what is expected? doubts information any other.. what is the advantage of employment vs practice
TRANSCRIPT
Tax Practice Management
What Is Expected?DoubtsInformationAny other..
What is the advantage of Employment Vs Practice
What is the Scope?Direct Tax Collections – 6 Lakhs CroresIDT Collection – 12 Lakh CroresCredits in IDT – 30 Lakhs CroresCost of Tax in Manuf. / Trading Sector – 25-
30%Cost of Tax in Services sector – 15-20%
Home Work – Analysis of Balance Sheet + Profit &
Loss Account
MYTHSSimplicity in the legislations will reduce the
opportunities in tax practice- Is it getting simpler?
Too many members in practice, and new entrants will not have opportunities- True in case of traditional areas + a generalist
A. One Stop SolutionB. Specialist
Which is better?
New Areas Opening?1. FTP, DGFT, 2. Domestic/ International Transfer pricing for
SME, 3. Customs + FEMA,4. Operational Audits [ Internal] 5. Insurance, Environmental audit, 6. CSR consultants 7. + Many others..
MYTHSPractice is monotonous – Very invigorating if
you love what you do- Mindset – Choose what you like or like what you have chosen - Exercise
CA seen as business advisor?- All large corporate now work as SBUs, SPVs, Person in charge responsible.
Less remunerative in the initial stages – Yes- However in long term – self-satisfying, comfortable, eternal commendation, name/ fame
Each generation goes further than the generation preceding it, because it stands on the shoulders of that generation. You will have opportunities beyond anything you've ever known.
Ronald Reagan- Former US President
IFAC- International Federation of Accountants- Role of a Professional
Creator of Value
By taking leadership roles in the design and implementation of strategies, policies, plans, structures, and governance measures that set the course for delivering sustainable value creation.
-> What model? LTU, SEZ, Thru JW – Trader, Service provider or manufacturer
-> Where located? Tax holiday areas-> Tax OptimisationTo start with compliances and
move up till you reach here.
Enabler of ValueBy informing and guiding managerial and
operational decision making and implementation of strategy for achieving sustainable value creation, and the planning, monitoring, and improvement of supporting processes.
-> SOP for tax: Internal control-> Technology usage-> Training of employees-> Hand Holding in Implementation periodValue Addition is Key – Each SBU/ SPV
wants good results- Knowledge of SBU/ SPV Critical
Preserver of ValueBy ensuring the protection of a sustainable
value creation strategy against strategic, operational, and financial risks, and ensuring compliance with regulations, standards, and good practices.
-> Internal / operational/ management audit to include Tax [ DT + IDT]
-> Plan for changing laws – New Co law, GST…
-> Disclosure of facts- No surprisesEmpathy; Current Global/ Indian Environment;Impact of Law, regulation broadly – to provide
specialised advice in area of your specialisation
Reporter of Value
By enabling the transparent communication of the delivery of sustainable value to stakeholders.
-> Credibility of Financial Statements- > Quarterly reporting-> Independent Authentic certification
Statutory/ Income Tax/ Vat 240 Audits, Internal Audit, Certification – TDS, Credits, Refund, Liability…Independence + No bias
+ Professional Skepticism
Traditional Areas for CAsAccounting – Not unless huge nos + HR skills
Tax Audit VAT 240 Audit – Limitation of fees- huge risk.
Company Audits – Limitation of fees- Huge risk
Internal Audit – Can be grown into a great compliance exercise covering Regulatory + Tax Compliance + Operational aspects
Financial Service – Raising of fund from bank/ Fin Inst.
What the Industry / Trade wantsOne Stop Shop- Multidisciplinary Vs
Specialised Niche Professional ServiceEnd to End – take responsibility for
complianceBusiness Advice [ confirmation- validation] Problem To be solvedReduction in costs/ time to resolve Ensuring benefits accrue as dueAll function by consultant to provide value
addition
What the Industry / Trade wantsSaving in resource costsOptimisation of credits [ Deferred Tax/ CST/
VAT/ CE/ ST] Cashing in of Refunds/ IncentivesGovernance/ safeguard that things all rightConsistent [ Can a proprietor provide?] Speedy Solution- Expect you resolve after
they have slept over matter….many more
General Areas of Tax PracticeRegistration/ Amendment- proceduralInitial disclosures/ procedures to the dept.Payment of duty/taxes after verificationCertification under IT [ Deduction, credits] Periodical return verification and submissionPeriodical review of IT/VAT/ CE/CUS/STReview of the above before departmental
auditAssistance in dealing with routine letters
Specialized Area of Tax PracticeProviding opinions/clarificationsTransfer PricingTransaction StructuringLocation AdviceImpact on the changes-budget, notifications,
case lawsObtaining refundsRectification of errors made earlier
Specialized Area of Tax PracticeReply to the departmental letterReply to the Show cause noticeLitigation- Representation before
adjudicating authorityReply and representation at appellate forumsAssistance to lawyers at High Court/Supreme
Court
Expertise obtained by:Start by choosing area and persevere
[ Demand Vs Supply, Strengths, Strong suits ]Reading/ discussing subject/ enroll in courseInvest in e-resources + books + online sitesAttending workshops/ seminarsTeaching the Subject to College students/
juniorsWriting articles/booksBeing a speaker to other members in the
industry/departmental officials
Baby StepsProprietorship Vs Partnership Vs LLP * Friends, Family, Neighbors, Principal, Piggy
back on CA (assignments), Start networking with peers
Professional Approach to clients – get needs in writing or communicate back in writing -> get a goods understanding of the client -> deliver a bit more than being paid. [ Initial stages opportunity more important than fees.]
Baby StepsBe sure you want to practiceInitial stages build rapport and reputation
[ Work on your strength]Identify mentor – role modelGet into buddy structure – make someone
responsible to question you along with authority to do so.
Birds of the same feather flock together
Unscrupulous Officers Increasing - Reasons !!!
1. Environment - Ethics, integrity and honesty - back seat ?
• Some Citizens/ professionals and corporate - go to any extent to avoid payment of bribes
• Bribery - way of life – feeling of better off – officer would anyway harass them
Are we forced to do so?
2. Whether able to have respect of the employees, customers, suppliers and tax dept. - moot question
• does not like to indulge in demeaning practice – majority
• but may have to adopt - avoid harassment and unending litigation
• Ethical professional could be a support and unethical means would reduce substantially
• Majority of transaction / tax payers find - need not do distasteful practice - bribe offering / taking automatically reduce
• Youth today are concerned – not find bribing as “cool” as it was earlier
• Not paying is “cool” 3. Tax officers use certain tools for
starting off the exercise from pliable tax payers
More Reasons..
4. Feeling among some professionals without compromising [paying bribe] - cannot survive
• Work may be faster by compromising – high cost
5. MNCs - inbuilt understanding - not to violate any laws in the country
• Largest business houses like Infosys, Wipro, Tata, GE group on record to say - do not encourage this method of doing things
Reasons …
• Most big businesses follows tax laws - avoids evasion other than a few wayward industries
• Enterprises contributing almost 70% of corporate taxes / indirect taxes - require ethical professionals
6. Reality - Ethical practitioners have great self respect
• revenue department also respects • not only surviving but are flourishing
Possible Defense• General fishing enquiries seeking large amount of
information: Seek reasons, provide sample bills. If doubt raised, even orally, put answer in writing• Calling incessantly seeking meeting: Fact maybe recorded and letter sent asking queries in writing. Maybe if too much mark a copy to higher officer - send by RPAD• Threat of raid/ summons/ seizure: Dealings are clear / records updated - no need of fear - put threat on record and intimate higher officer • Non communication, delay in application, indecision:Reminders with escalation to higher officers . If information block exists - RTI an alternative
Possible Defense• Audit- making up long list of non compliances and
offering to drop issues: Self audit - many issues would be resolved or ready answers to expected issues could be ready.• Once demand raised, assistance in getting the
same dropped: Process of order - inbuilt appeal mechanism. When compromises agreed - sword of Damocles always hangs. • Refund applications are a major area of
corruption:Correspondences in writing and escalate when needed.• Many others: Tax payers to be vigilant and
updated on ever changing laws. There should be an Independent ombudsman in every department
Move to higher levelOwn/ shared office – If possible good locationSystematic Operating methodEmpathy par ordinaryUse acknowledgment as toolHire after careful screening and interviewing
– article to wholeheartedly agree with firms philosophy
Train yourself and staff every weekGain visibility
..is a process for providing competitive advantage and adding benefits in order to maximize the total value to the customer.
.. is the commitment to providing value added services to external and internal customers, including attitude knowledge, technical support and quality of service in a timely manner.
What is Client Interfacing
The organization fails to recognize the extent of the customer interface and its effects.
The organization reacts to transitioning to a new business paradigm with discontent and resistance.
CAs promise the world and fail to point out any tradeoffs that are involved.
CAs are insensitive to specialized customer requirements.
Customers fail to recognize benefits properly and see only the loss of flexibility.
Loud claims- falling short, not delivering what you promised
Clients value confidentiality- Like doctor – you know something which no one knows
Practice Risks
Growth of PracticeAddressable market for servicesPositioning oneselfClient AcquisitionClient RetentionShare of Client spendClient RecommendationCA Recommendation – Only if no conflict Balance Between execution + running
professionContinuous learning
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.”
Jeff Bezos, CEO Amazon.com
