Opportunities for Company Secretaries under Goods & Services Tax

Over 150 countries have already implemented the GST. Most of the countries have a unified GST System. Brazil and Canada follow a dual system where GST is levied by both the Union and State Governments. France was the first country to introduce GST System in 1954.

Brij Mohan Jha

Over 150 countries have already implemented the GST. Most of the countries have a unified GST System. Brazil and Canada follow a dual system where GST is levied by both the Union and State Governments. France was the first country to introduce GST System in 1954.

The GST is a comprehensive destination based tax levy on manufacture, sale and consumption of goods and services at a national level which will subsume other indirect taxes such as Octroi, Central Sales Tax, State-level sales tax, entry tax, stamp duty, telecom licence fees, turnover tax, tax on consumption or sale of electricity, taxes on transportation of goods and services, etc. thus avoiding multiple layers of taxation that currently exist in India.

GST’ has also been defined under Article 366 (Clause 12A) of Constitution Amendment Bill, 2011 to mean any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.

On 14th July, 2016 – the Government has put the Draft Model GST Law on public domain after getting in principle nod from the Empowered Committee of State Finance Ministers, in a way, signalling that the GST might mark its advent from April 1, 2017.

“GST is expected to play a transformative role in the way our economy functions. It will add buoyancy to our economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. We are moving in various fronts to implement GST from the next year”

– Arun Jaitley, Budget Speech, 2015.

Opportunities in GST

The opportunities in GST in all probability will grow for following reasons – Firstly, the law of GST is new because of which more and more new assesses will board the tax wagon;

Secondly, as the law is still in its initial stages, the Government too is learning from experience and new opportunities are emerging every day;

Thirdly, with the comprehensive approach, there is still enough room for further expansion of the net. By venturing into the area of GST, Company Secretaries as professionals can play a proactive role and act as facilitator for the Government as well as the assesses.

GST draft law, though appears to be a simple one, is in fact not really so. It requires an in depth study of law and analytical skills to interpret the definitions and taxability of supplies. It is necessary for the goods / service provider as well as goods / service receiver to know whether the supply provided or received is taxable or not.

The spectrum of GST is wide and most of the industrial and corporate entities are exposed to GST as a service provider, service/goods receiver, importer, and exporter of service/goods or otherwise. Since these assesses come from a heterogeneous background (rural, urban, literate, illiterate, corporates, individuals, etc.), importing legal opinions on ticklish issues of tax, interpretation of judicial pronouncements and suggesting the course of action are some of the advisory and consulting services that professional like Company Secretaries could offer for better compliance.

Foreseeing the opportunities for the professionals under the proposed GST, it is reiterated that Company Secretaries, as competent professionals in the area of Indirect Taxes, can get hold of plethora of opportunities under the Goods and Services Tax.

GST is a tax of future, and lot of opportunities can be explored in it, especially by professionals. Lack of knowledge, poor compliance leading to penal provisions, frequent amendments in law and rules, growing assesse base and more importantly, heterogeneous group of assesses present an array of opportunities for finance and tax professionals. Professionals like Company Secretaries could act as a crucial link to bridge the knowledge gap, leading to fair and voluntary compliance of law and rightful discharge of tax liability by assesses. As the gamut of service tax expands, there is going to be an ever increasing need for professionals to be proactive and make full use of opportunities presented before them.

Company Secretaries can play an important role in being an advisor and facilitator for due compliances of laws relating to Indirect Taxes and (GST) and be an asset to the general business community and corporate world.

The Company Secretary can perform the following types of services to clients:-

(i) Advisory services or strategic advisor

A Company Secretary can comprehensively interpret the law of Indirect taxes or proposed GST law and provide complete guidance and advisory to the business entities. Company Secretaries are more suited for their services because of their knowledge of laws and good communication skills.

(ii) Tax Planning

Company Secretaries are competent to understand the impact of laws and its various alternatives and can be helpful in proper tax planning of indirect taxes/GST.

(iii) Procedural Compliances

Procedural Compliance includes registration, filing of returns, payments of taxes, assessment etc. Since a Company Secretary is already playing the role of a Compliance Officer under various other laws, he can assist in the same under proposed GST law also.

(iv) Book / Record Keeping

Like any other tax laws, introduction of GST would also require proper record keeping and maintaining systematic records of credit of input/input service and its proper utilisation etc. Company Secretaries must hone their skills to perform these tasks.

(v) Appeals and Representation

A Company Secretary can provide the service of representation with confidence because of practical exposure of appearing before various competent authorities. Because of their legal bent of mind, a Company Secretary can provide better services in the field of appellate work. The Clause 86(2)(c) of the draft Model GST law provides that the Practising Company Secretary, is inter alia, entitled to appear before various authorities under the Goods and Services Tax law, First Appellate Authority and the Appellate Tribunal.

(vi) Vetting

Vetting of legal documents and drafting agreements, etc. also requires professional skills. Company Secretary possess acumen in this area and could assist in drafting legal documents like replies to show cause notice, representations at appellate forums, representations before adjudicating authority, opinions and clarifications.

For better administration of new tax regime in the country, it is pertinent to have more and more competent and equipped professionals to facilitate regulators to ensure compliance of various statues and thus help in achieving this ambitious task. The Company Secretaries, who practice in almost all the branches of law and have a strong accounting background, are competent professionals to handle the regulatory compliance under the proposed GST laws. They are skilled professionals who understand legal, financial and compliance dimensions of business entity comprehensively and will assist in making GST as “Good and Simplified Tax” regime further fuelling the growth of India Inc.

A Company Secretary is well versed in laws subject. There is not even an iota of doubt on their academic knowledge and practical training. Company Secretaries particularly master their understanding in the law subjects. Whether it is in indirect tax laws or the proposed GST law, it will be a smooth ride for a Company Secretary owing to their understanding and expertise in the subject of various laws.

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View Comments (4)

  • Other than Advocates can not appear before revenue authority on own motion by the strength of power of attorney against the notice issued to the client. But other than Advocates can definitely appear before revenue authority against specific summons issued to him.

  • (1) Legal Practitioners are also authorized to prepare return of income & represent assesses U/s.288(2) of Income-Tax Act read with Rule 12A. Rule 12A inserted by Notification No.2029 Dt.13.6.1962, require Legal Practitioner covered U/s 288(2) to furnish report on the examination of assesses account books & documents in the assessment proceedings. Here question arises when such audit clause already present in Rule 12A of IT Rules, why once again Section 44AB inserted in Income-Tax Act.

    (2) When Legal Practitioners are authorized to prepare return of income under 12A of Income-Tax Rules, it is presumed that such persons possess knowledge of Income-Tax law read with accounting principle prescribed U/s 145 of Income-Tax Act. Information to be furnished in Certificates/Reports under Income-Tax Act amounts to practice of law as it require interpretation of law more & basic accounting knowledge sufficient.

    (3) When Legal Practitioners are the only class of persons entitled to practice law U/s 29 of Advocates Act, 1961 (Law Professionals), there is no justification in
    prohibiting Advocates to issue Certificates or Reports in Income-Tax Act. (This is well supported by Bar Council of India Vs. A.K.Balaji SLP (Civil) 17150-17154/2012)

  • Policy decision of Finance Ministry, Govt. of India in the Congress regime to expand the definition of “Accountant” to include related professionals in DTC-2013 for the purpose of Tax Audit under Direct Taxes Code read with delegated legislation Section 320(2)(iii) is highly appreciated. But, I do not understand why this was not incorporated in the Income-Tax Act till date.



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