India may face diesel dearth in Nov-Mar

India is likely to face a shortage of 2.5 million tonne of diesel during the November-March period, which would have to be met either through imports or from Reliance Industries' only-for-exports refinery. "The oil companies have told us that they will have a deficit of 2.5 million tonne from now till March," said S Sundareshan, Additional Secretary, Ministry of Petroleum and Natural Gas.IOC, Bharat Petroleum and Hindustan Petroleum have projected a cumulative diesel requirement of 1.05 million tonne for December to March, comprising 2,40,000 tonne of Euro-III diesel and 8,10,000 tonne of Euro-II grade fuel. If these quantities are not tied up with Reliance, the oil companies would have to turn to imports.However, diesel from Reliance's Jamnagar refinery can be bought only if government does away with double taxation, he said. Since Jamnagar has turned into an Export-Oriented Unit (EoU), any supply to domestic tariff area was levied with dual basic customs dut y and a double levy of special additional excise duty.For diesel these work out to Rs 6 a litre more in duties, which the oil companies say they cannot absorb given the fact that they already are losing over Rs 7 a litre on the sale of the fuel. “The matter is under examination and we hope a decision will b e taken (in time),'' said Sundareshan.

SOURCE: UTV

MCA to scan tax evasion cases

This could spell double trouble for tax-evading companies. The ministry of corporate affairs (MCA) has sought details from the Income-Tax
department of companies against whom tax-evasion charges have been framed. The ministry feels that scanning those records could unearth cases of violation of company law. While tax evasion can be settled through payment of penalty, many offences under company law are punishable as imprisonment for top managers. A proposal to establish a system wherein the ministry is kept updated on corporate I-T defaults is under consideration. Officials say the move will require setting up an information-sharing network between the two departments. The idea is to leverage on the I-T department’s data network to identify defaulting companies, and then examine if they have breached company law provisions. Experts do find logic in the move as evasion of taxes often results in distortion of numbers in the company’s financial results, an activity which constitutes an offence under the company law. Many companies, on being caught evading taxes, pay the penalty to the authorities and then shift the burden of it to their shareholders by fudging their financial records. A recent instance is the case of Mumbai-based Elder Pharma where the ministry procured details from the I-T department to initiate action against the company. The company, which is now being probed by the ministry’s Serious Fraud Investigation Office (SFIO) for altering its financial records, was earlier caught evading taxes. Officials feel that the proposal, if effectively implemented, could lead to a reduction in the number of tax evasion in the long term. While tax evaders in most cases shell out a penalty to move out of a prosecution, officials feel the present move might deter them from effecting similar offences. Company law provisions prescribe stricter punishment for offences, and in many cases carry an imprisonment for the offenders

Announcement for Final (New Course) Examinations in November 2008 -

Paper 8 : Indirect Tax Laws

It is clarified that in respect of taxable services covered in the syllabus of Paper 8 : Indirect Tax Laws, students will be examined only in respect of the following taxable services:

1. Franchise services

2. Intellectual property services *Financial services

3. Banking & other financial services

4. Credit rating agency’s services

5. Stock broking services * Transport of goods services

6. Goods transport agency’s services

7. Courier services

8. Mailing list compilation and mailing services

9. Transport of goods by air services

10. Clearing and forwarding services

11. Cargo handling services

12. Customs house agent’s services

13. Storage and warehousing services

14. Transport of goods through pipeline or other conduit

15. Transport of goods in containers by rail by any person, other than government railway * Professional Services

16. Practising chartered accountant’s services

17. Management or business consultancy services

18. Consulting engineer’s services

19. Scientific and technical consultancy services

20. Technical testing and analysis services

21. Market research services

22. Opinion poll services

23. Public relations services * Real estate & infrastructure services

24. Construction services in respect of commercial or industrial buildings or civil structures 25. Construction services in respect of residential complexes

26. Architect’s services

27. Real estate agent’s services

28. Site preparation and clearance, excavation, earthmoving and demolition services

29. Interior decorator’s services * Business services

30. Business auxiliary services

31. Business support services

32. Manpower recruitment or supply agency’s services

NEW LAW FOR REMOVING TIME LIMIT ON DIVIDEND CLAIM

The new company law proposes to remove the time limit for claiming dividend. The Companies Bill 2008 – recently cleared by the Cabinet and to be placed before Parliament soon – has removed the seven-year ceiling up to which unclaimed dividend remains safe in the government’s kitty. This means investors can claim their dividend even 10 years after declaration of dividend once the new Bill gets the approval of Parliament. Unclaimed dividend of investors is transferred to the Investor Education and Protection Fund (IEPF). The fund, which is maintained by the ministry of corporate affairs, allows claims only for seven years from the date of declaration of dividend. Officials in the ministry of corporate affairs say that the new law proposes to remove the time limit. This would mean that the rights of the investors to claim their unpaid dividend amounts credited to IEPF do not pass away. “The existing provisions on investor education and protection have been recast to ensure that the claim of an investor over a dividend not claimed for more than seven years is not extinguished,” an official in the ministry said. The idea, aimed at a safeguarding the interests of minority shareholders, would require the government to make statutory changes in the administration of IEPF. The new company law puts premium on the protection of investors rights. The ministry of corporate affairs is also known to have opposed the finance ministry’s stand that investor protection being the primary responsibility of market regulator Sebi, the investor protection fund should reside with the latter. Rejecting the finance ministry stand, the corporate affairs ministry had contended that investor protection was related to the corporate governance initiatives of the government and was necessary for safeguarding the interests of investors.

SOURCE: CA CLUB INDIA FORUM

INDIA POWERS ITS WAY INTO NUKE BIZ

Decks cleared for Indo-US deal, NSG bends guidelines to waive off sanctions
INDIA on Saturday powered its way into the global nuclear fold after the Nuclear Suppliers’ Group (NSG) rewrote its guidelines for resuming nuclear trade with New Delhi. The decision to admit India came after three days of intense diplomacy by the US in the nuclear cartel that controls the global flow of nuclear fuel and technologies.
The NSG’s acceptance of the US proposal to drop the ban on nuclear trade will now put the Indo-US nuclear deal on the fast track. The deal will now go to the US Congress for up-down approval before it adjourns in end September for elections.
Having failed to use its proxies effectively, China had come out in the open with its opposition to the deal. In a bid to prevent China hijacking the proceedings, US President George Bush wrote a letter to Chinese President Hu Jintao asking Beijing to support the India waiver. But the real opposition came from the non-proliferation ideologues — the Netherlands, Norway, Switzerland, Ireland, Austria and New Zealand — who were persuaded one by one constructive issue to run on between now and 2009 election. While the BJP has been engaged in fierce finger-pointing and blame-casting over the agreement, the hypersensitive people with overactive imagination in the Left have been concocting nightmares. A setback on the waiver would have complicated matters for both the ruling side and the prime minister.
Calling the waiver “a forward-looking and momentous decision,’’ the Prime Minister thanked the US and members of the NSG for granting the waiver “It is a recognition of India’s impeccable non-proliferation credentials and its status as a state with advanced nuclear technology,’’ Mr Singh said.
USPresident George Bushpraisedtheleadershipof the PM and appreciated the way he handled the negotiations. President Bush placed a call to Mr Singh soon after the waiver was announced in Vienna. The two leaders also discussed the next step of getting congressional approval for the 123 agreement.
External affairs minister Pranab Mukherjee, who has played pivotal role in the domestic battle on the deal,said that the waiver was consistent with the commitments given by the government to Parliament

Cabinet clears Companies Bill, 2008

Author : Shaleen Agrawal/DNAContent :
The Union Cabinet on Friday approved the Companies Bill, 2008, with an aim to encourage self-regulation by companies while making them more accountable.The Bill, expected to replace the existing Companies Act, 1956, does away with the criteria of minimum paid-up capital to start a company, provides for appointment of minimum 33% independent directors on board, and allows a single person to set up a company to encourage start-ups and entrepreneurship.Currently, entrepreneurs find it difficult to start new ventures in form of companies as the law asks them to have partners.The Bill also restricts corporations from issuing shares at a discount to prevent promoters from accumulating stake for a lesser price.The Bill is expected to be introduced in the coming session of the Parliament in October.It proposes relaxation in restrictions limiting the number of partners in entities such as partnership firms and banking companies to a maximum 100, with a ceiling on professions regulated by Special Acts."The Bill seeks to enable the corporate sector in India to operate in a regulatory environment of best international practices that fosters entrepreneurship, investment, and growth," science and technology minister Kapil Sibal said after the Cabinet meeting."It recognises insider trading by company directors as an offence with criminal liability," he said.The Bill proposes that rights of investors over dividend or security not claimed for more than 7 years be not taken away, so as to protect shareholders' interests.The chief executive officer, the chief financial officer and the company secretary will be recognised as the key management personnel. This, experts believe, will bring in more accountability into corporations' actions.A more effective regime has been provided for by inspection and investigations, and provisions of recovery and disgorgement have been included.The Bill also provides for special courts to deal with offences.It also proposes empowering the government to simplify the compliance regime for such companies.In other measures to promote simplicity, the Bill suggests ensuring speedy incorporation and promoting e-governance including filing of documents. It also suggests that the investor education and protection fund be administered by a statutory authority.As per the Bill, companies will not have the restriction on the number of subsidiaries. It proposes to make the consolidation of financial statements of subsidiaries with those of holding companies mandatory.Shareholders groups will be enabled to take legal actions in case of any fraudulent action. Further, regulation of insolvency, winding up and liquidation, have been made more effective.

ICAI, Infy to study norms to counter cartelisation

Accounting regulator Institute of Chartered Accountants of India (ICAI) has initiated a study that will look into the policy framework of mergers and acquisitions from the touchstone of competition laws. The move comes in the backdrop of apprehension in the government that price manipulation and cartelisation may have gripped key sectors such as cement, steel and telecom. The regulator, at a board meeting of its core research body Accounting Research Foundation (ARF) on Tuesday, decided to study the policy that governs joint ventures, and the regulatory safeguards to counter the ills of cartelisation. The research study has been initiated as part of the regulator’s MoU with information technology giant Infosys. “We encourage capacity-building measures for joint ventures. The idea of the study is to understand the causes and effects of cartels vis-à-vis joint ventures,” ICAI president Ved Jain told ET. Maintaining that the study is solely a research initiative of the regulator, Mr Jain said suggestions evolving from the study will be forwarded to the government. Cartelisation — which in simple terms means coming together of competing entities to distort competition — affects the consumer. While the government considers cartelisation a negative force in its efforts to contain the spiralling inflation, the country still lacks regulatory teeth to counter it. With market regulator MRTPC lacking teeth to rein in suspected cartel formations and the upcoming Competition Commission of India (CCI) yet to get its enforcement rights, the economy stands susceptible to such unethical business practices. The meeting, attended by Infosys officials, also approved a research proposal to study the process employed by domestic companies towards creation of intellectual assets and fostering a culture of intellectual property rights (IPR). The study lays its thrust on the needs and requirements for domestic companies in their endeavour to create a competitive structure of intellectual capital.
SOURCE: ECONOMIC TIMES

CITY LAD WHO HAS MADE CITY PROUD

RAGHAV SHARDA ON SECURING A.I.R 10 IN RECENTLY HELD CA FINAL EXAMS RECEIVING TROPHY IN SEMINAR ORGANISED BY CHANDIGARH BRANCH OF NIRC OF ICAI

Forex loss to get uni-track accounting

The ministry of corporate affairs is considering ways to bring uniformity between company law and accounting standards that require companies to declare their foreign exchange losses. The government’s concern stems from reported instances of domestic companies resorting to different accounting treatment for their mark-to-market (MTM) losses during the first quarter of 2008-09. The debate over foreign currency losses has resulted in companies adopting different accounting treatments. While some companies have relied on Institute of Chartered Accountants of India’s (ICAI) Accounting Standard (AS)-11 to show such losses in their profit-and-loss (P&L) account, many big corporate houses such as Reliance Industries (RIL), Reliance Communications (RComm) and Bharti Airtel have taken recourse to Schedule VI of the company law to not allow such losses to affect their Q1 net profit. “The ministry is taking the matter seriously and is considering bringing clarity to the provisions of the law,” officials told ET. While experts say the regulations mean both methods of accounting treatment are legally sustainable, officials maintain that action could be initiated against companies if found guilty. One option is to seek ICAI opinion on the regulatory overlap. ICAI president Ved Jain was earlier quoted as saying that companies should ideally report their MTM losses in their P&L statement. MTM losses for companies such as RIL, RComm, Bharti Airtel, Tata Steel and Tata Motors is estimated to run into hundreds of crores. RIL, RComm and Bharti Airtel took shelter under the Companies Act and kept such losses off their P&L account by adjusting them in their balance-sheet whereas companies such as Tata Steel, Tata Motors and Ranbaxy chose to reflect their MTM losses in the P&L account, resulting in lower net profit. Experts have favoured companies accounting their MTM losses as per AS-11, showing the losses in the P&L account. They have expressed discontent over the ministry’s lack of clarity on the issue. “The prevailing regulatory ambiguity will reinforce the global community’s distrust of Indian accounting standards,” an expert with an audit consultancy firm said.

Govt asks ICAI to prepare report on IPO valuation

In the wake of controversy relating to valuation of public issues, the government has directed the apex body of chartered accountants, ICAI, to conduct a study on the initial public offer pricing and suggest ways for protecting the interest of investors. "The government has asked the Institute of Chartered Accountants of India (ICAI) to study the issue of IPO valuation and system of stock movements. The ICAI will submit a report on the valuation of IPO in due course," Corporate Affairs Minister Prem Chand Gupta told reporters. "The ICAI study would take into account the practice followed in other countries as well as India and suggest ways for dealing with it," he said, adding that the apex body would also advise the government on making the whole process of IPO valuation more transparent.

When contacted, the ICAI President Ved Jain said that the institute has constituted a group of technical experts to study the issue of IPO valuation. The institute, he said, would compare the Indian practices with the best in the world and also study how the other countries have dealt with the problems concerning IPO valuation. The problem of the IPO valuation came to fore with public issue of some companies plunging below the issue price even on the listing day or afterwards, leaving investors high and dry. "... the tactical fight for market share (in the industry) is not likely to engage her for long. At some point, that role in government will beckon," the Fortune report had said. It further added that "Nooyi is an entirely different kind of CEO, a product of her native India as well as of PepsiCo's family-values approach to grooming CEOs." "... She is not hung up on pay... She is 52 years old and does not plan for this job to be her last. Her friend Henry Kissinger predicts that it is only a matter of time before she is plucked for a big Washington post, possibly a cabinet job, and Nooyi acknowledges that at some point, she'd like that." The report quoted Kissinger, who consults PepsiCo and other companies on international matters, as saying: "If you look at the job entirely from the American perspective, then it becomes impossible to run a global business." Fortune said that Nooyi was a "cosmopolitan, rigorously educated, and a strategic thinker" and her background of Boston Consulting Group makes her fit for "burgeoning markets in Russia and China than in the noisy US cola wars." "A dinner gathering at her house is as likely to include Tony Blair and government ministers from India or Mexico as traditional pinstriped business types," it noted. The top place on the Forbes list has been grabbed by Catherine Burzik of medical technology company Kinetics Concept, followed by Meg Whitman of internet auction giant eBay and Linda Lang of Jack in the Box, a US fast food chain. Other names in the list are Susan Ivey of Reynolds American (4th), Anne Stevens of speciality alloy manufacturer Carpenter Technology (5th), Andrea Jung of Avon Products (6th) and Western Union's Christina Gold at the seventh position. Nooyi was named among the top ten most powerful women in the world in a list prepared by Forbes late last year, which included people from areas of business, politics and entertainment among others.

ICAI Chartered Accountants to help CBI in economic offences

With economic offences seeing an increase, the CBI has written to the Institute of Chartered Accountants of India (ICAI) to probe the growing number of white collar crimes. "The CBI has already written to ICAI to provide expertise as and when required," says the new CBI Director Ashwani Kumar. Kumar, a 1973 batch IPS officer from Himachal Pradesh cadre, who took command of the premier investigating agency on August two, says the CBI has been giving special attention to economic offences ever since the outbreak of the 1992 Harshad Mehta scam. "We separated economic offences wing from general offences wing in 1992 and now we have full fledged five economic offences' wing functioning within the organisation," Kumar, 57, said here. Recalling that the agency was not well equipped when the "stupendous task" of securities scam was handed over to the CBI in 1992, he said, "Today, we have such good officers in the CBI who can take up any case of bank fraud." Now the agency is looking forward to have some chartered accountants who will coordinate with agency officials to probe the entire ramifications of economic offences.

ICAI issues new standards for internal checks in firms

ICAI issued four new standards to help companies streamline internal audits for minimising pilferage, ensuring cost efficiency and mitigating waste. This will standardise the process of internal checks in companies, and “companies can now expect that professionals engaged in internal audits will be rendering services of such standards as being issued by the institute,” ICAI president Ved Jain said. The institute has already issued three standards for internal audit. Management appoints chartered accountants to conduct such checks for detecting the anomalies in the management system through internal audit.

Mukesh Ambani warned by Mujahideen

The e-mail of Indian Mujahideen, which has claimed responsibility for the terror strikes in Ahmedabad, has warned of dire consequences to some politicians and business heads, prompting authorities to increase their security.
In its 14-page email, the militant outfit, believed to be a shadow amalgam of the banned Students Islamic Movement of India and Pakistan-based Lashker-e-Tayiba, warned Maharashtra Chief Minister Vilasrao Deshmukh and his deputy R R Patil of dire consequences over the alleged targeting of minority communities in that state.
"We wonder at your memory. Have you forgotten the evening of July 11, 2006, so quickly and so easily?" the e-mail warned.
Reliance Industries chairman Mukesh Ambani also figured in the e-mail in which he was asked to "think-twice" before "usurping and building a citadel on a land in Mumbai that belongs to the Waqf board.
"Lest it turns into horrifying memories for you which you will never ever forget," the e-mail said.
There was a warning for the UP Bar Council, too, for their repeated stand of not taking up cases of Muslims.
For the high-profile VIPs and VVIPs on the central security list, preventive measures have already been placed and for those on state list, authorities concerned have been asked to take up necessary steps, sources in the Union Home Ministry said in Delhi.