President's Message - September 2017 - (31-08-2017)
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My dear professional colleagues,
Definitive and challenging role of technology in creating success stories has increased manifold over the past two decades. Indian accountancy profession aims to evolve into a technology-driven profession to bring a strategic advantage for its stakeholders. Microsoft CEO Satya Nadella believes: Information technology is at the core of how we do our business and how our business model itself evolves. Dynamic information technology scenario has affected the education sector globally, impacting almost everything including course content and curriculum, method of disseminating education and training, and conducting examination and evaluation. We are gradually integrating the good information technology practices into our functioning.
ICAI has started a range of IT initiatives in the recent past, including ICAI Mobile App, Online Regulatory Forms, embracing social media, Online Member and Firm Card, e–Sahaayataa, ICAI Payment Gateway Services, ICAI TV, ICAI Knowledge Portal, ICAI Digital Library, ICAI Publications Online Store, ICAI e-Learning, ICAI Cloud Campus, Centralised Dispatch System (CDS), ICAI Digital Hub for Students, ITT labs and Self Service Portal for Post-Qualification and Certificate Courses, and so on. More such initiatives are at various stages of development. Besides, we are also expected to get conversant with existing trends in technology, including blockchain, automation, big data, data analytics, artificial intelligence and cyber security, which will empower us to counter the complexities of our times. Our pace may appear slow, but it is consistent and rising. Our stakeholders will soon notice a happy change in their dealings.
As CA professionals, let us embrace technology and empower ourselves to seamlessly continue playing a pivotal role in strengthening our economy, spreading financial awareness among our fellow citizens and safeguarding their economic interests.
Now, let me go over to some of the key professional developments that have taken place over the last one month:
GST Regime: Let’s Help in Its Effective Implementation
Goods and Services Tax (GST) regime has been rolled out. Though teething difficulties are being faced, I am confident that the Government will look into these and endeavour to sort them out. We at ICAI are giving feedback to the Government on the difficulties being faced. With this reform already in place for about two months, we can now laud the positive effects it will get for trade and businesses at large. It is also heartening to take into account the recently released Medium-Term Expenditure Framework of the Government, which expects that the GST and increased compliance will boost the tax revenues over the next two years, taking India’s tax-to-GDP ratio close to 12 per cent by the FY 2020.
To support the Government in this nation-building exercise to smoothen the implementation of GST, ICAI continues to undertake the measures to make the GST understandable for its members and other stakeholders. As in the past, it has recently submitted suggestions on some important issues under GST. Two new e-publications titled E-Book on How to Get Registered under GST and Study Paper on Taxation of E-Commerce under GST have been launched and hosted at http://www.idtc.icai.org/, which add to the existing list of our GST publications. Revised editions of Simplified GST Guide for Manufacturers and BGM on GST Act and Rules have been released.
ICAI has organised more than 2300 workshops, seminars and conferences on GST, 47 Certificate Courses (classroom sessions) in the year 2017, covering more than 1,90,000 participants across the country. Having useful GST content like offline webcasts, regular updates, articles, information on upcoming courses, programmes/seminars, e-publications, e-learning, GST Newsletter, etc., the website of ICAI’s Indirect Taxes Committee continues to play a pivotal role in GST knowledge dissemination. I congratulate our members who have actively participated in the Institute’s initiatives and helped so far in the execution of the Nation’s GST agenda successfully. I also request you to bring to ICAI’s Indirect Taxes Committee any issue/practical difficulty in the implementation. After deliberations, these will be taken up with the Government.
Suggestions/Representations to MCA
In response to a request from the Ministry of Corporate Affairs (MCA), ICAI had submitted its suggestions including some draft-Rule-specific propositions, on the Draft Rules on Registered Valuers and Valuation to the Ministry on 30th June 2017. ICAI is also in talks with the International Valuation Standards Council (IVSC) with regard to the issuance of Valuation Standards in India.
Representations were made for Clarification on Notification regarding disclosure and reporting by auditors due to demonetisation as issued by the Ministry of Corporate Affairs, and also request has been sent to provide data of companies and professionals so that they can be persuaded for enhancing the annual compliance by companies and limited liability partnerships.
Representations to CBDT
In response to a representation submitted to Central Board of Direct Taxes (CBDT) on the change made in the utility of ITR Forms on the e-filing portal, CBDT clarified the issue through its press release dated 24th July 2017 that, in respect of ITR Forms notified for the AY 2017-18, information regarding the details of bank account held outside India by a non-resident (excluding dormant accounts) is optional, which may be furnished if the non-resident assessee wants to claim a refund of income taxes and she/he does not have a bank account in India. In view of another representation submitted regarding the difficulties faced by taxpayers and members in uploading the income tax returns due to slow speed/ non-functioning of the e-filing website few days prior to the due date, CBDT had favourably considered the matter and, through a press release dated 31st July 2017, extended the date of filing ITRs from 31st July 2017 to 5th August 2017 for the taxpayers who were required to file their returns by 31st July 2017.
As informed earlier, ICAI had submitted representations to the CBDT in respect of Guidelines pertaining to Place of Effective Management (POEM) and discussions had been held. In order to further elucidate the concerns arising from paras 7 and 7.1 of the POEM Guidelines, further submissions have been made. Another representation has been submitted regarding consideration of the amendment of existing provisions of Section 115JB of the Income-tax Act, 1961 in relation to the exclusion of loan and interest waivers by banks/ NBFCs. Also, a clarification has been sought in respect of the taxability of waiver of principal amount by banks/ NBFC.
Lok Sabha Passes Companies (Amendment) Bill, 2017
Lok Sabha has passed the Companies (Amendment) Bill, 2017 recently on 27th July 2017 that had been introduced in the Lok Sabha in March 2016 and later been referred to the Parliamentary Standing Committee on Finance. On the basis of report of the Parliamentary Standing Committee, apart from amendments in 87 Sections and 13 sub-Sections proposed earlier, amendments in six more Sections have been moved leading to a total 107 amendments, i.e., in 93 Sections and 14 sub-Sections.
Some of the important proposals include omission of provisions with respect to ratification of appointment of auditor in Section 139(1), restriction on applicability of provisions of Section 130 for the re-opening of accounts for eight years, right of access by the auditor of a holding company to the accounts and records of the associate company, whose accounts are required to be consolidated, and requirement for auditors to report on Internal Financial Control with reference to financial statements only as per Section 143(3)(i), Fines for auditor default linked with audit fees with minimum amount in Section 140(3), and Limiting the liability of auditor to ‘shareholder or creditor’ in Section 147 (2), among others.
Once these amendments are enacted, majority of the issues faced by corporates and members will get substantially mitigated.
Meetings with SEBI Chairman and Executive Director
Along with my Council Colleagues CA. Debashis Mitra and CA. Anil Bhandari, I met the SEBI Chairman Shri Ajay Tyagi recently and briefed him on various activities of the Institute regarding audit quality control and disciplinary mechanism, among others, and apprised of the action taken in the disciplinary cases. Before this, I had also met the SEBI Executive Director Shri P. K. Nagpal, and apprised him of the Institute’s activities.
Meeting with CBDT Member (Investigation)
Along with ICAI Vice-President CA. Naveen N. D. Gupta and Central Council colleagues CA. Sanjiv Kumar Chaudhary and CA. G. Sekar, I met the CBDT Member (Investigation) Shri Gopal Mukherjee, Commissioner (Investigation) Shri Ramesh Kumar Yadav and Joint Commissioner (IT) (OSD) Ms. Anima Barnwal in New Delhi. Shri Mukherjee has requested us to create awareness amongst assessees with regard to Operation Clean Money initiated by the Department, referring to the assessees’ better faith in what ICAI or its members convey.
Capacity-Building Support to CPA Afghanistan
ICAI and CPA Afghanistan have agreed to enter into an MoU towards mutual co-operation in the areas of institutional capacity building, knowledge sharing professional ethics, professional accountancy training, audit quality monitoring, technical research and other allied areas. During bilateral talks, ICAI had been requested to provide technical support to CPA Afghanistan, holding training programmes for its officials and helping Afghanistan in regulating the accountancy profession. In pursuance thereof, 31 officials from CPA Afghanistan recently visited ICAI and got trained by the distinguished ICAI Central Council members as well as the Heads/ Secretaries of ICAI Departments/ Committees. The training got an overwhelming response and a wide appreciation from the delegates of CPA Afghanistan for its quality and coverage.
Proposal for SOCPA’s Organisational
Restructuring and IFAC’s Myanmar Project I am happy to inform you that in line with its constant endeavour to help other nations establish and develop professional accounting bodies and originations, and strengthen their accounting infrastructure, ICAI has successfully submitted two proposals relating to the organisational restructuring of Saudi Organisation for Certified Public Accountants (SOCPA) and IFAC’s project for capacity building for Myanmar. Such projects would help ICAI in increasing its global presence further.
ICAI Council Releases Publications
Recently, we have released Compendium of Accounting Standards updated as on July 2017, which incorporates the changes in Accounting Standards pursuant to the amendments notified by the Ministry of Corporate Affairs vide Companies (Accounting Standards) Amendments Rules, 2016, other amendments/announcements issued by ICAI post-issuance of last version of the Compendium. The Compendium is relevant for all companies, other than the companies following the Ind AS, and non-corporate entities for the purpose of preparation and presentation of financial statements. We have also released a publication titled Early Signals of Fraud in Banking Sector, which aims to equip our members with risk mitigation strategies, providing an analysis of how fraud occurs in banking sector. Another publication released is Educational Material on Ind AS 16, Property, Plant and Equipment, which provides guidance by way of FAQs (frequently-asked questions) explaining the principles enunciated in the Standard, dealing with component accounting, initial measurement to include asset dismantlement, and removal and restoration costs, among others.
Standards on Internal Audit Mandatory
Internal audit, to be effective, must be conducted in accordance with a set of recognised Standards. ICAI has till date issued 18 Standards on Internal Audit (SIAs), which aim to increase the overall credibility, consistency, clarity and comparability of the work performed by internal auditors. We have initiated the process of revising the SIAs and making them mandatory in a phased manner.
Appointment of ICAI Council Member at IAESB
I am delighted to inform that ICAI Central Council member CA. G. Sekar has been appointed as CAPA (Confederation of Asian and Pacific Accountants) representative to the Consultative Advisory Group of International Accounting Education Standards Board for a period of three years, i.e. 2017-2019.
Need for Professional Indemnity Insurance for CA Professionals in line with Insolvency Professionals
As you may be aware, some insurance companies will soon offer a tailored cover to the insolvency professionals, in the wake of their exposure to multiple risks including litigations. Although Section 233 of the Insolvency and Bankruptcy Code gives protection to those professionals in good faith, the onus to prove innocence is on them, which at times might be quite expensive in terms of time and money. In such circumstances, it is quite right to assume that professional indemnity insurance will be vital, since no professional would like to be uninsured. On similar lines, let me suggest that our other practicing members too should have professional indemnity insurance, to cover any contingencies.
ICAI has an insurance scheme in place for our members, provided by the New India Assurance Co. Ltd. Also, CABF (Chartered Accountants’ Benevolent Fund) is another such scheme for our members, where financial assistance is provided to our members in distress or to the families of the deceased members.
During 1st April 2017 to 31st July 2017 total contribution of 52,02,715/- has been received by the CABF (Chartered Accountants’ Benevolent Fund) and a sum of 42,04,500/- has been released as medical and financial assistance to the members in distress and to the families of deceased members through CABF. I would urge my professional colleagues to contribute to CABF and help it extend a fair support to the distressed membership.
Past Presidents Meet in New Delhi
A meeting of ICAI past Presidents from the Northern, Central and Eastern regions of the Institute was organised in New Delhi on 12th August 2017, where their wisdom was sought on strengthening of ICAI’s disciplinary mechanism, communicating positively about profession to Government, regulators, media, members, etc., making Indian firms globally-relevant, and enhancing ethical values among our members, among other relevant professional issues.
Centralised Distribution System for Study Material
To save on finances, obsolescence, duplicate transportation, manpower, etc., and to achieve various other intangible benefits such as delivering only updated/revised study material at the doorstep of our students saving their time and avoiding out-of-stock situation, as per the guidance of the ICAI Council, the Board of Studies of ICAI has developed and commenced a centralised distribution system (CDS) to centrally dispatch and deliver updated/ revised study materials to students. Students concerned can place their order at https://icai-cds.org. Also, through this system, at the time of registration/conversion at any level, students will get automatic notification email/SMS alerts regarding their login id and password.
National Conference on Capacity Building Measures in Bhubaneswar
Recently, ICAI organised a successful and well-attended National Conference on the Capacity Building Measures of Practitioners with special focus on Direct Tax, Insolvency and Bankruptcy Code, Company Law, Ind AS, and GST for its members on 5th-6th August 2017 in Bhubaneswar, which was inaugurated by the Hon’ble Chief Minister of Odisha Shri Naveen Patnaik, and the valedictory session was addressed by Hon’ble Union Minister of State for Petroleum and Natural Gas Shri Dharmendra Pradhan.
2017 International Conference on 8th-9th December 2017 in Mumbai
I am happy to inform you that the mega event of ICAI International Conference has been scheduled to be held on 8th-9th December 2017 in Mumbai. A preliminary confirmation of South Asian Federation of Accountants to hold Board and Committee meetings on the sidelines of Conference has been received. Against our block-yourdiary communication to the representatives of international accountancy bodies and the managing committee of ICAI Branches and overseas Chapters, we have received an encouraging response. Online registration will start soon. Till then, I request all of you to block your dates and bring the same to the notice of your professional colleagues, partners, etc.
Bhoomi Poojan at Jodhpur Branch of CIRC
I am happy to inform that bhoomi poojan ceremony was recently held at Jodhpur Branch of CIRC for commencement of the construction of Branch building, where I was present along with my Central Council colleagues CA. Prakash Sharma, CA. Shyam Lal Agarwal and CA. Mukesh Singh Kushwah. Dignitary guests on the occasion included Hon’ble Rajya Sabha MP Shri Narayan Lal Panchariya, Jodhpur City MLA Shri Kailash Bhansali and Jodhpur Mayor Shri Ghanshyam Ojha. At a members’ programme held a day before the ceremony, Hon’ble Lok Sabha MP Shri Gajendra Singh Shekhawat delivered a very motivational and well-received speech.
Prospectus, Syllabus and Study Material under Revised Scheme
As you know, the Revised Scheme of Education and Training has been formally launched on 1st July 2017 and with its launch, registration to new courses, i.e. Foundation, Intermediate and Final, has also started. Revised Scheme, its prospectus and the syllabus of all subjects at all levels along with the Transition Scheme has been hosted on the ICAI website. FAQs relating to the Revised Scheme have also been hosted. I am happy to inform that the study material of better quality for Foundation and Intermediate has been printed and, is ready for distribution. E-books, responsive to smartphones, tablets, laptops/ desktop computers, etc., are also being made available to registered students. Study material for the Finals is being finalised and uploaded on piecemeal basis.
Examination Results Declared
Results of the CA Intermediate (IPC) examinations held in May 2017 have been declared. While Mr. Gaurav Sarawagi from Churu achieved first rank with 80.71 per cent, Mr. Ronak Rajendra Jain from Nashik and Mr. Hasan Mohammad Ibrahim Iqbal Usama from Nagpur got second and third rank with 80.14 and 80.00 per cent respectively. In Both Groups category, out of 49967 candidates, 11550 (i.e. 23.12%) candidates passed one of the Groups or Both groups. In only Group I and II, out of 66680 and 65453 candidates respectively, 6562 (i.e. 9.84%) and 11440 (i.e. 17.48%) candidates have passed. Results of the post-qualification courses, Information System Audit-Admission Test and International Taxation-Assessment Test held in May 2017 have also been declared. Results of Special Examinations held under Mutual Recognition Agreements/ Memorandum of Agreements entered into by ICAI with overseas accounting bodies held in June 2017 have also been declared.
Instances of bright and young professionals losing their life at a young age have come to our notice. It is sad that such instances have surfaced in our profession too, recently.
Work is worship but the same can’t be said about the overindulgence in work. Stress up to a certain level is productive, but, after that, it starts affecting our health negatively, which is essential for our physical well-being and for our effective functioning in all walks of our life, including our profession. At times, we tend to work harder than the hardest, at the cost of our mental and physical heath, to have a better-quality life for ourselves and our family. In this process, sometimes, we forget the ultimate beneficiaries themselves and the basic purpose is lost. A pastoral counselor has rightly commented on this irony: So many people spend their health gaining wealth, and then have to spend their wealth to regain their health. According to Mahatma Gandhi, it is health that is real wealth.
Since our job is sedentary in nature, let us get regularly involved in some of the physical fitness activities like yoga, walking, running, swimming, working out, etc., to tone our body and mind. The month of September will be challenging in view of the timelines pertaining to GST and tax audit. Let us approach our work with a healthy and positive mindset and a smile, since when we are happy doing things, stress is always a distant reality.
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