ICAI wants FM to withdraw the Budget proposal on Scrapping GST audit

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Reetubaraik | Feb 11, 2021 | Views 93585

ICAI wants FM to withdraw the Budget proposal on Scrapping GST audit

ICAI wants FM to withdraw the Budget proposal on Scrapping GST audit

The Institute of Chartered Accountants of India (ICAI) has asked finance minister Nirmala Sitharaman to restore a provision proposed to be taken away by the Budget for 2021-22 for the mandatory requirement of getting the annual account audited for specified professionals with respect to goods and services tax (GST).

The Institute has argued that the benefits of such an audit outweigh the ease of compliance that the new rule would bring for assessees. “We have clarified that thousands of crores of rupees collected in tax (GST) happened because of the chartered accountants…It was not self declaration, but because the CA conducted the audit and asked the firm to pay the tax in the Form 9,” Atul Kumar Gupta, President, ICAI said.

The budget provision in the clause 101 of the Finance Bill 2021 seeks to omit sub-section (5) of section 35 of the Central Goods and Services Tax Act so as to remove the mandatory requirement of getting annual accounts audited and the reconciliation statement submitted by specified professionals.

While the rule is meant to improve the ease of doing business, ICAI in a letter to the finance ministry and the prime minister’s office has said that it will make ‘early detection difficult’.

“We check several compliances as part of the annual audit. Prevention is better than cure…Detect the disease early so it can be cured or it will become a life and death case,” Gupta added.

Meanwhile, the institute has initiated disciplinary action against 25 chartered accountants found to be involved in the GST fraud while warning all its members to be cautious while performing their services.

ICAI is also developing audit quality indicators, audit maturity model, to benchmark the quality of an audit engagement, Gupta said.

New networking guidelines to face global competition.

ICAI has also introduced revised networking guidelines for the chartered accountants firms to enable them to face global competition from big conglomerates such as Big4. The CA firms would be able to enter into different networks at the national level to develop into pan-India firms. “We did not have an eco-system for them to join hands and form a common brand…They will be able to pool resources and compete on a global platform,” Gupta added.

The network will be registered with the ICAI and will be able to have its own brand name, website. “Indian firms should become global rather than global firms coming to India and taking over the work…This is an important step towards facing bigger conglomerates which dominate the business,” the ICAI president said.

The previous networking guidelines approved in 2005 were revised due to changing global scenario and certain hindrances related to financial resources such as clubbing turnover among other things. “We will have three models- affiliate, lead firm or network…The ecosystem for registration will be launched in the next few days… CA firms can later go on for a full fledged merger as well,” Gupta said.

The institute has also developed the guidelines for multidisciplinary partnership where a CA can become partner with a company secretary, cost accountant or an engineer, actuarial and valuer. “We will start registration after the law ministry’s approval. Each profession will be regulated by their respective regulator,” Gupta added.

The ICAI president was speaking at the launch of accounts assistant scheme to help graduates develop skills in book-keeping, accounting, GST and Income Tax.

ICAI will select 200 students as part of the pilot project through an online test and groom them by classroom training and internships with chartered accountants and small and medium companies to provide basic support services for accounting.

The institute has also launched its international curriculum which will be made available in 44 countries where there is no such professional institute. “We will have collaboration with the external affairs ministry so their local citizens can participate in the program. ICAI will be a thought leader and support bilateral relationship,” Gupta said.

Source: Bussiness Times

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