President’s Message | September 2020

From the President

Dear Professional friends,

I feel truly privileged to write to you as the President of this association and communicate my thoughts through this message. I have taken up this post at a time when there are changes happening around the world and everyone has been caused by nature and we humans are learning to respond. Our association is no different, we are equally trying to cope with changing times to meet the ends. The profession of accountancy which we thrive has also been in the brink of sea change, hopefully for good and we may derive intrinsically better values by adapting to change. The association has toiled hard to reach where it has reached today, and the dreams and wishlist are bucket full to us, I hope with the support of my team these can be achieved comfortably. I would like to keep our wishes as an inclusive list. We will be open to any suggestions, any feedback and any constructive criticism on how best we can better serve members.

The recent GDP numbers of India hit the newspaper headlines; economic output shrank by 23.9 per cent in the first quarter of FY21. Economists believe that the economy is set to enter a recessionary phase with most of the contraction expected to continue in subsequent quarters. Technically on the verge of recession with weak investment and capital spending coupled with subdued consumption demand continue to negatively impact economy. Most analysts anticipate contraction in subsequent quarters also. The worry is also with political and military tension, the surge may be drastically disastrous.

Representations

We had three influential and important representations which was moved to various departments, one was to the Ministry of Corporate Affairs, to move the AGM beyond 30th September 2020 in background of Pandemic. The representation met a favourable outcome with immediate relief on extension. Second one was to Director of Co-operative Society (Audit), Karnataka on various pain points including suggestions, which was also positively well received by the department. And third was jointly by various professional associations to Income Tax department to cure certain maladies in 26AS and TDS.

Direct Taxes:

On the direct taxes front, we have witnessed a massive rejig in the department across India, pursuant to the announcement of Transparent Taxation. There is diversion/re-designation of many Officers to Regional e-Assessment Centre in Karnataka and Goa region vide order dated 02.09.2020 which also has also provided a list of residual posts. It appears that more than 70% of the posts have been consumed by ReAC. This indicates a massive change in the landscape of how the assessments/non- assessment works will be conducted under this 60-year-old Act. We should also wait and watch how faceless appeals will be implemented. To ensure a seamless flow of information, CBDT has also provided functionality for certain Institutions to check ITR compliances.

Indirect Taxes:

GST has completed its 3 years and is stepping into 4th year. If I recollect this journey, it has been turbulent and marred by far too many issues ranging complex laws, faulty implementation, frequent changes in law & procedures, GST rate changes and portal related technological glitches. When GST was ushered in on 1st July 2017, it was tipped as a revolutionary path breaking tax reform of the century and our Hon. Prime Minister termed it as a ‘Good and Simple Tax’. But it hasn’t lived up to its expectations because of issues well known to everyone. Stepping into its 4th year, the Council realised, in order to make GST a ‘Good and Simple Tax’, the law needs to be stable and less complex. As it is said ‘never late than ever’, it is never too late to take right steps. In that direction, the Council has taken few bold steps by scrapping new return filing system – GST RET-1, ANX-1 & 2, GST – Sahaj &Saral instead deciding to streamline the existing return filing system for making it more taxpayer friendly, which are welcome measures. The GSTN portal has enabled 2 new features, namely, GSTR-2B, an autopopulated static report pushed every 12th of the month which will enable taxpayers in availing input tax credit rightly and another report in PDF generated from filed GSTR-1 for the month to provide a guidance for taxpayer in preparing Table 3 of the GSTR-3B. Hon. Finance Minister has further assured that GST rate changes will be made an annual affair. These measures surely go a long way in making the GST laws stable. I earnestly hope that some radical changes will be brought to make this law taxpayer friendly, which is the need of the hour in these distressed times.

Corporate and Business Laws:

The MCA had issued a circular on 17th of August clarifying the extension of AGM for the financial year ended 31st March,2020. The MCA had clarified that the companies unable to hold the AGM ought to file Form No GNL –1 seeking extension in time in holding of AGM. Further the ROC- Karnataka issued an order on 8th of September providing extension of 3 months for holding AGM without any requirement to file Form No GNL-1.

MCA has notified the provision for Placement of Annual Return on the Company website. Henceforth, every company having a website shall place a copy of the Annual Return on the website of the Company and also the web-link of such annual return shall be disclosed in the Board report.

MCA has relaxed the deposit norms for startup companies allowing additional 5 years time to repay deposits of Rs. 25 Lakhs or more. Post this amendment, the Startup companies are now required to repay the deposits within a total period of 10 years time.

MCA has also amended the CSR rules to include activities such as incubators or research and development in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government and also widened its scope by including Ministry of AYUSH.

Also to facilitate India’s fight against COVID-19 CSR Policy definition is amended to include any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to prescribed conditions.

Conclusion:

With so much of confusion and anxiety which prevails at this juncture of humanity and world, the necessary for professionals and intellectuals to business and common man is also high.

I remember what World-renowned neurologists and author Ben Carson in his book – Think Big: Unleashing Your Potential for Excellence says, “Knowledge is the key that unlocks all the doors. You can be green-skinned with yellow polka dots and come from Mars, but if you have knowledge that people need instead of beating you, they’ll beat a path to your door”. This must be the guiding force for us to reflect on how the intelligent can turn intellectual to help the world in need at this time.

Happy reading and stay safe!

 

Yours Sincerely,

CA. Kumar S Jigajinni
President