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September 2018

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In This Issue

Trending Topics 03

Section 29A of Insolvency and Bankruptcy 2016:

Harsh on Promoters?

Forensic Audit - A Modern Day Thrust and Thirst

Audit under GST in detail

India: Transfer Pricing In International Transactions –

An Overview

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Notifications and Circulars 18

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Section 29A of Insolvency and

Bankruptcy 2016: Harsh on

Promoters?

4

Introduction

The Government amended Insolvency and

Bankruptcy Code, 2016 (IBC) by promulgating

an ordinance which brought sweeping changes

to both substantive as well as procedural

aspects relating to the insolvency process.

Changes were introduced by way of ordinance

dated 23rd November 2017 and later on ratified

through Amendment Act, 2018.

Section 29A emanated from the above-

mentioned amendment. Sec 29A is a restrictive

provision which impedes any person falling into

the negative list from submission of a

resolution plan.

The rationale of Sec 29A

Before the inception of section 29A, every

individual or body corporate could be involved

in a bidding process. Even the promoters who

were party to fraudulent motives and

contributed to the default of the Corporate

Debtor were able to regain the control of their

company again by bidding in hefty discounts

while banks and other financial institutes taking

haircuts.

Section 29A was introduced to disqualify those

people who had contributed to the downfall of

the corporate debtor.

In short, the plan of lawmakers is to end the

practice of phoenixing i.e. where the

management of a company puts it into

resolution or liquidation solely to buy the same

business back and set up a new ‗phoenix‘

company in the same or similar business,

shorn of the debts of the old company.

Ineligible person

A person shall not be eligible to submit a

resolution plan, if such person, or any other

person acting jointly or in concert with such

person –

Is an undischarged insolvent;

Is a wilful defaulter in accordance with the

guidelines of the RBI issued under the

Banking Regulation Act, 1949;

Has an account, or an account of a

corporate debtor under the management or

control of such person or of whom such

person is a promoter, classified as a non-

performing asset in by the RBI and at least

a period of 1 year has elapsed from the

date of such classification;

Provided that the person shall be eligible to

submit a resolution plan if such person

makes payment of all overdue amounts

with interest thereon and charges relating

to non-performing asset accounts before

submission of resolution plan;

Has been convicted for any offence

punishable with imprisonment for 2 years

or more;

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Is disqualified to act as a director under

the Companies Act, 2013;

Is prohibited by the SEBI from accessing

the securities markets;

Has been a promoter or in the

management or control of a corporate

debtor in which a preferential transaction,

undervalued transaction, extortionate

credit transaction or fraudulent transaction

has taken place and in respect of which an

order has been made by the Adjudicating

Authority under this Code;

Has executed an enforceable guarantee in

favour of a creditor in respect of a

corporate debtor against which an

application for insolvency resolution made

by such creditor has been admitted under

this Code;

Has been subject to any disability,

corresponding to clauses (a) to (h), under

any law in a jurisdiction outside India; or

Has a connected person not eligible under

clauses (a) to (i).

Acting in Concert

The term ‗Acting in concert‘ has not been

defined under Code. However, Code provides

that words/expressions not defined under the

Code shall have the meaning assigned to

them under other acts identified under the

Code including the SEBI Act, 1992.

Therefore, the definition of person acting in

concert (―PAC‖) will have to be borrowed from

the SEBI (SAST) Regulations, 2011 that

defines PAC as persons who have the

common objective/purpose of acquisition of

shares/ voting rights in/exercising control over

a company pursuant to an agreement or

understanding, formal or informal, directly or

indirectly co-operate for acquisition of

shares/voting rights in/ exercise of control of

the company.5

“Connected person” means –

Any person who is the promoter or in the

management or control of the resolution

applicant;

Any person who shall be the promoter or

in management or control of the business

of the corporate debtor during the

implementation of the resolution plan; or

Holding company, Subsidiary company,

Associate company or a related party of a

person referred to above

Layers of Ineligibility

An assiduous analysis of Section 29A

reveals that the section imposes four layers

of ineligibility, as mentioned below-

First layer ineligibility, where the person

itself is ineligible;

Second layer ineligibility, i.e. where a

―connected person‖ is ineligible;

Third layer ineligibility, i.e. being a ―related

party‖ of connected persons; and

Fourth layer ineligibility, where a person

acting jointly/in concert with a person

suffering from a first layer/second

layer/third layer ineligibility.

Applicability

The order passed by Judicial Member MK

Shrawat, in an order dated June 4, 2018,

related to the insolvency case of Wig

Associates, -

Comes as a relief for the promoters of big

defaulting companies such as Essar Steel,

Bhushan Steel and Alok Industries as the

existing promoters of the companies get an

opportunity to join hands with other financial

institutions to bid to buy it back.

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It has been clearly stated in the Amendment

Act, 2018 that it is to apply from 23.11.2017.

Hence, pending cases before this date cannot

be governed by section 29A. It is a settled

legal principle that old rights are to be

governed by old law and new rights by new

law.

Exemption for „MSMEs‟

The Amendment Act, 2018 has made

dispensation from the Disqualification Criteria

under paragraphs (c) to (h) of Section 29A to

‗micro‘, ‗small‘ and ‗medium‘ enterprises

(MSMEs). Therefore, the applicability of

section 29A is restricted only to disqualify

wilful defaulters from bidding for MSMEs.

Promoter suffering

The Section 29A does not recognise a

genuine business failure or an inadvertent

corporate action of a limited liability company.

Let‘s evaluate the following three cases: -

a) A company takes a loan and then fails to

repay it because of genuine financial or

economic distress.

b) Promoters give a personal guarantee to

creditors for loans.

c) An innocuous commercial arrangement

without any mala fide intent to defraud

creditors could still qualify as a preferential

or undervalued transaction under the IBC.

In all three above mentioned arrangements,

the promoter can be debarred from the

submission of a resolution plan.

Section 29A has excessively enlarged the

scope of disqualification to the extent of

drastically reducing the prospective resolution

applicants on the basis of what could be

labelled as generalized criteria for

disqualification wherein it does not

differentiate between a genuine applicant and

one with antecedents.

6

A similar view was expressed by the National

Company Law Tribunal (―NCLT‖) in the

matter of RBL Bank Ltd v. MBL Infrastructure

Ltd wherein it was expressed that it cannot

be the intention of the legislature to disqualify

the promoters as a class but to rather

exclude those class of persons who may

affect the credibility of the resolution process

given their antecedents.

Addressing promoter‟s concern

English law provides a useful template

wherein connected parties interested in

purchasing assets of an insolvent company

has an option to approach the Pre-Pack Pool

and disclose details of the deal.

The Pool comprises of experienced business

people who conduct independent scrutiny of

such deals and opinion on their commercial

bona fide. A positive statement gives

confidence to the creditors to approve a deal

whose bona fide has been independently

verified.

A similar concept can be introduced in India

where a promoter who is interested to buy

back his business during insolvency

resolution can place his resolution plan

before Committee of Independent Experts. If

the committee approves such an

arrangement, then the deal could still

proceed.

The fact that the promoter‘s resolution plan

is supported by an independent committee

would give greater confidence to a creditors‘

committee in considering whether to accept

the plan.

Moreover, it shall be unfair to outrightly reject

the application even though downfall may be

on the account of bona fide and innocuous

commercial arrangements.

CaClubindia.comThe content of the articles is intended to provide a general guide to the subject matter. Specialist advice should

be sought about your specific circumstances.

Forensic Audit - A Modern Day

Thrust and Thirst

7

Introduction

In the recent past, more so in the previous

decade, accounting and auditing community

witnessed and in fact, confronted and gone

through scandals emanating from fraudulent

and manipulative devious and dubious

accounts. These shames outraged not only the

auditing community but the public at large.

What is noticed in all these cases is the

methods deployed are tailored to suit the

deceitful purpose of manipulations in financial

statements. Enron episodes and other

companies‘ incidences made the accounting

and audit community to sit erect and ponder

over a stratagem to come out of that rut—the

result is the birth of forensic accounting.

Part played by CARO

Companies (Auditors‘ Report) Order, 2003 was

also an attempt to target specific areas to plug

the loopholes so as to arrest the untoward in

the horizon. CARO clauses call for straight

answers to the queries depicting the correct

positions prevailing in the setup for the period

under audit.

One of the clauses requires auditors to report,

amongst other things, ―whether any fraud on or

by the company has been noticed or reported

during the year; If yes, the nature and the

amount involved are to be indicated‖.

The CARO 2016 in clause 3 (x) has further

enlarged the scope of the clause to spell out

and extract as to ―whether any fraud by the

company or officers or employees has been

noticed the nature and the amount involved is

any fraud on the Company by its or reported

during the year; If yes, to be indicated‖.

Nonetheless, even in the present avatar of

CARO, auditors‘ responsibility is limited to

report under this clause when these frauds are

noticed during audit, either in internal reporting

of the management or otherwise.

Auditors added Responsibility under

the provisions of the Companies Act

2013:

The responsibility of the auditors has been

well enlarged as clearly spelt out in Section

143, especially with reference to Internal

Financial Controls-- ―Whether the company

has adequate internal financial controls in

place and operating effectiveness of such

controls?‖(143(3)(i) of the Act).

Thanks to this heightened responsibility in the

main audit report, CARO, 2016 has

dispensed with the clause on Financial

controls in three vital areas, that is, for the

purchase of inventory and fixed assets and for

the sale of goods? Whether there is a

continuing failure to correct major weaknesses

in internal control‖.

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The responsibility of an auditor(s) is to

express an opinion on the financial statements

based on his or their audit after taking into

account the provisions of the Companies Act,

2013 (the Act) and the Rules made there

under and also the provisions of other

applicable Acts, the accounting and auditing

standards (Refer Section 143(10) of the Act)

and matters which are necessary .

Those Standards require that the auditors

comply with ethical requirements and plan and

perform the audit to obtain reasonable

assurance about whether the financial

statements are free from material

misstatement. SA 240 on THE AUDITOR‘S

RESPONSIBILITIES RELATING TO FRAUD

IN AN AUDIT OF FINANCIAL STATEMENTS.

In other words, an audit involves performing

procedures to obtain audit evidence about

the amounts and the disclosures in the

financial statements. The procedures

selected depend on the auditor‘s judgment,

including the assessment of the risks of

material misstatement of the financial

statements, whether due to fraud or error.

In making those risk assessments, the auditor

considers internal financial control relevant to

the Company‘s preparation of the financial

statements that give a true and fair view in

order to design audit procedures that are

appropriate in the circumstances. An audit

also includes evaluating the appropriateness

of the accounting policies used and the

reasonableness of the accounting estimates

made by the Company‘s Directors, as well

as evaluating the overall presentation of

the financial statements

As per Section 143(12) if the auditors of a

company have reason to believe that an

offence involving fraud is being or has been

committed against the company by officers or

employees of the company, he shall

immediately report the matter to the Central

Government within such time and in such

manner as may be prescribed.8

In other words, the audit report gives an

opinion as to the best of their information

and according to the explanations given

to them, the financial statements give the

information required by the Act in the

manner so required and give a true and fair

view in conformity with the accounting

principles generally accepted in India, of the

state of affairs of the Company as on a date .

From this it is clear, a financial statement

audit does not scrutinize or investigate every

transaction or look for fraud particularly.

While a properly planned financial statement

audit may uncover fraud, the focus is not on

uncovering likely fraudulent acts.

Forensic Audit

Forensic Audit, on the other hand, is a

different ball game altogether. No doubt,

forensic auditors start on the basis of audited

accounts and the auditors‘ Report. But, their

ball game is different based on the specific

domain.

In cricket, the ball that is hit over the ground

beyond the boundary line is ―six‘ that is ‗sexy‘

for the audience. If it is hit through the

ground to periphery, it is four that never

bores. But, in tennis it is out, whence it

crosses border. But, in football, if it crosses

into the goal space, it is a ‗goal‘ for any

player in the team to esteem.

What does it covey? As different rules are

played out in different games for assessing

the boundaries, different procedures have to

be deployed for different forensic

assignments as they warrant. Why?

Each forensic project is unique by itself and

calls for different approach to unravel the

mystery behind.

Therefore, a standard approach cannot

decipher the issue on hand. How to go about

is ingenuity – an initiative that tries to unknot

the unknown hidden.

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Consequently, the forensic/accountants and

auditors may have to necessarily develop an

audit program for the specific objective of the

individual engagement with necessary backup

of Legal team including criminal lawyer

&police without sticks so as to testify as an

expert in a court of law.

―Accountants look at the numbers. Forensic

accountants look behind the numbers‖

Therefore, it will be appreciated it is more of

investigative work of talking with involved

officials for extracting the correct position that

may involve cross examinations with the each

other as a valve to decipher the issue on

hand.

More extensive corroboration:

Naturally, keeping the above back drop, it may

call for working with a legal team, under

distinctive and instinctive assumption that he

or she will have to testify as an expert in a

court proceeding.

The qualifications and expertise of the

engagement team is paramount as the

documents created during the forensic audit

may be needed in civil and criminal

proceedings, by law enforcement, government

agencies, or confidential investigations.

Therefore, besides performing all that are

required of financial statement auditors, a

forensic accountant will often require more

extensive corroboration, since it demands of

expertise with practical tinge that focus on a

dedicated line of attack designed to spot out

financial fraud.

Skills expected:

Forensic accountants/fraud auditors are

generally accountants or auditors who by

virtue of their aptitudes and attitudes, talents

and abilities, skills and dexterities, knowledge

and practical experience are bona fide

authentic experts and specialists in sensing

and detecting frauds in accounting and

financial transactions so as to document fraud

losses for criminal and civil purposes. 9

They should have developed the art of

interviewing third party witnesses so as to

testify as an expert witness. ―Investigative

mentality‖ and ―professional scepticism‖ is

the core and chore of forensic audit. A

forensic accountant may have to focus more

on seemingly immaterial transactions to look

for indications of fraud that are not subject to

the scope of a financial statement audit.

1. Theft and Squandering of money:

It relates to any fraud by the company

(management) or officers or employees of

the company. Under CARO, it is whence

noticed. But, under forensic audit, it is to be

examined in detail, in deep and mostly

through well-defined investigative process.

Auditors may have to give goodbye to

‗sample checks‘ in forensic audit but should

be in ‗ample ‗as warranted by the situation

and projects under investigation.

2. Manipulation of Accounts and

Financial Statements:

Fraudulent financial reporting means

deliberate misstatements so as to trick

others by unfair means to unjust gains. This

is normally attempted where management is

ostensibly under pressure, to achieve a

target that is seemingly unrealistic, where

consequences of failure are significant.

More often than not, it is attempted to

maintain or increase the earning trends to

float well in the share market especially in a

year when it is going for public subscription.

Accounts are also at times scripted to take

some tax advantage. This can be attempted

through various dubious means- by

intentional falsification or alteration of

records; by applying wrong estimates with

intent to window dress; calculated omission

in financial stamens and on the top

misapplication of the principles of accounts

as to recognition, measurement,

presentation and disclosure requirements of

various mandated standards.

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3. Non-compliance of Statutory and other

regulatory Requirements:

The world has been reduced to a global

village. What is happening right in the morning

in Japan affects the rest of the world as time

zone advances!

Today, shareholders and other stakeholders

are spread across the globe. When there is

cold in America, we sneeze it here. As a

result, laws and regulatory requirements are

periodically updated to suit the dictates of

times.

There are various international agreements

that warrant compliances from the signatory

countries. Accounting and auditing standards

are becoming monolithic so as to understand

in the same wave length.

Therefore, very often, it is possible, different

agencies may call for compliance certificate

that may warrant forensic audit in specific

circumstances where investigation is sine quo

non.

The court, various tax departments and

various regulatory authorities may also ask for

and rely for substantive evidence.

4. Computer Forensics –

Assisting and helping in electronic data

recovery and enforcement of IP rights etc.

This may call for specialist service with high

computer background.

5. Others:

Besides, forensic may cover and include

within its scope conducting due-diligence that

is also unique for ease assignment; Business

valuation; specific management auditing; and

Evaluating loss before settling insurance

claims.

These may further include plethora of cases

like calculating and quantifying losses and

economic damages,10

whether suffered through wrongdoing or

breach of contract; disagreements relating to

company acquisitions, breaches of

warranties and what not. These may be

engagements relating to civil

disputes/settlements.

Conclusion:

Though forensic auditors start their

assignments on the basis of audited

accounts and the auditors‘ Report as pointed

out earlier, each forensic project is unique by

itself and calls for different approach to

unravel the unknown behind.

Therefore, a standard approach cannot

decipher the issue on hand. How to go about

is already dealt with earlier in the article.

When the size of business has enlarged by

leaps and bounds over the periods and audit

is necessarily to be completed within the

appointed time, opinion expressed on audit

report is basically to give an opinion as to

the best of their information and

according to the explanations given to

them, the financial statements give the

information required by the Act in the

manner so required and give a true and fair

view in conformity with the accounting

principles generally accepted in India, of the

state of affairs of the Company as on a date

except where it is qualified .

From this, it is crystal clear, a financial

statement audit does not scrutinize or

investigate every transaction or look for fraud

particularly. While a properly planned

financial statement audit may uncover fraud,

the focus is not on unearthing fraud that

could be a hard nut to crack under statutory

audit not only because of the time constrain

but also because of the scope of the audit.

Besides, forensic audit demand different

skills and wherewithal‘s, time and energy to

uncover the fraud hidden in the transactions,

it is a different ball game altogether as

explained earlier copiously.

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As on date, there is no articulated Guidance

Note nor any dependable check lists for

reason that each assignment is unique and

distinctive; and as a result, different routes to

be used to go to the roots; - as seas can be

used for navigation, roads for road traffic,

planes by air- again different types of vehicles

are used on the same routes depending of the

size and level of passengers and quantum,

size and quality of the materials.

11

Therefore, most important in forensic audit is

to decide the effective modus- operandi -

technique, style procedure, approach, course

of action and articulated methodology so as

to successfully handle and deliver the correct

result of the assignment so as to fix the fraud

CaClubindia.com

The content of the articles is intended to provide a general guide to the subject matter. Specialist advice should

be sought about your specific circumstances.

Audit under GST in detail

12

Introduction

The GST regime continues to promote the

scheme of self-assessment like erstwhile

indirect tax laws and Audit of records of tax

payers is the basis for the proper functioning of

self-assessment based tax system.

As per section 2(13) of CGST Act, 2017. GST

Audit means examination of records, returns

and documents maintained and furnished by

registered person to check the following:-

Verify the correctness of turnover declared.

Input tax credit availed and utilized.

Exemptions and deductions claimed.

Rate of tax applied in respect of supply of

goods or services etc.

The following three types of GST audit are

envisaged under the GST Law:-

1. GST Audit u/s 35(5) of Act, if turnover

exceeds prescribed limit (i.e Rs. 2 Crore)

2. GST Audit by tax authorities u/s 65.

3. Special GST audit direction from

department u/s 66.

Types of Audit in GST Law

1. GST Audit u/s 35(5)

As per section 35(5) with rule 80, in case

registered person whose aggregate turnover

during the financial year exceeds Rs. 2 crore,

he shall get his accounts audited by Chartered

Accountant or Cost Accountant.

Here the term used is aggregate turnover and

not turnover in state. Aggregate turnover is

computed on all India basis having same PAN.

Therefore, if a registered person is liable to

gets his accounts audited under section 35,

then all the registration obtained under same

PAN will also be liable to GST audit.

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For example, if a company XYZ Ltd has

operations in two states Haryana and

Rajasthan, and turnover in Haryana is 3.75

crore and in Rajasthan is 25 lakh, then GST

audit to be conducted for both the states. GST

Audit under this section to be conducted

GSTIN wise.

The registered person whose accounts are to

be audited, he shall submit audited accounts

along with his annual return in Form GSTR-9C

and a reconciliation statement reconciling

turnover in audited financial statement and

return furnished for financial year.

2. GST Audit by Tax Authorities u/s 65

It is important tool in tax administration to

ensure compliance of law and prevent

revenue leakage. This section authorizes

conduct of GST audit by commissioner or any

officer authorized by him of transactions of

registered person only. It means GST audit of

unregistered person cannot be carried out

under this section even if he is liable to

register. The commissioner may issue general

or specific order to authorize officers to

conduct GST audit.

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Before commencement of audit, proper officer

will issue a notice in form ADT-01 at least 15

days prior to commencement of audit. The

audit may be conducted at place of business

of registered person or in the office of proper

officer. During audit, officer will ensure

correctness of turnover declared, input tax

credit availed and utilized, deductions and

exemptions claimed etc. The GST audit under

this section be completed within 3 months

(subject to extension by commissioner) from

commencement of audit. On completion of

audit, officer will inform the discrepancy

noticed with registered person and after

considering reply of registered person, his

findings to be finalize.

The proper officer will inform the final findings

of his audit to the registered person in form

ADT-02.The finding under GST audit may be

used by proper officer to initiate action u/s 73

or 74.

3. Special GST audit direction by

department u/s 66

Special GST audit direction under this section

is issued to registered person only when any

proceeding (being scrutiny, enquiry,

investigation or any other proceeding) is

pending before him and having regard to

nature and complexity of case and interest of

revenue , he is of opinion that

13

Value has not been correctly

declared OR

Credit availed is not within normal limits

In such a case, proper officer with prior

approval of commissioner, issue direction to

registered person in form ADT-03 to get his

records including accounts audited by

Chartered Accountant or cost Accountant

as nominated by commissioner (Auditor is

not choosed by registered person).

The audit direction under this section may be

issued even if accounts/records of such

person is already audited under this act or

any other act.

On completion of audit, Auditors will submit

his report to proper officer within 90 days

(subject to extension) and registered person

will be informed of finding in form ADT-04.

Opportunity of being heard is given to

person, if officer intends to use material

gathered during GST audit in any

proceeding.

The proper officer may initiate proceeding

u/s 73 or 74 on the basis of finding of special

GST audit.

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The content of the articles is intended to provide a general guide to the subject matter. Specialist advice

should be sought about your specific circumstances.

India: Transfer Pricing In

International Transactions – An

Overview

14

Introduction

Transfer pricing refers to the pricing strategy in

play when there is transfer of goods/ services

between associated enterprises. Transfer

pricing law aims to ensure that transactions

between associated enterprises1 does not

happen at an unreasonably favourable and

controlled price.

Objective of transfer pricing law:

The main objective of transfer pricing law in

international transactions is to ensure that

transactions between associated enterprises

take place at a price as if the transaction was

taking place between unrelated parties.

International Transactions between

two associated enterprises

An 'international transaction' in the context of

transfer pricing law shall include a transaction

between two or more associated enterprises,

either or both of whom are non-residents

wherein there is purchase, sale or lease of

tangible or intangible property, or there is

provision of services, or there is lending or

borrowing of money.

It becomes important to note here that a

transaction entered into by an enterprise with a

person other than an associated enterprise

shall be deemed to be an international

transaction entered into between two

associated enterprises, if:

there exists a prior agreement in relation to

the relevant transaction between such other

person and the associated enterprise, or

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the terms of the relevant transaction are

determined in substance between such

other person and the associated enterprise

where the enterprise or the associated

enterprise or both of them are non-residents

irrespective of whether such other person is

a non-resident or not.

Arm's Length Price:

Section 92 of the Income Tax Act, 1961, which

deals with the computation of income from

international transactions lays down that any

income arising from an international

transaction shall be computed having regard

to the arm's length price.4 Note that 'arm's

length price' means a price which is applied or

proposed to be applied in a transaction

between persons other than associated

enterprises, in uncontrolled conditions.

Most appropriate Method:

As per the nature of the transaction, the most

appropriate amongst the following methods6

shall be utilized to compute the arm's length

price:

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Comparable uncontrolled price method;

Resale price method;

Cost plus method;

Profit split method;

Transactional net margin method;

Such other method as may be prescribed

by the Central Board of Direct Taxes.

The most appropriate method to be applied for

determination of arm's length price shall be

applied in the manner as prescribed under

rules 10A, 10AB, 10B, 10C and 10CA of

Income-tax Rules, 1962.

Maintenance and keeping of

information and document:

It is mandatory for every person who has

entered into an international transaction to

keep and maintain certain information and

documents in that respect. Such information

and documents are prescribed under Rule 10

D of Income-tax Rules, 1962. Note that failure

to keep and maintain such information would

attract a penalty of a sum equal to two per

cent of the value of each of such international

transaction.

15

Reference to Transfer Pricing

Officer:

If a person enters into an international

transaction and the Assessing Officer

considers it necessary then he may, with the

previous approval of the Principal

Commissioner or Commissioner, refer the

computation of the arm's length price in

relation to the said international transaction

to the Transfer Pricing Officer. Consequently,

an adjustment will be made by the

concerned officer, if needed.

Remarks:

Associated enterprises entering in

international transactions need to ensure that

the transactions takes place at an arm's

length price as if the transactions was taking

place between unrelated parties in an

uncontrolled manner. If such arm's length

price is not ensured and documents are not

maintained in respect thereof, adjustments

and penalties may be attracted.

Mondaq.com

The content of the articles is intended to provide a general guide to the subject matter. Specialist advice

should be sought about your specific circumstances.

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DUE DATE CHART (September’2018)

Due Date Category ParticularsForm/

Challan/Site

7th Sept 2018TDS/ TCS

Payment

Deposit of TDS for the month

of August‘2018ITNS 281

Deposit of TCS for the month

of August‘2018Form 26QB

11th Sept 2018 GST ReturnFiling details of Outward

Supplies for August‘2018GSTR – 1

15th Sept 2018

PF/ESIC

Payment

Payment of PF / ESIC for the

month of August‘2018

http://www.epfi

ndia.com

Advance Tax

Payment

2nd instalment of advance tax

for AY 2019-20

https://www.inc

ometaxindia.g

ov.in

20th Sept 2018

GST ReturnSelf Assessment Return for the

month of August‘2018GSTR – 3B

GST ReturnReturn for Non-Resident tax

payer for August‘2018GSTR – 5A

25th Sept 2018EPF Return

Provident Fund Return for the month of August‘2018

Form -2

30th Sept 2018

GST Return

Details of ITC received and

distributed by ISD for the

period of July‘18 to August‘18

GSTR-6

Annual ReturnFiling Return of Income for the

Assessment year 2018-19

http://www.mc

a.gov.in

NOTIFICATIONS

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Notification/ Circular Reference No.

Amendment in the DTAA between India and Qatar

w.e.f. 29.04.2018

For complete information, please refer-

https://www.incometaxindia.gov.in/communications/notificat

ion/notification32_2018.pdf

Notification No.32/2018,

Dated 17- 07-2018

Amendment in Form No. 3CD w.e.f. 20.8.2018 - Certain

clauses have been amended as well as new clauses

inserted in the Form No. 3CD to bring them in line with

amendments made in the provisions of the Income-tax

Act, 1961.

In exercise of the powers conferred by Section 295 read

with Section 44AB of the Income-tax Act, 1961, the CBDT

has through the Income–tax (8th Amendment) Rules, 2018

amended Form No. 3CD (Statement of particulars required

to be furnished under Section 44AB of the Income-tax Act,

1961) as contained in Appendix II of the Income-tax Rules,

1962.

For complete information, please refer-

https://www.incometaxindia.gov.in/news/notification-33-

2018.pdf

https://www.incometaxindia.gov.in/news/circular6-2018.pdf

Notification No.33/2018,

Dated 20-07-2018 and

Circular No. 6/2018,

Dated 17-08-2018

Indian Advance Pricing Agreement regime moves

forward with signing of nine UAPAs by CBDT in July,

2018

The CBDT has entered into nine more Unilateral Advance

Pricing Agreements (UAPAs) during the month of July,

2018. With the signing of these Agreements, the total

number of APAs entered into by the CBDT has gone up to

232, which includes 20 Bilateral Advance Pricing

Agreements (BAPAs).

For complete information, please refer-

https://www.incometaxindia.gov.in/Lists/Press%20Release

s/Attachments/724/Press-Release-Indian-Advance-Pricing-

Agreement-regime-moves-1-8-2018.pdf

Press Release,

Dated 1-8-2018

Direct Tax Law

19 Source: ICAI e-Journal

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Others (Excise / GST / FEMA)Notification/ Circular Reference No.

Extension in time limit - furnishing the return by an ISD

For complete text of notification, refer the link:

https://cbec-gst.gov.in/pdf/central-tax/Notification-30-2018-

central_tax-English.pdf

Notification No. 30/2018

– Central Tax

Dated 30th July, 2018

ITC accumulated on supplies received on or after the

1st day of August, 2018 shall be available

For complete information, please refer-

https://cbec-gst.gov.in/pdf/central-tax-rate/notfctn-20-2018-

cgst-rate-english.pdf and https://cbec-gst.gov.in/pdf/central-

tax-rate/notfctn-21-2018-cgst-rate-english.pdf

Notification No. 20 &

21/2018-Central Tax

Dated 26th July, 2018

Exemption from tax on procurements made from

unregistered person under Section 9(4) of CGST Act,

2018 till September 30, 2019

For complete text of the circular, please refer the link:

http://gstcouncil.gov.in/sites/default/files/Notifications-

2018/notfctn-22-2018-cgst-rate-english.pdf

Notification No. 22/2018

– Central Tax (Rate)

Dated 6th August, 2018

Provisionally migrated persons may now apply for

GSTIN

For complete text of the circular, please refer the link:

https://cbec-gst.gov.in/pdf/central-tax/Notification-31-2018-

central_tax-English.pdf

Notification

No.31/2018-Central Tax

Dated 6th August, 2018

The present system of filing of GSTR 3B is extended

upto March, 2019

For complete text of the circular, please refer the link:

https://cbec-gst.gov.in/pdf/central-tax/Notification-34-2018-

central_tax-English.pdf

Notification No. 34

/2018 – Central Tax

Dated 10th Aug, 2018

Refund of IGST on export of goods on payment

of duty-Clarification in case of SB003 errors and

extension of date in SB005 & other cases using

officer Interface for rectification of errors

For complete text of the circular, please refer the link:

http://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-

circulars/cs-circulars-2018/circ22-

2018cs.pdf;jsessionid=255172943E1A4379A162AFA99AB5

ECDF

Circular No. 22/2018

Dated 18th July, 2018

Source: ICAI e-Journal

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Seminars and DiscussionsTaxation Matters

22ICAI CPEC Website

S.No. PoU Topic Place DateContact

Details

CPE

Hours

1

DTPA Chartered

Accountants

Study Circle Of

EIRC

CPE Programme on

Money Laundering,

GST & Income tax

Learning Centre, RIL

Motikhavdi, Dist Jamnagar

08-09-2018

10:00-16:30

Niraj Harodia

80174672026

2

Navi Mumbai

Branch of WIRC

of ICAI

Recent

Ammendments in

form 3CD & Tax

Audit :

Conference Hall 1st Floor

NMSA sector 2 Vashi Navi

Mumbai

08-09-2018

10:00-13:00

Mr. Manoj

97731538773

3

GHATKOPAR

CPE STUDY

CIRCLE OF

WIRC

RECENT

PRONOUNCEMENT

UNDER TDS AND

PRACTICAL

ISSUES

DIRECT TAXES

Smt. P.N Doshi College,

SNDT Dome, Cama Lane,

Ghatkopar West, Mumbai –

400086

08-09-2018

18:00-21:00

BHARTI

THAKKER

99871554283

4

Kanchipuram

District Branch

of SIRC of ICAI

Advanced Workshop

on GST

KANCHIPURAM DISTRICT

BRANCH OF SIRC OF ICAI

Flat No.301, Third floor

No.1A, Perialwar Street,

Sundaram Colony, East

Tambaram, Chennai-600 059

08-09-2018

09:00-17:00

&

09-09-2018

09:00-17:00

04422390098 12

5

BAREILLY

BRANCH OF

CIRC

SEMINAR ON TAX

AUDIT US 44 AB

ACCOUNTING AND

AUDITING

HOTEL AMAYA

CIVIL LINES

BAREILLY

08-09-2018

11:00-14:00

CA AMIT

JAISWAL

83186973183

6

Central Delhi

CPE Study

Circle of NIRC

Tax Audit Report &

Issues in various

ICDS

Hotel Singh Sahib,

Satbharawan School Road,

Near Metro Pillar No 88,

Karol Bagh New Delhi –

110005.

10-09-2018

17:00-22:007838878293 5

7

BANGALORE

BRANCH OF

SIRC

Taxation of Co-

operative Institution

Bangalore Branch of SIRC of

ICAI, No.16/O, Millers Tank

Bed Area, Vasanthnagar,

Bangalore-560052

12-09-2018

18:00-20:00

Ms.Geethanjali

D 080-305635132

8

SOUTHERN

INDIA

REGIONAL

COUNCIL

GST Audit and

Reconciliation

Hotel Singh Sahib,

Satbharawan School Road,

Near Metro Pillar No 88,

Karol Bagh New Delhi –

110005.

14-09-2018

17:30-20:30

A. RAHMAN

ALI

044302103623

9

HYDERABAD

BRANCH OF

SIRC

Place of Effective

manager Merit & its

Implications in India

11-5-398/C Red Hills

Hyderabad

19-09-2018

17:30-20:30- 3

10

SOUTHERN

INDIA

REGIONAL

COUNCIL

Meeting on NPOS”s

Formation and

Taxation

No. 122 Mahatma Gandhi

road

Nungambakkam

Chennai 34

22-09-2018

09:00-12:00

A. RAHMAN

ALI

044302103623

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23ICAI CPEC Website

Accounting & Auditing Matters

S.No. PoU Topic Place Date Contact DetailsCPE

Hours

1

WESTERN

INDIA

REGIONAL

COUNCIL

Workshop on Tax

Issues Arising on

Account of IND AS

ICAI Tower, ‘G’ Block, Opp.

MCA Club, Bandra Kurla

Complex, Bandra (E), Mumbai

– 400 051

08-09-2018

10:00-17:3002233671421 6

2

Bangalore

Cantonment CPE

Study Circle of

SIRC

One Day Workshop

on Auditing Standards

(ACCOUNTING

AND AUDITING)

Bangalore Branch of SIRC of

ICAI, No.16/O, Millers Tank

Bed Area, Vasanthnagar,

Bangalore-560052

11-08-2018

09:30-17:00

Ms.Geethanjali

080.35635136

3

EASTERN

INDIA

REGIONAL

COUNCIL

Seminar on IND AS

Overview, 101, 16,17,

Compliant Schedule

III

EIRC AUDITORIUM EASTERN

INDIA REGIONAL COUNCIL

THE INSTITUTE OF

CHARTERED ACCOUNTANTS

OF INDIA 7, RUSSELL STREET,

KOLKATA – 700071

14-09-2018

17:30-20:3030211108/04/33 3

4

SOUTHERN

INDIA

REGIONAL

COUNCIL

Audit Report on

Format and

Compliances -

Including Internal

Financial controls

over Financial

reporting

No. 122 Mahatma Gandhi road

Nungambakkam

Chennai 34

19-09-2018

17:30-20:30

A. RAHMAN

ALI

044302103623

Other Matters

S.No. PoU Topic Place Date Contact DetailsCPE

Hours

1

Bangalore

Cantonment CPE

Study Circle of

SIRC

FEMA &

EXTERNAL

COMMERCIAL

BORROWINGS.

(BUSINESS

MANAGEMENT)

Hotel ITC Fortune J.P.

Celestial Park, Race Course

Road, Bangalore – 560001

08-09-2018

09:30-13:45

BALAKRISHNAN

S – 9448043110

Prasanna Kumar J

N – 9632967507

4

2

WESTERN

INDIA

REGIONAL

COUNCIL

Meeting on ISA &

FAFP : Beneish

Model and Benford

Law

ICAI Tower, ‘G’ Block, Opp.

MCA Club, Bandra Kurla

Complex, Bandra (E), Mumbai

– 400 051

08-09-2018

17:00-20:0002233671421 3

3

SOUTHERN

INDIA

REGIONAL

COUNCIL

Breakfast Meeting on

Blockchain

Technology :

No 122

Mahatma gandhi road

nungambakkam

Chennai 34

15-08-2018

17:30-20:30

A. RAHMAN ALI

044302103623

4

SOUTHERN

INDIA

REGIONAL

COUNCIL

CPE Meeting on CA

as Insolvency

Professionals

Practical Issues

No 122 Mahatma gandhi road

Nungambakkam

Chennai 34

18-08-2018

17:30-20:30

A. RAHMAN ALI

044302103623

Batches for Upcoming

Courses

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Certificate Course on Enterprise Risk

Management

studies, e-learning and Case Study

preparation and presentation i.e.,

Self Study : 100 hours

Class room teaching : 50 hours

E-Learning : 20 hours

Case Study preparation and presentation : 30

hours

CPE Hours

CPE credit of 100 Hours (50 hours of

structured learning and 50 hours of

unstructured learning) will be given to the

participants.

Further Details and Assistance

Chairman, Internal Audit Standards Board

Tel.: 0120-3045995

Email: cia@icai.in;

Background

The Internal Audit Standards Board of the ICAI is

pleased to offer Certificate Course on ―Enterprise

Risk Management‖ to enable members to

develop competence in this emerging field and

offer value added services. This course would

help the members to understand the various

issues relating to the enterprise risk management

and in developing the necessary skills to provide

value added services in this area.

Objective of the Course

The overall objectives of the course are:

To enhance the role of Chartered Accountants

in the area of ERM.

To build ERM as one of their core

competencies

The main thrust of the course is to educate the

participants on:

Theory and concepts of ERM.

Manner in which ERM is designed and

implemented in practice.

Current thinking on risk management and its

impact on contemporary business enterprises.

Course Duration

The duration of the course is 200 hours spread

over six class rooms studies, self

24

Certificate Course on Not for

Profit OrganizationsDuration of the Course

6 days (Generally on Saturday and Sunday)

(9:30 AM to 5:30 PM)

CPE Hours

30 Hours

Fees for the Course

Rs. 9,440/- For members up to the age of

30 years on 1st January

Rs. 10,000/- For other members

The fees can be paid either by a Demand

draft, Cheque or through online mode. The

demand draft / cheque shall be drawn in

favour of ―The Secretary, The Institute of

Chartered Accountants of India"

Evaluation Test

Generally examination is held within 2-3

weeks after completion of the classes.

For further details about the course

structure, please click here

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Background

The Committee for Co-operatives and NPO

Sectors of the ICAI has been set up to promote

good governance and best practices in the NPO

Sector. The Committee conducts Certificate

Course on Not for Profit Organizations to make

the members competent in the field of NPO.

This Course is conducted at various locations

throughout the country. The Course aims at

providing:

About Non-Profit organizations

NPO-World scenario

Laws Applicable to NPOs

Authorities regulating NPOs & Formation of

NPOs

Role of NPO with regard to Corporate Social

Responsibility obligation of companies under

Companies Act, 2013

Internal control, Risk Management &

Accounting aspects of NPOs

Audit of NPOs

Taxation aspects of NPOs

Eligibility for the Course

The course is open for the members of the

Institute of Chartered Accountants of India as

well as for the students who have cleared CA

final examination.

ABOUT US

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S.P. Chopra & Co. is a professional services firm established in

1949; Ranking amongst the top 20 firms in India

11 full time partners and staff strength of over 100

Offices in New Delhi, Mumbai, Canada and Dubai

Our firm offers Accounting, Assurance and Consultancy as its core business

lines for domestic and global businesses of medium to large size.

We have been empanelled with Reserve Bank of India, Royal Audit

Authority of Bhutan, United Nations and World Bank. We are also a

member of the Prime Global (an Independent association of more than

350 accounting firms all over the World).

27

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DISCLAIMER: While SP Chopra & Co., has made every effort and has exercised due skill, care and diligence in

compiling this document based on publicly available information, it neither guarantees its accuracy, completeness or

usefulness, nor assumes any liability whatsoever for any consequence from its use. This document does not have any

approval, express or implied, from any authority, nor is it required to have such approval. The users are strongly

advised to exercise due diligence while using this document. This document in no manner constitutes an offer,

solicitation or advice to buy or sell securities, nor solicits votes or proxies on behalf of any party. This document is just

for the purpose of imparting knowledge and brings to light the impact of the provisions of the statute to reader. Further,

this document in no way intends to allege any company, individual or any other person.

This document may not be reproduced in any manner without the written permission of SP Chopra & Co. All disputes

are subject to jurisdiction of High Court of Delhi. All rights reserved.

Business Process Outsourcing

Accounting and Book-keeping

Tax Return preparation

Payroll processing

Financial Reporting

Advisory

Business Risk and Control

Standard Operating Procedures (SOPs)

Financial Due Diligence

Transaction Support

Assurance Services

Statutory and Tax Audit

IFRS Convergence and Reporting

Internal Financial Control (IFC)

29

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