Vivek Kedia

Dismisses challenge to show cause notice premised on audit findings : HC Delhi Magicon Impex Private Limited Ruling : Delhi HC dismisses challenge to show cause notice (SCN) by holding that “SCN may be premised on the findings of the audit report, the same is within the statutory framework.”; Pursuant to an audit, SCN as per section 74 was issued; On receipt of multiple audit memos, the same not only indicated the findings of the auditors, but also called upon the assessee to pay tax as determined, along with the interest and penalties as applicable; Besides, clarifies that “Any irregularities in issuing the audit memos does not impinge the validity of the impugned SCN”; Thus, concluding that SCN cannot be set aside at ‘threshold stage’ disposes of the petition with a direction to Adjudicating Authority to consider the response to SCN, if filed by Assessee #GST #GSTLitigation #GSTUpdates #GSTCompliances #GSTNews

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🔴 Big News: ICAI takes disciplinary action against EY affiliates 😳 What really happened? Let’s take a look ⬇️ For the first time, ICAI has passed such an order. 🤔 What’s the order? → ICAI has charged 3 EY India affiliates as guilty of professional misconduct.  → Reprimanded 2 of the firm’s partners of breaches of CA Act 🧐 Why? Because of the matter of dealings between Indian arms of EY & Global EY network firms (which are not regulated in India) ➡️ Entities charged are: → SR Batliboi & Associates → SRBC & Co. LLP → S. R. Batliboi & Co. LLP (all are network firms of EY in India) 👉 What kind of dealings are we talking about here? 🔹 EY affiliates had paid referral fees to EY Global and EY EMEIA (Europe, Middle East, India & Africa), which is against the Chartered Accountants Act’s guidelines as these firms are not regulated in India. 🔹 EY entities were using of email addresses and visiting cards advertising their global affiliates which meant publicity for a foreign audit firm in India not regulated here (again, a contravention of the CA Act). ❌ Disciplinary Action: As a result, a disciplinary action has been taken against them. ICAI has deregistered the partners from membership of ICAI for 3 years! (DAMN, that’s harsh) 👉 There’s also some politics going on. 🔹 The ICAI has been critical of the local entities of global accounting network firms (Big 4s - Deloitte, KPMG, PwC, and EY), arguing whether these BIG 4s are really local just because they have entities registered here. 🔹In 2018, the Supreme Court of India asked the Government of India Official to form a committee to look into the aspects of these firms' operations in India. 🔹The committee concluded that the term "multinational accounting firms" (MAF) was a misnomer, as these Indian network firms are neither owned nor controlled by the international network/entity. EY's response? 🔴 SRBC & Co LLP expressed disappointment with the order, emphasizing their respect for rules and laws, and indicated they are considering all available legal remedies. Conclusion? ✔ ️ICAI's decision serve as a reminder of the importance of ensuring that international firms operating in India comply with local regulations. What are your views on the same? Follow CA Archit Agarwal for more such insightful posts on Big 4s. Follow Thinking Bridge if you want to get Practical Training in Finance. #ey #big4 #icai #srbatliboi #professionalmisconduct

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✅ The current tussle of NFRA and ICAI over the adoption of ISA 600 issued by the International Auditing and Assurance Standards Board (IAASB) will be an interesting one. ✔️ I hope the newspaper reports are correct and this matter will be deliberated in the upcoming ICAI council meeting. ✔️ #India generally converges the international standards instead of adopting. Some carve-outs and carve-ins are always there. ✔️ In india, seperate component auditors are appointed in banking, insurance sector and some other public sector companies. ✔️ Lets wait for the response from ICAI council. I am sure Council will also take the views of partners from Big firms and eminent Chartered Accountants. ✔️ #MCA should mediate as it is the parent body of both #ICAI and #NFRA. ▶️ Views are personal.

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Join us today for the Panel Discussion on "2nd Accounting Standards Day" starting at 02:30 PM at NDMC Convention Centre, CP, New Delhi. We'll be joined by experts to delve into the below:- 📌 Framework, Formats & Applicability of Accounting Standards 📌 Critical aspects of assets related standards 📌Critical aspects of Liabilities & Expense related standards 📌 Critical aspects of Revenue related standards For further details refer attached flyer. #AccountingStandardsDay #Accounting #NewDelhi

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✅ Breaking News The Institute of Chartered Accountants of India has issued #SQM1 and #SQM2 which are based on ISQMs issued by #IAASB. Here is the link to access the whole announcement : https://lnkd.in/gGkCuRPR ▶️ SQMs will replace the existing SCQ1. ▶️ Please carefully note the effective date mentioned in the respective SQM. ▶️ Whether these SQMs will be notified under Companies Act 2013 as well? ♂️ Please share your thoughts. For more such posts, you may follow CA. Devender Pandey 🇮🇳

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CPE Hours - Some Important points to note from the CPE Statement 2023, are as follows: 1. 2 CPE hours each on the topics “Code of ethics” and “Standard on auditing” were mandatory till Calendar year 2023 only. These are Recommendatory from Calendar Year 2024 onwards. 2. Due to introduction of Consequential Provisions from Calendar year 2024 onwards the last date of completion and submission of Self Declaration Form for claiming Unstructured hours (ULA) from Calendar year 2024 is preponed to 31st December of every year. 3. Member is exempted to comply with CPE Compliance only for the particular Calendar year during which he/she gets membership for the first time. 4. Member can Complete its Structured learning requirements using indicative list of eligible CPE Structured Learning Activities available at Advisory on Structured Learning (revised) 5. In case member Surrendering & Obtaining COP during/in between any Calendar Year than Applicability of CPE requirements are as follows: Applicability of CPE requirements in case ofPeriodSurrendering of COPObtaining of COPFrom 1st January to 30th JuneNon-COP holderCOP holder1st July to 31st DecemberCOP holderNon-COP holder 6. Out of 20 Structured CPE Hours which is mandatory to be completed by Members below 60 years and holding COP, in each Calendar year, 4 Structured CPE Hours can be completed in virtual mode through Digital Learning Hub till any further modification. 7. There is actual credit of Structured CPE hours for Completion of Certificate/Diploma Courses (Virtual/Physical) conducted by Central Committees of ICAI. 8. Further it may kindly be noted that crediting of CPE hours for any CPE Event would be effective in the Calendar year in which event is concluding. CPE Hours Status: You can view your updated CPE hours status by logging into the CPE Portal at www.cpeicai.org. Use your six-digit membership number as the User ID and the default password format: cpe+6 digit membership number. Therefore, Members are again requested to complete and claim their CPE hours requirements (structured/unstructured) for the current Calendar year (2024) in timely manner without any delay - latest by 31st December, 2024. To avoid any hardship and to ensure compliance as per Continuing Professional Education Statement, 2023, we once again urge you to review your current CPE hours status on the CPE Portal www.cpeicai.org. Updated CPE Statement for your consideration is attached. #ICAI #CPEHours

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📢 ICAI Elections 2024 It’s heartening to see many professional colleagues raising concerns about ICAI elections and governance. Among these concerns is the use of ICAI funds for seminars and conferences, which may indirectly benefit #Council members. In my personal view, proving such a claim is challenging. Some of these programs are genuinely beneficial and align with the Continuing Professional Education (CPE) requirements. While the decision-making process around these programs and fund allocation is a separate debate, there is an opportunity for practicing members to derive indirect benefits if approached strategically. These programs allow CCMs to stay connected with faculties, speakers, moderators, and of course CA influencers, creating a strong professional network. For practicing members, this is a positive development. However, members in the industry might feel overlooked, as their specific needs often remain underrepresented in such initiatives. Rather than expecting too much, members can leverage these programs as effective networking #opportunities. Who knows? You might find yourself as the next speaker or moderator at one of these events! What’s your take on these programs? Share your thoughts in the comments. ♂️ Let’s keep this conversation going! 🔔 Follow CA. Devender Pandey 🇮🇳 for more discussions. CA Ronak Khandelwal (ACA, CCCA, CGST) Sanjay Joshi #ICAI #Governance #Elections2024

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• The NFRA fined M/s Venkatesh & Co ₹2 crore for professional misconduct in the 2019-20 Coffee Day Enterprises audit. • Auditors Dasaraty V and Desikan G were banned for 10 and 5 years, respectively. • Dasaraty was also fined ₹10 lakh, and Desikan ₹5 lakh. • The penalties stemmed from a Sebi report revealing a ₹3,535 crore fund diversion from Coffee Day subsidiaries to Mysore Amalgamated Coffee Estate Limited. • The auditors failed to report the fraud and protect public interest. • The order will take effect after 30 days. • In August, NFRA fined KPMG affiliate M/s BSR & Associates LLP ₹10 crore and debarred two auditors for lapses in the 2018-19 Coffee Day audit.

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 🔵 Audit Will Not Be Same Anymore :( For good or for bad? Here’s everything you MUST KNOW 👇 The National Financial Reporting Authority (NFRA) has launched a BOLD reform to overhaul the way auditors verify corporate financials in India. NFRA is revising all 38 Auditing Standards & two Quality Management Standards set by The Institute of Chartered Accountants of India. This is huge because, in the current practice, Auditing Standards issued by the ICAI are deemed final. SA 600 is already in process which deals with consolidated financial statements of business with more updates expected soon. 🧐 Why such reforms are needed? The move comes after corporate scandals like Satyam, IL&FS, and others highlighted the need for stricter audits and accountability. NFRA’s approach might have caused some disagreements with ICAI, but this isn’t a conflict. It’s about meeting the mandate of Section 143(10) of the Companies Act, 2013. Quiz for Smart CAs: What is the mandate of Sec 143(10) of CA’2013? Correct answer will get a “Practical Audit Resource”. Let’s gooo! My fellow CAs, what do you think about this BOLD move of NFRA? Would love to read your take on this. #AuditingStandards #NFRA #ICAI #AccountingStandards

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Hope BRS / KPMG has insurance cover. Good they get punished like this. Insurance should be disallowed for such penalties actually https://lnkd.in/dTPbMAkB

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ICAI Releases SQM 1 and SQM 2: A Game-Changer for Audit Firms ICAI has introduced two new standards—SQM 1 (Quality Management for Firms) and SQM 2 (Engagement Quality Reviews)—to elevate quality management in audit firms. SQM 1: Quality Management for Firms ✅Applicable to firms conducting audits, reviews, and assurance services. ✅Focus: Establishing a risk-based quality management system covering leadership, ethics, client acceptance, performance, resources, communication, and monitoring. SQM 2: Engagement Quality Reviews ✅Applies to engagements requiring independent quality reviews. ✅Ensures engagement quality through competent, independent reviewers, covering significant judgments and documentation. Challenges for Non-Big Four Firms ✅Resource constraints, training, and technology adaptation. Preparedness Tips ✅Early implementation, staff training, resource allocation, and investment in audit technology. By addressing these areas, Non-Big Four firms can smoothly transition to the new standards and uphold high-quality engagements. Ref the link to download standards #NFRA #Audit #ICAI #StandardsonAudit

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CIRCULAR ON EMERGING MATTERS IN THE PAYMENT OF VOLUNTARY CONTRIBUTION UNDER THE CONTRIBUTORY PENSION SCHEME The National Pension Commission (PenCom) has enhanced the processes of voluntary contribution (VC) in a significant move aimed at improving the contributory pension scheme (CPS). In response to feedback from licensed pension fund operators (LPFOs), PenCom issued a circular to LPFOs to address significant concerns raised by contributors and retirees regarding voluntary contributions. REDUCED RETENTION PERIOD Mandatory and non-mandatory contributors can now access the 50 percent contingent portion of their voluntary contributions after one year, which is a reduction from the previous two-year requirement. This change aims to provide speedy access to funds in order to meet personal needs, which often arise. UNIFORM WITHDRAWAL RULES Retirees, exempted contributors, political office holders, employees in organisations with an AES, and foreigners are now permitted to withdraw 50 percent of their voluntary contributions before the expiration of their employment or contract. This provision seeks to eliminate withdrawal variations in the previous guidelines. TAX DEDUCTIONS In line with section 10 (4) of the PRA 2014, any income accrued on voluntary contributions are taxable according to relevant tax laws if the withdrawal is made before five years from the date of contribution. This clarification ensures consistency with the Act and addresses concerns raised by stakeholders. Please read on 👉

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“Better safe than sorry” Sharing a very important chapter “penalties on auditor” from Company Audit Series by CA. Pramod Jain

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Re-opening of ITC Reversal Reporting Opening Balance GSTIN has recently issued advisory dated 17 September 2024 with regards to ‘Re-opening of ITC Reversal Reporting Opening Balance’. Below are the relevant points encapsulated for ease of reference: Background: In July 2022, vide Notification No.14/2022- Central Tax dated 05 July 2022 read with circular 170/02/2022-GST dated 6 July 2022, Government (‘GOI’) had introduced certain changes in Table 4 of Form GSTR-3B regarding availment & reversal of ITC along-with reporting of re-claimed and ineligible ITC. Advisory: Vide the enclosed advisory GOI has extended the timelines for reporting the opening balance in the Electronic Credit Reversal and Re-claimed Statement, as outlined below: 1. The functionality for reporting the opening balance will be accessible from 15 September 2024 until 31 October 2024. Amendments to the declared opening balance can be made until 30 November 2024. 2. Monthly filers should report opening balance considering ITC reversals made up to the return period of July 2023, since balances of subsequent period are already appearing in the ledger. 3. Quarterly filers should report opening balances for the first quarter of FY 2023-24, considering ITC reversals for the period ending June 2023 since balances of subsequent period are already appearing in the ledger. 4. It is pertinent to note that no further extensions will be granted for reporting the opening balance and the system will soon prevent the re-claim of ITC beyond the amount previously reversed. Therefore, taxpayers will be able to reclaim ITC up to the balance available in their Electronic Credit Reversal and Re-claimed Statement.

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Update on GSTR-1A: A Game-Changer for GST Compliance! The introduction of GSTR-1A in August 2024 has added a new layer of flexibility to GST compliance. This optional form allows taxpayers to amend or add details to their outward supply data already filed in GSTR-1, ensuring accuracy and reducing errors before filing GSTR-3B. What You Need to Know About GSTR-1A: 1️⃣ Optional Filing: Use it only if corrections or updates are needed after submitting GSTR-1. 2️⃣ Timing: File GSTR-1A before GSTR-3B for the same tax period. 3️⃣ Scope: Amend invoice-wise details, debit/credit notes, or consolidated supply data. 4️⃣ Restrictions: GSTIN changes must be made in the next GSTR-1, not GSTR-1A. 5️⃣ Compliance Note: If saved but not filed, GSTR-3B cannot proceed until GSTR-1A is either filed or reset. This move enhances transparency and helps businesses align their GST returns with actual transactions seamlessly. For those managing GST compliance, this is an opportunity to rectify errors efficiently and maintain error-free filings.

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Recent media reports indicating that India may further delay implementation of Pillar Two/ Global Minimum Tax (GMT) rules should come as no surprise. OECD’s GMT rules has certain design related issues which need a wider and more comprehensive consultation before implementation. The model rules as drafted by the OECD is complicated and would be difficult for countries to simply add to their pre-existing tax systems without considering interaction with current national and international tax rules. This level of complexity might be difficult for developing countries such as India to handle whose priority should be to rationalise and improve the existing tax system. With additional revenues from GMT expected to be meagre, there may be no incentive for India to rush through with the same. Further, in the Indian context, GMT rules as designed by the OECD may raise fundamental questions around issues such as nexus and extra-territoriality as well as concerns around fiscal sovereignty which need to be thoroughly examined. With the current focus of the Government on “simplification” of the Income tax law, it would be counter intuitive to expect a concurrent introduction of GMT which can only add another layer of complexity! https://lnkd.in/gYdcFivR

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Sharing the 10th Chapter – “Clause 21” of #TaxAudit Series – Version 4.0, which is available at https://lnkd.in/gSi_qBxp In this chapter, practical aspects of Clause 21 of #FORM3CD containing 9 sub-clauses and 16 sub-sub clauses related to amounts not allowed as deduction due to being of personal, capital, etc. in nature, non-deduction of #TDS, amounts inadmissible u/s 40(b), 40A(3), 40A(7), 14A, 36(1)(iii), etc. are discussed. The chapter also contains the link to earlier chapters. I hope this would be of use.

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NFRA vs. ICAI: The Audit Standards Debate The National Financial Reporting Authority (NFRA) and the Institute of Chartered Accountants of India (ICAI) are at odds over proposed changes to audit standard SA 600 ¹ ². What's the Issue? NFRA wants to align SA 600 with international standards, making principal auditors accountable for subsidiary audits. ICAI fears this will concentrate the audit market in a few hands, harming small practitioners ¹ ². Key Concerns: - Concentration of Market: ICAI worries that revising SA 600 will lead to bigger firms dominating the audit market, pushing out smaller firms ¹. - Principal Auditor's Responsibility: NFRA proposes holding principal auditors accountable for subsidiary audits, which ICAI believes is unfair ². - Impact on Small Firms: ICAI claims that 97,000 small CA firms will be affected if NFRA's changes are implemented [2). The Way Forward: ICAI suggests improving processes and implementing additional checks and balances instead of revising SA 600 ². NFRA's goal is to enhance audit quality and reliability, crucial for India's growing economy ¹. https://lnkd.in/gqBgbm5Q Share your thoughts on this controversy. How can NFRA and ICAI find a balance between audit quality and supporting small practitioners? Let's discuss! 💬 #NFRA #ICAI #AuditStandards #SA600 #Accounting #Finance #India

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