OPPORTUNITIES FOR CA IN THE ORDER OF ICAI FINAL SYLABUS

CA Leaning Solution

Highlights of this Article :

  • Discussed practical application in life of the subject studied in CA Final
  • Paper by paper analysis
  • Information  collected  from the industries expert.

PART 1 : GROUP 1

Financial Reporting

  • Application of IND-AS in the various industries w.e.f. 1/4/2017 : Central Government has made in stages the implementation of IND-AS mandatory.

It will be made applicable to large companies first.

  • Valuation of business and intangibles for the business acquisition: Business acquisition strategy can work properly for growth only when it is properly structured. Goodwill, patent, copyright and other intangible may be valued by a registered business valuer. Such valuation process needs to be properly implemented by a Chartered Accountant.
  • Internal Financial Control (IFC) mechanism : Internal control has become a serious professional task in a multi country and multicultural business environment. It requires following the standard codified international guidelines on a consistent basis.
  • International Financial Reporting Standard(IFRS) compliances from international perspective : IFRS is a common global platform which requires

All countries to follow common accounting practices. India is also working on the convergence model by changing to IND- AS first. The developed countries and few least developing countries have already implemented IFRS. IFRS will make the flow of capital across world easy because the reporting practice will be common and easy to understand just like Microsoft which universally same.

Strategic Financial Management 

  • Strategies for derivative and hedging : The stock brokers create business strategies for derivative and hedging. These are used for creating growth around stocks and commodities. Profit can be booked in the future based on the hedging strategies defined by the investment experts.
  • Capital budgeting proposals for the big infrastructure and power projects :

Big projects need capital planning on a longer horizon. This requires a decision on the capital expenditure and revenue expenditure with a focus on the breakeven, internal rate of return and corresponding payback period.

  • Wealth management planning for High Net worth Individual (HNI) : HNI is a person who requires a guidance on fund and asset management. Different banks and consultants are working to give solution so that optimum utilization is achieved for HNI funds and assets by diversifying the risks.
  • Analysis of Share market operation: Share market goes through bull and bust in a business cycle. Cyclical movement allows a business to work upon the future direction in the interest of shareholder and debenture holders. Analysis of these parameter allows the individuals and businesses to understand and improve the investing direction of investors on a short term and long term horizon.

 

Advanced Auditing & Professional Ethics

  • Internal audit of the various industries : CAs are known for their internal auditing capability which requires certain basic common requirements universally. These are known as the Standard of Auditing  called as SA.

But in case of the different industries say mining or aviation we may find that

the capabilities and standard requirement will vary according to the requirements of the industry.

  • Internal control design for the different companies: CAs are better known as an internal control design experts for the various businesses and industries. Automated Internal control questionnaire help an expert to find the suitable solution towards the client’s requirements on a long term basis.
  • Forensic Audit : Businesses are susceptible to the frauds which can be countered through the application of the Forensic Audit.
  • CAG Audit and Bank Audit : Central government allows a regular conduct of statutory audits of the central government institutions annually by a CA firm. Likewise, banks are also asked to get their accounts audited annually.

Company and Allied Law  

  • MCA Compliances Filing : Ministry of Company Affairs has created as per Company Act 2013,the various compliances filing at the various periodic interval of time. MCA has made it’s compliance filing mandatory to certain type of companies.
  • Company Law Case studies and it’s judicial solution before Company Law Board : This is again a sunrise area where due to the change of Company law Act from 1956 to 2013 has lots of new opportunities to the professional at the practice level and at the corporate level has come. New Act, circulars, explanations allow the companies to reorient properly.
  • Foreign Exchange Management Act (FEMA ACT) related compliance : Foreign exchange movement for the products and services by way of export and import is essentially required by India which is regulated by FEMA. FEMA limits for the foreigner, person of Indian origin, NRI and resident are different. Proper compliance through RBI mechanism is required through FEMA Act.
  • SEBI related compliance : Stock exchange Board of India related compliances as required by the SEBI Act is an alluring working area for the professionals which require deep knowledge in to the Act and circulars.

TRANSFORMATIONAL VALUE OF CA ARTICLESHIP -PART 2

Headline of this Article:

  • know about what is your assets in this profession
  • what to learn in these three years of article ship
  • different area of mastery in CA Profession

    articleship

If you have a vision for your future that you can become  a successful CA then believe me you must be serious with your article ship training. You must always remember that you are known by the quality of   work and not by qualification alone. CA Qualification serves as a gate pass only. The quality of work and skills matter most. You must  have patience and a learning mindset which requires innovation and hard work style.

As an article clerk   you may have an exposure on a variety of areas. Now when you become a professional, can you prove your capability of handling issues in the Book keeping, Financial Accounting, Cost Accountancy, Company Law, Direct Tax, Indirect Tax, Auditing, ERP, IT Audits and Financial Planning.

There are only a few big firms who are offering all the above comprehensive learning in the three years training cycle. These trainings done diligently allow a life time learning which becomes an  asset . You must always remember this is the golden period of life which must be catalyzed. You can’t miss this period because it develop you as an intellectual professional who knows the pulse of auditing, accountancy and auditing.

Hence as a trainee or an intern you must put yourself to the learning from the under given check list :n

Basics of book keeping required professionally.

Financial accountancy using the accounting software like tally.

Company Law compliances regarding MCA site

Tax planning and compliances including filing returns for various entities including NRI, Corporates, firm, cooperative societies, HUF etc

Indirect tax planning covering Custom

Indirect tax planning covering Excise.

Indirect tax planning covering Service Tax

Emerging areas like Foreign Trade Policy

Traditional Auditing covering internal audit, statutory audits

New type of Auditing ranging management audit, Balance Sheet Audit ,IT audits and System Audit

Financial management including capital budgeting and  trade finance

Growth areas like Hedge fund, Derivative, share market operation

Sunrise sector like IND-AS and IFRS

High demand areas like GST which will be mandatory from 1.4.2017

New sectors like financial literacy ,XBRL

Accounting and auditing of NGO sectors/ not for profit sector/ trust

Niche  professional areas like Financing of power sector, infrastructure sectors

Product costing using traditional and new ways like ABC costing, kaizen costing

Micro Soft skills of Power point Presentation, Excel word required for the clients

Norms  of  accounting and auditing of Banking and Insurance sectors

Decision making both financial and non -financial in various business scenario

Strong Communication skills which give confidence to yourself and clients

Newer areas like Transfer pricing, International taxation

 

Traditional Areas Additional Modern Aspects
Basics of book keeping required professionally Emerging areas like Foreign Trade Policy
Financial accountancy using the accounting software like tally New sectors like financial literacy ,XBRL
Company Law compliances regarding MCA site High demand areas like GST which will be mandatory from 1.4.2017
Indirect tax planning covering Custom New type of Auditing ranging management audit, Balance Sheet Audit ,IT audits and System Audit
Indirect tax planning covering Excise. Sunrise sector like IND-AS and IFRS
Indirect tax planning covering Service Tax Growth areas like Hedge fund, Derivative, share market operation
Tax planning and compliances including filing returns for various entities including NRI, Corporates, firm, cooperative societies, HUF etc CA can qualify certain subjects and can  get foreign qualification like CPA/ACCA
Traditional Auditing covering internal audit, statutory audits Product costing using traditional and new ways like ABC costing, kaizen costing
Financial management including capital budgeting and  trade finance New areas like Transfer pricing, International taxation
Accounting and auditing of NGO sectors/ not for profit sector/ trust New opportunities  areas like business branding, due diligence, valuation of business
Microsoft skills of Power point Presentation, Excel word required for the clients the analytical and innovative  mind puts him on the cockpit of the engine of growth of the country and the world at large
Norms  of  accounting and auditing of Banking and Insurance sectors Taxation, accounting and Auditing under Merger and acquisition

 

Niche  professional areas like Financing of power sector, infrastructure sectors Valuation certification
Strong Communication skills which give confidence to yourself and clients Social Audit (Gram Sabha and Panchayati Raj; Corporate Social Responsibility Audit)

 

Decision making both financial and non-financial in various business scenario Environmental Audit

 

  Business Risk Service

 

  Information System Audit of establishments incorporated under certain Acts like RBI, SEBI, IRDA

 

  Usage of emerging technologies like cloud computing and Web 3.0 and their audit

 

  Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InVIT)

 

  Venture Capital Company and Venture Capital Funding

 

  Forensic Audit

 

  Credit admissibility as per MAT, AMT and CENVAT credit Rules

 

  Salary based payments like provident fund, gratuity and ESI

 

A to Z of CA ARTICLE SHIP

Headline of this Article:

  • know about what is your assets in this profession
  • what to learn in these three years of article ship
  • different area of mastery in CA profession

articleshipIf you have a vision for your future that you can become  a successful CA then believe me you must be serious with your article ship training. You must always remember that you are known by the quality of   work and not by qualification alone. CA Qualification serves as a gate pass only. The quality of work and skills matter most. You must have patience and a learning mindset which requires innovation and hard work style.

 As an article clerk   you may have an exposure on a variety of areas. Now when you become a professional, can you prove your capability of handling issues in the Book keeping, Financial Accounting, Cost Accountancy, Company Law, Direct Tax, Indirect Tax, Auditing, ERP, IT Audits and Financial Planning.

There are only a few big firms who are offering all the above comprehensive learning in the three years training cycle. These trainings done diligently allow a life time learning which becomes an  asset . You must always remember this is the golden period of life which must be catalyzed. You can’t miss this period because it develop you as an intellectual professional who knows the pulse of auditing and accountancy.

Hence as a trainee or an intern you must put yourself to the learning from the under given check list :

  • Basics of book keeping required professionally.
  • Financial accountancy using the accounting software like tally.
  • Company Law compliances regarding MCA site
  •  Tax planning and compliances including filing returns for various entities including NRI, Corporates, firm, cooperative societies, HUF etc
  • Indirect tax planning covering Custom
  • Indirect tax planning covering Excise.
  • Indirect tax planning covering Service Tax
  • Emerging areas like Foreign Trade Policy
  • Traditional Auditing covering internal audit, statutory audits
  • New type of Auditing ranging management audit, Balance Sheet Audit ,IT audits and System Audit
  • Financial management including capital budgeting and trade finance
  • Growth areas like Hedge fund, Derivative, share market operation
  • Sunrise sector like IND-AS and IFRS
  • High demand areas like GST which will be mandatory from 1.4.2017
  • New sectors like financial literacy ,XBRL
  • Accounting and auditing of NGO sectors/ not for profit sector/ trust
  • Niche professional areas like Financing of power sector, infrastructure sectors
  • Product costing using traditional and new ways like ABC costing, kaizen costing
  • Micro Soft skills of Power point Presentation, Excel word required for the clients
  • Norms of  accounting and auditing of Banking and Insurance sectors
  • Decision making both financial and non -financial in various business scenario
  • Strong Communication skills which give confidence to yourself and clients
  • Newer areas like Transfer pricing, International taxation
  • New opportunities areas like business branding, due diligence, valuation of business
  • Even a CA can qualify certain subjects and can get foreign qualification like CPA/ACCA
  • Finally the analytical and innovative mind puts him on the cockpit of the engine of growth of the country and the world at large.

 

ANALYSIS of CA FINAL NOVEMBER 2016 : ADVANCED MANAGEMENT ACCOUNTANCY

This time the questions were unique and analytical in nature. Standard costing had a different dimension because two questions which were asked needed application oriented solution. In case of activity based costing it was transport based question which was easy to solve in decision making. The shutdown question was tricky. Again question on operating costing covering hotel costing was asked which was a past examination paper.

 

Cash budget was an unexpected question in this subject. In case of operation research transportation question was lengthy. Also the question on simulation was though a lengthy question but it was an old examination question. In case of theory, 22 marks questions were asked from past examination papers which were direct.

 

It has been noticed that LPP question was tricky. The question on PERT & CPM required knowledge of crashing. Learning Curve question was easy but required proper knowledge of logarithm.

This paper was different from the previous examination from two angles. Firstly, in the compulsory section there was a theoretical question asked for the first time. Secondly, in case of Operation research there was no direct question this time. Perhaps Operation research which appeared in compulsory section was surprising. On an overall basis this examination was test of speed and accuracy

Question Paper and Analysis of CA IPCC NOVEMBER 2016 EXAM – Indirect Tax laws

IDT TAX
IPC  NOV,2016     TAXATION
Suggested Answers in Indirect Taxation
By
S.P. RAO, Visiting Faculty of ICAI; New Delhi. 

Q.1.(b): ET Bank Ltd. Furnishes the following information relating to the services provided and the gross amount received. Compute the value of taxable services and service tax liability.

                                                                                                                             (Rs. In Lakh)

  • Sale and purchase of forward contract                                                     25
  • Commission charged on debt collection services                                  18
  • Margin earned on reverse repo transactions                                             5
  • Administrative charges collected for extending home loans             12

Assume:

  • ET Bank Ltd is not eligible for small service provider exemption.
  • Service tax is not included in the above amounts and is to be charged separately @ 14.5%.

 

Answer: 1. (b):

Computation of Service Tax liability of E.T. Bank Ltd.,

 

Description                                                               Value                           TaxableValue                                                                                                                              Rs. In Lakhs

  1. i) Sale and purchase of forward contract       25                                      –
  2. ii) Communion on debt collection                   18                                         18

iii) Margin on reverse repos                                    5                                             –

  1. iv) Administrative charges for home loans   12                                          12
  2.         Total                                                                                                                 30

ST@14.5%  of Rs. 30,00,000= Rs. 435,000/-                                                                                                                                                      

 

Notes:

  1. Sale and purchase of forward contract is a trading activity, covered by negative list.
  2. Reverse repo charges are transactions in money or transactions involving interest which is in the negative list.

 

  1. 1(c) Nagarjuna Ltd. Of Tamil Nadu provides the following information for the month of December 2015:

 

Particulars                                                                                       Amount (Rs)

Purchase of raw materials from the local market   45,00,000

(excludingVAT @ 4%)

 

Half of the goods manufactured from the above raw materials were exported at a sale price of Rs. 25,00,000. Remaining goods were given on lease to Mr. X of Karnataka  at a deemed sale price of Rs. 35,00,000 (excluding VAT @12.50%).

 

You may assume that exports are subject to Zero rate of tax and input tax credit of tax paid on raw material used in the manufacture of leased goods is available immediately. Compute the amount of net VAT payable/refund and input credit for the month of December 2015.

 

Answer: 1(c):

 

Computation of VAT Liability of Nagarjuna Ltd.,

 

VAT payable on lease         3500,000@12.5%                                        437,500

ITC on purchases                 4500,000@ 4%                                        (-)180,000

 

                        Net Tax Payable (VAT)                                  Rs. 257,500

 

Note: Full credit (ITC) is available on Zero rated sale.

 

  1. 2(b):Purve Sainik Security Service Ltd providing the security services entered into a contract with Women Welfare Mandal, for exhibition of jewellary held between 22nd August 2015 to 26th August, 2015. Contract signed on 5th August 2015 and the company received and advance of Rs. 5,00,000 by an account payee cheque on signing date. On 22nd Aug 2015, the company received Rs. 6,00,000 by credit card and on 26th August 2015 Rs. 4,00,000 by pay order.

 

Determine the value of taxable service and the service tax liability payable by Purve Sainik Security Service Ltd. Assuming the above company is not eligible for SSP exemption and service tax has been charged separately @ 14.5%.

 

Answer: 2(b)

 

Service Tax Liability of purve Sainik Security.

 

Date of Receipt                    Mode of Payment                           Received.

 

5TH August                             Cheque                                               500,000

22nd August                           Credit Card                                        600,000

26th Aug                                 Pay order                                           400,000


Total                                                                               Rs.                  1500,000

                                               

                                         Service Tax @ 14.5%                 217,500

Notes:

Value of money includes amounts received in Cheque Credit Card and Pay Order.

Tax liability arises on the date of advance payment also.

 

  1. 2(c) : Compute the taxable turnover and the tax liability of M.R Saket under CST Act, assuming that the VAT rate within the state is 4%.

 

Total interstate sales during the financial year 2015-16 were Rs. 25,00,000 inclusive of CST. The sales do not include the following:

  1. Goods worth Rs. 50,000 provided as free samples to Mr. C. of Ludhiana.
  2. Sale of goods amounting to Rs. 1,50,000 to Mr. Sam, a foreign tourist.
  • Despatch of goods worth Rs. 2,00,000 to Mr. Saket’s branch located in another state.
  1. Hypothecation of the goods wirth Rs. 12,00,000 for a working capital loan from SBI amounting to Rs. 10,00,000.

Answer:

Computation of Taxable Turnover and the Tax  of M.R. Saket.

Rs.

Sales inclusive of CST                                            2500,000

Rate of C.S.T 4%

Taxable Turnover before CST                               24,03,846

C.S.T               payable                                                   96,154

 

Notes:

  1. i) Free samples, stock transfer and hypothecation are non taxable as there was no sale.
  2. ii) Sale to a foreign tourist is a local sale so,VAT is payable.

 

  1. 3(b) Mr. Dhingra rendered the following services by renting his properties

            located in Gujarat for various uses:

 

  1. i) Land let out to Jumbo Circus 1,50,000
  2. ii) A building let out to Singhania classes for

providing coaching to CA students                       Rs. 5,00,000

iii)       A vacant land used for horticulture                      Rs. 3,00,000

  1. iv) A building let out to EXIM Ltd. For use

as a corporate office                                                            Rs. 8,00,000

 

Determine the value of taxable services and service tax liability thereon @ 14.5%. Assume. Mr. Dhingra is not eligible for small service provider exemption and the above mentioned amounts are exclusive of service tax.

 

 

Answer: 3(b)

Tax Liability of Mr. Dhingra

 

  1. Renting of land to Circus                                                  150,000
  2. Let out to Singhania Classes                                            500,000
  • Land for horticulture (-ve list)      —
  1. Let out for a corporate office                                               800,000

Total                                                                       Rs. 1450,000

 

S.T @ 14.5% = Rs. 210,250

 

  1. 3(c) : The Inter State Sales of Mr. Raghav are Rs. 60,00,000 (inclusive of CST)

for the F.Y.2015-16 and the Inter State Sales include:

 

  1. i) Excise duty Rs. 6,00,000
  2. ii) Deposits for returnable containers & packages Rs. 10,00,000

iii)       Freight (not shown separately in invoice) Rs. 2,00,000.

 

Compute the taxable turnover and CST payable.

 

Assuming Rate of Central sales tax is 2% and all the transactions sales were covered by valid C form.

 

 

Answer: 3(c):

Computation of Taxable Turnover and the Tax  of Mr. Raghav.

 

Total Sales of Mr. Raghav :                                    60,00,000

Less Deposit of returnable containers                  10,00,000


                                                                                           50,00,000

 

Rs.

Taxable Turnover 50,00,000×100/102     =          49,01, 960.78

=               49,01,961 (rounded off)

C.S.T = 5,000,000X2/102                            =                    98,039

 

Note: Excise duty is taxable, hence not deducted. Freight is taxable as not shown separately.

 

  1. 4 (b) Compute the CENVAT credit available to M/s. Shine Enterprises Ltd., in respect of the following services availed by it in the month of October 2015 duly mentioning why CENVAT Credit is available.

 

      Nature of Service availed                               Service Tax Paid

  1. Market research services                                   2,00,000
  2. Service of General Insurance taken for

motor vehicles which are not capital goods        52,000

  1. Credit rating services                                           1,09,000
  2. Health & fitness centre service for the

Personal use of the managing director

Of the company                                                        72,000

  1. Repairs & Renovation services for office

Premises                                                                    1,40,000

 

Answer: 4 (b) Shine Enterprises Ltd.

Computation of Cenvat Credit.

 

Particulars                                                              Cenvat Credit Available

 

  1. a) Market Research                                              200,000
  2. c) Credit rating services                                     109,000
  3. e) Repairs & renovation services                     140,000

           Total Credit                                                        449,000         

 

Note: items (b) and (d) are not input services as per the definition

  1. 4(c): Examine the validity of the following statements under Central Excise Act, 1944 and under Central Excise Rules, 2002:

 

  1. i) Goods subjected on NIL rate duty are not excisable goods.
  2. ii) XYZ Ltd., manufacturer of Khandasari Molasses, claims that it is not liable to pay excise duty on the molasses produced.

 

Answer: 4(c):

  1. Nil rated goods are excisable subject to chargeable to nil rate of duty. By definition excisable goods are those which are specified in the tariff act, 1085. Hence the given statement that nil rated goods are non excisable is not valid.

 

  1. XYZ’s contention is correct. Rule 4 of Central Excise Rules, 2002 places responsibility on buyer of Khandsari Molasses, not on manufacturer.

 

  1. 5(b): Shanti Ltd., imported an equipment in the month of May 2015 whose assessable value was US $ 18,000.

 

  1. i) From the following additional information compute the duty payable.
  2. a) Date of Entry inward was 09-05-2015. Basic custom duty on that date was 20% and exchange rate notified by central board of excise & customs was US$ 1=Rs.60.
  3. b) Date of Bill of Entry was 13-05-2015. Basic custom duty on that date was 10% and exchange rate notified by central board of excise & customs was US$ 1=Rs.65.
  4. c) Additional duty payable under section 3(1) of the Customs Tariff Act, 1975 was 12.5%
  5. d) Additional duty payable under section 3(5) of the Customs Tariff Act, 1975 was 4%
  6. e) Education Cess was 2% and Secondary & Higher Education Cess was 1%.

 

  1. ii) How much CENVAT credit can Shanti Ltd avail?

 

Answer: 5(b):

Applicable rate of duty as per section 15 is 10%

 

Applicable rate of exchange as per section 14 is Rs. 65/-

 

Computation of Customs Duty for Shanti Ltd.

                                                                                  Value                         Duty

Assemble Value $                                                    18000

Add BCD @ 10%                                                        1800                           1800


                                                                                     19800

 

Add CVD @ 12.5%                                                  2,475                          2,475

 

                                                                                   22275 x 65                4,275×65

 

Converted to INR @ 65/-                                        14,4 7,875                 277,875

Add Cess @ 3% on 277,875                                             8336                       8336

 

Total  before Spl. CVD                                                     14,56,211                  286,211

 

 

 

Add Spl. CVD @ 4% on (1456,211)                          58,248                    58,248

 

                                                                                     15,14,459                 344,459

 

                                                                 Or       Rs.      15,14,460                 344,460

 

  • Availability of cenvat credit for Shanti Ltd.

If Shanti Ltd is a manufacturer/service provider, Cenrat credit is available as given below.

 

If Manufacturer                     If  Service Provider

 

CVD:   2475X65                               160,875                                  160,875

Spl. CVD                                              58,248

———-                               ———–

Total Credit                                     219, 123                                 160, 875

 

 

  1. 5 (c ) Maruti Ltd., a manufacturer of Cars sold a car to S.K. Enterprise Ltd., at a price of Rs. 4,50,000 excluding taxes and duties. It also charged the following additional amounts for providing extra benefits:

 

  1. i) Assembly of music system 15,000
  2. ii) Design and Engineering charges 25,000

iii)          Outward Freight and handling charges

from factory to depot.                                             2,500

  1. iv) Special Accessories to beautify the car 18,000

 

Determine the total amount of Central Excise duty payable as per Central Excise Act, 1944, with explanations and reason.

 

Answer:  5(c )

Computation of Excise Duty:

 

Price before taxes                                        450,000

Add:   Assembly of music system              15,000

Design & Engineering                                   25,000

Freight from factory to depot                         2,500

Spl. Accessories                                             18,000


Total Assessable Value                  Rs.      510,500

 

Duty @ 12.5% on 510,500 =          Rs.       63,813/-

(assumed)                                               (rounded off)

 

Comments:

  1. The paper setter is harsh on IPC students. Rate of duty is absent which is unusual in excise problems.

 

  1. Freight from factory to depot have been included assuming that the sale is from depot.

 

This is a good question for final students.

 

Q.6(c) Mr. Abhishek, a taxable service provider, filed his service tax return for the

half year ended 30th September 2015 on 25-11-2015. He seeks your advice on

the following issues.

 

  1. i) Is he liable for any late fee for the delayed filing of half yearly return? If yes. How much?
  2. ii) Can he revise such belatedly filed return? If yes, what will be the last date of filing the same?

 

Answer 6(c):

  1. As per Rule 7(c) of Service Tax Rules, 1994, late fee is payable on delayed filing of return ST-3. It is Rs. 1,000 upto first 30 days and further Rs. 100 per day subject to the maximum of Rs. 20,000.

In the instant case, Mr. Abhishek is liable to pay Rs. 1000+ 700. (for a delay of 37 days)

Late fee may be waived partly or fully in case of nil return if the delay is due to sufficient cause shown to the satisfaction of the proper officer.

 

  1. He can revise the belated return but within 90 days of submission of return, that is 90 days from 01-12- 2015. [Rule 7(b) of Service Tax Rules, 1994]

 

 

  1. 6 (d) Examine the validity of the following statements under the provisions of Customs Act, 1962:

 

  1. Customs duty is not attracted on goods jettisoned from the vessel to save the vessel from sinking.

 

Answer : It is not correct to say that customs duty is not payable on jettisoned goods. If the jettisoned goods happen to float to the customs area they are liable to duty as if they have been imported. (Vide Section 21 of the Customs Act, 1962)

 

Jettison means throwing goods into the save to save the ship from sinking.

 

  1. ii) Customs duty is not attracted for any imported goods pilfered before

Answer : Pilferage of goods after unloading but before clearance from port area are protected. Here importer is not liable but custodian is liable to pay duty as per section 45 of the Customs Act, 1962.  It is governed by Section 13 of the Act.

 

But if the goods are pilfered before unloading, duty is payable.

 

  1. 6 (b): Explain the manner in which service tax is payable by an aggregator.

 

Aggregator” has been defined under Rule 2 of Service Tax Rules, 1994 as “a person, who owns and manages a web-based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name.

 

“in relation to the service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator of the service is liable to pay service tax
Provided that if the aggregator does not have a physical presence in the taxable territory, any person representing the aggregator for any purpose in the taxable territory shall be liable for paying service tax;
Provided further that if the aggregator does not have a physical presence or does not have a representative for any purpose in the taxable territory, the aggregator shall appoint a person in the taxable territory for the purpose of paying service tax and such person shall be liable for paying service tax.”

 

6 (c): Decide with reasons whether the following places can be treated as “Place of Removal” in terms of Rule 2(qa) of CENVAT Credit Rules, 2004.

 

  • Warehouse of XYZ Ltd. Wherein the excisable goods have been permitted to be deposited without payment of duty.

 

Answer: Warehouse is a place of removal as the definition clearly states this. As the goods are delivered for sale from the warehouse

 

  • Customs port from where goods are directly exported by the manufacturer exporter to his foreign buyer.

 

  • Where goods are directly exported from customs port by the manufacturer exporter to his foreign buyer , the customs port is a place of removal. This has been decided by the courts and the tribunals consistently in many a case.

 

Author: S.P. Rao, Faculty of Indirect Taxes, New Delhi. He can be reached at spraoidt@yahoo.com, whats app No. 9811737205.

 

DISCLAIMER: The author does not hold himself responsible for the accuracy of the answers though every effort has been made to make the answers as per the existing legal position.

Question Paper and Analysis of CA FINAL NOVEMBER 2016 EXAM –ADVANCED AUDITING & PROFESSIONAL ETHICS

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Download Question Paper of ADVANCED AUDITING & PROFESSIONAL ETHICS – CA FINAL November 2016 Exam – click here

Analysis:

After the tedious exam of CA Final ‘Strategic Financial Management’, Low percentage of students appeared for the audit exam i.e. Advanced Auditing and Professional Ethics of November attempt which was held on 5th of November 2016.

As we all know that the audit exam is considered as one of the toughest exams of CA-final because the exam contains lots of case studies on accounting standards which most of the students find difficult to crack. Also, there is strict marking in the audit exam. The trend of marking of questions was same as followed from the past years i.e. First question is mandatory and students have to do only 5 questions out of the rest 6 questions.

There are some important chapters of subject on which the complete exam depends viz. Standards on Auditing, Company Audit, Professional Ethics, Cost Audit, Internal Audit etc. But if we see the question paper of this attempt, it seems that there were various direct and indirect questions asked from the rest of the chapters, viz. Special Audit Assignments, Audit of Co-operative Societies, Report to Registrar, which all teachers and students considered less important as compared to above important chapters. This also seems quite disappointment for the students.

If we compare this attempt exam with the May2016 attempt exam of Audit, then we can notice that less case studies were asked in this exam while a lot of case studies were asked in May 2016 exam. Also less questions on Accounting Standards were asked this time as compared to May attempt exam.

From the student’s point of view, we can say that the AAPE exam was quite easy but unexpected.

I wish all the students a lot of ‘best wishes’ who have positively or confidently attempted the exam.

If you have any query relating to this exam, you can contact at info@calearning.in

 

CA IS A DREAM CAREER

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CA is an ever growing career which positively affects the society. You learn a lot in the three years of the training as an article in the different areas of professional expertise.  Remember always with the changes coming in the profession quickly in the Company Law, GST , IND-AS, there are numerous opportunities which are coming before the profession. Even the expectation of society from the CA profession has enhanced.

If we talk of Auditing , sunrise  sectors  of the forensic audit has come in to the picture. In the field of Information system auditing   ERP auditing, MIS compliance in reference to banking with reference to Basel 2 is now being implemented. IT Act has thrown lots of business opportunities also.

In the case of transitioning of financial reporting in India, Government of India is going to make IND- AS mandatory.  Hence it is expected that the professionals will get equipped with this knowledge properly.

The Company law is also going a change. Formats of compliances and legal provision between Company Law 1956 and Company Law 2013 is going through lots of changes which require lots of comparative study by the professionals. The industry is also watching close cooperation in this regard.

Emergence of Goods and Services Tax  popularly called as GST will bolster the Indian economy under 0%,5%,12%, 18% and 28% scheme of taxation which is being finalized by GST council. Hopefully it will be implemented in April 1, 2017.

At the overseas, CA are hot in demand. Almost major advanced countries consider this qualification valid. A few papers need to be cleared to gain entry in to these country’s qualification. The popular courses are CPA(USA), CPA ( Australia) and CIGA. In Gulf and Africa the Indian CA are considered as a valuable resources.

Hence CA profession is ever growing in its scope. It is required that CA should equip their knowledge diligently. Currently there are 260,000 CAs. Around 11,00,000 + students are enrolled at the various stages of the ICAI structure.

Also ICAI course is also going for change very soon on the International curriculum.  This will make ICAI profession well recognized in the perspective of the professional needs, industry and businessed.

 

To know more – http://calearning.in

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