Volume VI, Issue 8 November 2017

s, a de i l e i it ng w h en d v in i n e e l i ipl h w i s c m. e v d the i t rea b e ting ntri c Be u t men ala b ple it K im Am ~

Connection Volume VI, Issue 8

November 2017

Volume VI, Issue 8

LLB & CO.

Just to Remind You: • Nov 20 - GSTR 3B for October • Nov 28 - AOC – 4 and AOC - 4 XBRL • Nov 30 - Transfer Pricing Audit Report • Nov 30 - Payment & Monthly Return of Maharashtra PT • Nov 30 - Payment of TDS for purchase of property for October

Inside this issue:

MVAT Refund

4

Insolvency - Case Laws

4

Demonetization - 6 Income Tax Update Processing of Income Tax Returns

6

FAQs on ethical issues

8

Report on Audit Quality Review

9

November 2017

GST - Export under LUT In view of the difficulties being faced by the exporters in submission of bonds/ Letter of Undertaking (LUT for short) for exporting goods or services or both without payment of integrated tax, Notification No. 37/2017– Central Tax dated 4th October, 2017 has been issued which extends the facility of LUT to all exporters under rule 96A of the Central Goods and Services Tax Rules, 2017 (hereafter referred to as “the CGST Rules”) subject to certain conditions and safeguards. This notification has been issued in super session of Notification No. 16/2017– Central Tax dated 7th July, 2017 except as respects things done or omitted to be done before such super session. 2. In the light of the new notification, three circulars in this matter, namely Circular No. 2/2/2017– GST dated 5th July, 2017, Circular No. 4/4/2017– GST dated 7th July, 2017 and Circular No. 5 / 5/ 2 01 7– G S T dat e d 11th August, 2017, which were issued for providing clarity on the procedure to be followed for export under bond/LUT, now require revision and a consolidated circular on this matter is warranted. Accordingly, to ensure uniformity in the procedure in this regard, the Board, in exercise of its powers conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017 clarifies the following issues: a) Eligibility to export under LUT: The facility of export under LUT has been now extended to all registered persons who intend to supply goods or services for export without payment of integrated tax except those who have been prosecuted for any offence under the CGST Act or the Integrated Goods and Ser-

vices Tax Act, 2017 or any of the existing laws and the amount of tax evaded in such cases exceeds two hundred and f i ft y lakh rupe es unlike N o ti f icat ion No. 16/2017- Central Tax dated 7th July, 2017 which extended the facility of export under LUT to status holder as specified in paragraph 5 of the Foreign Trade Policy 2015-2020 and to persons receiving a minimum foreign inward remittance of 10% of the export turnover in the preceding financial year which was not less than Rs. one crore. b) Validity of LUT: The LUT shall be valid for the whole financial year in which it is However, in case the goods are not exported within the time specified in sub-rule (1) of rule 96A of the CGST Rules and the registered person fails to pay the amount mentioned in the said sub-rule, the facility of export under LUT will be deemed to have been withdrawn. If the amount mentioned in the said sub-rule is paid subsequently, the facility of export under LUT shall be restored. As a result, exports, during the period from when the facility to export under LUT is withdrawn till the time the same is restored, shall be either on payment of the applicable integrated tax or under bond with bank guarantee. c) Form for bond/LUT: Till the time FORM GST RFD-11 is available on the common portal, the registered person (exporters) may download the FORM GST RFD-11 from the website of the Central Board of Excise and Customs (cbec.gov.in) and furnish the duly filled form to the jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business. The LUT shall be furnished on the letter head of the registered person, in dupli-

cate, and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorized by such working partner or Board of Directors of such company or proprietor. The bond, wherever required, shall be furnished on non judicial stamp paper of the value as applicable in the State in which the bond is being furnished. d) Documents for LUT: Selfdeclaration to the effect that the conditions of LUT have been fulfilled shall be accepted unless there is specific information otherwise. That is, selfdeclaration by the exporter to the effect that he has not been prosecuted should suffice for the purposes of Notification No. 37/2017- Central Tax dated 4th October, 2017. Verification, if any, may be done on post-facto basis. e) Time for acceptance of LUT/ Bond: As LUT/Bond is a priori requirement for export, including exports to a SEZ developer or a SEZ unit, the LUT/ bond should be processed on top most priority. It is clarified that LUT/bond should be accepted within a period of three working days of its receipt along with the self-declaration as stated in para 2(d) above by the exporter. If the LUT / bond is not accepted within a period of three working days from the date of submission, it shall deemed to be accepted. f) Bank guarantee: Since the facility of export under LUT has been extended to all registered persons, bond will be required

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Innovate Create Lead to be furnished by those persons who have been prosecuted for cases involving an amount exceeding Rupees two hundred and fifty lakhs. A bond, in all cases, shall be accompanied by a bank guarantee of 15% of the bond g) Clarification regarding running bond: The exporters shall furnish a running bond where the bond amount would cover the amount of self-assessed estimated tax liability on the export. The exporter shall ensure that the outstanding integrated tax liability on exports is within the bond amount. In case the bond amount is insufficient to cover the said liability in yet to be completed exports, the exporter shall furnish a fresh bond to cover such liability. The onus of maintaining the debit / credit entries of integrated tax in the running bond will lie with the exporter. The record of such entries shall be furnished to the Central tax officer as and when required. h) Sealing by officers: Till mandatory self-sealing is operationalized, sealing of containers, wherever required to be carried out under the supervision of the officer, shall be done under the supervision of the central excise officer having jurisdiction over the place of business where the sealing is required to be done. A copy of the sealing report would be forwarded to the Deputy/ Assistant Commissioner having jurisdiction over the principal place of business. i) Purchases from manufacturer and Form CT-1: It is clarified that there is no provision

for issuance of CT-1 form which enables merchant exporters to purchase goods from a manufacturer without payment of tax under the GST regime. The transaction between a manufacturer and a merchant exporter is in the nature of supply and the same would be subject to GST. j) Transactions with EOUs: Zero rating is not applicable to supplies to EOUs and there is no special dispensation for them under GST regime. Therefore, supplies to EOUs are taxable like any other taxable supplies. EOUs, to the extent of exports, are eligible for zero rating like any other exporter. k) Realization of export proceeds in Indian Rupee: Attention is invited to para A (v) Part-I of RBI Master Circular No. 14/2015-16 dated Olnuly, 2015 (updated as on 05th November, 2015), which states that “there is no restriction on invoicing of export contracts in Indian Rupees in terms of the Rules, Regulations, Notifications and Directions framed under the Foreign Exchange Management Act, 1999. Further, in terms of Para 2.52 of the Foreign Trade Policy (20152020), all export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency. However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a nonresident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan”. Accordingly, it is clarified that the acceptance of LUT for supplies of goods to Nepal or Bhutan or SEZ developer or SEZ unit will be permissible irrespective of whether the

Connection payments are made in Indian currency or convertible foreign exchange as long as they are in accordance with the applicable RBI guidelines. It may also be noted that the supply of services to SEZ developer or SEZ unit under LUT will also be permissible on the same lines. The supply of services, however, to Nepal or Bhutan will be deemed to be export of services only if the payment for such services is received by the supplier in convertible foreign exchange. l) Jurisdictional officer: In exercise of the powers conferred by sub-section (3) of section 5 of the CGST Act, it is hereby stated that the LUT/Bond shall be accepted by the jurisdictional Deputy/Assistant Commissioner having jurisdiction over the principal place of business of the exporter. The exporter is at liberty to furnish the LUT/bond before either the Central Tax Authority or the State Tax Authority till the administrative mechanism for assigning of taxpayers to the respective authority is implemented.

Innovate Create Lead

Volume VI, Issue 8

MVAT Refund to UN agencies and Diplomatic Authorities The UN agencies and the Diplomatic Authorities (notified) in Maharashtra were eligible for refund of VAT on purchases in Maharashtra. VAT refund claims for periods prior to 1st july 2017, shall be processed as per VAT provisions.

•

From 1st July 2017, VAT would continue to be levied on petroleum crude, petrol, diesel, natural gas, aviation turbine fuel and alcoholic liquor for human consumption. The old procedure and admissibility/ inadmissibility for VAT refund on purchases of any of the above referred goods, for the periods from 1st July 2017 onwards, continues unchanged.

2. Unique Identity Number (UIN) to UN Agencies and Diplomatic Authorities:

The UN agencies and the notified embassies in Maharashtra shall now be eligible for refund of GST on their inwards supplies. The Central Government and the Government of Maharashtra has issued notifications (reference no.1 and 2) to provide for refund to the following:

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United Nations or a specified international organization [hereinafter, referred to as “UN agencies” for brevity],

Foreign diplomatic mission or consular post in India, or diplomatic agents or career consular officers posted therein [hereinafter, referred to as “ diplomatic authorities” for brevity]

The suppliers are granted GST TIN during registration. However, the UN agencies and the diplomatic authorities would be granted UIN. The UN agencies and the diplomatic authorities, which were earlier eligible for VAT refund, have already been granted the UIN. 3. UIN on Invoices & in GSTR1: The suppliers, who supply to the UN Agencies or the Diplomatic Authorities, are expected to record the UIN of the concerned UN Agency or the Foreign Embassy on the Invoice or bill of supply.

and the Diplomatic Authorities in obtaining GST refund. The suppliers may note that it is mandatory to mention the GST TIN or the UIN on the tax invoice or bill of supply, if the recipient is registered or holds UIN under GST. If any supplier does not record the UIN on Invoice, then such fact may be brought to the notice of the authorities, referred in para 4 of this circular. 4. In case of any assistance, clarification or any difficulties faced by the officials of the UN Agencies or the diplomatic authorities, assistance of the Joint Commissioner of State Tax [Nodal-8] (02223760125) or the Deputy Commissioner of State Tax (E709) (022-23760141), who are handling refunds of the UN Agencies, embassies, may be taken.

The suppliers are also instructed to record such supplies in the outward supplies return in GSTR-1 with UIN, so that no inconvenience is caused to these UN Agencies

Insolvency & Bankruptcy Code – Select Decisions Innoventive Industries Ltd. Vs. ICICI Bank and Anr. (Civil Appeal Nos. 8337-8338 of 2017) The Hon’ble Supreme Court extensively interpreted the Code with a message: “we thought it necessary to deliver a detailed judgment so that all Courts and Tribunals may take notice of a paradigm shift in the law. Entrenched managements are no longer allowed

to continue in management if they cannot pay their debts.” It summed up the Code: “The scheme of the Code, therefore, is to make an attempt, by divesting the erstwhile management of its powers and vesting it in a professional agency, to continue the business of the corporate body as a going concern until a resolution plan is drawn up, in which event the management is handed over under the plan

so that the corporate body is able to pay back its debts and get back on its feet. All this is to be done within a period of 6 months with a maximum extension of another 90 days or else the chopper comes down and the liquidation process begins.” Interpreting section 17(b) of the Code, it observed: “once an insolvency professional is appointed to manage the

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Innovate Create Lead company, the erstwhile directors who are no longer in management, obviously cannot maintain an appeal on behalf of the company. In the present case, the company is the sole appellant. This being the case, the present appeal is obviously not maintainable.” Interpreting the non-obstante clause in section 238 of the Code, it observed: “It is clear that the later non-obstante clause of the Parliamentary enactment will also prevail over the limited non- obstante clause contained in Section 4 of the Maharashtra Act. For these reasons, we are of the view that the Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code.”

Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited (Civil Appeal No. 9405 of 2017) The Hon’ble Supreme Court has settled several issues in this matter. As regards ‘existence of a dispute’ under section 8(2)(a) of the Code, it clarified that what is material is that a dispute must exist in fact. It should not be spurious, hypothetical or illusory and it should not be a patently feeble legal argument or an assertion of fact unsupported by evidence. It is not material whether the dispute would succeed or not and it is not necessary to examine the merits of the dispute at this stage. As regards the word ‘and’ in ‘existence of a dispute, if any, and record of the pendency of the suit…’ under section 8(2) (a) of the Code, it clarified that ‘and’ must be read as ‘or’. “If read as “and”, disputes would only stave off the bankruptcy process if they are already pending in a suit or arbitration proceedings and not otherwise. This would lead to great hardship; in that a dispute may arise a few days before

triggering of the insolvency process, in which case, though a dispute may exist, there is no time to approach either an arbitral tribunal or a court. Further, given the fact that long limitation periods are allowed, where disputes may arise and do not reach an arbitral tribunal or a court for upto three years, such persons would be outside the purview of Section 8(2) leading to bankruptcy proceedings commencing against them. Such an anomaly cannot possibly have been intended by the legislature nor has it so been intended.” As regards timelines for disposal of applications by NCLT and NCLAT under section 64 of the Code, it observed: “The strict adherence of these timelines is of essence to both the triggering process and the insolvency resolution process. As we have seen, one of the principal reasons why the Code was enacted was because liquidation proceedings went on interminably, thereby damaging the interests of all stakeholders, except a recalcitrant management which would continue to hold on to the company without paying its debts. Both the Tribunal and the Appellate Tribunal will do well to keep in mind this principal objective sought to be achieved by the Code and will strictly adhere to the time frame within which they are to decide matters under the Code.”

Surendra Trading Company Vs. Juggilal Kamlapat Jute Mills Company Limited and Others (Civil Appeal No. 8400 of 2017) The Hon’ble Supreme Court held that the time of seven days prescribed in the Code for removal of defects by an applicant is directory. It observed: “Further, we are of the view that the judgments cited by the NCLAT and the principle

Connection contained therein applied while deciding that period of fourteen days within which the adjudicating authority has to pass the order is not mandatory but directory in nature would equally apply while interpreting proviso to subsection (5) of Section 7, Section 9 or sub-section (4) of Section 10 as well. After all, the applicant does not gain anything by not removing the objections in as much as till the objections are removed, such an application would not be entertained. Therefore, it is in the interest of the applicant to remove the defects as early as possible. Thus, we hold that the aforesaid provision of removing the defects within seven days is directory and not mandatory in nature.”

Sanjeev Shriya Vs. State Bank of India and Ors. (Civil Writ Petition No. 30285 of 2017) The Hon’ble Allahabad High Court considered the issue as to whether the proceedings against a guarantor of a corporate debtor before a Debt Recovery Tribunal (DRT) under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 must be stayed in the light of the ongoing insolvency resolution of the corporate debtor before the NCLT under the Code. It observed that until liabilities of the corporate debtor and guarantor are in a fluid stage and not crystallized, the guarantors cannot be held liable and it cannot allow the creditor to pursue two remedies on the same cause of action. Therefore, it stayed the proceedings before the DRT till the finalization of corporate insolvency resolution process or till the NCLT approves the resolution plan under section 31 or passes an order for liquidation of corporate debtor under section 33 of the Code, as the case may be.


Volume VI, Issue 8

Notice u/s 142(1) in cases related to substantial cash deposit during demonetization On the basis of data analytics and information gathered during the first phase of online verification under ‘Operation Clean Money’, a list of assessees who had deposited substantial Cash in bank account(s) during the demonetisation period (8th November, 2016 to 30th December, 2016) but have not yet filed Income-tax return for Assessment Year 2017-2018 till date has been generated for further follow up action by the Income-tax Department. (2) The list of such Non-Filers of income-tax returns is being made available in a phased manner to the jurisdictional income-tax authorities in AIMS module of ITBA under “Notice u/s 142(1) for AY 2017-18”. (3) These cases would be handled as per the following Standard Operating Procedure (`Sop’): (i) While Government PANs (using 4th character) have not been flagged in the list, it is possible that a particular PAN might pertain to an entity which is not obliged to file the return (e.g. CSD Canteens, Army Hospitals etc.). Such cases should be marked as

“No Return Required” by using the functionality provided in AIMS module of ITBA by the concerned Assessing Officer. (ii) Thereafter, in remaining cases under “Notice u/s 142 (1) for AY 2017-18”, the jurisdictional Assessing Officer shall issue notice u/s 142(1) of the Income-tax Act, 1961 (‘Act’) to the concerned assessees for filing return of income for Assessment Year 2017-2018. (iii) To facilitate service of notice, information regarding addresses in PAN database and earlier ITRs is available in ITBA portal. (iv) The notice should be generated through the ITBA System only. (v) Notice u/s 142(1) shall be issued electronically as well as through postal authorities. The evidence of service of notice as well as postal remarks (in case of return of notice) should be preserved carefully. Where notice could not be served either electronically or through the postal authorities, then, personal service through departmental ITIs/Notice-servers should be

made. (vi) In cases where difficulties are faced in service of 142(1) notice, Ills may make local enquiries to trace the concerned assessee and serve the notice upon him. As a final alternative, as far as possible, notice by affixation with due procedure should also be done. In all cases of affixture, information should be captured in the system by selecting the appropriate option in ITBA. However, where notice could not be served even by by affixture because of fictitious/non-existent address, this information should also be captured in the system against the appropriate option available in ITBA. (4) All information regarding date(s) of service of notice u/s 142(1) upon the addressee has to be captured using the functionality provided in ITBA for this purpose. The process of service of notice under section 142(1) should be completed by 31st December, 2017.

Processing of income-tax returns u/s 143(1) Sub clause (vi) of clause (a) of sub-section (1) of section 143 of the Income-tax Act, 1961 (Act) as introduced vide finance Act, 2016, w.e.f. 01.04.2017, while processing the return of income, prescribes that the total income or loss shall be computed after making adjustment for addition of income appearing in form 26AS of Form 16A or Form 16 (the three Forms) which has not been included in computing the total income

in the return. In this regard, while processing income-tax returns filed in Forms ITR-2, 3, 4, 5 & 6, doubts have arisen regarding the nature, extent and scope of comparison of information as contained in the return of income with the three Forms which might lead to issuance of intimation proposing adjustments in the returned income. It has also come to notice that some of the information so

available in the ITRs is incomparable with information contained in the three Forms. In this backdrop, it has become imperative to lay down suitable guidelines for CPC/AOs so that provisions of section 143(1)(a)(vi) of the Act are invoked only in appropriate cases. After examining the matter, Central Board of Direct Taxes (CBDT), in exercise of its powers under section 119 of the

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Act, hereby lays down following guidelines regarding applicability of section 143(1)(a)(vi) of the Act while considering returns for processing pertaining to ITR Forms 2, 3, 4, 5 & 6: For purposes of section 143 (1)(a)(vi) of the Act, only the information so contained in the three Forms specified therein, would be taken into consideration. In returns filed in ITR-4 Form, information about a particular head/item of income under the heads ‘salary’, ‘income from house property’, or ‘income from other sources’ is only on net basis and thus, complete data/information may not be available therein which may enable any comparison with the data/ information as contained in the three Forms. Therefore, section 143 (1)(a)(vi) shall not be applicable in such instances. However, if the receipts under these heads are completely omitted from the return, then the provisions of section 143 (1)(a)(vi) shall be applicable. Further in ITR-4, wherever in the return form, presumptive income under both Sec. 44AD and 44AE is disclosed, it will be difficult to correlate the receipts in the return with the information in the three Forms. Hence, any likely difference in the receipts under these items in the return with the receipts in the three Forms under this scenario would be excluded form the purview of Sec. 143(1)(a)(vi). Similarly, it will be difficult to correlate the income under sec.44AE in the return with the information in the three Forms. However, where the presumptive income from business either u/s 44AD alone are reported in the return and the gross receipts from presumptive business or profession shown in the return is less than the gross receipts as per the three Forms, inti-

mation proposing adjustment would be issued. For returns in Forms IRT-2 & 3, as receipts/income under the heads ‘salary’ is comparable with information available in the three Forms on a Gross basis, provisions of section 143(1)(a)(vi) of the Act may be invoked in such cases wherever applicable. In ITRs 3, 5 & 6, in respect of income under the heads ‘income from house property’ or ‘income from other sources’, there may be difficulties in ascertaining whether the receipt being shown in the three Forms in getting reflected under the head ‘income form house property’ or ‘income from other sources’ in the ITR Form or is being treated as business income under the head ‘income from business or profession’ by the concerned assessee. under these circumstances, any likely difference in income shown under the head ‘income from house property’ or ‘income from other sources’ as contained in ITRs 3, 5 & 6, with the three Forms, being difficult to verify under section 143 (1)(a)(vi) of the Act, would be excluded from purview of intimations proposing adjustments. However, there are certain types of income which are only taxable under the head ‘income from other sources’, in such situations, in case of mismatch at gross level, adjustments u/s 143(1)(a)(vi) of the Act shall be proposed. In respect of income under the head “income from house property’ being shown in ITR-2, as receipts/income are comparable with information available in the three Forms on a gross basis, provisions of section 143 (1)(a)(vi) of the Act may be invoked. In case of business receipts being taxable under the head ‘income from business or pro-

Connection

fession’ which are reported in ITRs 3, 5 & 6 Forms, comparison of such receipts in the three forms with data in ITR at gross level may not be possible as receipts shown in the three forms would get subsumed in the consolidated income in P&L A/c. Further, items in the P&L a/c such as commission, interest etc may be shown at a net basis whereas the details in the three forms are reported on a gross basis. Hence, any likely difference in business receipts as contained in ITRs 3, 5 & ^ with the three forms is excluded from the purview of intimations proposing adjustments under section 143 (1) (a)(vi) of the Act since they may not be comparable. In case of income under the head ‘capital gains’ being shown under any of the ITR Forms i.e.2,3, 5 & 6, for purposes of section 143 (1)(a)(vi) of the Act, the information of payment, which may span multiple years, being reflected in the three Forms and the information being captured in the ITRs may not be comparable. Therefore, section 143 (1) (a)(vi) of the Act shall not be applicable in case of income under the head ‘capital gains’ being shown under any of the ITR Forms i.e. 2, 3, 5 & 6 However, the credit for tax which is deducted at source and paid to the credit of the Central Government shall be governed by section 199 of the Act read with Rule 37BA of I.T. Rules, 1962. Further, information in the three Forms regarding TDS on immovable property in the case of persons engaged in real estate etc. may be in the nature of business income, such cases being covered under para 3.5 above, section 143(1)(a)(vi) would not be applicable on them.

Volume VI, Issue 8


FAQs on ethical issues relating to GST Q1 Whether a member in practice can engage as GST practitioner? Yes , a member in practice can engage as GST practitioner , as the activities to be performed by GST practitioner mentioned in CGST Act 2017 read with CGST Rules 2017 are within the purview of a member in practice as per the provision of chartered Accountants Act 1949 and Regulation Framed thereunder.

Q2 Whether a member who has enrolled as GST practitioner can act as tax return Preparer of GST? Yes, as per Rule 83(8) of CGST Rules 2017 a GST practitioner can inter alia undertake the assignment of filling returns under the CGST Act 2017

Q3 Whether a member holding COP Who is an employee in a CA firm, can be enrolled as GST practitioner? Yes, he can enroll as GST practitioner (as this is not an attest function) subject to contractual obligations, if any, with the employer

Q4 Whether member COP part time basis, working as an employee in an entity other than a CA firm can enroll as GST practitioner? Member holding COP part time basis, working as an employee in an entity other than a CA firm can enroll as GST practitioner subject to contractual obligation, if any, with the employer.

Q5 Can member? Firm conduct training through seminar etc on GST?

Yes, a member/ firm can conduct training through seminar etc on GST. However the member /firm may only invite its existing client to such training programmes. Inviting individuals or entities other than existing client may amount to solicitation, which is prohibited under Clause (6) of Part- I of First Schedule to the Chartered Accountant Act 1949.

Q6. Whether a member can send presentation/ write-up on GST and include service provide in the same? He can send Presentation on GST / write-up on GST only to existing client, and to a proposed client if an enquiry was received from the proposed client with regard to the same.

Q7 Whether it is permissible for member to mention himself as “GST Consultant? No, in terms of provision of clause (7) of Part-I of First Schedule to The chartered Accountant Act 1949 it is not permissible for a member to mention himself as GST Consultant.

Q8 Whether a member can GST updates on modes like mass mail / social media? A member can share GST updates mentioning himself as “CA” with individual name, provided the communication is limited to providing updates. Mention of firm name is not allowed.

Q9 Whether a member can publish testimonials/ appreciation letters received by him with regards to GST Training assignment? Such testimonials are allowed

to be mentioned on CA Firm website, but not on Social media like Facebook, Linkedin etc.

Q10 Whether a member can provide GST Training? GST Training can be provided to existing client. In case of non-clients, training can be provide only if the member is invited to provide such training as Part of contribution towards initiatives taken by the government ICAI GST Sahayataa Desks have been made operational on pro bono basis at all major cities for training / facilitating understanding of GST among small businessmen, traders, shopkeepers and public at large.

Q11. Whether it is permissible for a member to put a Notice for GST Registration/Return preparation along with mention of his name/ name of CA Firm? Whether he can mention fees/charges for providing such services? GST services are part of professional services provided by a chartered accountant, and accordingly, its advertisement has to be in terms with the ICAI Advertisement Guidelines, 2008 only. He cannot mention the fees/charges, as it is not allowed in the Advertisement Guidelines.

Q12. Whether a member in practice can give GST consultation to clients of another professional? The member is not allowed to share fees with another professional ; however, he can engage separately with the clients of such other professional to provide GST consultation.

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LLB & CO. 525, The Summit Business Bay, Behind Gurunanak Petrol Pump, Near W.E. Highway Metro and Cinemax, Andheri (East), Mumbai - 400 093

Office No.: 5, Barsana, Salasar Brij Bhoomi, Near Maxus Mall, Bhayandar (West), Thane - 401101 Phone: +91 - 22 - 26831036 +91 - 22 - 49242456 +91 - 22 - 28040048 E-Mail: [email protected] Web: www.llbco.in

Report on Audit Quality Review (2016-17) of the Quality Review Board Government of India has, in exercise of the powers conferred under Section 28A of the Chartered Accountants Act, 1949, constituted a Quality Review Board (the ‘Board’) to perform the following functions u/s 28B of the Chartered Accountants Act, 1949:a) to make recommendations to the Council with regard to the quality of services provided by the members of the Institute; b) to review the quality of services provided by the members of the Institute including audit services; and c) to guide the members of the Institute to improve the quality of services and adherence to the various statutory and other regulatory requirements.

Board may, inter alia, evaluate and review the quality of work and services provided by the members of the Institute in such manner as it may decide and also lay down the procedure of evaluation criteria to evaluate various services being provided by the members of the Institute and to select, in such manner and form as it may decide, the individuals and firms rendering such services for review. Pursuant to the Rule 6, the Board has issued ‘Procedure for Quality Review of Audit Services of Audit Firms’ (the ‘Procedure’) providing for various matters, adopting best practices, in laying down the necessary system for conducting reviews of Audit firms in India.

2. Government of India has also issued ‘Chartered Accountants (Procedures of Meetings of Quality Review Board, and Terms and Conditions of Service and Allowances of the Chairperson and Members of the Board) Rules, 2006’. In terms of its Rule 6, in the discharge of its functions, the

3. In terms of the aforesaid Procedure, the Quality Review Board has initiated a system of independent review of statutory audit services of the audit firms auditing accounts of top listed and other public interest entities in India pursuant to a process comprising selection of the Audit firms for review and

engagement of Technical Reviewers. 4. The Board has issued a Report on Audit Quality Review (2016-17) providing findings, analysis and summary of observations made by the Technical Reviewers in review reports during the period which is available at the website of the Quality Review Board http:// www.q rb ca.in /wp -con tent/ uploads/2017/11/qrb37506.pdf). It is hoped the concerned stakeholders will find it useful.

Disclaimer: This newsletter is prepared strictly for private circulation and personal use only. This newsletter is for general guidance on matters of interest only and does not constitute any professional advice from us. One should not act upon the information contained in this newsletter without obtaining specific professional advice. Further no representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this newsletter.