G. Ramaswamy, to suggest draft amendments in the Act arising out of the Report of the High-Powered Committee so as to empower the Act to take disciplinary action against erring CA firms, only in grave circumstances and, also, in cases of repetition of gross negligence by their partners. In addition to our Council colleagues' suggestions on table, they have also been asked to send their written comments, if any, for consideration of the Group.

Group to Resolve Dispute for Members: A new group has been constituted recently under the convenership of our Central Council colleague CA. Nilesh Vikamsey to examine the matter of development of an alternative dispute resolution mechanism (arbitrator) for dealing with disputes of member vis-à-vis member and member vis-à-vis student, and bringing the same back to the Central Council with its recommendations.

Auditors, Remuneration and Indian Banks: We have made a representation to Shri G. Gopalakrishna, Executive Director, Reserve Bank of India regarding the revival of Category of Part C auditors for audit of Public Sector Banks. We have sent a letter to NABARD Chairman Shri Umesh Chandra Sarangi regarding appointment and remuneration of auditors of state and district central cooperative banks. Indian Banks Association has appreciated the suggested coverage of the report on concurrent audit of banks as comprehensive and has stated that it covers the major functions of the branches.

Webcast on Direct Tax: The Direct Taxes Committee has conducted a live webcast recently, where the undersigned along with the ICAI Vice-President CA. G. Ramaswamy and Central Council colleague CA. Dhinal Shah participated in deliberations of the webcast from Chennai. The Committee Chairman and Vice-Chairman CA. Jayant Gokhale and CA. M. Devaraja Reddy respectively participated in the webcast from Delhi and provided their valuable inputs.

Cause of Concern: US Move to Discourage Outsourcing: As members are aware that fee hikes for H1-B visas and Ohio's decision to ban outsourcing of government IT projects will directly affect Indian tech workers and Indian companies in the US. US President Barack Obama now intends to end corporate tax breaks for US companies that "create jobs and profits in other countries. This move has triggered consternation across India's US$50 billion annual outsourcing industry. It is indeed a matter of concern, although the issue of tax breaks is not going to have a direct impact on our accountancy profession or our outsourcing business, because the US companies are outsourcing to India for better operational efficiency and to arbitrage labour costs, not taxes, as Indian corporate tax rates are actually higher than those in the US. Blocking of tax breaks is unlikely to be enough detriment for US companies to stop outsourcing. However, what is more worrying is the trend of 'populist extra-protectionism' that US is trying to set, which might affect Indian CA professionals in the long run. In this age of globalisation, such protectionist barriers can only prove to be detrimental. We would advise the interested members to prepare themselves to face such protectionist trends as well.

Students' Matters

Students necessarily have an element of idealism and the world becomes better when they enter into the institution of a family with their idealism. This is called a gift of the new world. We would like to appeal to our members to encourage such endeavours in students during articleship. Meanwhile, we will continue to take strong measures in the students' interests:

Reduction in Scale of Entitlement to Train Articled Assistants: The Executive Committee has discussed and rationalised the criteria for entitlement to train articled assistants by an Associate/ Fellow member or a full-time employed chartered accountant considering that a large number of vacancies remain unfilled especially in the case of SMPs. On the recommendations of the Committee, our Council has considered the reduction in scale of entitlement to train articled assistants, as a large number of vacancies are unfilled due to the change in scheme and education wherein students are entitled to commence article only after passing IPCC instead of immediately after passing CPT examination.

International Conference on Indian Accountancy Profession: An international conference of CA Students would be organised on December 28-29, 2010, in Delhi jointly by the Board of Studies and the NIRC of the ICAI. Theme of the conference would be Indian Accountancy Profession - Marching towards Global Centre Stage. Detailed announcement will follow in the students' Journal and in the Newsletters of other Regional Councils and Branches. We sincerely hope that our students will actively participate and make it a success.

Eligibility for admission to CPT examination: The Council, realising the difficulties faced by students, has decided that the students who have not passed 10+2 examination but have passed any other diploma course and later have pursued graduation are eligible for the CPT examination. The same is being taken up with the Central Government for necessary approval.

Residential Course: We have decided to organise the residential course on General Management and Communication Skills (GMCS) at more centres so that a large number of students can be benefited. The duration of the course will be reduced to six weeks from three months. And, top 10 rank-holders in the PCC/IPCC and Final examinations will be enrolled for the sixweek course without any fee.

Live Virtual Classes: Considerable progress has been made to start Live Virtual Classes (LVC) for CPT, IPCC and Final courses of the CA curriculum. The conduct of classes would commence very shortly and we are hopeful that a large number of students would derive benefit from these classes.

Campus Selection for Articled Assistants: An optional campus placement scheme has been introduced for selection of articles. The Pilot Campus Placement Programme was held at Delhi in August 2010 for the firms having their offices in Delhi. 41 CA firms and 390 students registered for the programme, and, out of these, 31 firms and 148 students participated. Considering the positive response, feedback and request from both firms and students, it has been decided to start an Online Articles Placement Portal to facilitate placement of articles in firms on pan-India basis. Eligible firms and candidates can register at http://bosapp.icai.org that would be opened shortly.

Nationwide Programmes/Conventions: 21 one-day seminars were successfully organised across the nation. Regional Councils and Branches of the ICAI organised elocution and quiz contests. Branches also organised 34 careercounseling programmes to popularise the CA course. Ernakulam Branch of ICAI hosted a state-level conference. A twoday National Convention of Students was held in Kolkata and attended by almost one thousand students. Chief Guest and Special Guest on the occasion were Minister-in-charge, PWD, West Bengal, Shri K. Goswami and former Indian cricket captain Shri Sourav Ganguly respectively. Shri T. N. Manoharan, former ICAI President, and the Chairman and the Director of the Board of Studies also addressed the students.

VI Pay Commission and ICAI Officers' Pay Revision

We are extremely happy to inform that the issue regarding the pay revision of the ICAI officers based on the recommendations of the VI Pay Commission was largely completed by the appointed Group. We are sure that this decision will further motivate our officers towards their responsibilities and strengthen their bonds with the Institute.

-------------

Commonwealth Games, Delhi's biggest-ever event, are approaching fast. So much has been said for our preparations and efforts in this regard. Isn't it too late to speak our concerns over this? Demand of the hour asks us to be positive and to try to add to the success of the event and to the comfort of our athletes, both national and international, and other guests. Let us speak positive. We grow together learning from each other. We all are responsible people. Let us behave more responsibly. Let us put in our concerted efforts to make it a spectacle by understanding our role in it.

Let us try to make this event a success by celebrating the occasion and we are sure to remember it as an event of national pride in retrospect. Let the festival of Dussehra speed up our win over the evil. We wish everybody a very happy and joyous Dussehra.

Best Wishes

CA. AMARJIT CHOPRA
President, ICAI
September 26, 2010

Please Post Your Views Here

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

ICSI Enrolment Status for Dec, 2010 Exam...

2010-10-01T16:09:00.001+05:30

Dear Subscribers,

Check your ICSI Enrolment Status for Dec, 2010 Exam. Click on the below link or visit our blog...

STATUS

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)

Mutual Recognition Agreement between ICAI and CPA Ireland - (30-09-2010)

2010-09-30T18:34:00.001+05:30

Mr Ved Jain, Past President ICA India, Mr Amarjit Chopra, President ICA India, Mr Eamonn Siggins, CEO, CPA and Mr Bob Bunting, President IFAC

The Institute of Chartered Accountants of India has entered into a into a mutual recognition agreement (MRA) with the Institute of Certified Public Accountants In Ireland (CPA Ireland). This agreement offers both bodies the opportunity for key strategic partnerships and supports trade opportunities between the two countries by fostering peer to peer relationships. The MRA facilitates global careers opportunities for members of both the Institute of Chartered Accountants of India and Irish certified public accountants, as it provides a route for qualified members to become members of each other Institutes.

The MRA offers CPA Ireland and ICA India the opportunity to work more collaboratively, providing increased levels of service to members, undertaking joint research and thought leadership initiatives on the global stage, and acting as advocates within the International Federation of Accountants (IFAC) and regional accounting networks.

The agreement does not cover those wishing to practice as a public practice accountant and/or to undertake auditing work due to the specific regulatory and legal requirements in each jurisdiction. The MRA comes into effect on 01 October 2010.

The details on the route to become members and relevant forms shall be uploaded shortly in the website of ICAI.

Siddharth Rutiya
!! Be a Helping Hand !!
(www.sidrutiya.blogspot.com)
(http://www.google.com/profiles/SIDSHARTH)