President’s Message | March 2020
Dear Professional friends,
The month of March has been one of the busy months for our members, but this year looks to be a cautious year with pandemic right in front of us. The Pandemic caused by viral, known as Covid 19 has thrown extremely challenges to humanity. India is also not immune to such epidemic and has reported cases of this infection, Government is trying to take all preventive measures to control and contain this epidemic. Government has been trying to spread awareness but unprecedentedly, there are lot of unscientific and unverified information in public domain. Rather, panic and misinformation, is growing bigger than virus itself. And hence request members not to heed to such information, rather would request them to take care of their health by practicing hygiene.
The Yes bank’s crisis due to liquidity and NPA coupled with RBI’s stringent action has had its knee jerk reaction from market but to the world of auditing, it must be a reminder to diligently perform its duty for its upcoming bank audit season.
The recently concluded 32nd Annual conference was a grand success and accolades have been received by this association. We thank every member for their participation and believe that KSCAA is not only knowledge bearing organisation but also an organisation which fosters relationship amongst Chartered Accountants. The conference is a testimony to the fact that, this association has been supported and considered as an organisation for network by CAs and welfare of Chartered Accountants. The change in sessions and timing was well received and more than 1200 CAs and their family participated in the conference.
It is imperative that an association like ours must have its own state of art building and as step towards it, KSCAA has already formed building committee. We request members to let us know any suitable building within Bengaluru for purchase by KSCAA and also request members to donate to KSCAA building fund.
News Roundup
Goods and Service Tax
- The Government is all set to put in place the most simplified New GST Return system effective from April 1, 2020. Under New GST Return system, the taxpayers would be required to file only a single GST Return either GST RET-1 (Normal Return), GST RET-2 (Sahaj) or GST RET-3 (Sugam) with data flowing from two annexures namely GST ANX-1 (Output tax) and GST ANX-2 (Input tax). The New GST Return system is expected to meet the most fundamental principle of GST which being the matching concept of Input tax credit.
- The Government is planning to defer the implementation of e-invoicing after getting a lukewarm response from the taxpayers during trials introduced in January 2020.
- The forthcoming 39th GST Council Meeting which is scheduled for March 14, 2020 is expected to deliberate and hammer out decision on the vexed question of whether to charge late tax payment interest on the Net tax liability or the Gross tax liability. Let’s hope the Council would provide much needed relief to the taxpayers by clarifying that the late filing interest would be payable on the Net tax liability.
Corporate and Business Law
The central government has notified Companies (Auditor’s Report) Order, 2020 (“CARO 2020”) on 25 February 2020. This has been brought in mainly with the objective of strengthening the corporate governance framework under the Companies Act, 2013 to attain the national objective of becoming a $ 5 Trillion economy. The CARO, 2020 is applicable for audit of financial statements of eligible companies for the financial years commencing on or after the 1st April 2019. Even though CARO 2020 has been brought in suppression of CARO 2016, the conditions for applicability criteria of eligibility of companies on which the CARO, 2020 shall be applicable has not been changed and hence it shall be applicable to all those companies on which CARO, 2016 was applicable.
CARO 2020 is aimed towards enhanced due diligence and disclosures on the part of auditors of eligible companies and has been designed to bring in greater transparency in the financial state of affairs of such companies.
The Limited Liability Partnership (LLP) is viewed as an alternative corporate business vehicle that provides the benefits of Limited Liability but allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. Owing to flexibility in its structure and operation, the LLP often become the preferred option for small enterprises. It had come to the Government’s notice that large number of LLPs have defaulted in filing Form (3) viz. LLP Agreement and changes therein and statutory return viz. Form-8- Statement of Account & Solvency (Annual or Interim) and Form-Tl- Annual Return of LLP.
As part of Government’s constant efforts to promote ease of doing business it has Introduced a scheme namely “LLP Settlement Scheme, 2020” by allowing a One-time condonation of delay in filing statutorily required documents with the Registrar. This scheme will come into force on 16 March 2020 and remain in force up to 13 June 2020. During this period any defaulting LLP can file belated documents, which were due for filing till 31st October, 2019 on payment of additional fee Rs 10 /- per day for delay in addition to any fee as is payable for filing of such document or return but not exceeding Rs. 5,000 (per document).
Direct Tax
- No TDS by Mutual funds on income in the nature of Capital Gains.
- ITBA instruction dt: 18/02/2020: Steps to clear the pendency of processing of Paper Returns or E-returns transferred by CPC-ITR due to verification of relief claimed u/s 90/90A or 91 of the Income Tax Act, 1961
- ITBA instruction dt: 19/02/2020: Functionality for Demand Adjustment u/s 245 by AO in ITBA (Income Tax Business Application) has been issued.
- Procedure of PAN allotment through Common Application Form (CAF) along with registration of Foreign Portfolio Investors (FPIs) with SEBI under Department of Economic Affairs and KYC for opening Bank and Demat Account has been notified.
- Form 10IC and Form 10ID for exercise of lower Income Tax Rate option (Section 115 BAA- new tax rate for domestic companies & 115 BAB for new manufacturing companies for FY 19-20 onwards notified.
Conclusion
The recent crisis reminds of incident from Dr Fredrick Banting and Dr Charles Best, in 1922, at the University of Toronto, scientists went to a hospital ward with children who were comatose and dying from diabetic keto-acidosis. Imagine a room full of parents sitting at the bedside waiting for the inevitable death of their child. The scientists went from bed to bed and injected the children with the new purified extract – insulin. As they began to inject the last comatose child, the first child injected began to awaken. One by one, all of the children awoke from their diabetic comas. A room of death and gloom, became a place of joy and hope. This is the world of medicine and it’s miracle which I thought to share and I’m sure we would also ebb out of this with such miracle. Until then stay safe and healthy.
I wish you all a happy reading.
Yours Sincerely,
CA. Chandrashekara Shetty,
President
