The Institute of Chartered Accountants of India

President’s Message-May 2017-(28-04-2017)

Esteemed professional colleagues,

First President of India Dr. Rajendra Prasad called Chartered Accountants the providers of first line of defence to the unwary public against money grabbers and opportunists. This is because our profession enjoys a statutory autonomy. The financial statements, documents and certificates that are not only attested but even issued by our members provide reliability to the users of those statements. In 1957, the then Vice-President of India Dr. Sarvepalli Radhakrishnan, who later became our second President, had said addressing the Chartered Accountants: Whatever you do you must have that standard that you are doing something ennobling…you have a vital contribution to make to the progress of the country and you can make that contribution through honesty and efficiency.

Nilesh Shivay

Today, both the Government and the public hold us Chartered Accountants in high esteem. With this noble precedence, we had started the journey of our profession. For our high ethics and integrity, today we enjoy the status of conscience-keepers. But whatever legacy we enjoy today, we must understand that the wrongdoing committed by a single member of our profession brings disrepute to our profession as a whole. I would urge all members to uphold the dignity and the image of the profession in the work which they carry out.

Let us do everything to keep the flag of our profession high and flying.

Now let me brief on some of the significant developments that have taken place since my last communication to you:

Three New Govt. Nominees on 23rd ICAI Council

The Ministry of Corporate Affairs has nominated MCA Joint Secretary Shri K. V. R. Murthy, Ministry of Commerce Joint Secretary (Trade Policy Division) Shri Sudhanshu Pandey and Sri Ram College of Commerce Associate Professor Dr. Ravi Gupta as members on the 23rd Council of our Institute for the term of the Council or till further orders. These members will replace the earlier Govt. nominees former MCA Joint Secretary Shri Manoj Kumar, former Joint Secretary of Ministry of Commerce Dr. Guruprasad Mohapatra and Supreme Court of India Sr. Advocate Ms. Indu Malhotra respectively. We welcome the three new members and sincerely hope to have their guidance and contribution in every decision of the profession. We are thankful to the three outgoing Government nominees on the Council, for the vision and guidance they provided to the profession during their stint in the Council.

Meetings with Union Ministers

Recently, I attended a Breakfast with Businessline event held in New Delhi, where the Hon’ble Union Finance Minister Shri Arun Jaitley interacted with various stakeholders. I suggested that in view of the implementation of GST, the long-standing disputes of excise, service tax and VAT should be cleared by way of a Resolution Scheme. The Hon’ble Minister responded positively saying that such a scheme would be successful only if the Chartered Accountants advised their clients/ employers.

We also had meetings with Union Railway Minister CA. Suresh Prabhu and Union Minister of State (Independent Charge) for Power, Coal, New and Renewable Energies, and Mines CA. Piyush Goyal, where on behalf of the profession, I shared our concerns primarily on the issues of penalty imposed on Chartered Accountants under Section 271J of Incometax Act, 1961, joint audit, managerial autonomy given to public-sector banks regarding appointment of auditors and constitution of National Financial Reporting Authority, while reiterating our commitment to extend all possible support and assistance to the initiatives and endeavours of the Government.

Presidential Assent for 4 GST Bills; New Draft Rules Introduced

Hon’ble President of India has accorded his assent on the four key legislations, viz. Central GST Act, 2017, Integrated GST Act, 2017, GST (Compensation to States) Act, 2017, and Union Territory GST Act, 2017, on 12th April 2017 paving the way for an earliest possible rollout of the GST. GST Council is working in full swing to put in place a related regulatory framework and, at its 13th meeting held on 31st March 2017, approved the amended GST rules, namely Invoice, Payment, Refund and Registration, and gave a tentative nod to the remaining 4 rules, i.e. Composition, Valuation, Transition and ITC, for comments and suggestions by various stakeholders. Further, draft GST rules on Assessment and Audit, e-Way Bills and Return (revised) have been put up for public comments on 13th April 2017.

A Meeting with Revenue Secretary Shri Hasmukh Adhia was held recently to discuss the initiatives undertaken by ICAI towards GST implementation and our support as partner-in-knowledge-dissemination in that regard, across the nation.

Further, we initiated a series of live webcasts, jointly with the Service Tax Commissionerate of Delhi Zone, on Chale GST Ki Aur (meaning “let us move to GST”) in April 2017, which was inaugurated by the CBEC member (IT & Admn.) Shri S. Ramesh, and Delhi Zone’s Chief Commissioner of Service Tax Ms. Ameeta Suri. These webcasts are available offline at  https://www.youtube.com/indirecttaxcommittee or www.idtc.icai.org.

Representations

Section 271J of Income-tax Act, 1961: The Finance Bill, 2017 proposed an insertion of Section 271J in the Income-tax Act, 1961. Considering the undue hardships to be caused to our members, the ICAI had made various representations to the Ministry of Finance, Revenue Secretary and CBDT, suggesting the proposed penalty under Section 271J to be withdrawn. ICAI representatives had meetings too with CBDT Chairman, and Union Power Finance Minister in that regard. Now that the provisions of Section 271J have already been enacted, as an interim measure, ICAI has submitted a representation to the CBDT Chairman requesting a suitable relief by defining what will be considered as ‘incorrect information’ and providing right to appeal, etc., in this regard, while our efforts to withdraw the provision will continue.

Section 269ST of Income-tax Act, 1961: The Finance Act, 2017 has taken several steps to curb black money by discouraging cash transactions and promoting digital economy. Among those, there is a restriction on cash transactions by introduction of new Sections 269ST and 271DA to the Income-tax Act. According to Section 269ST, no person (with some specified exceptions) shall receive an amount of two lakh rupees or more. Any contravention to this provision shall attract a penalty as envisaged under Section 271DA, with some exceptions. Although CBDT has issued a clarification that the restriction on cash transactions shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank, through a representation submitted to the CBDT, we have voiced our concerns on clarification on ‘transactions relating to one event or occasion’, permission of payment made through banking channels including credit/ debit cards and e-wallets, and provision of exceptions on the lines of Rule 6DD.

Guidelines on POEM: The Finance Act, 2015 had amended Section 6(3) to provide that a company (other than a domestic company) is said to be resident in India in any previous year, if its ‘place of effective management (POEM)’ in that year is in India. Thereby, the residency test was shifted from ‘whole control and management’ to POEM. CBDT through its Circular No. 06 of 2017, on 24th January 2017, has provided the guiding principles to be followed for the determination of POEM. Issues pertaining to the same and related suggestions have been submitted to the Ministry of Finance and a meeting was also held with the CBDT Chairman Shri Sushil Chandra in that regard.

RBI Guidance on Appointment of Auditors

Issues involved in the appointment of auditors of publicsector banks have been a matter of great concern for the profession. We had proposed to the RBI Deputy Governor Shri S. S. Mundra to develop a software for fair, transparent and equitable allotment of branch statutory audits, by which allotment of the assignments would be made in a systematic manner without manual intervention. In this regard, we again took up this matter during our recent meeting with the RBI Deputy Governor. I am happy to inform that, pursuant to our representations and meetings, the RBI has advised all PSBs to formulate a fair and transparent policy and procedure in the matter of selection and appointment of statutory branch auditors, which may also be hosted on their website. RBI has further advised that the Banks may appoint SBAs centrally at Corporate Office with the help of software for parameter based allocation of audit amongst the eligible firms or other suitable software, customised or otherwise, to select audit firms in terms of the appointment policy formulated/approved by the Banks Board/ACB. In this regard, I acknowledge the efforts of my Central Council colleagues CA. Prafulla Chhajed, CA. Ranjeet Agarwal, CA. G. Sekar and CA. Kemisha Soni.

Meeting Our Members in Public Service

To collect and share the inputs with our members in Public Service on various relevant professional concerns, we recently organised a Regional Meet of ICAI Members in Public Service at ICAI headquarters in New Delhi, which was attended by 16 senior members of the profession including Rajya Sabha MP CA. K. Rahman Khan, Lok Sabha MP CA. Subhash Chandra Baheria and Supreme Court of India retired Justice (CA.) Anil R. Dave.

Insolvency Professionals-New Avenue for Members

The Insolvency and Bankruptcy Code has good potential for going forward. Our members can use the said area of practice and potential opportunity by becoming Insolvency Professionals, since a large number of cases relating to insolvency, bankruptcy and liquidation are pending in India.

30th Overseas Chapter of ICAI in the Offing

I wish to inform that the ICAI Council has recently approved the opening of the Netherlands (Amsterdam) Chapter of ICAI, which will be inaugurated shortly. With this, we will have 30 overseas Chapters of the Institute, which play a pivotal role in furthering the mission of the Indian accountancy profession.

35th International Conference at UAE (Dubai) Chapter

Recently, myself and ICAI Vice-President CA. Naveen N. D. Gupta, attended the 35th Annual Conference of UAE (Dubai) Chapter of ICAI on the theme Future of Future, which was held on 7th-8th April 2017 in Dubai. With a huge participation of more than 900 delegates, the Conference was inaugurated by UAE Cabinet Member & Minister of Culture & Knowledge Development H. H. Sheikh Nahyan Bin Mubarak Al Nahyan.

ASB of ICAI Celebrates Its 40th Anniversary

I am very happy to inform that the Accounting Standards Board (ASB) of ICAI, established on 21st April 1977 under the chairmanship of (Late) CA. N. C. Krishnan, celebrated its 40th anniversary recently. Since its formation, the ASB has achieved a number of milestones, enhancing the status of ICAI as premium accounting body in the country. One of the most noteworthy achievements is, it paved the way for implementation of accounting standards (AS) at par with International Accounting Standards (IAS) by issuing many accounting standards in the year 2000- 2002. Keeping in mind the needs of emerging economy for high quality globally acceptable financial reporting standards, it developed a concept paper for convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS). It has relentlessly strived hard in the interest of nation and formulated Indian Accounting Standards (Ind AS) converged with IFRSs from 2010-11 onwards and lived upto ICAI’s vision as partner-in-nationbuilding by enabling the Government to realise its vision to transform Indian financial reporting systems and practices to global standards.

A New Global Digital Accounting and Assurance Board Formed

We are putting in our best efforts to undergo a paradigm shift at the ICAI to embrace technology and technologydriven capacity. As you are aware, the digital economy has transformed the contours of businesses and in order to assess the accounting and auditing issues in this emerging scenario caused by data analytics, artificial intelligence and issues like cyber security, etc. ICAI has recently constituted Global Digital Accounting and Assurance Board, as a nonstanding committee.

Development of Online Regulatory Forms

I wish to inform that the Digital Transformation & Process Reengineering Group (DTPRG) at ICAI is working towards the development and implementation of various online regulatory forms for our students and members. Forms related to members (Form No. 96, 101, and 117) and for Students (103, 103 Re-Registration), 109 and 108 (Service Certificate for Articleship) have already been launched and are available on the ICAI Website under the e-Services. The Group has further identified a need for the automation of Key Forms for the registration in IPCC and Final. While the CPT Form is already live, I am happy to inform that the IPCC and Final registration forms would be available online by 30th April 2017.

Member and Firm Card Online

I am happy to inform that we have created Member and Firm Cards online at the ICAI website, where members/ firms can validate themselves and see their respective details and concerns online and they can access http://eforms.icai.org/reprintletter/membercard.aspx and http://eforms.icai.org/REprintletter/Firmcard.aspx for member and firm cards respectively. These green endeavours of the ICAI will prove economical too, saving time and infrastructure cost of all concerned stakeholders.

Web-Interface on Students Exam Life-Cycle Management

ICAI has embarked upon an integrated web-interface called Student Exam Life Cycle Management project, where CA students using a single user ID and password, can access various examination-related services, including application for duplicate marksheets/ pass certificates/ transcripts, change of centre/ medium/ group, downloading admit cards, checking results, and applying for verification/ seeking certified copies of answer books post-result.

Two More Universities to Offer PhD to Chartered Accountants

I am pleased to inform that Maharishi Arvind University of Jaipur has recognised the Chartered Accountancy qualification along with the Bachelor’s degree for the purpose of Chartered Accountants’ admission into their PhD (Doctorate of Philosophy) programme. Dibrugarh University of Dibrugarh has recognised CA qualification as equal to Masters in Commerce. The number of institutions that now offer their PhD programme to CAs is 109, i.e. 101 Universities, 6 IIMs and 2 IITs.

Expeditious Disposal of Disciplinary Cases

Keeping with the practice introduced last year, I wish to apprise our stakeholders that we have constituted two Benches of the Disciplinary Committee, in the current year too to sustain the process of expeditious disposal of cases and reduce the pendency substantially.

Regional Chairmen Meet

Recently, we had a meeting with Chairmen of all five Regions of ICAI along with the heads of all Decentralised Offices at ICAI headquarters. Both myself and ICAI Vice- President CA. Naveen N. D. Gupta addressed the meeting and discussed with them the expectations of the profession from the heads of Regional Councils as well as ICAI Committees/ departments. Actionables and concerned timelines were decided at the meeting with the ICAI executives responsible for the action.

Encouraging Response to Our Campus Placements

During our 45th edition of campus placement programme held in February-March 2017 across 21 principal cities in India, 118 organisations including public-sector undertakings and banks with their 199 interview teams, participated in the placement programme. They made offers to a total 1,267 newly-qualified Chartered Accountants.

Vink Corporation DMCC and Bharti Airtel Ltd have offered the highest salary, i.e. 43 lakh and 21 lakh per annum, for international and domestic posting respectively.

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Our Institute has a fully operational online grievance redressal mechanism called e-Sahaayataa (http://help.icai.org/). I would request our members and students to use this platform to put their queries, complaints, issues, etc., so that the concerned Committee/ Department could respond and resolve to the issues in a time-bound manner. Apart from phone calls or e-mails, recording concerns at e-Sahaayataa will help the Institute in tracking and monitoring of the resolution process and fixing the responsibility and accountability of the concerned personnel. I earnestly request our members and students to use e-Sahaayataa for their grievances.

Of late, a trend of expressing concerns on various public fora including on social media has evolved. Whilst appreciating the concerns the members may have and considering the limitations of the existing system, if any, can I humbly request them to have restraint in their use of social media and other forums in the overall interests of the profession and introspect the damage that is being done to the profession at large?

Our first President Shri G. P. Kapadia had said: This is your Institute and mine and of each of us. Let us stand by it very loyally, let the altar of worship be our own Institute, our own country. We owe a homage to our country and our own Institute. It is our sacred duty to build it up, to strengthen it, to get for it the best of traditions and the highest status possible in course of time.’ We should not lose our warmth and sense of our pride for the Institute. Being alumni of the Institute, we must consolidate its existence, since its existence and empowerment is closely connected with the economic well-being of ours as well as our nation.

The great Indian sage Gautama Buddha taught us to follow the noble Eightfold Path, i.e. practices of right view, right resolve, right speech, right conduct, right livelihood, right effort, right mindfulness and right meditative absorption, to attain liberation. I wish and congratulate everybody on the occasion of Buddha Purnima (i.e. Gautam Buddha’s birthday) that falls on 10th May this year.

Best wishes,

CA. Nilesh S. Vikamsey
President, ICAI

Mumbai, 24th April 2017

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Tags : Budget (1471) Budget 2017 (347) goods and services tax (1616) GST (1200) ICAI (2093) Section 269ST (18)

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