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Tuesday, December 15, 2015
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Accounting of Public Spending

Our Honorable Chief Minister of Delhi, announced a special seven day drive of removing Malba, dust and garbage in case he receives photographs through a special mobile application. Huge amounts
were spent on the entire exercise specially on advertisement. Delhi did not see any result and the outcome couldn't be measured, in the absence of accounting, Management Information System, proper checks and control and no provision for monitoring of outcome.
The Chartered Accountant profession, hereby, volunteers setting up of the entire system of accounting of public spending including:-

  • A transparent pre sanction detailed techno economic feasibility study
  • Disclosure of the entire break up of plan, technical specifications, description of Bills of Quantity, including standard service level, quality levels and other terms or condition proposed to the potential bidders through a transparent electronic public procurement process.
  • Post sanction implementation monitoring including accounting, internal control, delegation of powers and record keeping of actual deliveries against the committed deliverable by measurement of actual physical outcome. A regular step by step website disclosure and invitation of public questioning will ensure that Bill of Quantity (BOQ) is adhered in letter and spirit.

Public Accounting in a transparent manner and its disclosure to the entire democracy is mandatory for structured and monitor growth. The government has specified detailed disclosure, transparency requirement beside compliance's for the private sector. The similar accounting disclosure requirement as well as internal control mechanism is to be put in place for the Central Government, State government and local bodies. The various social schemes, planned expenditure as well as unplanned expenditure needs to be properly accounted for, Management Information System to be put in place with clear cut governance process. In the absence of above, the public funds will always be misused. For Example- Education Cess meant for modernization and infrastructure had been mainly spent on mid-day meal for last several years. The Institute of Chartered Accountants of India (ICAI) can provide a framework and organise Chartered Accountants into groups to provide necessary technology including hand holding of the  implementation .This will ensure eradication of mad competition in the tendering process and will provide suitable remuneration for professional services and high quality result to the Central Government, State Government, Indian Railways, National Highway Authority of India, Public Sector Units (PSUs) and all other similar initiative & schemes of government. The exercise can be funded to ICAI body for onward Chartered Accountant groups to support the exercise professionally.
Sunday, December 13, 2015
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Accounting of Public Spending

Our  honorable chief minister of Delhi, announced a special seven day drive of removing Malba, dust and garbage in case he receives photographs through a special mobile app. Huge amounts were spent on the entire exercise specially on advertisement.  Delhi didn’t see any result and the outcome couldn’t be measured, in the absence of accounting, MIS, proper checks and control and no provision for monitoring of outcome. The Chartered Accountant profession hereby volunteers setting up of the entire system of accounting of public spending including:-
Ø  A transparent pre sanction detailed techno economic feasibility study
Ø  Disclosure of the entire break up of plan, technical specifications, description of BOQ, including standard service level, quality levels  and other terms or condition proposed  to the potential bidders through a transparent electronic public procurement process.
Ø  Post sanction implementation monitoring including accounting, internal control, delegation of powers and record keeping of actual deliveries against the committed deliverable by measurement of actual physical outcome. A regular step by step website disclosure and invitation of public questioning will ensure that BOQ is adhered in letter and spirit.
Public Accounting in a transparent manner and its disclosure to the entire democracy is mandatory for structured and monitor growth. The government has specified detailed disclosure, transparency requirement beside compliances for the private sector. The similar accounting disclosure requirement as well as internal control mechanism is to be put in place for the  Central, State government and local bodies. The various social scheme plan expenditure as well as unplanned expenditure needs to be properly accounted for, Management information system to be put in place with clear cut governance process. In the absence of above, the public funds will always be misused for Example- Education Cess meant for modernization and infrastructure had been mainly spent on mid-day meal for last several years.

The institute of Chartered accountant of India can provide a framework and organise chartered accountant into groups to provide necessary technology including hand holding of the implementation .This will ensure eradication of mad competition in the tendering process and will provide suitable remuneration for professional services  and high quality result to the central government, state government, railways, national highway authority, PSUs  and all other similar initiative & scheme of government. The exercise can be funded to ICAI body for onward CA groups to support the exercise professionally.
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Foreign Direct investment-Defense Sector-big opportunity- safeguards to be in place

The government of India has recently announced large scale liberalization in the defense sector including up to 100% of foreign ownership under approval route. On the one hand this has given major boost to Indian entrepreneur like Reliance, TATA, Baba Kalyani and thousands of others to plan large scale production units in high tech defense sector. A Large number of International companies including the top five defense manufacturers in the world are very swiftly firming up their plans to make defense equipment in India
In the backdrop of majority and up to 100% foreign ownership, major apprehension on the sovereign, safety and integrity of India are being raised. While we support the latest initiative of liberalization, at the same time sovereign risk needs to be addressed by adequate safeguards. We Suggest as a mandatory condition while granting approval, the Indian government should provide for rights of regular inspection, regulation of sales including export, scrap disposal, , placement of permanent security including military personnel and regular visit of security agency. The sale, scrap, information and raw material and components movement need close 100 % monitoring. The license condition should provide for sovereign action including right to recall the license, in case of any risk or even potential of any risk. We can’t and we will not repeat East India Company. India is capable,

Competent, strong, credible and is fully confident.
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WTO: Will Nairobi round push International trade

The Ministerial Conference is a top decision making body of World Trade Organisation. The 10th Ministerial Conference would be held in Nairobi, Kenya from 15th to 18th December, 2015. Last 3 rounds have not brought any major positive movement or result. The WTO framework, currently in operation is on the basis of Doha round and has determined various mandatory guidelines in relation to International Trade including Tariff Barriers, non-tariff Barriers, most favoured nation treatment, anti-dumping, anti-subsidy and other several norms, determining  trade relationships of more than 150 countries.
G7 countries have been using WTO as a major tool to serve their interest. The negotiation in Doha round got stuck on the issue of food security, public procurement, agriculture subsidy, working condition and so on. To circumvent WTO, USA and 12 other countries have entered into Trans Pacific pact (TPP). Similarly USA is in final stage of signing TIPP with European Union. These multilateral and plurilateral pacts being parallel to WTO framework are giving special advantage to the signatory countries at the cost of rest of the world. It is worth noticing that china and India have been kept out of TPP and TIPP. These pacts are hurting even the most favoured nation treatment, in the name of harmonisation of standard.
India and China now need to strategies together as to how to counter these pacts by signing similar parallel pacts with select countries or to push new strategies on the WTO framework itself to make the WTO move in a manner that all parallel pacts are killed. India & China with the support of Russia, South Africa, select south American countries and the entire Asian and African continent can decide to have a completely new strategy to remove WTO hurdles in negotiation on the one hand and to find out to new issues and methodologies to ensure safeguard of their own interest. That would mean, accepting partly the pressure of the developed world on the WTO platform , while simultaneously taking away larger benefits in WTO negotiation to safeguard Indian (domestic) interest in all the 4-5 Strategic contentious issue, a new vision of the honourable Prime Minister and intellectual panel can guide a new direction.
Limitation of benefit Protocol (LBO)
In the international double tax avoidance agreement USA, Europe, and Australia have provided major relaxation mutually, without providing similar LBO benefit to the citizen of India and other developing Countries. This is clearly against WTO pact.

Services : The general agreement on trade in services (GATS-) have not moved much due to insistence on movement of natural person, to be made free, being insisted upon by India china and developing countries . No developed country is comfortable in the free movement of natural person. Accordingly, the time is right to at least negotiate on other parameters For example: in accounting sector, or in medicine the requirement for mutual recognition of qualifications need to be institutionalised at world level ( e.g. IFAC in case of Accounting qualification), requirement for permanent residency, requirement of citizenship could be negotiated harder, while leaving movement’s natural person matter to bilateral negotiation, requisite safeguards against terrorism, anti- national and other illegal activities. America’s shrewd trade & economic Politics in the WTO framework can be countered only by shrewd and well planned strategies of the Indian & Chinese to be supported by Russia and Africa.
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No need to affix MRP on goods declared to be 'not for retail sale'; excise duty payable on transaction value

The Supreme Court of India held that where assessee had declared on goods that they were not meant for retail sale and revenue could not produce any evidence to contrary, there was no requirement to affix MRP thereon and goods were to be valued based on transaction value under section 4.

Commissioner of Central Excise, Noida v. Control & Switchgears Contactors Ltd [2015] 63 taxmann.com 82
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Job worker couldn't be treated as agent just because assessee had given loan to it for buying machinery

The Supreme Court of India held that merely because principal manufacturer has extended loan to job-worker for investment in machinery, job-worker cannot be regarded as dummy of principal manufacturer.

Commissioner of Central Excise, Bangalore v. Campco [2015] 62 taxmann.com 273
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Government offers tax sop to spur ship building

The government has announced a slew of tax sops to spur shipbuilding in the country as part of measures aimed at boosting the Make in India programme. These include exemption from customs and central excise duties on all raw material and parts for use in the manufacture of ships, vessels, tugs and pusher crafts.
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Three excise rules declared unconstitutional

The Supreme Court ruled that the demand for interest and penalty under Rules 96ZO, 96 ZP and 96 ZQ of the Central Excise Rules was illegal.

The direct and immediate impact upon the fundamental right of the citizen is that he is exposed to a huge liability by way of penalty for reasons which may in given circumstances be beyond his control and/or for delay which may be minimal. The possibility of achieving the object of deterrence in such cases can be achieved by imposing a less drastic restraint.

Shree Bhagwati Steel Rolling Mills vs. CCE
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Finance Ministry notifies revised duty drawbacks rates

The Finance ministry notified revised rates of duty drawback that will be effective from November 23.

Duty drawback rates raised on engineering goods, leather handbags, readymade garments made of cotton wool and cotton with lycra , shrimps Two percentage points rise in duty drawback for engineering sector to allow higher tax refund to exporters of machinery and appliances, electrical machinery, tools among others.
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Holding period of capital asset shall not include period for which it was held as stock in trade

The High Court of Delhi held that where stock in trade is converted into capital asset, the holding period for the purposes of classifying it as long-term or short-term capital asset shall be reckoned excluding the period for which it was held as stock-in-trade prior to conversion.

Commissioner of Income-tax -Delhi –I v. Abhinandan Investment Ltd. [2015] 63 taxmann.com 263
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No TP adjustment for corporate guarantee issued by parent co. on behalf of its subsidiary co.

The ITAT Ahmedabad Bench 'D' held that the issuance of corporate guarantees by holding company on behalf of its subsidiary where it is done to provide or compensate for lack of subsidiary's core strength to raise bank finances is in the nature of quasi capital or shareholder activity and does not amount to a service in respect of which arm's length adjustment can be done. This is a transaction which cannot happen in an arm's length situation. This is because no bank will ever issue a guarantee in favour of an entity which lacks creditworthiness to raise a loan. It is inherently impossible to decide arm's length price of a transaction which cannot take place in an arm's length situation.

Micro Ink Ltd. v. Additional Commissioner of Income-tax [2015] 63 taxmann.com 353
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Auditors use algorithms to scan books minutely

Algorithms, the software programs that are increasingly replacing humans in many complex jobs where precision and speed decide the winner, are becoming an essential tool for auditors as well. The different tools used by the auditors give them specifics of even the smallest if transactions once it is defined by the auditor. The auditors need to have a basic know how to run these tools but the results are transparent and elaborate.

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Highlights of Special Investigation Team (SIT) Report on “Shell Companies and Beneficial Ownership”

·      There are 2627 persons holding Directorship in more than 20 Companies in violation of Section 165 of the Companies Act, 2013. It may be mentioned this is also in violation of s. 275 of the erstwhile Companies Act, 1956. The total number of Companies involved is 77696.

·      A total of 345 addresses have at least 20 Companies operating from the same address. The total number of Companies sharing their address with at least 19 more Companies are 13581 in number. 
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President clears Madhya Pradesh labour reforms

Companies employing up to 300 workers will be allowed to retrench workers or shut shop without government approval in Madhya Pradesh against the provision for up to 100 workers earlier.
Easier Rules
·         Retrenched workers to get at least 3 months’ compensation
·         In the event of a dispute, a worker has to approach conciliation officers within 3 years
·         Workers to get earned leave after 6 months, which could be availed of in the same calendar year
·         Overtime hours in a quarter raised from 75 hours to 125 hours
·         Women can work in night shifts; state government to ensure security

·         Plant & machinery to be excluded in calculating building and construction cess.
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Government may consolidate Private Sector Employee Benefits

The Labour Ministry is finalising the social security code that would amalgamate half a dozen laws to simplify social security regulations besides allowing working women to avail longer maternity leave and make gratuity portable.

The key laws that will be subsumed under such a social security code include the Employees Provident Fund & Miscellaneous Provision Act, 1952, the Employees' State Insurance Act, 1948, the Employees' Compensation Act, 1923, the Payment of Gratuity Act, 1972 and the Maternity Benefit Act, 1961.
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No restriction on ESOPs given to independent directors earlier

Securities and Exchange Board of India said independent directors can exercise their ESOP (employee stock ownership plan) granted to them earlier. The restrictions apply only on fresh grant of ESOPs that were issued after new Sebi guidelines came into force.
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Debt paper: Rule change likely for Mutual Fund investment

·         Investment limit in a single issuer to be changed to less than 15%, depending on the rating of the paper.
·         At present, Securities and Exchange Board of India restricts investment in rated investment grade debt instruments issued by a single issuer to 15 per cent of the scheme’s Net Assets Value
·         About Rs 1 lakh crore of mutual funds’ assets under management exposed to papers perceived to be high risk
·         SEBI wants mutual funds to stop relying on credit rating agencies, build own risk assessment system

·         SEBI asks fund houses to follow best practices guidelines on upfront commission.
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SEBI to set rules, offer sops for green bonds

What are green bonds?
Structured like ordinary bonds but will invest in only those companies and projects that help in reducing carbon footprint
Projects they invest in
Renewable energy, energy efficiency, sustainable waste management, sustainable land use, biodiversity conservation, clean transportation, sustainable water management and climate change adaptation
Special dispensations
No special dispensations allowed, apart from them being under RBI’s infrastructure bond category. Do not attract statutory requirements such as CRR & SLR
Funds raised by these bonds globally
$12.9-billion raised during the second quarter of 2015, bringing year-to-date totals to roughly $19.2 billion. Last year, fund-raising globally touched a record high of $37 billion

Indian issuances and fund-raising
YES Bank issued the first-ever green infra bonds in February this year. It raised Rs 315 crore through the issue of green infra bonds to IFC on a private placement basis. Exim Bank raised Rs 3,330 crore in March via green bond sale. IDBI plans to mop up Rs 2,331 crore via green bonds.
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SEBI outlines new listing norms for exchanges

Paving the way for stock exchanges to list, SEBI outlined the broad guidelines for an Initial Public Offering (IPO) by bourses. The securities market regulator has made it mandatory for stock exchanges to ensure that the minimum public shareholding is at least 51 per cent.
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Listing norm breach may lead to freezing of promoter holding

The Securities and Exchange Board of India warned of specific consequences if entities are found to be breaching the listing regulations on an exchange. One of these is the freezing of promoter and promoter group holding in such an entity.
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RBI nod to three cos to set up trade receivables discounting system

Reserve Bank of India (RBI) granted an "in-principle" approval to three companies to set up and operate a new Trade Receivables Discounting System (TReDS) to be formed under the Payment and Settlement System (PSS) Act 2007.
A joint venture between the National Stock Exchange's NSE Strategic Investment Corporation Limited (NSICL) and Small Industries Development Bank of India (SIDBI), private sector lender Axis Bank and Gurgaon based Mynd Solutions Pvt Ltd has been granted the node to start a new TReDS system. The approval is valid for 6 months.
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RBI nod must for investors picking up more than 5% stake in a private bank

In a bid to have a greater scrutiny over banking ownership the Reserve bank of India has said that new investors who buy over 5 per cent shares or convertible debt of a private sector bank will have to get the central bank’s approval.
Existing promoters will also have to take the RBI’s approval if they intend to increase their holding to beyond 10 per cent in the bank.

The shareholders having 5 per cent or more of the paid up share capital of a bank would have to give an annual declaration on their ‘Fit and Proper’ status. However, the major shareholder will have furnish the details of the source of funds for such incremental acquisition and obtain ‘no objection’ from the concerned bank.
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India to launch $1-b equity fund for renewable energy

India proposes to launch a $1-billion equity fund, with seed capital from public sector units, to support renewable energy companies.

Government hopes to launch a $1-billion private equity fund where the government companies will seed the initial capital and then at a later date we will look at foreign capital to pool with it to provide equity support to companies which want to come and invest in India’s renewable energy sector.

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BRICS bank to issue bonds

The New Development Bank (NDB), floated by the BRICS nations to step up infrastructure funding in emerging economies, has decided to raise funds in the financial markets by issuing bonds. Last year, the five BRICS countries -- Brazil, Russia, India, China and South Africa -- announced the establishment of the NDB which had an initial authorised capital of USD 100 billion and it will start its operations early next year.  

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Online portal launched to promote small traders’ biz

With an aim of promoting interests of Rs.5.77 crore small businesses, an online portal e-lala was launched to promote business-to-business and trader-to-customer transactions and reduce costs. Urban Development Minister M Venkaiah Naidu inaugurated e-lala, an e-commerce portal of Confederation of All India Traders (CAIT).

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Government defines manufacturing for FDI

India has activated recent policy changes that liberalised foreign direct investment (FDI) rules and has spelt out the definition of the term "manufacturing" to provide clarity to companies and promote ecommerce.
Under the revised policy, a company manufacturing goods in India is free to sell online without any restrictions. However, the term "manufacturing" had not been clearly defined in the policy.
As per the definition by the Department of Industrial Policy and Promotion, "any change in the physical object resulting in transformation of the object into a distinct article with a different name or bringing a new object into existence with a different chemical composition or integral structure" would qualify as manufacturing.

Companies that assemble products in India, such as those in the automobile and telecom sectors, stand to gain while those that have simply been processing or relabeling products won't qualify as manufacturers, according to experts.

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Government puts final touches to strategic stake-sale policy framework- The Road to Disinvestment

  • Draft note on policy for strategic sale of distressed PSUs being circulated
  • Cabinet likely to approve the note by December end
  • Disinvestment Commission to decide whether to sell or revive sick PSUs
  • Assets of unlisted loss-making PSUs might go under the hammer
  • Assets to include factories, warehouses, hotels, office buildings and land parcels
  • Cabinet secretary has been meeting various ministries regarding their companies
  • FY16 disinvestment target Rs 69,500 Cr - Rs 41,000 Cr from stake sale in listed profitable PSUs and the remaining from strategic sales
  • So far, only Rs 12,600 Cr garnered from four stake sales through Offer For Sale route
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NBFC-MFIs: Revision of the loan amount with tenure not less than 24 months

The RBI has extended the limit of the loan amount for NBFC-MFIs, for which the tenure of the loan shall not be less than 24 months, has been raised to ₹ 30,000/- from the present limit of ₹ 15,000. All loans necessarily be prepaid without any penalty, as hitherto.
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NBFCs step in to fill the void, lend more to SMEs

An increasing number of non-banking  finance companies (NBFCs) are ramping up their reach to small and medium enterprises (SMEs) to tap these ‘High  quality borrowers’  Bank lending to this sector leaves a lot to be desired – it declined 3.3 per cent in April-September this fiscal.
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Divestment, Exports, Infrastructure get Government push

Major Cabinet Decisions
·         Cabinet okays 10% stake sale in Coal India, eyes Rs 20,000 crore
·         3% interest subvention scheme to be applicable from April 1, 2015, to boost exports
·         Faster clearances for road projects, as ministry empowered to clear projects worth up to Rs 1,000 cr excluding land.

·         Sugar Industry: CCEA okays production subsidy of Rs 4.5 a quintal of cane crushed for sugar directly to growers
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Foreign borrowing norms relaxed

For rupee denominated ECB, the rate will be commensurate with the prevailing market conditions. The penal interest for default or breach of covenants is capped at two per cent over and above the contracted rate of interest
For ECB with a minimum three-to-five-year average maturity, the all in cost ceiling is 300 basis points over the six month London interbank offer rate (Libor), or applicable benchmark for the respective currency The ECB with an average maturity of over five years will carry a ceiling of 450bps over the six –month Libor.
Apart from usual lenders like banks such rupee resources can now be borrowed from sovereign wealth funds, pension funds and insurance companies according to the final guidelines. The liberal approach with fewer restrictions on end uses and higher all in cost ceiling will help for long term foreign currency borrowings as the extended term makes repayments more sustainable and minimises roll over for the borrower.
More Liberal Norms
In Focus: RBI allows more liberal norms for external commercial borrowing effective from 1 April
Hit Abroad: Rupee denominated bonds (Masala Bonds) which are already which are already being issued in large numbers, are a huge hit with Japanese retail investors.

Effect on Currency: As more such bonds are issued, rupee will become more international and strong.
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Investment by a person resident outside India in an Investment Vehicle

·      A person resident outside India including an RFPI and an NRI may invest in units of Investment Vehicles subject to the conditions laid down in this Schedule.
·      The payment for the units of an Investment Vehicle acquired by a person resident or registered / incorporated outside India shall be made by an inward remittance through the normal banking channel including by debit to an NRE or an FCNR account.
·      A person resident outside India who has acquired or purchased units in accordance with this Schedule may sell or transfer in any manner or redeem the units as per regulations framed by SEBI or directions issued by RBI.
·      Downstream investment by an Investment Vehicle shall be regarded as foreign investment if neither the Sponsor nor the Manager nor the Investment Manager is Indian 'owned and controlled' as defined in Regulation 14 of the principal Regulations. [“Nor” to be replaced by “and” (Major Drafting error)]

Source: Notification NO.FEMA.355/2015-RB]/GSR 858(E), DATED 16-11-2015
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Foreign banks buy up bulk of Indian state government debt

Three banks snapped up almost 90 percent of bonds sold by Indian states to foreigners, and turned them into derivatives, raising the prospect of more volatility in one of Asia's best performing debt markets. Rs.30000 crore out of Rs.35000crore bonds on offer in October have been picked up by 3 banks.

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Stress on bank loans reduced in first half FY 16

The banking sector saw a moderation in the pace of stressed asset formation from around 5.6 per cent in FY15 to 3.3 per cent in the first half of FY16, according to a report by ratings agency ICRA.
Including the exposure refinanced under 5/25 scheme, however, stressed assets formation remained high at about 5.5-6 per cent during the period.

Banks’ credit growth dropped to a multi-year low of 8.8 per cent and overall systemic credit growth (including corporate bonds and commercial paper) was higher at 11.6 per cent.

Monday, November 16, 2015
Friday, November 13, 2015
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ICAI Elections –Your vote will make the difference

The most crucial time for the profession of Chartered Accountants i.e. 3 yearly elections of the Institute are scheduled for December 4-5, 2015. How we exercise our vote will decide future of each one of us. The role being played by the Elected Central Council & the Regional Council is very crucial and it is important to understand while voting that We need a leadership which takes the profession in a right Direction, new and larger professional opportunities are harnessed nationally as well as internationally, we meet various challenges as a profession and all members are effectively, efficiently and respectfully deliver professional services and add a highly acclaimed value to the corporate, while being in employment.

The scenario in the society, economy, Industries, service sector, international and domestic investment, technology and regulatory frame work is changing very fast including:
·         Companies’ Act 2013 and the rules thereunder have recently given us a flavour of new challenges and opportunities
·         International Financial Reporting Standards (IFRS) phase 1 will be implemented in the current year ending March 31, 2016.
·         The Goods & Services tax (GST) is likely to be implemented very shortly, draft rules have started pouring in.
·         The Income Tax Act is being comprehensively modified by a Finance Minister appointed High Powered Committee
·         The Economic growth is entering the phase of steep growth momentum in next few months
·         Foreign Direct Investment (FDI) has recently crossed highest record levels.

Need of the Hour
In the above backdrop, the CA profession will have to play a very crucial role not only in implementation of the new laws but also in giving shape to new projects, implement new regulations, establish controls, arrange resources and to provide a strong footing for sustained growth of business in India.
Credibility and glory of the profession is being tarnished by ulterior motives. A strategic move is important to address this.

Role of Central Council
The Central Council is the top most policy making governing body of the Institute which takes crucial decision, actions and initiatives in respect of:
·         Education, training and examination of students
·         Development of specialised skills and capacity building among members
·         Rejuvenation of senior members in the current framework and update them comprehensively.
·         Setting up of Accounting Standards and Auditing standards
·         To monitor quality of professional services and prosecute erring members under its disciplinary mechanism.
·         Auditing is core area of the profession for which it is recognised and the goodwill of the institute and members per se is directly attached to our performance as auditors.
·         To negotiate international relationships with the Institutes in various countries and International Federation of Accountants (IFAC) , International Auditing Standard Board(IAASB), International Accounting Standards Board (IASB) Confederation of Asian Pacific Accountants (CAPA), South Asian Federation of Accountants (SAFA), etc.

Ability to understand, appreciate, plan and respond to various issues and Challenges is very crucial

·         Professional development-new opportunities, managing competition and most importantly ensuring that the image of the profession and respect for the professionals gains strength.
·         To represent the profession on various key decision making committees of SEBI, Ministry of Corporate Affairs, Central Board of Direct Taxes, Central Board of Excise & Customs 
·         To represent on International Forums like World bank, Securities Exchange Commission, multilateral and bilateral agencies and foreign Government. The Regional Councils play a very important role.

Vision and a focused approach is a must for playing a meaning full role with the Government and international bodies is a must

Role of Regional Council

The Regional Councils play a very important role
·         In continuing education of members by organising professional update programs on contemporary topics in a practical manner-
           Quality of elected leaders will decide quality of the profession
·         To understand day to day problems of the profession in practise and in industry and to play hand holding role, organising practical workshops, providing professional updates in a timely, purpose-full and in depth manner, explaining implications of the new developments.
·         Dealing with Registrar of Companies- identifying issues, providing practical solutions, taking up system related issues and guiding members to solve them.
·         In case of Taxation, there are large numbers of issues bringing harassment as well as system related issues- the regional council need to take regular action on all such professional issues.
·          A practical outlook and deep understanding of all the subject related issues is a must in our Regional Council Representatives.

Just sending e-mail updates as a candidate seeking election may not be enough. High Quality updates coming from some of the potential candidates are needed to be institutionalised through Regional Council and Central Council.

·         A regular active interaction between Institute and members will add great value to meet expectations of members as well as users of our services and stakeholders.
How will you choose?
·         It is important to elect highly competent and seasoned professionals for Central Council. It is important to examine their commitment, past contributions, level of understanding and capabilities of facing severe challenges. Technical knowledge, presentation skill and ability to take up issues strongly are a must.
·         The regional council candidates should be a mix of young and experienced, should have the professional capabilities, ability and commitment to give time
·         Understanding deep minute details of practical professional issues both for members in industry as well as members in practise is most important

The learned Chartered Accountants can-not vote based on personal connection, parties, and get together or other extraneous factors as the correct selection shall directly benefit your own future. Let us all meet the candidates, have free and frank discussions, understand their capabilities and commitments and also study carefully their credentials, their academic record and most importantly to check their confidential reference while undertaking due diligence.
Thursday, November 12, 2015
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Advances received for job work couldn't be held as deemed dividend

The Supreme Court of India dismissed Special Leave Petition against High Court's ruling that advances received by assessee - shareholder under an agreement to do job work for company could not be treated as deemed dividend.

Commissioner of Income-tax-I v. Amrik Singh [2015] 62 taxmann.com 213 
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No search proceedings against client due to seizure of CA's hard disk containing ITR data of client

The High Court of Delhi rules that the hard disk recovered from computer belonging to CA during search on CA's premises containing workings supporting client's ITR filing cannot be said to "belong to the client". Therefore, section 153C cannot be invoked against the client based on such seized hard disk. Merely because the data pertained to the client, the hard disk seized from CA cannot be said to belong to the client.

Commissioner of Income-tax.-7 v. RRJ Securities Ltd. [2015] 62 taxmann.com 391

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Establishment and Transfer of Ownership and Control of Indian Companies

As per the FDI policy establishment and ownership or control of the Indian company in sectors/activities with caps requires Government approval. This provision has now been amended to provide that approval of the Government will be required if the company concerned is operating in sectors/ activities which are under Government approval route rather than capped sectors.
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FDI policy in downstream investment by LLPs

It has been decided that in line with companies, an LLP having foreign investment will be permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions. Further, for the purposes of FDI policy, the term ‘internal accruals’ has also been defined.
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FDI policy on Limited Liability Partnerships (LLP) has been amended to provide that investments in LLPs will not require Government approval. 100% FDI is now permitted under the automatic route in LLPs operating in sectors/activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions. Further, the terms ‘ownership' and ‘control’ with reference to LLPs have also been defined. 
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FDI policy w.r.t. Indian Brands

It has been clarified that Indian brands are equally eligible for undertaking SBRT. It has been decided that certain conditions of the FDI policy on the sector namely; products to be sold under the same brand internationally and investment by non-resident entity/ entities as the brand owner or under legally tenable agreement with the brand owner, will not be made applicable in case of FDI in Indian brands.