WIRC Bulleitn Dec 2015

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WESTERN INDIA REGIONAL COUNCIL

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA(Statutory Body under an Act of Parliament)

Rohit Chambers, Janmabhoomi Marg, Fort, Mumbai 400 001.Tel.: 2204 3406 / 2204 3416 / 2284 1138 � Fax : 2287 0763 E-mail : [email protected] � Website : www.icmai-wirc.in

In this Issue....

EDITORIAL BOARD

Chief Editor:CMA Harshad S. Deshpande

Editorial Team:

CMA Soumen DuttaCMA S. N. Mundra

CMA Pradnya Y. Chandorkar

Vol. 43 No. 12 December 2015Price : Rs. 5/- For Members only

Page• From the Desk of Chairman 3• Regional Cost Convention 2016 4• GST Corner – CMA Ashok B. Nawal 7• Startup Gamut – CMA Dr. V. V. L. N. Sastry 14• Management Accountant and

Business Strategies – CMA Yashan Eruch Jokhi 16• Swachh Bharat CESS (SBC) – CMA L. D. Pawar 20• Chapter News 21• Refresher Course on "Indirect Taxation and gearing for GST" 23


WESTERN INDIA REGIONAL COUNCILAND

PIMPRI-CHINCHWAD-AKURDI CHAPTERare pleased to announce

REGIONAL COST CONVENTION 2016Theme:

"Make in India through -Cost Competitiveness,

Tax Reforms, Ease of Doing Business and Digital India"16th & 17th January 2016

Venue : Auto Cluster Auditorium, H-Block, Plot C-181,Pimpri-Chinchwad, Pune 411 019

WIRC BULLETIN � DECEMBER 2015

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Constitution Day celebration - Ahmedabad Chapter Diwali Get-together - Ahmedabad Chapter

CMA Vivek G Bhalerao, Chairman-PD Committee introducing the speaker duringCEP conducted by Navi Mumbai Chapter on 18th October 2015. Also seen CMA B NSapkal Chairman and CMA Bhushan Patel

CMA Asit Ganguly, Vice Chairman felicitating CMA Bhushan Patel, Faculty duringCEP conducted by Navi Mumbai Chapter on 18th October 2015.

CMA K V V S Murthy felicitating the second speaker Mr. Ashish Ukidwe during theCEP organised by Navi Mumbai Chapter on 1st November 2015.

CMA K V V S Murthy felicitating the speaker CMA S H Pathan during the CEPorganised by Navi Mumbai Chapter on 1st November 2015.

CS Darshan Talikot - Chairman ICSI Nasik Chapter, Dr. Shilpa Parkhi - Chairperson,Nasik-Ojhar Chapter of ICAI, CMA A Sekar - faculty, CMA Pradnya Chandorkar, ViceChairperson, Nasik-Ojhar Chapter of ICAI, CMA Suraj Lahoti - Secretary, Nasik-Ojhar Chapter of ICAI, during seminar organised by Nasik-Ojhar Chapter on9th September 2015.

Felicitation of Faculty CMA A Sekar by Dr. Shilpa Parkhi, Chairperson, Nasik-OjharChapter of ICAI, during seminar organised by Nasik-Ojhar Chapter on 9th September2015.


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Respected Members,

The Western India Regional Council will organize theRegional Cost Convention for 2015-16 jointly with thePimpri-Chinchwad-Akurdi Chapter of CostAccountants at Auto Cluster Auditorium – Pimpri-Chinchwad, Pune, on 16th& 17th January 2016. Thetheme of the convention is "Make in India through -Cost Competitiveness, Tax Reforms, Ease of DoingBusiness and Digital India". Details of the RegionalCost Convention 2015 is published in the current issueof WIRC Bulletin. I expect that members at large willbe benefited by the different technical sessions of thesaid convention.

We are aware that implementation of GST in India isround the corner. Our Institute has already organizeda number of programs on the same subject throughoutthe country to update our members to play theirdistinctive role in the proposed tax regime. I am happyto inform you that WIRC will organize three daysprogramme on 18th to 20th Dec. '2015 at WIRCauditorium (recently revamped with roof fixedprojector and a big screen for the benefit of members)on refresher course on " Indirect Taxation and gearingfor GST". We expect that on the basis of continuousendeavor of our beloved CMA Ashok Nawal - CCM &Chairman Taxation committee, our members will gettheir due share of practice at the GST regime and ourexpectation to include ourselves in the definition ofAccountant under the Income Tax Act will be in realityin very near future.

WIRC conducts Investors Awareness Programregularly. Recently, such program had been conductedat Nagpur with the association of Nagpur GPO, whichwas well appreciated by the govt. authorities. In themonth of Nov. '15 WIRC had organized a CEP on"Handling of large size enterprise in SAP". Thepresentation of Mr Rajesh Sharma, AGM IT, DB PowerLtd. was extremely commanding. Members presentbenefited from the said program.

We strongly believe that all Chapters are back bone

From the Desk of Chairmanof the Institute. Head Quarters should take right stepsto combat genuine grievances of all chapters. Allprofessional development including students coachingfacility, should be conducted under the leadership ofthe respective chapters within their areas. Let chaptersplay their pivotal role in their respective area ofoperation. There should not be any ambiguity or clashof ownership of the program in between the chaptersor any other authority.

On 15th November 2015 the WIRC & ChaptersCo-ordination Meet' was held at Pune Chapterpremises. Different chapters shared their thoughts andideas to improve the face of the profession. It was aright step taken by the Institute at the right time. StillI believe that huge potentialities are there in ourprofession. Only due to lack of visibility and propermarketing of our profession we are lacking behind ascompared to our peer Institutes. May I request all ofour members to mention "CMA" before their name inall official correspondence? Our Institute circulated thesame directives long back but unfortunately we arenot following the same. This will definitely improvethe image of our profession at our work place. I alsorequest our central council through this message todistribute the CMA Logo among members at theearliest to avoid any ambiguity regarding the sizecolour and other aspects of the logo. I believe this willsurely improve our image in society.

All sectors of the Indian economy & Infrastructuresector in particular are under tremendous pressure.Since lot of new projects are getting delayed only dueto delay in decision making process from theappropriate authority, RBI has already taken somepositive decision to counter the situation. I stronglybelieve that under this situation our members can playa very important role in total cost management of suchtype of infra projects.

On behalf of WIRC, I convey my best wishes to allstudents appearing for December 2015 Examination.

Wish you and your family a Happy New Year 2016.See you next month.

With warm regards

CMA Debasish Mitra


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REGIONAL COST CONVENTION 2016DELEGATE FEES :

Corporate Delegates: Rs. 2,000/- For Self-Sponsored CMAs: Rs. 1,250/- Students: Rs. 750/-

Cheque/DD should be in the favour of "ICAI-WIRC"Details for NEFT/RTGS Payment

Account Name : The Institute of Cost Accountants of India- WIRCBank: Bank of Baroda. SB Account No: 27940100022156. Branch: Horniman Circle, Mumbai

IFSC Code: BARB0PBBMUM. MICR Code: 400012111. PAN: AAATT9744L

THEME:Manufacturing Sector of India contributes approx 16% oftotal GDP. This share is very low when we compare thiswith countries like Indonesia, China, Brazil whereinmanufacturing sector contributes more than 20% of GDP.World Bank has suggested that to realize its full potentialIndia needs to continue making progress on its domesticreforms agenda and encourage investments.Improvement in manufacturing sector is need of the dayto enable India to achieve higher economic growth.

However, there are many problems faced bymanufacturing sector, which stand as an obstacle in thepath of economic growth. This year's Regional CostConvention aims at focusing on how Make in India canbecome a reality with the help of four main pillars viz.Cost competitiveness, Ease of Doing Business, Taxreforms and Digital India.

Cost Competitiveness: The main problem faced byManufacturing Sector is Cost of Doing Business. To boostmanufacturing, both for domestic and internationalmarket, and making success of make in India, what areneeded are - lower costs of doing business.

Ease of Doing Business: Apart from reducing costs,

Manufacturing sector ails from number of issues whichmake doing business in India very cumbersome. In a studyundertaken by the World Bank on "Ease of doingbusiness", India is ranked at 142 among 189 countries.In order to enable success of "Make in India", we have toensure that many issues such as outdated labour laws,ease in acquisition of land etc are streamlined and anybusiness owner will find that starting and running asuccessful business in India will not be an impossibledream.

Tax Reforms: Simpler Tax structure is long awaitedreform. India's taxation system has become too complex.Apart from the direct and indirect taxes imposed by theCentre, large number of duties are imposed by the States.This results in increased costs and inordinate delays indealing with various authorities.

We need to address the cost and non cost factors andchange the perception around the investment climate inIndia.

Thus, we aim, through this Regional Cost Convention,to discuss the various issues faced, to make the delegatesaware of the various reforms undertaken and to enableskill development among our members.

PROGRAMME SCHEDULESaturday, January 16, 2016

Time Session

09.00 a.m. - 10.00 a.m. Registration & Inauguration10.00 a.m. - 11.15 a.m. Inaugural Session11.15 a.m. - 11.30 a.m. Tea/Coffee Break11.30 a.m. - 01.30 p.m. Technical Session 101.30 p.m. - 02.15 p.m. Lunch02.15 p.m. - 04.15 p.m. Technical Session 204.15 p.m. - 04.30 p.m. Tea / Coffee Break04.30 p.m. - 06.00 p.m. Technical Session 306.00 p.m. - 07.00 p.m. Chapters Meet07.00 p.m. - 08.00 p.m. Cultural Programme08.00 p.m. - 09.30 p.m. Dinner

Sunday, January 17, 2016

Time Session

09.45 a.m. - 11.15 a.m. Technical Session 4

11.15 a.m. - 11.30 a.m. Tea Break

11.30 a.m. - 12.30 a.m. Technical Session 5

12.30 a.m. - 02.00 p.m. Valedictory Session

02.00 p.m. onwards Networking Lunch


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Co-ordination Committee :CMA Debasish Mitra, Chairman, ICAI-WIRCCMA Pradip H. Desai, Vice-Chairman, ICAI-WIRCCMA Shriram N. Mahankaliwar, Hon. Secretary ICAI-WIRCCMA Laxman D. Pawar, Treasurer, ICAI-WIRCCMA Kailash R. Gandhi, RCM & Chairman, PD Committee, ICAI-WIRCCMA Harshad Deshpande, RCM & Editor WIRC

Reception Committee :CMA Harshad Deshpande - RCM & Editor WIRCCMA Bhavesh Maroliya, Treasurer,ICAI-Pimpri-Chinchwad-Akurdi ChapterCMA Chaitanya Moharir, Vice-Chairman, Pune ChapterCMA Pradnya Chandorkar, Vice Chairperson, Nasik ChapterCMA Maya Sharma, Secretary Kutch Gandhidham ChapterCMA Jayant Hampiholi, Secretary,ICAI-Pimpri-Chinchwad-Akurdi ChapterCMA Deepak Borse, Jt. Secretary, ICAI-Pimpri-Chinchwad-Akurdi ChapterCMA Anil Kumar Gupta, Chairman, Jabalpur ChapterCMA Probhakar Ghosh, Chairman, Vindhyanagar Chapter

Sponsorship Committee :CMA Shriram N. Mahankaliwar, Hon. Secretary ICAI-WIRCCMA Ashish Deshmukh, Chairman,ICAI -Pimpri-Chinchwad-Akurdi ChapterCMA Vinod H. Savaliya, Chairman, Ahmedabad ChapterCMA Deore Surendrasingh, Chairman, Aurangabad ChapterCMA V. Madhusudana Rao, Chairman, Nagpur ChapterCMA Baliram N. Sapkal, Chairman, Navi Mumbai ChapterCMA R. M. Kandoi, Chairman, Vapi Daman Silvassa ChapterCMA S. J. Joshi, Secretary, Baroda ChapterCMA Dipen Mehra, Chairman, Bilaspur ChapterCMA B. N. Agarwal, Chairman, Bhilai ChapterCMA Ratan Khatwani, Treasurer, Raipur Chapter

Delegate Committee :CMA Neeraj D. Joshi, Regional Council Member, ICAI-WIRC

COMMITTEES

CHIEF PATRON :CMA P. V. Bhattad, President, ICAI

PATRON :CMA Manas Kumar Thakur, Vice President, ICAICMA Ashok B. Nawal, Central Council Member

CMA Amit Anand Apte, Central Council MemberCMA Brijmohan Sharma, Past President, ICAI

Convener :CMA Pradip H. Desai, Vice Chairman, ICAI - WIRC

Co-Convener :CMA Kailash R. Gandhi, Chairman, Professional Development Committee, ICAI-WIRC

CMA Ashish Deshmukh, Chairman, ICAI -Pimpri-Chinchwad-Akurdi Chapter

Co-ordinator :CMA Shriram N. Mahankaliwar, Hon. Secretary ICAI-WIRC

CMA Laxman D. Pawar, Treasurer, ICAI-WIRC

CMA R. K. Patel, Chairman, Baroda ChapterCMA Yogesh Chourasia, Secretary Bhopal ChapterCMA Rammohan Menon, Chairman Goa ChapterCMA G. B. Shamnani, Chairman, Kalyan Ambernath ChapterCMA Anant Dhavale, Chairman, Pune ChapterCMA Mahindra Bhombe, Vice-Chairman,ICAI- Pimpri-Chinchwad-Akurdi Chapter

Technical Committee :CMA Ashok Nawal, Central Council MemberCMA Brijmohan Sharma, Past President, ICAICMA Kailash Gandhi, Chairman, PD Committee, ICAI-WIRCCMA Laxman D. Pawar, Treasurer, ICAI-WIRCCMA (Dr) Shilpa S. Parkhi, Chairperson, Nashik ChapterCMA B. F. Modi, Secretary, Vapi Daman Silvassa ChapterCMA Arun Kumar, Secretary, Nagpur ChapterCMA Amit Shahane, Secretary, Pune ChapterCMA Sudeep Satyendra Saxena, Chairman, Indore Dewas Chapter

Souvenir Committee :CMA Kailash R. Gandhi, RCM & Chairman, PD Committee, ICAI-WIRCCMA Mahindra Bhombe, Vice-Chairman,ICAI- Pimpri-Chinchwad-Akurdi ChapterCMA Laxmikant Vijayvargiya, Chairman, Bhopal ChapterCMA Manish Analkat, Secretary Ahmedabad ChapterCMA Basant K. Das, Secretary, Navi Mumbai ChapterCMA Manubhai K Desai, Chairman, Surat South Gujarat ChapterCMA Arindam Goswami, Chairman, Raipur ChapterCMA Ashish Kumar Jain, Secretary, Indore Dewas ChapterCMA Anand A Katyare, Chairman, Kolhapur Sangli ChapterCMA Manoj Malpani, Pimpri-Chinchwad-Akurdi ChapterCMA M K Katkar, Pimpri-Chinchwad-Akurdi ChapterCMA Pradeep Deshpande, Pimpri-Chinchwad-Akurdi ChapterCMA Soumen Dutta, Editorial Board Member, WIRC Bulletin

Hospitality/Logistic Committee :CMA Laxman D Pawar, Treasurer, ICAI-WIRCCMA Sandhya Nair, Hon. Director,ICAI- Pimpri-Chinchwad-Akurdi Chapter


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CMA Neetu S Kapoor, Secretary, KalyanAmbernath ChapterCMA Vilas P Wadkar, Secretary, Kolhapur Sangli ChapterCMA Jayant Hampiholi, Secretary,ICAI-Pimpri-Chinchwad-Akurdi ChapterCMA Meena Vaidya, Treasurer, Pune ChapterCMA Swaro Girija Saankar, Secretary, Aurangabad Chapter

Press Release & Committee :CMA Laxman D Pawar, Treasurer, ICAI-WIRCCMA Shriram N Mahankaliwar, Hon. Secretary ICAI-WIRCCMA Kailash R Gandhi, RCM & Chairman, PD Committee, ICAI-WIRCCMA Harshad Deshpande, RCM & Editor WIRC

TARIFF

Sponsorship TariffPlatinum Rs. 5,00,000/-Diamond Rs. 2,00,000/-Gold Rs. 1,00,000/-Silver Rs. 75,000/-

Co-SponsorConvention Kit Rs. 1,00,000/-Cultural Event Rs. 60,000/-Dinner Rs. 1,00,000/-Lunch Rs. 1,00,000/-Hi Tea Rs. 50,000/-Mementoes Rs. 1,00,000/-

Souvenir TariffBack Cover Rs. 50,000/-Front Inside Cover Rs. 40,000/-Back Inside Cover Rs. 30,000/-Colour Full Page Rs. 20,000/-Ordinary Full Page (B & W) Rs. 10,000/-

For Registration Please Contact :

Western India Regional Councilof ICAI

Rohit Chambers, 4th Floor, Janmabhoomi Marg,Fort, Mumbai 400 001.

Maharashtra. India.

Tel. : 022-22043406, 22043416Email : [email protected]

Website : www.icmai-wirc.in

* * * * * *

Pimpri - Chinchwad - Akurdi ChapterCMA Bhawan Plot No.12, Survey No. 36,

Finolex Chowk,Opposite City International School,

Court Road, Morwadi, Pimpri, Pune - 411018

Tel. : 020-6520 5444 , 86051 48330, 88057 78771

Pune Central CEPStudy Circle

Pune Central CEP Study Circle formed under theguidelines of the Institute of Cost Accountants of Indiaorganized its sixth function on 21st November 2015.CMA Brijmohan Sharma, Past President of our Institutegave the lecture on this occasion. Topic of the lecturewas ‘Insights into GST ’.

There will be paradigm shift in the Indirect Taxationmechanism in our country in the near future. Inconnection to this many members wanted to understandthe basic concepts of GST which is going to replace thecurrent Indirect taxes Regime, both, at Central as wellas State level. Keeping in mind the viewpoint of themembers of our Institute, Study Circle arranged theprogram on GST and our past president elaborated allthe basic concepts of GST in an easiest manner.

CMA Prashant Vaze, Convener of the Study Circle alongwith CMA Rajendra Pardeshi (Members of the Advisorycommittee of the Study Circle) and CMA PradnyaDhamdhere arranged the Program. CMA HarshadDeshpande, RCM and CMA L. D. Pawar, TreasurerWIRC were also present at this event.

Professor (Dr.) Paresh Shah, FCMA,(7386) Ph.D.,(Finance), Alumnus of IIM, Ahmedabad; Freelanceand Accredited Management Teacher, receivedManagement Teachers Consortium (MTC) GlobalAward for Excellence-2015.

He was given the award as an OutstandingManagement Teacher - Global, as a contribution toacademia by way of teaching, research and writing.From across the globe, only one award was given asan Outstanding Management Teacher (India Based)- Global.

The award-giving ceremony was held on September12, 2015 at Bangalore, under the guidance of founder,convener and president of MTC Global Award Prof.Bholanath Dutta.

Congratulations ! ! !


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GST CORNERBy CMA Ashok B. Nawal

Contact: +91 9890165001 • Email: [email protected]

Every Citizen of India is keenly waiting for outcome ofwinter session w.r.t. 122nd Constitutional AmendmentBill 2014. Each citizen is also hoping that political sensewill prevail and economic decisions will be taken ratherthan political decision. Empowered Committee of StateFinance Minister have made following documents openin public domain and also started deliberating across India.Department have invited Trade & Industries fordiscussions on following business Process Reports and

given the presentation and answer the queries.

• Business Process Report - Registration

• Business Process Report - Refund

• Business Process Report - Returns

• Business Process Report - Payment

We have also submitted our suggestions as follows:

• Registration :

Sr.No.

Clause asper Report As per Report Suggestion Justification

1

2 2.1 (2) Gross Annual Turnover notdefined

Gross Annual Turnover to bedefined definition needs moreelaboration and whetherfollowing to be considered inTurnover :o Intra state branch transfer

or multiple verticalsregistered separately withinthe state

o Intrastate Captiveconsumption

o Intrastate job work

o Temporary Removal - goodssent for repairs, calibration,testing

o Goods supplied on returnablebasis

o Free supply of goods andservicese

Gross Turnover being criteria fordeciding the applicability ofregistration should be clearlydefined

2.1 (2) Once a dealer crosses therequired threshold or he startsa new business, registrationapplication must be filed within30 days from the date of thedealer?s liability for obtainingsuch registration. Effective dateof registration would be the dateof application in all cases i.e.whether the application hasbeen filed within prescribed timelimit of 30 days or otherwise.The taxpayer would be eligiblefor ITC in respect of all hispurchases from the date ofapplication in case applicationfor registration has been filedwithin 30 days. The taxpayerwould, however, not be eligiblefor ITC in respect of his

No Law to be made when it isfelt that it will not fall in thejudicial scrutiny

ITC to be allowed on all theinputs / supplies received nosooner either registration ismade or threshold limit iscrossed and compoundingscheme is not opted andsuitable transitional ITC to beallowed on the stock held.

Law should be drafted in such afashion that it should notrequire amendment forconsiderable period of time. Itwill provide confidence to theinvestor and stake holders.


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Sr.No.


purchases prior to the date ofregistration in case theregistration application is notfiled within the prescribed timelimit of 30 days, although Centreis of the view that such aprovision may not stand the testof judicial scrutiny.

2(10) The concept of Input ServiceDistributor (ISD) presentlybeing followed in Centre's Lawmay continue if the GST Law soprovides. They would berequired to obtain GSTIN fordistributing the credit of GSTpaid on services proposed to beused at multiple locations whichare separately registered. Thiswould be an exception/ deviationin case of services only. GST LawDrafting Committee to makeappropriate provisions for thesame

Provision of registration of ISDshould be deleted and alllocations on all India basis tobe registered and any supply ofgoods or supply of services,eventhough apportionment ofcommon expenses should beagainst GST invoice. If stillconcept of ISD continues, then

Distribution of Credit of Goodsreceived at Head Office is yet tobe decided (also mentioned inthe report).

Distribution of the credit ofgoods in case service providersneeds to be looked into (alsomentioned in the report).

Clarity on Multiple ISDregistrations needs to beincorporated as an entity mayhave multiple location whereinthe services are received.

Number of common expensesare incurred and those areapportioned based on servicesrendered / suitable basis interms of Cost AccountingStandard -3 issued by Instituteof Cost Accountants of India.

3.7 Switching over fromCompounding scheme toNormal scheme and vice-versa

Transitional Provision ofavailing ITC or reversing ITC onstocks should be made availablein line with Rule 11 of CenvatCredit Rules, 2004.

5.2 Tax Return Preparer Scheme -A taxable person may preparehis registration application /returns himself or can approachthe TRP for assistance. TRP willprepare the said registrationdocument / return in prescribedformat on the basis of theinformation furnished to him bythe taxable person. The legalresponsibility of the correctnessof information contained in theforms prepared by the TRP willrest with the taxable person onlyand the TRP shall not be liablefor any errors or incorrectinformation. If so provided in theGST law, TRPs would beapproved by the taxadministration of the Centreand the States and will also beprovided appropriate trainingby them, as per commoncurriculum to be devised by EC/GST Council.

Qualification and eligibilitycriteria for TRPs to be defined


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Sr.No.


5.3 Facilitation Centre (FC) shall beresponsible for the digitizationand / or uploading of the formsand documents includingsummary sheet duly signed bythe Authorized Signatory andgiven to it by the taxable person.After uploading the data oncommon portal using the ID andPassword of FC, a print-out ofacknowledgement will be takenand signed by the FC and handedover to the taxable person for hisrecords. The FC will scan andupload the summary sheet dulysigned by the AuthorizedSignatory. This is the system invogue for submitting TDSreturns by more than 2 milliontax deductors to the Income TaxDepartment.

Existing Criteria laid down byCBEC should be followed forgranting FC

11.15 Field 19 asks for the details ofauthorized representative (TRP/ CA/ Advocate, etc.) of thetaxpayer.

Field 19 asks for the details ofauthorized representative (TRP/ Practising Cost Accountant /Pracitising CharteredAccountant / PractisingCompanies Secretary /Advocate) of the taxpayer.

Only professionally qualifiedpersons should be eligible for theTRP for better professionalservices to the tax payer.

Centralized Registration - forService Providers having PanIndia presence should be madeavailable so as to reducecompliance cost.

If centralized registration ofservice providers having panindia presence is not providedthen such person have to filealmost 37(thirtyseven) returnsevery month, which will add tocompliance cost. At present,service provider is eligible toobtain centralized registrationwhere centralized accounting orcentralized billing system ispossible and any destination orany branch can provide theservices to any account holderlocated in India. Therefore, it willbe a very tedious exercise to filethe return of such transactions.For example, a person having hisaddress in Delhi Branch of Bankof India can operate his bankaccount from any branchesacross in India and services areprovided from any branch to suchaccount holder. Similarly,services are provided on-linethrough internet banking andhence, centralized registrationwill reduce not only compliancecost but will eliminate anylitigations on account of SGSTpayable. Hon'ble PrimeMinister of India and all StateGovernments are committed to


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Sr.No.


introduce the procedure whichachieves the mission of Ease ofdoing business in India andtherefore compliance proceduresand cost will be reduced.

Forms All Registration Application Constitution of Business in theall Application for registrationformat should includeAssociation of Person and JointVentures.

Forms Identification of DeemedExporter on the GSTN for buyerof the goods and services is notenvisaged in the proposedbusiness process forregistration. A legal entity mayhave all the units includingEOU, SEZ, DTA, etc.

2 No provision for refund of Taxespaid by units availing areabased exemptions

Provisions related to transitionperiod in the GST Act (CGST Act& IGST Act of CentralGovernment and SGST Act ofvarious state governments )should have unambigiouswording w.r.t conversion ofexisting exmeption scheme toexemption by way of RefundMechanism.

Forms Para 12 of Registration Format Para 12 of Registration Formatshould include Deemed Exportcategory . Further provision tobe made to select more than onecategory of business activity.

1 - No provision for refund ofbenefits already granted underIndustrial Policy of variousStates

Provisions related to transitionperiod in the GST Act (CGST Act& IGST Act of CentralGovernment and SGST Act ofvarious state governments)should have unambigiouswording w.r.t conversion ofexisting exmeption scheme toexemption by way of RefundMechanism.

3 B (iii) Obtaining non duty paid inputsand exporting final productwithout payment of duty.

It is recommended that the firstoption mentioned above i.e.option to procure duty freeinputs for exported goods shouldnot be available in the GSTregime. This would obviate therequirement of submission ofstatutory form and the supplierof goods to the actual exporterwould be required to pay the GSTand will not be required tocomply with various formalities

It is recommended that the firstoption mentioned above i.e.option to procure indigenousduty free inputs for exportedgoods should not be available inthe GST regime. This wouldobviate the requirement ofsubmission of statutory formand the supplier of goods to theactual exporter would berequired to pay the GST and willnot be required to comply withvarious formalities presentlyrequired for making tax freesupplies.

Number of exporters areavailing the benefit of advanceauthorisation under ForeignTrade Policy with no paymentof any duties (including BasicCustoms Duty, CVD, SAD, Anti- Dumping Duty and safe GuardDuties ) and they should not beput a loss and / or requirementof high working capital forblockage of duties.

• Refund


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Sr.No.


presently required for makingtax free supplies.

Present system of importinginputs without payment of dutyagainst Advance Authorisationshould continue not only forpayment of basic customs dutybut also for IGST

5 A (iii) In first two situations i.e. in caseof wrong mention of nature of tax(CGST / SGST / IGST) or in caseof wrong mention of GSTIN, thetax administration is requiredto verify the correctness of thetaxpayer's claim and thereforethe taxpayer may file a refundapplication which should bedecided within a period to beprescribed by the GST Law.

(1) Mechanism of adjustment ofexcess / wrong tax paid intocorrect tax code within specifiedperiod of ultimate payment torespective tax authorities finallyremitted from bank (2) Suchdefaults should not beconsidered under BLACKLISTING provisions . The typetax should be available ratherthan refund mode oralternatively such type ofadjustment can be routedthrough nodal agency / clearinghouse rather than payment firstin the correct code / type andobtaining refund for theincorrect payment of CGST /SGST / IGST and vice versa.

This needs to be done otherwisethere would be impact as follows:

1. Delay in the noticing theerror, interest paymentwould be required.

2. Blockage of Funds on doublepayment and thereafterobtaining the refund

3. Fear of BLACKLISTING inthe transition period fromthe stage of locating errorand payment.BLACKLISTING wouldcause the loss of businesssince the purchaser wouldcannot avail the ITC.

6 B (v) (g) As regards the BRC, it was notedthat as per the RBI guidelines,the exporter has a time periodof one year from the date ofexport, within which the exportproceeds are required to beremitted into India. Thus BRCwill not be available till the timeexport proceeds are realized.Therefore it is recommendedthat submission of BRC may notbe insisted upon at the time offiling of refund application andpost facto verification can becarried out by the taxauthorities. The refund in suchcases should be subject tosubmission of BRC detailswithin a period of maximum oneyear or such period as extendedby RBI from the date of theexport. If such details are notsubmitted at the portal atwhich the refund applicationwas made, the portal shouldgenerate an alert/report for theconcerned tax authorities totake up appropriate action. Incase of any short receipt of exportreceipts, necessary action forrecovery of proportionaterefunded amount may be takenaccordingly.

This para should be eitheromitted or restricted to exportshaving commercial value andthis para should not be madeapplicable to any exports whichis having without consideration.As a matter of fact, export is zerorated and therefore, exports canbe made without payment of anyIGST or paid refund mechanismis allowed. If refund is linkedwith BRC, then it will bediscrimination.

Where BRC received in Indianrupees then how to deal in suchsetuation.

Even in the existing law ofCentral Excise / VAT / CST,suchtype of provision is not inexistence. Refund / Rebates incase of exports have never beendisallowed. Further, FOCsamples/ replacement / JobWork / repairs etc... will have theincidence of taxes which isagainst the international normsand WTO policy. (2) Even RBIallows for self-write off to theextent of 10% of FOB value ofexports of the preceeding yearand in such case, at present,excise duty/VAT is notdemanded. Hence, refundcannot be linked with BRC incase of exports

Further when amount is notrealized on account of failuir topay by customer but coveredunder insurance cover of ECGCthen even draw back is given andno reversal is asked for.As a principal of GST, thetaxability is on the supply, thenwhy only in case of exports BRCis asked for which is incontradiction of GST Principal.

7 B (i) DEEMED EXPORT OF GOODSOR SERVICES

Chapter 7 to be replaced insteadof chapter 8

Deemed Exports relates tochapter 7 of Foreign Trade Policy2015-2020 and not chapter 8 asit was Chapter 8 of ForeignTrade Policy 2009-14


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Sr.No.


8 B (ii) (b) The supplier may file a simplerefund application along with aChartered Accountant'sCertificate certifying the fact ofnon-passing of the GST burdenby him, being claimed as refund.GST Law Drafting Committeemay prescribe a thresholdamount below which self-certification (instead of CACertificate) would be sufficient.

Certification should be from anyPracticing Cost Accountant orChartered Accountant instead ofexisting wording of "CharteredAccountant".

Institute of Cost Accountants ofIndia and Institute of CharteredAccountants of India are set upby the Act of Parliament andmembers of either Institute arethe professional in the fields ofaccountancy, taxation, audit andmanagement and members aregovern with code of Ethics andDisciplinary Mechanism of therespective institute. Therefore,both the professionals arequalified to conduct the auditunder Central Excise Act, 1944,Finance Act, 1994, and StateVAT Acts. Since, all the taxesunder the above laws arescheduled to be subsumed inthen GST, both the professionalsare eligible for certifying therefunds as well as the audit.

9 C (vii) Provisional AssessmentFor satisfying the requirementof unjust enrichment, thetaxpayer would be required tosubmit a CharteredAccountant's Certificatecertifying the fact of non-passingof the GST burden by thetaxpayer, being claimed asrefund.



10 D (i) Refund of Pre-Deposit for FilingAppeal including refund arisingin pursuance of an AppellateAuthority's orderLooking at thepolicy objective of making therefund process hassle free, it isrecommended that the taxpayermay file a simple refundapplication along with aChartered Accountant'sCertificate certifying the fact ofnon-passing of the GST burdenby the taxpayer, being claimedas refund.

As a matter of fact, when it ispre-deposit, even today, doctrineof unjust enrichment is notapplicable and hence nocertification should be insistedfor and at present by simpleletter, refund is granted, similarprocedure is to be adopted withnecessary modification linkedwith GSTN. (2) If pre-deposit isconsidered, the payment alreadymade during the investigationperiod self-certification from theTax payer should be obtainedthat the said amount had notbeen recovered from customerdirectly or indirectly.

However, if Certification isinsisted, it should be from anyPracticing Cost Accountant orChartered Accountant.

At present, doctrine of unjustenrichment is not applicable formandatory deposit made beforefiling appeal in accordance withdecision held in Commsioner ofCustoms Import Raigad vsFinachord Chemicals PrivateLimited 2015 319 ELT 616 SCand Union of India vs SuvidheLimited 1997 (94) ELT A159and hence there is no need toprove the onus of unjustenrichment before granting therefund and hence no certificationis required


13

Sr.No.


11 E (iv) PAYMENT OF DUTY/TAXDURING INVESTIGATIONBUT NO / LESS LIABILITYARISES AT THE TIME OFFINALIZATION OFINVESTIGATION /ADJUDIACTION

Looking at the policy objectiveof making the refund processhassle free, it is recommendedthat the taxpayer may file asimple refund application alongwith a Chartered Accountant'sCertificate certifying the fact ofnon-passing of the GST burdenby him, being claimed as refund.



12 F TAX CREDIT ON INPUTSUSED FORMANUFACTURING /GENERATION /PRODUCTION/CREATION OF TAX FREESUPPLIES OR NON-GSTSUPPLIES:

13 F (vi) The tax credit on the inputs usedfor supply of exempted / NILrated / non GST goods or servicesshould be treated as "ineligibleinput tax credit" and thereshould be an appropriateprovision in the return toprovide the related invoicedetails.

One to one correlation of inputand output should not beinsisted, but provision ofreversal of ITC should be madeavailable if such material isused for supply of of exempted /NIL rated / non GST goods orservices and rather than makingineligible input tax credit at thetime of receipt and suitableprovisions would be made in theReturn for reversal of ineligibleinput tax credit.

There are chances of errors indeciding the eligibility ( in somecases may be proportionateeligibility) at the time ofavailment of ITC (Which isbased on supply statement ofthe supplier)

1 GSTR-1 Clarification w.r.t. requirementof shipping bill no at the time offiling of return, since theshipping bill is filed after theconsignment is reached to theport and taxpayer may not havethe shipping bill number at thetime of filling of return.

In case of export, whether theexports needs to be reported onlyafter the shipping bill is filed.?

• Returns :

2 GSTR-3 After completion of return,payment link to be provided andupon following of the same theexact amount of tax is allowedto be paid so as to avoidsituation of refund in case ofexcess payment.


14

1 Process involved in e-payment of GST:The taxpayer can choose any ofthe gateways available on theportal for making the payment.The exact charge should becalculated separately by thegateway service provider. Thegateway provider should collectthis amount separately over andabove the challan amount. Thechallan amount should be fullycredited to respectiveGovernment accountsmaintained with the authorisedbank (acquiring bank for CC/DCpayments), while the gatewaycharges should be retained backby the gateway provider.

While authorizing the bank tocollect the tax revenue thosebanks who will not recover anycharges for remitting thegovernment revenues shouldonly be preferred.

at present, tax payer is notcharged for any any paymentmade to the bank with respectto Government revenues.Therefore, it is in line with easeof doing business without anyadditional cost.

• Payment :

17

Sr.No.


Chairman of Empowered Committee of State FinanceMinister had to resign and last meeting on 20thNovember 2015 was chaired by Shri. Arvind Kejariwaland in the next meeting New Chairman will be appointed.Meanwhile, sub-committee on Revenue Neutral Rate havesubmitted the report but it was further formed the sub-committees to finalise the revenue neutral rate.

Let us hope, Draft GST Law will be in Public Domain byend of this month or in early December and winter sessionof Rajya Sabha will pass 122nd Constitutional Bill 2014.

Meanwhile, Government is getting ready. Industry andTrade have to be geared up.

STARTUP GAMUTCMA Dr. V. V. L. N. Sastry

Director, Firstcall India Investment Banking, Mumbai.

The startup culture of India boomed quickly. Financialinvestors did not leave any chance to increase theirinvestments. Consecutive imbuements, valuationsbeyond imagination, betting on numerous steeds of thesame race, everything is going so well. One startupbusiness entrepreneur is motivating 100 others.Innovation arrangements have turned out to be hot tothe point that other traditional financial investors wouldprefer not to sit it out and watch the activity developfrom the sidelines. Hedge funds, mutual funds, assetmanagement, and family offices have all been effectivelytaking an interest in venture rounds.

The first three quarters of calendar year-2015 werefantastic for startups in India. In the past nine months,angel investors and venture capitalists have been pouringmore money into early stage Indian startups and latestage companies more than ever before. Between Jan-Sept, USD 7.3 billion has been invested across 639 deals.The 2015 Q3 funding has shown a growth of about 2xfrom that of Q1 and Q2. Crunching the numbers from

2014 Q4 also shows that the growth is about 200 percent.

We keep on seeing the money people look for and goafter deals and arrangements in upcoming hot new startupcompanies.

The expanded pace in startups was to a great extentbecause of three things: 1) Several VCs raised new andbigger assets which prompted speedier investments, 2) Aconsiderable late stage capital all of a sudden got to beaccessible which supported early stage financial investorcertainty and hence higher number of deals ahead ofschedule stage bargains, 3) The speed was further helpedby sudden blast of hyperlocal and other mobile led newbusinesses. Attempts to comprehend things in an orderlyway reveal us the startup gamut.

What are new startup companies?

The watchwords that could be appended to new businessesare scale, development, innovation, development andaspiration. Getting the thought from the west and seeingthe examples of overcoming adversity of numerousoutside firms like Amazon, Uber, Google, Facebook; India


15

additionally began following the league and doubtlesslysome of them truly did well. Presently these startuporganizations began pulling in enormous investments likeJapan's Tech titan Softbank, China's Alibaba, SequoiaCapital, US-based Tiger Global Management and so forth.

When is the 'Opportune Time' for Startups toApproach an Investor?

The principal thing that is frequently in the brains ofmost startup business visionaries or even those with onlya 'brilliant thought' is to discover an investor who cansupport their thought or startup. In any case, if the newvisionary adopts a practical approach for all purposes,when the thought has just manifested itself and stillremains to be tested, it might be too early to try andthink on those lines. Unless he himself has some concretefooting for his thought or idea, how would he be able torope in others to go along with him? Just as there is aright time for everything, he has to sit back and wait forthe opportunity to strike so as to approach potentialinvestors to fund his venture. If he approaches thembefore time when he himself does not have a clear visionof the proposed venture, he is faced with the possibilityof getting rejected or alternatively, even if he can manageto get someone interested in his proposition, he couldend up with a not so attractive bargain.

Here are a few things that ought to be confirmed in hisagenda before he can even think of approaching aninvestor. He will need to concentrate on authenticity ofhis claims regarding his idea, item or product.

Entrepreneur's money first!!

This is the first prerequisite which would immediatelydrive home the point that he has the confidence in hisproposed venture. It is easy to play around with others'money but when the question is of one's own money, heis bound to push harder to make things work. Chancesare that he will work out things faster at the same timeadopting a conservative approach with the idea ofgenerating revenue at the earliest in order to keep thingsmoving. This strategy also helps the investor gainconfidence in the entrepreneur's commitment towardshis own venture.

Commitment

If one has the wholehearted passion and devotion towardshis idea with the sole purpose of making it a viableventure, he should not treat it a 'second alternative'. Thismeans it should not be that he has already a job in handand this proposed venture is just being given a few hoursafter office daily or the weekends. If it is only a venturebeing pursued in 'available time', it is likely that at theslightest hitch, he would be tempted to give it up andcontinue with his job. Here one needs to ask oneself whyan investor would show interest in pooling in funds in aventure where the entrepreneur himself is not confidentof his venture and is playing safe.

Till such time that one commits himself entirely to theventure, he would not have the fear of failure since he

already has a backup plan in place. Thus, it is veryimportant that he should harbor fear of failure since thiswould be the driving force for him and this in turn willhappen only if he is focused entirely on his startup.

Building a highly capable team

Regardless of how enormous the vision or how one of akind the entrepreneur's thought is, he needs to rememberthat he cannot achieve it single-handedly. The teamshould be as committed and enthusiastic to make ithappen. This calls for the entrepreneur to exercisecaution while he is choosing the first ten team memberswho will begin with him, from scratch and stand by himboth in good times as also in tough and trying times.There is no doubt that experience and capability are ofutmost importance but it is also important that the teammembers are capable of multitasking and should be ableto view the venture with a wider perspective. A competentteam with extraordinary execution prowess is a primefactor in attracting investors.

Demonstrate some stronghold

Here there is a need to address what will have a morepositive effect on the investors as well as theentrepreneur's confidence in his own product/idea. Is itgoing to be actual firm footing for his item/product orsimply some projections made and communicated toinvestors? All things considered, nothing can beat thegenuine product/idea. This gives all the more reason forthe person to approach potential investors only when hisMVP (Minimum Viable Product) is prepared and he has asolid base to persuade and convince them about itspotential. This will help the person prove that he hasbeen able to create a demand for the product successfullyviz.a few projections around a thought that is still in theidea stage and even the entrepreneur is unsure of whetherat the business projections will work out as expected.

Client testimonials

Nothing can be more convincing as a 'proven track record'from customers/clients who have already invested in thisventure. This gives the potential investor the confidencethat the investment is safe and gives an idea of how riskyor safe the investment in a particular venture is. Almostevery investor would use the product/service and makesure that the people in his network also give a 'go ahead'signal before deciding whether to invest in this startup.

Conclusion

Each business has a risk associated with it and thusinvestment cannot be the foundation of any new venture.It is the entrepreneur's passion, product, highly capablecore team and customers that should form the core orcrux of the new venture. If all these aspects are in place,the entrepreneur can have a smooth sailing irrespectiveof favorable or unfavorable incidents. These aspects alsodecide his fate in the industry or market. Investors arealso interested in the entrepreneur's stand in the marketsince their fate in turn depends on his.


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Perceived Role of a Management Accountant:When recruiting accounting professionals, organizationsglobally expect them to help create values in the form ofbetter decision making tools and better management ofthe members of the organization.

Keeping the above objective in mind, our professionalcolleagues have proven track record in adding immensevalue in the industries they have served or owned. TheManagement Accountants have successfully introducedcritical & relevant measures, financial and non-financialin nature, monitoring the organization's pulse andsuggesting improvements across functions & industries.

In my opinion, the basic three forces which are evolvingthe organization today which is turn churns the basics ofManagement Accounting are Technological changes,Globalization and Customer needs. Organizations havedifferent goals and are composed of different members;therefore no universal rules of Management Accountingmay apply. Hence accounting is not a static process buthas proven to be dynamic in nature.

The functions evolved in response to the new environmentare tabulated below:

• Operational Control• Product and Customer profitability• Management Control• Strategic Control

The dimensions of changes in the ManagementAccounting systems are felt in the following heads:

• Ownership• Content• Frequency of usage• Life cycle stage• Process orientation• Tools and techniques• Integration with IT.

Hence over a period of time, CMA/CIMA members haveacquired high level of expertise in most of the belowaccounting processes/functions:

Basic Functions• Book keeping• Reconciliations• Inventory Valuations• Profit & Loss Account• Balance Sheet & schedules• Budgetary Control• Variance Analysis

Management Accountant AndBusiness Strategies

(By CMA Yashan Eruch Jokhi)

• Working capital management• Banking relations• Audits• Board members coordination• Forex Trading

Advance Functions• Debt Restructuring• Internal Controls & Due Diligence• Corporate Governance• Feasibility Reports• Investment Decisions• Strategic Planning• Balance Scorecard• Target Costing• Activity Based Management• Lean Management

I have elaborated in detail on the above aspects in myprevious articles.

Strategic aspects of Mergers & Acquisitions:In an event of mergers & acquisitions, one of the primaryresponsibility of a Management Accountant is to conductappropriate Due Diligence However, in my opinion, amore important aspect would be to decide on the businesssector and timing of such a decision. Let me try to explainas below.

Some of the dilemmas faced by Owners are listed below:

1. When do we exit from the current business activity•2. Do we exit core and non-core businesses both, or,

either one and which one?3. When do we enter a new business line?4. Do we expand horizontally (in our core strength) or

vertically (diversify)?5. Do we acquire an existing business or start a fresh?6. Do we retain partners in an acquired business or own

100%?..... and so on….With a detailed insight of internal and externalenvironment information, the Management Accountantshould play an effective role as an internal businessconsultant, in facilitating the promoters.

In this article, I have tried to elaborate on the strategicaspects of businesses based on my personal experiencein the Gulf region. This exercise was conducted in one ofthe organization, I have served. The name of theorganization has been kept confidential on ethicalgrounds.


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The steps followed for this exercise are as below:

1. List down the companies within the group, whichneeds strategic attention. Generally most of thecompanies within a group requires such deliberation,with few exceptions.

2. Nominate a facilitator who would be the champion ofthis exercise. Generally the person nominated is froma Group Strategic Department, if such a departmentexists within a group. Else a senior member of thecorporate team or a Board member is nominated bythe Company Owners.

3. The facilitator coordinates with each company CEO'sto identify cross functional key members, who arecapable of giving strategic inputs for this exercise.

4. The ideal team would consist of four members fromeach company consisting of Marketing, Production/Operations/Quality, Finance and Support services.

5. As a first step the team members identifies thecompetitive position and market attractiveness of thecompany. The factors to be considered for these twoaspects are elaborated later in this article.

6. Based on indices arrived form step 5, the company iscategorized for its current position.

7. Each of the factors for competitive position and marketattractiveness are debated at length to arrive atstrategies with an objective of improving the indices.

8. Strategies for Core Businesses are listed and agreedupon with timelines. The strategies are categorizedas Expand, Maintain, Contract, Milk or Withdraw.

9. Strategies for Non-Core Businesses are listed andagreed separately.

10. The CEO's in coordination with the facilitator ensureimplementation of those strategies as per agreedtimelines.

11. The effectiveness of strategies is continuouslyevaluated by the team and any changes required tothe strategies are communicated for review andapproval.

12. The team generally meets initially once a week andthereafter once a fortnight till the strategies areagreed upon. The whole exercise will take around 2to 3 month time depending upon the organization size& structure.

Strategic AssessmentThis is the critical step before decision making. Thestrategic assessment procedure and suggestionsconcerning appropriate strategy selection will help toguide and stimulate thinking along strategic lines.However they should not be mechanistically applied.Hence this should be used as an analytical tool and notas a substitute for good decision making.

Savvy business leaders generally seek attractive marketswhere their particular resources and capabilities givethem a competitive advantage so as to achieve a strongcompetitive position.

Strategic position depends upon two main factors VIZ:a) Market attractiveness ANDb) Competitive position

The parameters to be considered for each of the abovefactors are as below:

a) Market Attractiveness:- Rate of future real industry market growth- Average future industry profit level- Major threats to market- Future potential for product/service displacement

b) Competitive position:- Ability to meet market needs & preferences- Quality- Service- Costs (not price)- Reputation- Financial strength- Proprietary position- Current market share- Future market share

Categorizing Companies for Strategic AssessmentThe organizations are categorized under one of thefollowing categories in relation to their marketattractiveness and competitive position indices:

As a Management Accountant one should develop a senseof vision as to the course and direction of the Companyby;

a) Systematically helping the top management incategorizing the Company,

b) Indicate Strategies for Core Businesses ANDc) Indicate Strategies for Non-Core Businesses.

Strategies for Businesses:Broadly the strategies for businesses falls under the belowfive categories:

Expand Aggressive posture to grow market shareSales growth exceeds market growth

Maintain Vigorous defense of market shareSales growth matches market growth

Contract Pruning StrategyShrink total sales while increasingprofitability

Milk Gently coax resources out of a businesssegmentMinimize investment and maximize cashflow

Withdraw Exit over brief time

Indicated Strategies for Core BusinessesBased on the indices of market attractiveness andcompetitive position, the indicated strategies for corebusinesses are tabulated as below:


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Categorization of Companies

High Moderate Low

STAR BLUE CHIP CASH COWHigh Growth Moderate Growth Negative-low growthHigh Investment Moderate Investment Low InvestmentHigh Depreciation Moderate Depreciation Low DepreciationHigh Profit Good-High Profit Good ProfitModerate debt Low debt No debtPositive cash flow Good cash flow Cash fountain

GO-GO DARK HORSE PLODDERHigh Growth Moderate Growth Negative-low GrowthHigh Investment Moderate Investment Low InvestmentHigh Depreciation Moderate Depreciation Low DepreciationGood Profit No profit-Good Profit No profit- Low profitHigh debt Low-moderate debt Low debtRequires financing Requires financing Self financing

WILDCATTER GAMBLER LOSERHigh Growth Moderate Growth Negative-low GrowthHigh Investment Moderate Investment Very low InvestmentHigh Depreciation Moderate Depreciation Very low depreciationLow Profit No profit LossesHigh debt Moderate debt Low debtCash hungry Cash hungry Cash hungry

MARKET ATTRACTIVENESS

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Indicated Strategies for Core Businesses

High Moderate Low

STAR BLUE CHIP CASH COW

Expand core business Expand or maintain Milk, maintain or contractSegment core business segment core business segment

GO-GO DARK HORSE PLODDERI

Expand core business ???? core Milk or withdraw fromSegment business segment core business segment

WILDCATTER GAMBLER LOSER

Expand core business Expand or withdraw from Withdraw fromSegment core business segment core business segment


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19

Indicated Strategies for Outside Core Businesses

High Moderate Low

STAR BLUE CHIP CASH COW

Expand outside core Expand outside core Expand outside corebusiness business business

GO-GO DARK HORSE PLODDERI

Possibly expand outside Possibly expand Get into some othercore business outside core business business

WILDCATTER GAMBLER LOSER

Do not expand outside Do not expand outside Withdraw fromcore business core business or get into business

some other business


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POSITION

Indicated Strategies for Non-Core Businesses:

Based on the indices of market attractiveness and competitiveposition, the indicated strategies for outside core businessesare tabulated as below:

Points To Remember While Making Decisions:• The indicated strategies for core business exhibit above

shows the strategies which are usually most appropriatefor segments falling within each sector. The Core BusinessStrategy decision has absolute priority over all otherstrategic decisions. You must not make any majorcommitments until you have established core strategies.

• The indicated strategies for outside core businesses exhibitshows the approach to expansion outside the core businesswhich is usually most appropriate for companies fallingwithin each sector. Core business expansion is to bepreferred if resource limitations force a choice between corebusiness expansion and expansion outside the corebusiness. Any expansion strategy, whether inside or outsidethe core business, requires rigorous justification.

• The question mark concerning the Dark Horse core businessstrategy indicate that generalizations are not possible forthis category. The Dark Horse may take on thecharacteristics of any other categories, depending on itsposition within the sector. Likewise, the appropriatestrategies will vary.

• Go-Go and Dark Horse companies will very likely not haveenough resources for both expanding within and outsidethe core businesses - therefore "possibly" expand outsidecore business. Wildcatter and Gambler companies will havelimited resources which must be concentrated 100% on thecore business - with the following exception:

The Gambler must either expand and move out of theGambler category, or he must get out of the core businessand get into something else. But as long as he stays in thatcore business, he must concentrate 100% on it. Note thatthe Gambler status is unacceptable - it requires eithermoving up or getting out. Loser status is also unacceptable.

Core business expansion of the Loser is generally notworthwhile. The Loser should bail out and get intosomething else immediately.

• The Plodder may or may not be worth keeping and milking.In either case, the Plodder should get into some otherbusiness.

• New opportunities falling the Gambler, Loser or Ploddercategories should be avoided. The rewards are not worththe risks for Gamblers and Plodders. And Losers are justthat - Losers. Opportunities falling in any of the othercategories may be considered on their merits.

Remember, these indicated decision making process should notbe mechanically applied. Use them as food for thought, not asshort-cut.How Many Ways Could We Shoot Ourselves in the Foot?The best possible strategic formulation and execution can be invain if the company shoots itself in the foot. Unfortunately,corporate foot-shooting is not an uncommon event. Foot-shooting is avoidable. It usually comes from failing to takesome action or failing to consider some unexpected consequence.It is a result of being too busy.

Conclusion:As a Management Accountant, it is highly essential, that apartfrom helping the organization towards excellence throughvarious tools & techniques, the professionals should play anactive role in advising the top management for decisions likeExpand, Maintain, Contract, Milk or Withdraw.If decisions need to be made, make the decision, if possible, orat least determine the criteria for making the decision. If theoutcome is beyond your control, analyze the situation, lookingfor key determinants and ways in which you might eitherinfluence or understand these determinants. This is the areawhere you may need contingency plans.

Your inputs should help your organization grow towardsbecoming a Blue Chip and eventually a STAR performer.

Best Luck and Cherish the profession!


20

Silent Features• It is a Cess which shall be levied and collected in

accordance with the provisions of Chapter VI of theFinance Act, 2015, calledSwachh Bharat Cess, asservice tax on all the taxable services.

• Government has notified vide Notification No. 24/2015-Service Taxlevy of Swachh Bharat Cess at therate of 0.5% of the value of taxable services with effectfrom 15th November 2015. Presently new service taxrate is 14% and rate of SBC is 0.5%. New rate ofservice tax plus SBC would be 14.5% on all value oftaxable services.The proceeds from this cess will beused for financing and promoting Swachh Bharatinitiatives.

• Swachh Bharat Cess is not leviable on services whichare fully exempt from service tax or those coveredunder the negative list of services.

• Swachh Bharat Cess shall be calculated in same asservice tax. SBC is not to be calculated on ServiceTax but on the taxable value of the service provided.

• Swachh Bharat Cess calculation - For a service worthRs. 100, Service Tax will be Rs. 14 at 14% rate andSBC will be Rs. 0.05 at 0.5%. So the total chargeableamount will be Rs. 114.5.

• Where abatement is allowed on service tax, suchabatement shall be allowed for calculating SwachhBharat Cess.For example:

In the case of GTA, [Service Tax + SBC]% would be (14%Service Tax + 0.5% SBC) X 30% = 4.35% (4.20%+0.15%)Taxable Rate would be 4.35%

In the case ofworks contract, original works and otherthan original works under the works contract servicewould be 5.8% [(14% + 0.5%)*40%] and 10.15% [(14% +0.5%)*70%] respectively. Similar, would be the taxtreatment for restaurant and outdoor catering services.

In relation to serving of food or beverages by a restaurant,eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of theestablishment, would be 0.5% of 40% of the total amount,i.e, 0.2% of the total amount. The cumulative service taxand Swachh Bharat Cess liability would be [14% ST +0.5% SBC] of 40% of the total amount, i.e., 5.8% of thetotal amount charged.

In respect of reverse charge mechanism, SBC liability isdetermined in accordance with Rule 7 of Point of Taxation

Rules, as per which, point of taxation is the date on whichconsideration is paid to the service provider. Thus, SBCliability in such case will be 0.5% X Value of taxableservice.

• According to Rules of Point of Taxation,

- In cases where payment has been received andinvoice is raised before the service becomestaxable, i.e. prior to 15th November, 2015, thereis no liability of Swachh Bharat Cess.

- In cases where payment has been received beforethe service became taxable and invoice is raisedwithin 14 days, i.e. up to 29th November, 2015,even then the service tax liability does not arise.

- Swachh Bharat Cess will be payable on serviceswhich are provided on or after 15th Nov, 2015,invoice in respect of which is issued on or afterthat date and payment is also received on or afterthat date.

- Swachh Bharat Cess will also be payable whereservice is provided on or after 15th Nov, 2015 butpayment is received prior to that date and invoicein respect of such service is not issued by 29thNov, 2015.

• SBC would be levied, charged, collected and paid toGovernment independent of service tax. This needsto be charged separately on the invoice, accountedfor separately in the books of account and paidseparately under separate accounting code whichwould be notified shortly. SBC may be chargedseparately after service tax as a different line item ininvoice. It can be accounted and treated similarly toEducation cesses.

Swachh Bharat Cess Tax Other Penalties Deduct(Minor Head) Collection Receipts Refunds

0044-00-506 00441493 00441494 00441496 00441495

• SBC is not integrated in the Cenvat Credit Chain.Therefore, credit of SBC cannot be availed. Further,SBC cannot be paid by utilizing credit of any otherduty or tax.

• As SBC is not integrated in the Cenvat Credit chainand reversal under Rule 6 is payment of amount equalto 7% of the value of exempted services, hence,reversal of SBC is not required under Rule 6 of CenvatCredit Rules, 2004.

SWACHH BHARAT CESS (SBC)CMA L. D. Pawar, Treasurer WIRC

Mobile : 9921516368E-mail: [email protected]


21

CHAPTER NEWSAHMEDABAD

Chapter has organized CEP program on "Management ofEmotions at Work Place and Life (Scientific approach)for Mastering Emotions" on 30th Oct. 2015. CMA PDModh, eminent speaker submit presentation among themembers. CMA V H Savaliya, Chairman welcome speakerby offering bouquet. Around 15 members haveparticipated in the program. CMA Manish Analkat,Secretary proposed vote of thanks.

******

Chapter have observed Rashtriya Ekta Diwas (NationalUnity Day) - Shapath (Pledge) on 30/10/2015 in thememory of Late Sardar Vallabhbhai Patel. A goodnumbers of staff / members and students of the chapterparticipated

******

Diwali Get-to-Gether

Chapter has organized Diwali Get-to-Gather of Membersand students on 20th November 2015 at Candela Banquetand Restaurant, Ahmedabad. More than 200 membersand students have participated in the program.Entertainment program was also organized.

******

Chapter has celebrated the communal harmony campaignweek during 19th to 25th Nov. 2015 and Flag Day on24th Nov. 2015 of the national foundation communalharmony as per the order of HQ.

******

Constitution Day

Chapter has celebrated the constitution day on 26th Nov.2015 at 17.00 hrs at its premises in the memory of 125thbirth anniversary of Dr. B R Ambedkar. During thecelebration "Preamble to the constitution of India" wasread out. Around 60 staff, students, faculties and memberswhole heartily participated.

NAVI MUMBAICorporate Cost Management Week

On Sunday 18th Oct., 2015, Navi Mumbai Chapter underthe programme of Corporate Cost Management Week ofthe Institute, organised CEP on the subject "Costing &MIS in the Healthcare Industry".

CMA Bhushan Patel, General Manager Finance &Accounts of the Lilavati Hospital & Research CenterMumbai was the speaker. Mr. Bhusan has given an insighton the specific area of, departments, cost centers,activities. Cost collections, allocation and absorptions, andrevenue recognition in the healthcare industry. MISstatements required for the management, Cost recordsto be maintained by the Health Industries etc.

The contents and the delivery of the presentation wasexcellent and knowledge updating. It was explained inbrief on "how the prior approval is sought from insurancecompanies or their approved agency at the time ofsettlement of the bills and while giving the discharge to

the patients from hospital. In his lecture Mr. Bhushanalso explained regarding the ICU, ICCU, SICU anddifference between various medical procedures tests andinvestigations. And knowing the different basis forcharging to the customers or method of invoicing wasunique for healthcare service industry which was logicallydifferent for different services, he also explained the legalcomplications and risks factors of the health care industry.

Overall it was regarding preparing the useful MIS forthe management and ensuring the compliance of CostRecords in the Health care service industry. We areheartily thankful to Mr. Bhushan and all the participants.

Members in Industry Week

On Sunday the 1st November, 2015, Navi MumbaiChapter celebrated the "Members in Industry Week" byorganising a CEP programme on the subject of "StockAudit & Internal Audit system in banks". The programmestarted with introduction of speakers by CMA VivekBhalerao, Chairman-PD committee.

We were fortunate to get a speaker like CMA S. H.Pathan, (ACMA, M.C.S., M.Com., LL.B., CAIIB, CISA )who is working as AGM in Abhyudaya Co-op. Bank Ltd.While explaining the subject, he achieved a perfectbalance between theory & practical aspects of stock audit& internal audit. He explained in detail a sample auditformat, scope & coverage of internal audit, stock & bookdebts audit etc. He covered the aspects such as NPA,income leakage, customer service, loans & advancesaccount etc.

The other learned speaker was Mr. Ashish Ukidwe,(M.Tech., CISA), who runs an audit firm specializing inIS audit, and consultancy. He handled the subject ofInformation System Audit. He elaborated various topicslike Information security (concept, importance etc.),Information System audit, RBI guidelines, IS audit inbanking, and IS audit reports. His lucid explanations madethe otherwise dry topic, an interesting one. Both thespeakers were well received by the audience. Theprogramme ended with vote of thanks by CMA K.V.V.S.Murthy.

NASIK-OJHARCEP on 'SME - Managing Transition, Growth andGovernance'

Chapter in association with Nashik Chapter of WIRC ofICSI organized Half Day Seminar on 'SME - ManagingTransition, Growth and Governance' on 09th Sept. 2015followed by Felicitation programme of June 2015 passout students at The IEI Hall, PWD Campus, Nasik.

CMA Dr. Shilpa Parkhi, Chairperson of Nasik OjharChapter, welcomed all members and faculty. CMA A.Sekar, Faculty of the Seminar explained about SME-IPO,Institution Trading Platform (ITP), ComplianceManagement Systems etc. CMA and CS members andstudents were attended the seminar. CMA Suraj Lahotiproposed the vote of thanks.

Felicitation Programme for Successful students -June 2015 Examination


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The Nasik-Ojhar Chapter is the Best Chapter AwardWinner, and we are happy to declare that the June 2015results are very good. 24 students have completed Finalexamination and 6 students are All India Rank Holders.31 students have completed Intermediate Course and outof 31, four students are in All India Rank. FelicitationProgramme was conducted on 9th Sept., at IEI Hall,Nashik at 6.30 PM. The programme was attended allsuccessful students with their parents. Some studentsshare their experience about their success and hard work.All students were felicitating by giving them trophies.This Programme was comparing by Mr. Pankaj Bohra,Student Representative of Nasik Chapter and programmewas coordinated by CMA Pradnya Chandorkar, ViceChairperson, CMA Suraj Lahoti, Secretary, and CMAPrashant Yeole Treasurer.

PIMPRI - CHINCHWAD - AKURDIMembers in Industry Fortnight - Seminar on "CostManagement as an effective tool for better financialmanagement"

Chapter celebrated Members in Industry Fortnight in theMonth of November 2015. During this fortnight, a seminaron "Cost Management as an effective tool for betterFinancial Management" was conducted by CMA AjayKumar, Head (Corporate Finance), Minda CorporationLtd. at CMA Bhawan, Pimpri. CMA BhaveshMarolia,Treasurer - PCA Chapter gave the welcome speech. CMAL D Pawar, RCM felicitated the speaker, CMA Ajay Kumarby presenting him with a bouquet and memento.

In the session, CMA Ajay Kumar explained how costmanagement techniques can be practically applied. Heexplained in detail the challenges faced by cost accountantsin industry when presenting reports to highermanagement and how to overcome these challenges. Thesession was well attended by members of industry andpractice.

CEP Seminar on "GST Return, Payment & Refund"

The ICAI-Pimpri-Chinchwad-Akurdi Chapter hadorganized seminar on-"GST-Return, Payment and Refund"on November 28, 2015 at CMA Bhawan, Pimpri.

PCA Chapter had conducted CEP Seminar on GSTRegistration in the month of October 2015. Based ondemand from audience then, a second session was heldto discuss the Return procedure, payment and refundprocedure. CMA Jayant Hampiholi felicitated the guestspeaker CMAL D Pawar, RCM by presenting him with amemento.

In the Technical session, CMA L D Pawar explained indetail the provisions regarding Return, Payment andRefund procedure involved in GST. The Seminar was wellattended by members and industry.

CMA BhaveshMarolia proposed vote of thanks. Theseminar was well attended by members of industry andpractice. CMA Jayant Hampiholi felicitated Speaker CMAL D Pawar during CEP on "GST- Return, Payment andRefund" organized by Pimpri-Chinchwad- Akurdi Chapteron 28th November 2015. CMA L D Pawar felicitatedSpeaker CMA Ajay Kumar, Head (Corp. Fin), MindaCorporation Ltd. during programme organized by Pimpri-Chinchwad-Akurdi Chapter

SURAT-SOUTH GUJARATCEP on Role of Cost Accountants in Direct Taxation

A CEP on "Role of Cost Accountants in Direct Taxation"was organized by Chapter on 29-11-2015 at Chapter'sOffice. CMA Nanty Shah, Member of the Chapterwelcomed the faculty and members & gave briefintroduction about the subject & Faculty. CMA AmishParmar, a member, felicitated the faculty. CA SurendraKumar Rakhecha, a Practicing Chartered Accountantdiscussed comprehensively on the topic and gave variousideas and role of Cost Accountants in Direct Taxation.

VAPI - DAMAN - SILVASSACEP Report

CEP on 31-10-2015 on "Foreign Direct Investmentthrough External commercial borrowings route". CMADebasish Mitra, Chairman, WIRC was the speaker.

CEP on 22-11-2015 on "Valuation under Central Excisefor Captive Consumption – Cost Accounting Standard - 4"by CMA B F Modi, practising Cost Accountant.

Both these programmes were well attended by membersin practice and industry and students. The programs wereparticipative programs sharing knowledge by the experts.

DIRECTIVES FROM CENTRALCOUNCIL REGARDING THE

56TH AGM OF WIRC, IN RESPECTOF PUBLICATION OF DEBIT NOTESMATTER IN THE WIRC BULLETIN

The Central Council of the Institute at its 296thMeeting held on 7th & 8th November 2015 directedWIRC by email dated 23rd November 2015 andsubsequent letter dated 23rd November 2015,through Secretary (Actg.) Mr. Kaushik Banerjee, asfollows: "The Council also directed that the Secretaryshall write to WIRC to stop publishing the debit notesin WIRC Bulletin with immediate effect."

The said direction of Secretary - ICAI prohibits, WIRCfrom publishing the Debit note matters in WIRCBulletin with immediate effect. With due respect tothe mandate of the 56th AGM of WIRC held on 29thJune 2015, regarding publishing of debit notes,WIRC is mandatorily following the directives of theHQ. Therefore, WIRC and its office bearers will notbe in a position to address the consequences arisingout of it and the same will be represented to/by HQ,if any.

WIRC is also in process to avail copies of supportingpapers/ relevant provision of the Act from CentralCouncil in support of the said direction. Upon receiptof the said details the matter will be discussed inthe next Council Meeting and considering legal andprocedural aspects, future course of action will bedecided in consultation and directions of the HQ.


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The Institute of Cost Accountants of India(Statutory body under an Act of Parliament)

Taxation Committee Presents

Refresher Course on "Indirect Taxation and gearing for GST"Course Fee:

Rs. 3,000/- (Rupees Three Thousand only) - for all members and CMA final qualifiedpersons,with an exception of special fee for Senior Citizen CMAs - Fee Rs. 2,500/-

Date : 18th, 19th and 20th December 2015 • Time : 9 a.m. to 7 p.m. per dayVenue :

WIRC Office, Rohit Chambers, 4th Floor, Janmabhoomi Marg, Fort, Mumbai 400 001(Ten CEP Credit Hours will be provided)

Programme Schedule :

Day 1: Central Excise and VATTechnical Session 1 – Central Excise Law - concept, manufacture, levy of duty and valuationTechnical Session 2 – Procedural Aspects - Central Excise Rules, Valuation Rules and other rulesTechnical Session 3 – CENVAT Credit RulesTechnical Session 4 – Show Cause/ Reply to show Cause/ AdjudicationTechnical Session 5 – Case Study and Group DiscussionTechnical Session 6 – Issues of VAT

Day 2: Service TaxTechnical Session 7 – Service, Negative Services, Bundled Services, Declared servicesTechnical Session 8 – Exempted service, person liable to pay service tax, Place of Provision of ServiceRulesTechnical Session 9 – Point of Taxation Rules, Abatement, ValuationTechnical Session 10 – Routine Procedures - Registration, Invoice, Payment, ReturnsTechnical Session 11 – Works Contract, Valuation of ServicesTechnical Session 12 – GST - Case Study and Group Discussion

Day 3: Audit aspects under Central Excise, Service Tax and an Insight into GSTTechnical Session 13 – Audit under Central Excise and Service TaxTechnical Session 14 – Goods & Service Tax ( GST) - including Business Process Reports and Place of Supply

Rules.

Mode of PaymentOn-line (by Credit/Debit Card / NEFT) or Off-line (Cheque / Demand Draft) drawn in favour of 'Institute of Cost Accountants of India', payable at Kolkata should be sent along with a copy of

this registration form to the "Taxation Committee,The Institute of Cost Accountants of India, CMA Bhawan, 12 Sudder Street, Kolkata - 700 016"

Details for Bank Transfer (for NEFT)PUNJAB NATIONAL BANK A/c No. 0093002109030025

IFSC: PUNB0009300, Branch - New Market Branch, KolkataPAN: AAATT9744L Service Tax no: AAATT9744LSD005

For any further clarification / issues, please contact:

CMA Chiranjib Das, Secretary, Taxation Committee at [email protected] / + 919830766740WIRC of ICAI : Tel. : 022-22043406, 22043416 • E-mail : [email protected]

Registration: only on prior booking. NO SPOT REGISTRATION.

The views expressed by contributors or reviewers in the Bulletin do not necessari ly reflect the opinion of the Council nor the Editor.Published by CMA Harshad S. Deshpande on behalf of the Western India Regional Council of the Institute of Cost Accountants of India, Rohit Chambers,4th Floor, Janmabhoomi Marg, Mumbai 400 001 and Printed by him at Surekha Press , A 20 Shalimar Industrial Estate, Matunga, Mumbai 400 019.

If undelivered please return to:

THE INSTITUTE OF COST ACCOUNTANTS OF INDIAWESTERN INDIA REGIONAL COUNCIL,Rohit Chambers, Janmabhoomi Marg, Fort, Mumbai 400 001.

RNI No. 22703/72 Posted at Mumbai Patrika Channel on 10th of every month.Date of Publication is on 10th of every month.

Postal Regn. No. MCS/089/2015-17WPPLicense No. MR/TECH/WPP-41/South/2015

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View of Participants during CEP organised by WIRC on 21st November 2015.

To

Mr. Rajesh Sharma, Faculty being felicitated by CMA Rasesh Choksi during CEPorganised by WIRC on 21st November 2015.

CMA Amish Parmar felicitating Mr. Surendra Kumar Rakhecha, faculty during CEPorganised by Surat-South Gujarat Chapter on 29th November 2015. Also seenCMA Manubhai Desai, Chairman of the Chapter

Prof. D. N. Panigrahi, CMA T.B. Raman Murty, Zonal Manager, Bank of Maharastra,CMA P. V. Bhattad, President ICAI, CMA S.N. Mahankaliwar, Secretary WIRC andCMA K. V. Kasiviswanathan, during workshop on "Opportunity for CMA's in Bank"organised by Nagpur Chapter on 21st November 2015.

Fill the brain with high thoughts, highest ideals place them day and night beforeyou and out of that will come great work.

– Swami Vivekananda

Documents

WIRC Bulleitn Dec 2015