• Small Discription For Image - 1.

  • Small Discription For Image - 2.

  • Small Discription For Image - 3.

  • Small Discription For Image - 4.

New Post


Saturday, November 14, 2009
no image


The Institute of Chartered Accountants of India (ICAI) has sought details on reports of alleged discrepancies in the books of the Anil Dhirubhai Ambani Group’s flagship company, Reliance
Communications (RCom), to see if it needs to initiate any action against the telecom major’s auditor.
The Department of Telecom (DoT) has appointed independent auditor that scrutinized the accounts
of RCom had found that the telecom major has under-reported revenues of Rs. 2,799 crore to the
Government, resulting in under-payment of Rs. 315 crore as license fee and spectrum charges during 2006-08.
no image


The Securities and Exchange Board of India has proposed changes to the way public share offerings
are done, spelt out guidelines for smaller companies to raise capital through share sales, and called for more disclosures from listed companies to prevent delayed shocks in the form of holes in the books of accounts.

  • Companies listed on SME exchanges to be exempted from eligibility norms applicable for IPOs & FPOs
  • Minimum IPO application size and trading lot for small and medium enterprises to be Rs.1 lakh
  • Companies wanting to list on SME platform should have maximum Rs.25 crore paid-up capital. For listing on NSE and BSE, minimum paid-up capital of Rs.10 crore to be required
  • Shares reserved for a company’s employees in public issues will have a ceiling of Rs.1 lakh on the value of allotment per employee
  • All listed entities, with subsidiaries, have an option to submit consolidated financial statements as per IFRS, but these entities will have to continue filing their standalone results as per Indian GAAP
  • Companies have to give half yearly disclosure of balance-sheet items with audited figures or unaudited figures with limited review
  • Companies will mandatory disclose audited results within 45 days of the end of the quarter. Results have to be disclosed within 60 days for those companies that opt to submit annual audited results on a stand-alone basis
no image


According to the Securities and Exchange Board of India (SEBI), all trades in corporate bonds
between mutual funds, foreign institutional investors, venture capital funds and RBI-regulated
entities would be cleared and settled through the National Securities Clearing Corporation or the
Indian Clearing Corporation from December 1, 2009.
no image


Pursuant to the recommendations made by the Secondary Market Advisory Committee of SEBI
and discussions with major stock exchanges and with a view to expand the reach of the markets
for exchange traded products, it has been decided to allow SEBI registered stock brokers (including
trading members of stock exchanges) to provide access to clients through authorized persons. The
framework governing the market access through authorized persons is prescribed. This framework
provides the minimum requirements and the stock exchanges and stock brokers may prescribe
additional requirements, as they may deem appropriate, in the interest of investors and market.
The authorized person shall not receive or pay any money or securities in its own name or account.
All receipts and payments of securities and funds shall be in the name or account of stock broker.
The authorized person shall receive his remuneration - fees, charges, commission, salary,
etc. - for his services only from the stock broker and he shall not charge any amount from the
no image


A special bench of the Income Tax Appellate Tribunal (ITAT), Delhi has held that fees paid by
Indian broadcasting companies to foreign satellite service providers can be taxed in India. The foreign satellite companies held the view that the amount received by them from India cannot be taxed in India because they have no material or men or machinery or a combination of them in India.
no image


In a setback to telecom major Vodafone Essar, the Income Tax department has issued a show cause
notice to Vodafone International Holdings, alleging tax evasion in its $ 11.2 billion deal with Hutchison Telecommunications International Ltd. in 2007.In the 531-page notice sent under Section 201(1) and 201(1A) of the IT Act, 1961, it asked Vodafone to explain why it should not be held that “the tax department has competent jurisdiction to proceed against it for the default of non-deduction of tax at source” in the transaction.
no image


The empowered committee of the State Finance Ministers has come up with the first discussion paper on Goods and Services Tax. The broad contours of the proposed GST structure are as under:

The GST shall have two components:

  • one levied by the Centre (CGST i.e Central GST ) and
  • the other levied by the States (SGST i.e State GST)

CGST and SGST applicable on all transactions of goods and services for consideration except
  • exempt goods and services,
  • goods and services outside the purview of GST and
  • transactions below threshold limits
  • Separate books to be maintained for utilization or refund of credit.
  • Cross credits between CGST and SGST generally not permissible except in case of Inter State GST model
  • All inter-state transactions of goods and services to attract IGST i.e Inter State GST
  • IGST will be equal to CGST plus SGST
  • Inter-state seller to pay IGST after adjusting credit of IGST, CGST and SGST
  • The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST
  • The Importing dealer will claim credit of IGST while discharging his output tax liability in his own State
  • The Centre will transfer to the importing State the credit of IGST used in payment of SGST.
Two-rate structure –
  • a lower rate for necessary items and goods of basic importance and
  • a standard rate for goods in general.
  • There will also be a special rate for precious metals and a list of exempted items
  • Threshold limit under SGST for goods and services may be adopted of INR 10 lakhs
  • Threshold limit under CGST for goods may be kept of INR 1.5 crores, and for services not specified
  • Composition/ compounding cut-off of INR 50 lakhs and floor rate of 0.5% across states.
  • Scheme to allow option for GST registration to dealers with turnover below compounding cut off
At Central Level

Central Excise Duty, Additional Excise Duty, Excise duty under Medicinal and Toiletries Preparation Act, Additional Customs Duty (CVD) and Special Additional Custom Duty (SACD),
Service Tax, Surcharges and Cess

At State Level
VAT, Sales Tax, Entertainment Tax (not levied by local bodies), Luxury Tax, Taxes on lottery, betting and gambling, State Cesses and Surcharges relating to supply of goods and services, Entry tax (not in lieu of octroi)

  • Exports including supplies to SEZ (processing zones only) would be zero-rated.
  • Both CGST and SGST will be levied on import of goods and services into the country.
  • The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed.
  • Full and complete set-off will be available on the GST paid on import on goods and services
  • Periodical returns to be filed before the respective CGST and SGST authorities in common format as far as possible
  • PAN Based Identification Number with a total of 13/ 15 digits
  • The tax exemptions, remissions etc. related to industrial incentives should be converted into cash refund schemes after collection of tax
  • Exemptions, remissions etc. would continue up to legitimate expiry time both for the Centre and the States.
  • Any new exemption, remission etc. or continuation of earlier exemption, remission etc. would not be allowed
  • Effective date of GST implementation, rate of GST, and similar other aspects will be known in the course of appropriate legislative actions
no image


Foreign investment in India can come broadly in form of

  • Foreign Direct Investments (FDI)
  • Foreign Portfolio Investments
Foreign Direct Investment
Foreign Direct Investment is freely permitted in almost all sectors.

Types of Instruments: FDI includes investment in India by non residents in
  • Equity Shares
  • Fully and mandatory convertible debentures
  • Fully and mandatory convertible preference shares of an Indian company.
Routes for FDI
  • Automatic Route: the foreign investor or the Indian company does not require any approval from the Reserve Bank or Government of India for the investment.
  • Government Route: prior approval of the Government of India, Ministry of Finance, Foreign Investment Promotion Board (FIPB) is required.
Prohibition on investment in India
Foreign investment in any form is prohibited in following activities:
  • Retail Trading (except single brand product retailing)
  • Atomic Energy
  • Lottery Business
  • Gambling and Betting
  • Business of chit fund
  • Nidhi company
  • Trading in Transferable Development Rights(TDRs)
  • Activities / sectors not opened to private sector investment
  • Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisciculture and cultivation of vegetables, mushrooms, etc. under controlled conditions and services related to agro and allied sectors) and Plantations (other than Tea Plantations)
  • Real estate and farm houses except under specific condition and minimum size of project.
Eligibility for investment
Following persons are eligible for Investment in India:
  • A Person resident outside India (other than citizen of Pakistan)
  • Entity incorporated outside India (other than Entities incorporated in Pakistan)
  • Citizens / Entities of Bangladesh only with prior approval of RBI
  • Overseas Corporate Bodies incorporated outside India only with prior approval of RBI
Transfer of shares and convertible debentures
Foreign investors can also invest in Indian companies by purchasing / acquiring existing shares from Indian shareholders or from other non-resident shareholders. General permission has been granted to non-residents / NRIs for acquisition of shares by way of transfer subject to certain stipulations 

Reporting Requirements
  • Reporting of Inflow: Intimation for receipt of Share Application Money to be filed with RBI in specified format within 30 days of such receipt in the Advance Reporting form
  • Time frame for issue of shares: Share to be issued within 180 days from days of receipt of inward remittance. Else refunded to non-resident investor
  • Issue of Shares: File Form FC-GPR with RBI within 30 days of allotment along-with the following documents:
  • Valuation certificate from a Chartered Accountant;
  • Foreign inward remittance certificate;
  • Compliance certificate from a Company Secretary.
  • Transfer of Shares (From Resident to a Non-resident and viceversa): File form FC-TRS to be filed with RBI through authorised dealer within 60 days of receipt of consideration on value as per CA valuation as per guidelines.
Foreign Portfolio Investment
Foreign Institutional Investors (FIIs) registered with SEBI and Non-resident Indians (NRIs) are eligible to purchase shares and convertible debentures issued by Indian companies under the Portfolio Investment Scheme (PIS).
  • NRIs may purchase/sell shares/convertible debentures through a designated bank branch on repatriation or non-repatriation basis. The paid-up value must not exceed-
  • 5% of total paid - up value, for each NRI
  • 10% in aggregate for all NRIs can be raised to 24% if special resolution is passed.
In case of FIIs, holding must not exceed
  • 10% of total paid-up value for each FII
  • 24% of total paid-up value for all FIIs.
Above limit can however be increased by passing a resolution of BOD and special resolution of General Body.
no image


It is clarified that service tax is not chargeable on the services provided in respect of tour undertaken
for carrying out Haj and Umrah Pilgrimage in Saudi Arabia by Indian pilgrims considering these as
export of service, provided they fulfill the other conditions of export as provided in Export of
Service Rules.
no image


Essar Group’s telecom holding company (ETHL Communications) has raised Rs. 4,280 crore by
issuing rated, listed, zero coupon, non-convertible debentures (NCDs) through private placement to
part finance the group’s refinery and steel businesses. The issue which opened on October 7, 2009 was oversubscribed by more than three times with over 20 investors across mutual funds, insurance companies and corporates. The Non-Convertible debenture issue was sold in two separate series of Rs. 2,250 crore each, maturing in July 2011 and December 2011. The yield for the series A and series B is 9.15% and 9.25% respectively.
no image


Special Refinance Facility (SRF) to banks withdrawn under Section 17(3B) of the Reserve
Bank of India Act, 1934. In terms of this facility all scheduled commercial banks (excluding RRBs)
are provided refinance from the Reserve Bank equivalent to up to 1.0 per cent of each bank’s
Net Demand and Time Liabilities (NDTL). As per Second Quarter Review of Monetary Policy
2009-10, Banks cannot avail fresh refinance from the Reserve Bank under this facility from now
on wards.
no image


Government will provide interest subvention of 2% p.a. to Public Sector Banks in respect of short-
term production credit up to Rs.3 lakh provided to farmers. This amount of subvention will be
calculated on the crop loan amount from the date of its disbursement/drawal up to the date of
repayment or up to the date beyond which the outstanding loan becomes overdue i.e. March 31,
2010 for Kharif and June 30, 2010 for Rabi, respectively, whichever is earlier, subject to a
maximum period of one year. This subvention will be available to Public Sector Banks on the
condition that they make available short-term credit at ground level at 7% p.a.
no image


Mauritius vice prime minister and finance minister Ramakrishna Sithanen has strongly supported the
Double Taxation Avoidance Treaty (DTAA) it has with India. According to him, it is not a one-off
treaty between the two countries but that both the countries have such treaties with many other
countries and it is unfair to single out Mauritius and any unilateral move to change the terms of
the treaty would be in violation of international laws. He further said that the proposed direct tax
code of India which proposes treaty over-riding is also a unilateral move and against international
no image


  • Base Rate at 8.55 per cent taking 2008-09 data.
  • Sub-base rate lending not viable.
  • Norms to be applicable on loans with duration of one year and above, including working capital loans.
  • Lending below Base Rate not to exceed 15 per cent of total incremental lending for the financial year.
  • All new and existing loans that come up for renewal to come under the new rate.
  • All loan categories currently not linked to the Base Rate, except credit card receivables,  loans to banks’ own employees, etc.
  • Administered lending rate for small borrowers be deregulated.

According to the working group which reviewed the system of lending rates, the Base Rate could serve as the benchmark for floating rate loans. The committee wants banks to bring more transparency in pricing products and to reflect changes in policy rates. In addition, the committee
is contemplating abolition of sub-BPLR lending. Currently, more than 70 per cent loans are priced
below the BPLR.
no image


The ceiling on interest rates on pre-shipment rupee export credit up to 270 days and post-shipment
rupee export credit up to 180 days had been stipulated at BPLR minus 2.5 per cent, valid up to
October 31, 2009. It has been decided to extend the validity of the above dispensation up to April
30, 2010.
no image


The elections to the Central Council of the Institute of Chartered Accountants of India are scheduled on 4th and 5th December, 2009. At this juncture, it is therefore important to analyze some of the key agendas before the CA profession to be taken up by the Council of the Institute with the consultative process and the active participation of the members.

  • Employment Opportunities: It is important to harness national and international employment opportunities for newly qualified Chartered Accountants as well as for mid- level and top level management positions.
  • It is important to restructure education and training and to provide residential course for significant skill up-gradation of members empowering them to compete with MBAs and other professions globally.
  • Introduction of IFRS and International Accounting and Auditing Standards have increased complexities coupled with extensive compliance requirements. We have chalked out a plan for simplification and reduction in complexities in accounting and audit especially for small and medium enterprises/ companies.
  • Auditors’ Independence and appointment:The position of auditors has to be strengthened and duly empowered with independence. The power to appoint auditors by Board of Directors or those charged with governance has severely impacted the efficacy of audit.
  • It is important to strongly pursue with RBI, MCA, SEBI and other regulatory authorities for appointment of Chartered Accountants as independent auditors, joint auditors and special auditors through empanelment in banks, listed entities and other entities in which public is substantially interested  and it is also important to ensure transparency in appointments.
  • Professional Fee Scale: It is important to prescribe that the norms of eligibility for tendering are within reasonable professional standards and are not highly leveraged to suit to specific section. It is necessary to introduce minimum fee benchmark for all tendering assignments and to prohibit tendering in specific professional areas.
  • To prescribe minimum fee benchmark for concurrent, revenue and inspection audit of banks, insurance, co-operative societies, public sector enterprises etc.
  • To fully involve the members in industry in the Institute’s affairs and as members of the Councils, Committees and professional development and technical groups to utilize their immense talent to the advantage of the profession.
  • To empower Chartered Accountants to be elevated as CFOs, CEOs and as entrepreneurs for setting up industries, businesses, funds and service organizations.
  • To significantly increase professional opportunities for members in practice especially for younger members and smaller firms.

In the backdrop of prospective complete transformation of Direct Tax (DTC), Indirect Tax
(GST), Companies Bill 2009, Accounting Standards (conversion to IFRS), and Auditing Standards 
(conversion to clarity projects of International Accounting Standards Board), it is imperative that the
Institute, the regional councils and the branches are fully geared up to prepare members at large for a
complete alignment in the light of changing national and international economic environments. 
We stand committed to take the profession of Chartered Accountants to newer heights and to
increase its participation and status in all areas of profession, society and economy.