Workflow boost for accountants, advisory firms

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Plans are afoot to train 20,000 chartered accountants by March 2017 in different aspects of the GST
Corporate India is just about getting started to get their businesses ready for the goods and services tax ( GST) regime. This has opened up a sizable business opportunity for tax experts, advisory firms, and law firms. What has come as a shot in the arm for chartered accountants and cost accountants is the mandatory need for tax audits for certain companies under the GST regime.
Under Section 42 ( 4) of the draft Model GST Law, businesses with to- be- prescribed turnover have to get their accounts audited by a chartered accountant or a cost accountant. Accordingly, the Institute of Chartered Accountants of India ( ICAI) is preparing to boost training for its members to enable them to make the most out of the opportunity. “ Plans are afoot to train 20,000 chartered accountants by March 2017 in different aspects of the GST for conducting impact studies and filing of GST returns,” says Madhukar N Hiregange, senior partner, Hiregange & Associates, and chairman of indirect tax committee at the ICAI. To start with, over the next two months, around 500 trainers will go through the GST programme.
In the coming months, some key areas of work for accountancy professionals would relate to conducting impact studies for clients, taking companies through GST registration and the transition process, filing taxes and getting tax refunds, ensuring there are no mismatches in the tax input- output chain. Even though the new indirect tax system will come into effect from April 2017, tax experts expect the transition opportunity to last for the next two years.
“Compliance will become a major area of practice for accountants,” says Hiregange. He expects many companies to outsource their tax compliance work to tax consultancies and chartered accountancy firms.
In the coming months, businesses would have to re- jig their IT systems and also make businesses of their suppliers, distributors and sellers GSTcompliant.
The challenge for small and mid- sized companies would be to come up to speed with technology requirements under the GST regime. “ Many companies would need hand- holding while interacting with the GST Network, the IT backbone, in filing tax returns and in claiming returns,” says Hiregange. That may spawn small firms specialising in GST- related compliance issues. The ICAI is also looking at revising its syllabus by November this year in keeping with the latest changes in the indirect tax system.
Sensing the business opportunity that is up for grabs, most corporate law firms are ramping up their indirect tax practice. For instance, Lakshmikumaran & Sridharan, a law firm that has been advising the GST Network, has put in place a special team of 20- odd tax experts to tackle GST- related issues. “ In addition, there are 150- 200 tax lawyers across the country taking up sector- specific indirect tax related issues,” says a spokesperson from the law firm.
Similarly, accounting and advisory firms, especially the ‘big four’, are betting big on the opportunity. EY, for instance, has a team of 800- odd tax and advisory professionals working on GST. “ This year, we anticipate an increase of 25 per cent in our current headcount for GST,” said a company spokesperson. Many of these professionals come with expertise in supply chain, analytics, technology and processes.
According to Nitin Atroley, partner and head of sales & markets at KPMG, the firm set up a special team with members from different countries like Malaysia, Singapore and Australia that have earlier gone through the process of adopting GST.
Prashant Raizada, partner, indirect tax, BDO India, feels the challenge to transition to the new tax regime would be most felt by small and mediumsized enterprises. “ In Tier2and – 3 cities, businesses may not be that well versed in use of technology,” said Raizada. It will be busy days ahead for tax experts, accountants and consultants, as well as their clients as they get up to speed with the GST regime.

Government may offer foreign auditors direct access

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In a move that signals the government’s intent to allow foreign audit firms to register and operate directly in the Indian market, the Ministry of Corporate Affairs has written to the Institute of Chartered Accountants of India (ICAI) to seek its views and recommendations on the government proposal.

Currently, Indian laws don’t allow any multinational accounting firm to be registered in India as auditors. The thinking within the government is that as part of an ongoing reforms process, the services sector should also be liberalised and global auditing firms could be allowed to operate directly here to make the profession more competitive and robust.

The ministry has written to the institute on August 10, said ICAI president M Devaraja Reddy . The institute is set to discuss this proposal in a meeting to be held on August 24 and then respond to the the request, he added.

The government will have to amend the Chartered Accountants Act, 1949 that regulates the accounting profession in India to allow foreign firms to operate in India.

Currently, MNC professional services firms that offer auditing services in India, including the Big Four – EY, PwC, Deloitte and KPMG – audit Indian companies through a bunch of their network or affiliate firms.

Though for all internal purposes, the accounting practice in any of the Big Four is treated just as any other practice area like tax, transactions, or advisory , but on paper, the affiliate firms are run as separate partnerships.

If the Indian government does allow direct entry, more global firms are likely to invest big in their India network and also the market could see the entry of new players.

“Given the significant exposure of global investors in Indian firms, it’s natural to ask for an auditor who they are more comfortable with. More global players will mean more choice and better quality of services. It will also enhance the credibility of Indian markets,” says the CEO of a global firm.

For Indian audit firms, the move could spell further trouble, as they have been steadily losing the most lucrative audit assignments to the Big Four over the past two decades.The four global firms now dominate the book-keeping business in India. As it is, the mandatory audit rotation brought in by the Companies Act 2013, is set to kick off from April 1, 2017 and that will further see a movement of big accounts away from Indian firms towards the Big Four and other two prominent network firms, Grant Thornton and BDO.

In major markets, the global giants have a monopoly over the audit business – 99 per cent of companies in FTSE are audited by the Big Four firms, while 86 per cent of those listed on the NYSE work with these audit firms.

But in India, 62 per cent of the BSE 500 companies, including some of India Inc’s biggest firms, are still not audited by the Big Four.For example, Reliance has had Chaturvedi & Shah as auditors for decades, L&T books have been audited by Sharp & Tannan and Hindalco had stayed on with Singhi & Co for long time.In China, the Big Four lost domination to local firms after the government brought in regulations that were unfavourable for the global players. Indian accounting firms are also betting on government regulations that will keep their interests protected.

“The government will have to find a middle ground. It will have to create a regulatory framework that allows the global firms to invest and practice, also keeping in mind the concerns of the Indian accounting firms which service a large section of Indian companies, both big and small,” said the CEO of a leading Indian accounting firm.

Multipurpose Empanelment Form for the year 2016-17

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Multipurpose Empanelment Form of ICAI (MEF-ICAI), an online application, is meant for allotment of Bank / Branch Audits to the ICAI Members/ CA Firms, which can be filled and submitted at the MEFICAI website directly.

Online Multipurpose Empanelment Form (MEF) for the year 2016-17 is live at www.meficai.org. The last date for submission of online MEF Form for the year 2016-17 is 31st August, 2016 and for submission of hard copy of “DECLARATION FOR MEF 2016-17” is 12th September, 2016.

In case, an applicant faces any problem regarding MEF, complaint may be lodged by accessing complaint-box link available on www.meficai.org

 

In case, the complaint is not resolved or replied within a week, members can call at 011-30110444, 30110411, 30110440, 30110480, 30110438, 30110451 and 30110508 (between 3.00 PM to 5.00 PM on all working days).

 

With kind regards,

Prafulla Premsukh Chhajed

Chairman, Professional Development Committee

 

ADVISORY FOR FILLING MULTIPURPOSE EMPANELMENT FORM 2016-17

Govt allows Aadhaar e-KYC for new mobile connections

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Forget the bulky paperwork, you can now apply, validate and activate new pre-paid and post-paid mobile connections using your Aadhaar card and fingerprint at the point of sale.

 

The government today issued e-KYC guidelines to make the online process of application and authentication faster and simpler for subscribers. In contrast to the existing document-based process, the move is intended to cut down time for SIM activation as KYC is verified instantly.

 

In e-KYC, a customer through her Aadhaar number and biometrics will online authorise UIDAI to provide demographic details such as name, address, date of birth and gender, along with the digitally-signed photograph, to the mobile operator.

 

“Digitally-signed electronic KYC data provided by UIDAI is machine readable, making it possible for licensees to directly store it as customer record in their database for the purpose of issuing a mobile connection,” a DoT notification said. COAI Director General Rajan Mathews felt that the move will be helpful for all stakeholders as it simplifies activation, eases verification process and enhances security.

 

“Earlier, the entire verification process would last 8-10 hours and it will now be greatly reduced,” he hoped. Bharti Airtel plans to start rolling out Aadhaar-based e-KYC solutions this week, MD and CEO (India and South Asia) Gopal Vittal said.

 

Vodafone India termed the e-KYC solution as “an instant, secure and green mobile subscriber verification project” and said all stakeholders will benefit from it. Customers will soon be able to walk in with their Aadhaar card in any of the Vodafone stores and walk out connected within minutes, the company statement read.

 

“For the consumer, instant activation means better experience and security of personal confidential information. For Vodafone, it will improve quality of sales as well as regulatory compliance. For the regulator, it not only means a green initiative, but hassle-free governance and accurate audit results,” said Sunil Sood, MD and CEO, Vodafone India.

 

According to Hemant Joshi, Partner, Deloitte Haskins & Sells, the move will bring down the cost of subscriber acquisition significantly as telecom companies will not have to spend on physical transportation of forms, verification, scanning and storage. “Also, it would help easier compliance and reduction in litigation on account of audit carried out by term cell,” Joshi said.

Source: http://www.moneycontrol.com/news/business/govt-allows-aadhaar-e-kyc-for-new-mobile-connections_7288301.html

FPI equity buys in India touch $5.4 bn this year

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Foreign portfolio investors (FPIs) have bought equities worth $5.4 billion in the Indian markets in 2016 so far, according to data obtained from Bloomberg. This makes India the third biggest destination for FPIs after Taiwan and South Korea which have seen inflows of $13.6 billion and $8.1 billion, respectively, reports fe Bureau in Mumbai.

 

Thailand ranks fourth with foreign inflows of $ 3 billion followed by Indonesia which received foreign investment worth $ 2.8 billion. In 2016 so far, the Sensex gained 7.44% and Nifty50 gained 8.73%.

Gr1

Source:

http://www.financialexpress.com/markets/indian-markets/fpi-equity-buys-in-india-touch-5-4-bn-this-year/349325/

Commerce ministry eases rules to promote exports

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The commerce ministry has relaxed certain norms to promote outbound shipments and manufactured products from export-oriented units (EoUs), software technology parks of India (STPIs) and electronic hardware technology parks (EHTPs).

The norm of mandatory warehousing requirement for EoUs and software and electronic hardware technology parks has been done away with.

The Directorate General of Foreign Trade (DGFT) has also eased rules for the existing EHTP and STP units to avail tax exemptions in the case of conversion or merger of EoU and vice versa.

In a notification, the department said an EoU, which is into agriculture, aquaculture, horticulture and poultry, might be permitted to remove specified goods in connection with its activities for use “outside the premises of the unit”.

Earlier, it was allowed only for outside the bonded area. DGFT has said this in a notification, amending the foreign trade policy (2015-20).

The EoU scheme, which was introduced in December 1980, had allowed manufacturing units in export processing zones to enjoy 100 per cent tax exemption on profits from overseas sale and duty-free import of raw material.

As the scheme had a sunset clause, the tax benefits were stopped from March 2010. This scheme was utilised by small and medium enterprises to set up their units for the purpose of exports.

Later, a committee had suggested steps, including tax incentives, to revive these units.

The decision takes on significance as the country’s exports, after rising for the first time in 19 months in June, shrank again in July. It contracted 6.84 per cent due to the decline in shipments of engineering goods and petroleum products.

Source: http://www.business-standard.com/article/economy-policy/commerce-min-eases-rules-to-promote-exports-116081700050_1.html