Society News for the month of August 2024

Details:

SOCIAL OUT-REACH INITIATIVES:

Round Table discussions on Viksit Bharat:

The Finance, Corporate and Allied Laws Committee (FC&AL) of the Bombay Chartered Accountants’ Society (BCAS) organized two round table discussions on Viksit Bharat: Ideas and Suggestions in July 2024. The aim was to gather insights from experienced Chartered Accountants and promising young professionals to contribute to Prime Minister, Shri Narendra Modi’s vision to make a Viksit Bharat by 2047. The first round table discussion was held on Saturday 6^th July 2024 at the International Fiscal Association – India Branch in BKC, Mumbai where eminent Chartered Accountants shared their perspectives on various aspects of public policy and economic development crucial for India’s progress. The second roundtable discussion took place on Saturday 20^th July 2024 at ATLAS SkillTech University, Mumbai. This event brought together top-ranking CA Finals and Intermediate students, along with MBA students, to provide a fresh perspective on India’s future.

MOU with Bombay Industries Associations (BIA):

The Society entered into a collaboration agreement with BIA on 18^th July 2024 under which both bodies of eminence will mutually collaborate by leveraging strengths and enabling commerce. In this one of its kind partnership, both organizations, with 75 years of history, will combine their resources and capabilities towards collaborative learning opportunities, advocating for ease-of-businesses, offering policy suggestions, and engaging members from both associations with an aim to reinforce the overall economic structure.

BCAS Membership Survey:

Our members are at the centre of everything we plan and do. The Society believes in delivering high-quality professional experience for our members and community at large. Keeping that in mind, BCAS conducted a Membership Survey on 16^th July, 2024 and received an overwhelming response. We thank our beloved members for participating in the survey. Some of the statistics of the survey are as follows:

•  Relevance of Topic at BCAS Learning Events —Average rating 4.4
•  Quality of Speakers and Content at BCAS Learning Events: Average rating 4.3
•  Format of BCAS Learning Events- Average rating 4.1
•  Venue, Food, and other logistics at BCAS Learning Events — Average rating 3.9
•  Pricing for BCAS Learning Events — Average rating 3.9

The Society has also received many well thought suggestions from the members in the survey, and we shall strive to take that into consideration in our future activities.

Social Media Reach:

The Society has been striving to increase its reach to professionals and society and large and social media has been one of the relevant tools of current times to achieve the same. We are happy to announce that we have crossed 10,000 followers on Linkedin. Our Whatsapp channel is also live and within two days we have crossed 1000 followers. With these, our overall social media spread has reached 57,189 followers and counting.

BCAS WhatsApp Chatbot:

In a constant endeavour to bring ease to our members, the Society is delighted to introduce its own Whatsapp Chatbot. Now, all our members and non-members can access and register for BCAS events and other activities through the ease of WhatsApp. Readers can explore the chatbot by sending a simple Hi on the chatbot number — 9082634642 to get started.

LEARNING EVENTS AT BCAS:

1. 76^th Founding Day Lecture Meeting on Viksit Bharat — Role of Accounting and Finance Professionals held on 6^th July, 2024 at ITC Grand Central Hotel Parel.

The 76^th Foundation Day of the Society was marked by a significant event, featuring an interactive talk with the esteemed Padma Bhushan Shri K. V. Kamath. The topic, ‘Viksit Bharat — Role of Accounting and Finance Professionals,’ is a testament to the evolving landscape of India’s economy and the pivotal role that accounting and finance professionals play in it. Shri Kamath, with his extensive experience spanning over five decades, provided invaluable insights into India’s journey towards becoming a developed nation. As an inter-generational witness of India’s transformation, his dialogue with CA Raman Jokhakar, past president of the Society, highlighted the transformative changes that technology brought and the contribution of the Country’s infrastructure development plan, reflecting on the progress and the road ahead for India. He broadly spoke about the following.

Role of CAs: Since his early days at ICICI in 1971, Shri Kamath has witnessed first-hand the pivotal role of Chartered Accountants in shaping financial strategies and strengthening accounting practices. He reminisced about his experience in 1980, when he was leading a standalone division at ICICI acknowledging how chartered accountants assumed the role of technology architects in bringing technology to ICICI. Shri Kamath stated that people in the accounting and finance professions have to be leaders in absorbing and leveraging technology in a bigger way. According to Shri Kamath, the role of Chartered Accountants is going to be closely interwoven with technology for in the next 25 years, it will be difficult to differentiate between where the accounting stops and the technology comes in. He further stated that CA’s are the conscious keepers for the companies, Government and the public at large. That role is going to be more important as we go along with the new technology. He also emphasized the necessity of setting one’s mind on skilling and upskilling and getting everybody’s mindset aligned towards the technology part of the profession.

Learnings from the past: Talking about his learnings from driving and executing IT in ICICI, he said that the integration of technology into ICICI Bank’s operations between 2000 and 2005 marked a transformative era in Indian banking. The introduction of ATMs and the centralization of back-office operations, along with the establishment of call centres, significantly reduced the volume of in-branch transactions. He acknowledged that between 2020 and today, it has virtually revolutionized the way payments are made by individuals and corporations NPCI and QR technologies are taking over.

Characteristics of Viksit Bharat: On being asked about the characteristics/features of Viksit Bharat, he said that Viksit Bharat envisioned as a developed India, is characterized by its focus on rapid infrastructural growth, mirroring the transformative journeys of Japan, the Asian Tigers, and China. This vision is embodied in Mumbai’s current infrastructure projects like MTHL (Atal Setu), Eastern Freeway, and various metro and coastal road projects. According to Shri Kamath this seamless development will happen in every city, and town and will pervade down to every village and that according to Shri Kamath, will be a very visible sign of Viksit Bharat. He further explained that the infrastructure becomes the first building block as it adds to GDP during the implementation phase becoming the first ‘virtuous cycle’ leading to economic utilization of the said infrastructure in the next 15-20 years. With the fruits of infrastructure reaching every corner of the country, wealth will increase which will lead to more consumption leading to a second virtuous cycle.

Growth Rate and Per Capita Income: Speaking about the 10 per cent aspirational growth rate, and higher per capita income, Shri Kamath highlighted that given the size of the population, India has no challenge to put up new infrastructure for the next 25 years and put the same to utility. The country has had an agenda for over 20 years that provides momentum for sustainable development. The mark of 8-10 per cent is the combination of growth driven by infrastructure, consumption and other constituents like services, agriculture etc. In his view, the country should have a goal of achieving a growth rate of 8 per cent and a 25 trillion economy by 2047. According to him, funding is not a challenge today. It’s also not true to say that the private-sector capex cycle is not happening. With improvement in cash equivalence, and with very minimum access to borrowings, companies are now investing in themselves on a just-in-time basis without waiting for demand to develop. The new indicator of capital expenditure is therefore the increase in the gross fixed assets and capital working progress and not bank lending.

YouTube Link: https://www.youtube.com/watch?v=OxSpLouU8Iw

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2. Suburban Study Circle meeting held on Friday, 12^th July, 2024 @ Bathiya & Associates LLP Andheri.

The meeting was held on Friday, 12^th July, 2024 at Bathiya & Associates LLP Andheri. The meeting was led by Group Leader — CA Amit Purohit. CARO 2020 represents a significant shift in the audit reporting landscape, with enhanced requirements aimed at improving transparency and accountability. While these changes present challenges, they also offer opportunities for auditors to add value through more detailed and insightful reporting.

Key discussions in the meeting were about:

•  Property, Plant, and Equipment: Detailed disclosure regarding title deeds, revaluation, and proceedings involving Benami Property.
•  Inventory and Working Capital: Reporting on discrepancies of 10 per cent or more in the aggregate of each class of inventory.
•  Loan Advances and Guarantees: Scrutiny of loans, guarantees, and advances to related parties, including reporting on terms, conditions, and repayment status.
•  Fraud Reporting: Specific requirements to report any fraud noticed or reported during the year, including actions taken by the auditor. Ensuring the accuracy and completeness of data, especially for inventory and property, can be challenging.
•  Internal Audit System: Reporting on the existence and effectiveness of an internal audit system. The detailed nature of the new requirements means auditors must perform more comprehensive and in-depth audits.
•  Maintaining detailed documentation to support the new disclosures is essential but time-consuming.

The group leader shared practical insights to help auditors navigate these challenges and emphasized the importance of ongoing learning and adaptability in the ever-evolving field of audit and assurance.

3. International Economics Study Group meeting on the topic of ‘Analysing Parliament Election Results of 2024’

The meeting was held on Tuesday, 2^nd July 2024 through a Virtual platform by Group Leaders CA Harshad Shah and CA Pramod Jain. The unexpected outcome of India’s 2024 election has reasserted the unpredictable nature of its politics — and the strength and resilience of our democracy. The BJP’s significant drop of 63 seats marked a return to coalition politics, presenting significant challenges in parliament. The passage of bills will require substantial compromise, a stark contrast to the previous government’s majority passing. There is no clear sign of pan-India anti-incumbency, especially on the economic front. Mr Jain shared his views on inequality, highlighting ten areas of disparities. He questioned whether Indian democracy will ever mature and emphasized the role of professionals as the “fifth pillar” for the success of Indian democracy.

4. Lecture Meeting on ‘Obligations of Chartered Accountants under PMLA’.

The lecture meeting on “Obligations of Chartered Accountants under PMLA” jointly with the National Institute of Securities Market (NISM) was held virtually on Friday 28^th June 2024. More than 200 participants attended the webinar. The lecture was delivered by Mr. Krishnan Vishwanathan. The key takeaways of the session are:

•  Under PMLA it is an offence to assist in money laundering, and accountants may be responsible for detecting and preventing it, especially regarding predicate offences like bribery.
•  Only those professionals holding a Certificate of Practice from ICAI, CWA, or ICSI and conducting activities like managing client money or property are obligated to comply with PMLA.
•  Documentation of AML policies and procedures is crucial to avoid penalties, and these include client acceptance methodologies.
•  Procedures for periodic reviews and client’s due diligence are essential under PMLA.
•  Extra caution is needed when dealing with clients in Tax Havens due to the increased risk of money laundering and tax evasion. One has to be aware of beneficial ownership structures, shell companies, and politically exposed persons (PEPs).
•  Reporting to the Financial Intelligence Unit (FIU) is required, but only for truly suspicious activities with documented justification to avoid overwhelming the authorities.
• Training for employees and maintaining records for five years are mandatory.
•  Chartered Accountants can play a role in identifying proceeds of crime like unexplained cash or suspicious accounting entries.
•  Chartered Accountants need to be cautious when offering professional services, especially certifications or acting as collection centres, to avoid indirectly facilitating money laundering.

BCAS Lecture Meetings are high-quality professional development sessions which are open to all to attend and participate. The readers can view the lecture meeting at the below-mentioned link/code:

YouTube Link: https://www.youtube.com/watch?v=DJDX-mic1tw&t=19s

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5. FEMA Study Circle Jointly with ITF Study Circle meeting on ‘Cross Border Structuring for Individuals — FEMA and Tax Implications’

The meeting was held on 13^th June, 2024, at BCAS in hybrid format. The following relevant points were discussed in the meeting by the group leader — CA Bhavya Gandhi:

•  Key considerations for cross-border structuring include compliance with FEMA regulations and adherence to Indian tax laws.
•  Outbound investments must follow the Liberalized Remittance Scheme (LRS) limits and reporting requirements.
•  Tax residency status of the individual significantly impacts global income tax liabilities.
•  Proper documentation and valuation are essential to avoid penalties and ensure legal compliance.
•  Double Taxation Avoidance Agreements (DTAA) should be leveraged to minimize tax burdens.
•  Repatriation of funds to India requires careful planning to ensure compliance with both FEMA and tax regulations.
•  Estate planning and inheritance tax implications must be considered in cross-border structuring.
•  Continuous monitoring and review of the structure are necessary to adapt to any regulatory or tax law changes.

The meeting was attended by 79 members and was well appreciated.

6. Suburban Study Circle Meeting on “Income Tax Aspects of Redevelopment of Society”.

The meeting was held on 05^th May and 23^rd May, 2024 at Golden Delicacy, Borivali (W)led by CA Sharad Sheth as Group Leader and chaired by CA Nihar Jambusaria and discussions were spread over two sessions.

Group Leader prepared an interesting list of various situations arising in the redevelopment of the Housing Society and shared their views on the following:

•  When does the transfer of capital assets arises.
•  Income tax liability on transfer of tenancy right.
•  When does the benefit of section 45(5A) be availed.
•  When can exemptions under sections 54 and 54F be claimed.
•  Analysis of various caselaws on the relevant topic.

The session was thought-provoking with comprehensive discussion on practical issues faced. The session saw lively engagement from 55 + participants and the interactive nature of the discussion enriched the experience of everyone involved.

7. Indirect Tax Laws Study Circle on ‘Export Driven Custom’s Schemes — MOOWR, AEO — Benefits from Customs Perspectives’

The meeting was held virtually on Thursday, 23^rd May 2024. The key discussions are done by the Group Leader — CA. Shravan Gehlot, Chennai and Group mentor —Adv. Vikram Naik, Mumbai were as follows:

•  Manufacturing & Other Operations in Warehouse (MOOWR)
•  The application and registration process for availing the benefits and covered the key benefits, customs norms for activities in the warehouse and who must opt for the same.
•  The Authorised Economic Operator (AEO) scheme.
•  The AEO road map in India since 2001, eligibility criteria, benefits for importers as well as exporters, Customs clearance norms, registration & post registration compliances and other key considerations.
•  The professional opportunities for the Chartered Accountants in the MOOWR and AEO Scheme.

Around 50 participants all over India benefitted while taking an active part in the discussion on the 2 FTP Customs Schemes.

8. Indirect Tax Laws Study Circle meeting on ‘Issues in Logistic Sector’

The meeting was held virtually on Tuesday, 14^th May 2024 Group leader — CA. Darshan Ranavat had prepared case studies and a presentation covering various issues & challenges faced by taxpayers in the Logistic Sector under the GST law. The session was mentored by CA. A R Krishnan. The case studies covered the following aspects for detailed discussion:

1.  Taxability of clearing & forwarding agents including the claim of pure agent benefits.
2.  Issues relating to classification and RCM concerning the vessel charter business.
3.  Issues relating to classification and place of supply concerning the freight forwarding business.
4.  Issues relating to services provided by GTA to GTA.
5.  Specific issues in services provided to SEZ

Around 65 participants all over India benefitted by taking an active part in the discussion.