17-01-2020Hiregange Team

1. Waiver of Late Fees for GSTR-^[1] extended till 17^th January 2020:

[Notification No. 04/2020-CT dated 10th January 2020]

Late fees for filing return in Form GSTR-1 for the months/ quarters from July 2017 to November 2019 was waived, if the said returns could not be furnished by the relevant due dates but filed between the period from 19.12.2019 to 10.01.2020. Recently, the above waiver of late fees was extended for GSTR-1 returns filed upto 17th January 2020 vide Notification No. 04/2020-CT dated 10th January 2020.

Our Comments- A welcome move of the government as this may reduce ITC mismatch cases. It is suggested to check with all non-compliant vendors, especially where the invoices are not appearing in GSTR-2A and request them to file GSTR-1, if not filed from July 2017 to November 2019, on or before 17th January 2020 and avail the benefit of waiver of late fees. 

2. Appointment of Revisional Authority under GST:

[Notification No. 05/2020-CT dated 13th January 2020]

(a) Principal Commissioner/ Commissioner of Central Tax is appointed as Revisional

Authority for orders passed by the Additional/ Joint Commissioner of Central Tax; and (b) Additional/ Joint Commissioner of Central Tax is appointed as Revisional Authority for orders passed by the Deputy/ Assistant/ Superintendent of Central Tax.

1. Changes in GST rates recommended:

[proposed to be made effective from 1^stApril 2020]

Supply of goods/ service	Present GST rate	Proposed by GST council
Mobile Phones & specified parts	12%	18%
All types of Matches	Handmade: 5% Others: 18%	12%
Maintenance, Repair and Overhaul (MRO) Services for aircrafts	18%	5%

Our Comments-

1. GST rate on mobile phones increased to correct the inverted duty structure on recommendations of Fitment Committee.
2. GST rate on safety matches changed to address classification issues on handmade and other matches.
3. GST rate on MRO services for aircrafts reduced to 5% and it is proposed to change the place of supply for B2B MRO services to the location of recipient. Therefore, 5% GST would be applicable on repair cost when aircrafts are sent abroad for repairs. Further, such GST paid on repairs may not be available as credit due to restrictions under section 17(5) of the CGST Act, which would add to cost.
4. The above changes in rates are recommendations of the GST council. These changes would be made effective by issue of gazette notifications w.e.f. 1st April 2020.

2. Law related and procedure related changes:
3. Interest on net GST liability: Interest for delay in payment of GST to be charged on the net tax liability (paid by utilising electronic cash ledger) w.e.f. 01.07.2017. Law to be amended retrospectively.

Our Comments-A welcome decision of the Council and in line with our recommendations. The proviso inserted in section 50(1) of the CGST Act vide Finance Act (No. 2) of 2019 seeks to correct an anomaly in the provision as it existed prior to such insertion. The same should be read as clarificatory and operative retrospectively as held by the Madras High Court in case of M/s. Refex Industries Ltd. 2020-TIOl-382-HC-MAD-GST. Therefore, demands raised by the department for payment of interest on GST liability, paid by utilising input tax credit, is invalid.

2. Extension of time limit for filing application for revocation: Application for revocation of cancellation of registration can be filled up to 30^th June 2020, where registrations have been cancelled till 14^th March 2020.

Our Comments- The law provides for a time limit of 30 days for filing of application for revocation of cancellation of registration, subject to extension by the Additional Commissioner by 30 days, and by the Commissioner for a further period of 30 days.

This one-time measure of extension of time limit for filing of revocation application till 30^th June 2020, would facilitate the taxpayers whose registration was cancelled but could not apply for revocation within the time limit specified in the Act. 

3. Annual Return and Reconciliation Statement:
   1. Waiver of late fees for taxpayers having aggregate turnover of less than Rs. 2 crores for delayed filing of Annual return in Form GSTR-9 for FY 2017-18 and FY 2018-19.

Our Comments-Late fees of Rs. 200/- per day applicable for other taxpayers having aggregate turnover of more than Rs. 2 crores for delay in filing of GSTR-9.

2. Due date for filing Annual Return (GSTR-9) and Reconciliation Statement (GSTR-9C) for FY 2018-19 extended till 30^th June 2020.

Our Comments-Presently, the due date for filing Annual Return (GSTR-9) and Reconciliation Statement (GSTR-9C) was 31st March 2020. The proposed extension for FY 2018-19 would be made effective vide removal of difficulty order which is awaited as on date.

3. Filing of reconciliation statement in Form GSTR-9C for FY 2018-19 to be made optional for taxpayers having aggregate turnover below Rs. 5 crores.

Our Comments-Presently, the taxpayers whose aggregate turnover during a financial year exceeds Rs. 2 crores are required to get their accounts audited and furnish reconciliation statement in GSTR-9C.

4. Deferment of E-invoicing:
   1. E-invoicing and QR code deferred till 1^st October 2020.
   2. Certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code.

Our Comments-Taxpayers having aggregate turnover exceeding Rs.100 crores were required to issue e-invoice for B2B supplies, and taxpayers having aggregate turnover exceeding Rs. 500 crores were required to print QR code in the invoice for B2C supplies w.e.f. 1^st April 2020, in the first phase. This is deferred till 1^st October 2020 on account of technology support not available and still under development as on date.

5. Deferment of New Returns: Continuation of existing system of furnishing FORM GSTR-1 & FORM GSTR-3B till September, 2020.
6. Know Your Supplier: A new facility called ‘Know Your Supplier’ to be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business.
7. Import and Export related proposals:
   1. Extension of the present exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes up to 31^st March 2021.
   2. Deferment of e-wallet scheme upto 31^st March 2021.
   3. Bunching of refund claims allowed across financial years to facilitate exporters.
   4. Ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies;
   5. To provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA.
8. Refund to be sanctioned in re-credit as well, in case of excess payment of Tax: The council has proposed changes in GST rules to the effect that refund could be sanctioned in cash as well as by re-credit to the electronic credit ledger in case of excess payment of GST.
9. Transition plan for taxpayers in Dadra and Nagar haveli & Daman and Diu: The two Union Territories of Dadra and Nagar Haveli & Daman and Diu were merged into a single Union Territory with effect from 26^th January 2020. Consequent to merger, there was ambiguity on tax to be charged on supplies made within the UT, transfer of ITC balance, etc. The Council has proposed to bring out a transition plan which would be applicable till 31^st May 2020.
10. Special proposal for taxpayers in Ladakh: The Council has proposed to extend the due dates for registered persons having principal place of business in Ladakh for the returns in Form GSTR-1, GSTR-3B and GSTR-7 for the months from July 2019 to January 2020.

11. Compliance with GST during Insolvency Resolution Process: The Council has proposed to bring about a special procedure to ensure compliance with the provisions of GST laws by the corporate debtors who are undergoing the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016.
12. The Council has proposed to waive off the requirement of furnishing Form GSTR-1 for FY 2019-20 for those taxpayers who could not opt for special composition scheme under Notification No. 02/2019-CT(R) by filing Form CMP-02.
13. The council has proposed to bring about a procedure for:
    1. Reversal of input tax credit in respect of capital goods which are partly used for affecting taxable supplies and partly for exempt supplies.
    2. Apportionment of input tax credit in cases of business reorganization like in case of demerger, sale or transfer of business.???????
14. Other new initiatives proposed by the Council:
    1. Seeking information return from banks
    2. Restrictions proposed to be imposed on passing of input tax credit to the new GST registrations, before physical verification of premises and financial KYC, as a part of measure to curb fake invoicing.

Note: This is a summary of the recommendations made by the GST Council to the Government. The above recommendations would be given effect through gazette notifications/ Removal of Difficulties Order, which alone would have the force of law.

The objective of any profession of having quality students coming out of the system is one of the important ones. The profession expects that the knowledge requirements are obtained by going through the curriculum along with  

practice. In the CA course, questions especially at the final level test the understanding of the concepts and the application of the same. The potential employers are also interested in testing the same prior to taking on the professionals in their organizations.   

The Articleship period should be the time when what is learnt in the audits is applied while studying and what is learnt is studying applied at the workplace. In addition the ITT training and orientation along with GMCS I & II at a later point of time go to make the student a complete professional. In the campus the best salaries are offered to those who display the skills to apply in practical situations.  

The students of Chartered Accountants have to go through a lot of hurdles for clearing CA.   It is at this time an important decision whether to do self study for exams or to opt for some tuitions for all or selected subjects through a coaching centre is to be made.   

 As CAs we need to be highly knowledgeable both on practical basis and theoretically therefore only Practical knowledge without theory back up cannot be make us a complete professional. Our profession demands a lot from us. Therefore it is very important to concentrate on your work and as well as study for the exams.  Again it depends on whether one wants to get a rank or not; some people may even say passing itself is a great deal. Any ways for both the aspects a decision regarding studies needs to be taken.    

Self study  

Self study is an individual effort to learn by references/experimentation or a prescribed course. Self study would be for those who can manage studies by their own that does not mean that we should always opt for self studies. Sometimes coaching class is also better option.  

The advantages of self study could among many others be as follows:  

• Have privacy & independence with no fear of criticism. We can do it as we like it. It is flexible we can change our plan based on the priority of our work.  
• Own scheduled time. There is no need to follow others time period. We can study any time in a day.  
• Freely refer to other sources like internet, other reference books, ask a friend etc.  
• Much more cost effective.   
• A self study methodology increases the confidence in self. Your problem solving skills would also develop.  
• Also when you face an interview you would be better off as your understanding of the concepts would be clearer.     

Self study is not always useful to everyone. Some disadvantages of self study could be:  

• Understanding the study may be difficult without a mentor.   
• No certainty if you are studying the right thing. We may not understand.  
• If one does not follow time schedule, it creates frustration and concentration would be lost.  
• Possible time loss in learning and understanding.  

Coaching classes:  

Students are increasingly attending the private coaching classes who have stepped in seeing the enormous opportunity. A few of them are bridging the gap quite well with a well researched teaching and training curriculum. However most consider it a business and the right type of professional may not be coming out of the system as the emphasis is examination passing at any cost. The student could consider what is required for him/her to pass the examination vis a vis the coaching class.   

Coaching classes are recommended because it enhances the way one looks at the aspects alone while studying. It is assumed and presumed that the faculties at the academy have thorough knowledge of the subject; again it depends on the faculty who is providing coaching. The academy provides a forum between the students and faculty for knowledge sharing. There begins to be an interaction between students and the faculty or students and the student. Most of our difficult topics can be discussed and understood in an easy manner. Any doubts can be clarified. We get individual attention from the faculties and they correct us if we are wrong.  Again all this is possible only if the coaching centre is efficient/ pro active and student service centric.      

The students mostly decide to join a coaching centre based on the following:  

1. Colorful Pamphlets issued by the coaching centers.  
2. Colorful posters and banners  
3. Friends asking us to join, just because they have joined and as they have told to do so.  
4. Advertisement in TV or radio or other means of communication.  
5. Hoardings  
6. Advertisements by various websites    

While the above make us aware of the facility some students without even understanding whether the coaching centre or the faculty is efficient enough to provide coaching join up. As fees are collected in advance one is stuck.   

Some aspects could be considered while selecting a coaching class:  

1. Faculty is the key: Concerned and experience teachers can make a great difference as each one of us have experienced in our life. Initially CC may need to call them from nearby cities to ensure quality. When not available then CC need to develop them locally. For CPT-IPCC CA’s may not be required other than for taxation and audit papers. For final most faculties should be practicing or employed CAs.  
2. Frequent assessment: Since understanding the subject and knowing that one has understood is important, periodic examination [in examination conditions- may be lower time] and feedback on the students performance would help. This facility can be built in by having separated faculty who can develop questions and model answers based on ICAI SA/RTP.  
3. Individual Coaching: The faculty could evaluate the answers and provide vital individual feedback. This individual attention would be very important to assist the student to do better.  
4. Written Language skills: English language reading and writing skills especially at CPT/IPCC levels also to be imparted in between if possible where it is felt that this is weak. May be in non metros there may be a more of a need.  
5. Each student history card with grades/ marks scored, advice given etc to be captured for being able to guide the student holistically.  
6. Before the class starts 10 minutes reading time provided by teacher to cover the chapter to be taught.  
7. Use/ Emphasis on ICAI study material. Reference books for specific topics should be used in addition to the study material. If SM not used then a standard book maybe a good alternative. The coaching class notes [if covering the entire syllabus] could also be used to understand the concepts being taught.  
8. When students join the course an aptitude test to understand student’s strengths could be useful.  
9. Provide time for self study after coaching course is over and then a full fledged Mock test in all subjects [at least 45 days prior to actual examination]. This should be clarified in advance as many coaching classes may not be ready to offer these services. This could be evaluated and feedback provided to the students.  

There could be many more initiatives we could take which could be added on.  

We the students may find some of the above not available in the coaching classes and suggest to the coaching classes to include the same or choose the ones which have the same. Hope this note would be useful for students like us to decide on the coaching class to join as also how to improve our performances. Best of luck for the forthcoming exams.  

Acknowledgement to Sana Iqbal for her contribution to this article. 

   

Importance of Proper Articleship

05-04-2014CA Gaurav Shah , CA Madhukar N Hiregange, CA Monalisa Khuntia

The Chartered Accountancy course in India is amongst the best of its kind in comparison to the courses offered in other countries. Also, it is rated as one of the most difficult professional courses among all other streams of education in the country.   

The reason for the above is the quality and values that the profession of Chartered Accountancy has, and which it wishes to retain.  The vast curriculum, along with the rigorous practical training requirement (Articleship), is to ensure that the competent professionals carry the baton of the profession forward.    

Theoretical knowledge or practical knowledge alone cannot make a perfect professional. Both theoretical and practical aspects should go hand in hand to become an extra ordinary professional. As swimming cannot be learnt just by reading a book on how to swim, one has to actually jump into the water to learn swimming, likewise just obtaining theoretical knowledge and writing examinations would not provide the results one would like to have. The potential employers invariably examine whether the CA has the conceptual clarity and more importantly knows how to apply the theory learnt. The disparity in the salaries offered at the campus highlight this difference.   

The age old adage that – “Practice makes a man/woman perfect” always holds good. Practical training helps to inculcate a disciplined attitude for smart work and develops the necessary skill for the application of theoretical knowledge to practical situations.   

It is estimated that those students who apply what they learn in the work done [statutory/ internal audit, tax audit…] as well as learn the theory behind what they have been would be greatly advantaged in their examination especially at the final level.   

Articleship is the golden period of a CA Student’s career. How a trainee undergoes it, would have an impact on what type of CA he/she is destined to become. Taking Articleship lightly would have an adverse impact on training and overall learning experience.   

Moreover, Articleship training would help the Principal in several ways. Principals can delegate  work to the Article trainees and reduce their work pressure. Even by this practical training, a spirit of learning is inculcated in their firm and productivity of staff as a whole increases. By retaining well trained articles, principal may be able to expand his/her firm Thus effective practical training would enhance the reputation of principals and Article trainees could be their future colleagues/ partners.  

A few questions often trouble the students: Why is the Articleship training so long? Why is it needed or required?  

Some of the students are unable to understand the importance of articleship training and they do not take it seriously. Either they think that it is a waste of time or they are more involved in their theoretical part of studies. Understanding the importance and the fact that one stands a better chance to pass the examination. Further this training would help in better emoluments should prove this point.  The impact on future/ career can be examined as under:   

We all aspire and work hard for a better career. Is it possible to make a career in Chartered Accountancy without proper practical training? The answer is “no”. Two major career opportunities are available for the chartered accountants after completion of course, viz., job and practice. If we talk about the first one, the pass certificate can at best give them interview letter. It is difficult to face the interview board and convince them of what they want – knowledge of problem solving ability. The experienced interviewers would assess the depth of knowledge or lack of it within no time. Even if one gets a job, one may not be able to perform or deliver the desired results and their survival in organizations could be at stake. At the same time as far as practice is concerned, it is impossible to set up one without practical knowledge.  

Once the importance is made understood to the students, the next question arises as to:  

 When to do the articleship?  

Where to do the articleship?   

As per the current format of the curriculum, a student having completed first or both the groups of IPCC exams (Intermediate) is eligible to start his/her articleship, which is for a period of 3 years.   

The student can undergo his/her articles under a Practicing Chartered Accountant, or a Firm of Chartered Accountants, subject to the eligibility of the CA or the firm.   

Just like utmost care is taken by the parents to decide which school/college should the child study in, the decision of selecting a place to do articleship must be decided with utmost care too.  This decision should not be taken based on the convenience that would be available to the student during his articleship, but should be based on the quality of the work that the student intends to learn. Guidance/opinion can be sought from various seniors or students who have already done their articleship or are in process of completing it.   

Many a times the students decide to get registered for the articleship training under a known/relative practicing CA and chose not to actually undergo training. (Dummy Articles). In the view of the writer, apart from this not helping to gain any practical knowledge, this activity is not permissible by the institute and can cost the student his entire career.      

This article provides an insight about the various kinds of firms along with their features in which the prospect article would like to pursue his/her articles.   

The firms can be classified as:   

1. Big 4’s    
2. Big Firms  
3. Mid sized firms    

Further to the above classification, the firms can be sub classified as:  

1. Specialized Services firm  
2. General Practice  firm    

Big 4’s :     

If desired to work for a Big 4, the question that arises would be for which team to work. Big 4’s have various areas of practice. Audit & Assurance, Direct Taxes, Indirect Taxes, Internal Audit & Risk advisory services, Mergers & Acquisitions and many more. The above mentioned areas would also have subdivisions.  Since the student would be just starting his career, it would be very difficult for him/her to decide which area to work in. The area can be chosen based on the area of interest or an opinion can be sought from a senior. The area of work could also be chosen keeping in mind the subjects that the students have studied in IPCC. An area which the student thinks he/she had difficulty in studying could be chosen so that the fundamentals of that subject would become strong.     

    The best feature about a big 4 is that the systems that are developed and implemented by them are the best of its class. Every activity/assignment has a process associated with it. The big 4’s have a prescribed system/code of going about with every activity.  Since the systems are developed for every activity, the process of accomplishing the work becomes much easier and simple. This does not mean that the work as such becomes simple. But it helps to focus better on the said assignments than to plan out for how to go about with the assignment. The procedures in respect of documentation, reporting etc. are very substantiate but also very helpful.   

Another feature about working in big4’s would be that most of the tasks are assigned to and executed in teams. Working with teams having senior and experienced persons would help the students to articulate better knowledge and skills.     

Big Firms :     

A big firm would be one with a size of 10-20 partners. Though the size is big, it might not be as big as a Big 4. These firms also have a wide area of expertise which includes Audit, Taxation, and Internal Audit, etc. The only difference would be that these firms are not present globally and hence would be difficult to provide services for clients having multiple locations. Another advantage in these kinds of firm over big 4’s would be that the policies would not be so strict and as an article trainee, the article would be allowed to get trained in various teams as desired by him. Also, in these kinds of firms, the articled student would be getting a more variety of experience compared to the mid sized firms. These firms, because of their size and experience, are usually empanelled in the list of firms eligible to audit the Public Sector Companies including Public Sector Banks. The firm may also be eligible for other special assignments given by the Comptroller and Auditor General of India.     

Mid Sized Firms:  

The No. of partners in these kinds of firms may be between 1-10. A proprietary firm or a firm with 2- 3 partners could also be considered as a midsized firm considering the size of operations. Though, these firms would not have multi specialization services, they might be into   

1. General practice in all areas; or   
2. One particular specialized area of services.   

In these firms a student would be exposed to all levels of work early; from basic verification to finalization in a short time. Also, the student may be able to handle the work independently within his/ her articles completion.     

Each kind of firm has its own advantages.     

If a student has a particular area of interest and wishes to continue in that area as a career, then he/she should choose to do articles in such a firm which is totally into one area of specialization. If a student is not very sure about what his area of interest is, it is preferable to join a midsized firm which is into general practice in all areas.   

The advantage in these kinds of midsized firms would be that the level of hierarchy would not be like the big firms. The article might have a chance to directly interact with the partner of the firm which would help him/her in getting a more exposure in crucial areas.   

These kinds of firms may not have ready implemented systems or procedures to conduct their regular assignments, which would give a chance to the articles to apply their own mind and try to develop the systems as required. This would help them having a better problem solving techniques.    

The above descriptions about the various kinds of firms can be just a referral to take a decision as to which firm to be chosen. However, this cannot be exhaustive. A student should also keep in mind his career objective and other factors like, whether he/she wants to stay in practice or in industry, whether to get specialized in a particular area or not and other factors as the case maybe.   

The Institute has prescribed certain minimal stipend norms to the articled clerks which would be paid by any of the firms. However, many firms pay more than the prescribed norms depending upon the work and efforts put in by the student. However, in the opinion of the writer, selection of the firm shall not be only based on the stipend that the firm is offering, since articleship period is as good as study period and remuneration