Professional Opportunities
The chartered accountant is a versatile professional who has unparallel practical exposure
and a tough examination. They certainly top among 1-2 % of the population in terms of
education and knowledge. The area of Service tax practice may not be much different from the
practice in direct taxes, which is much more familiar to this community. The younger members
have had this subject as a part of their curriculum, who may enjoy a slight advantage. The
respect for the practitioner in this area is generally much higher due to the lack of
professionals in this area along with low awareness of this law. The compensation would also
be significantly higher as well as the stakes involved especially in litigation.
Some of the areas where services are already being provided in metros as well as tier
2 cities are as under:
1. Where there are large projects in government or commercial sphere by proper
tax planning: Indirect tax costs which could form up to 25% of value, (Excise 12% +VAT 13%/
Service Tax 12% + Misc taxes 2%) could be reduced, by structuring the transaction in such a
way, ensuring the pricing is competitive. The professional accountants with their knowledge
could guide the client in structuring the transaction such as examining the transaction
ascertaining the nature of customer, whether the customers could avail credit, obtaining dealer
registration in order to pass on the credit etc. Thus, a professional plays a vital role in
reducing the tax burden and making the price of the product more competitive.
2. Initial Registration: Registration is deemed and it is one of services that could be of
help to the client and it does not take too many days. The confirmation with the negative list
that the clients service is not excluded and with exemptions to ensure that the same is not
exempted maybe value additive areas at that point of time.
Further, professionals could ensure that the right information was disclosed during registration
in order to avoid future hassles. Also they could ensure that all the information as required
was duly provided in the registration process in order to avoid the delay in obtaining
registration.
3. Initial Disclosures to department: Initial disclosures made to the department such as
books of accounts maintained, procedures followed by the assessee, copies of documents
including intimation about important contracts and tax treatment with respect to the same, play
a significant role which most of the assessees tend to overlook. Thus, initial disclosures made
to the department could save an assessee from being assessed to tax from extended period of
limitation [5 years] and imposition of penalties under section 78 of Finance Act or Section
11AC of Central Excise Act.
4. Initial Procedures: As the assessee would not be aware of the law, Chartered
Accountants can explore the opportunity of providing the initial hand holding exercise, wherein
for the initial few months of operations, CAs could assist/ guide the assessee in maintaining
the accounts, raising the bills, drafting quotation, filing of returns, payment of service tax,
calculation of interest standard operating procedures, controls to be instituted.
5. Monthly/ Quarterly payment of Tax/ duties: Assessees having multi dimensional
activity, having to comply with different laws, would welcome outsourcing of its tax
computation and tax remittance activity, so that the assessee is not burdened with tax
compliance work, enabling them to carry out their routine work.
6. Return Verification/ Filing of returns/ filing of bill of entry: Where the client was
keeping records and passing entries but was not abreast with latest amendment etc,
professionals could explore an opportunity of reviewing the returns, ensuring the tax returns
depict true and correct information, avoiding litigation hassles. A basic understanding of law
and Information technology would help in this service.
7. Service Tax Review and Quarterly Audit: Chartered Accountants could provide a
value addition review audit, wherein the CA could examine if the eligible tax credits are duly
availed, documentation for availing credits, classification of goods/ services, filing of returns in
time, availing the benefits of exemptions, disclosures made to department, exploring the
opportunity of job work transaction, making payments under protest when the levy was
unconstitutional etc As CA’s practice in the area of attest function, but never concentrate on
value additional function, which could be a better remunerative job provided CAs provide value
addition to their work. In the nutshell review of IDT transaction along with internal audit or as a
separate service would really create value addition to the clients.
8. Review just before departmental audit: Professional could take up reviews
immediately prior to start of departmental audit. Such a review could provide the assessee an
opportunity to ascertain the grey areas and possible risk associated with it. It also provides the
assessee an opportunity to take immediate action to rectify the grey areas and mitigate the
risk of hefty demand notices along with interest and penalty. It also provides a feeling of
comfort that major issues/ possible errors have been examined.
9. Assistance during departmental IAP or CAG audit: These audits are dreaded by the
tax payer who normally has a very limited knowledge of the provisions and rules. Therefore a
knowledgeable professional CA is needed who can interface with the department. Such
assistance could really provide a great value addition to the client. As CAs would be abreast with all the latest amendments, notification etc, it would restrict departmental officers from
exposing the clients to unwarranted issues, committing false statements etc which could
create problems to the assessee at the higher forums during litigation.
10. Opinions/ Clarifications: Where the IDT consulting is given by a CA over a number of
years, whether industry is doing well or not the client could be able to structure optimally his
availment of credits, payments towards liability of service tax, thus ensuring smooth cash flow
to other aspects of his business. The CA with a good idea of business is an ideal professional
for this.
11. Transaction structuring: Chartered Accountants would play a vital role in area of
transaction structuring, as transaction structuring plays a significant role in tax planning, credit
availing and utilization, input service distribution, centralized registration etc. The impact of
which would result in litigation free business, due compliance with the law and also
overcoming uncertain tax laws.
12. Effect of Budget/ recent changes on activity: Updating and getting abreast with the
budget changes, its implications on the existing business practice and alteration of business
practice in case of negative impact due to such amendment, would also play an important role.
Therefore CA can look into this area of professional opportunity.
13. Refunds of Service Tax: Today assisting the client in complying with information,
documentation and collation of data for the purpose of applying for refund of service tax and
excise, provides an opportunity. However this area of practice requires high ethical standards
to be followed.
14. Past errors rectification: Compliance with least difficulty considering the various
exemptions, date of applicability, availment of credits, voluntarily to avoid penalties.
15. Departmental letter reply: Almost every departmental audit has 6-20 or more
objections. A reasoned reply provided to the audits by professional with extracts of the law/
circulars or Tribunal Judgments may eliminate 90% of the points, which in turn would result in
low probability of litigation.
16. Show Cause Notice Reply: The best learning (as also the earnings) generally come
to the professional when he/ she handles the SCN reply as the result would also determine
where he is perceived to be. At this point the professional should let the client know the
chances in writing / mail so that there is no scope for disappointment. The law is developing
and at times is neither equitable nor reasonable and therefore false assurances are to be
avoided to keep up credibility.
17. Representation before adjudicating authority: This normally follows the SCN reply.
All the important evidences and defenses and factual issues should be put forward at this
point as is possible to get all the necessary details.
18. Reply/ Representation at appellate forums: As in reply and representation at the
Commissioner Appeals stage and Tribunal stage where large stakes are involved the
assistance of an experienced pleader whether a CA or advocate maybe sought.
19. Assistance to advocate at High Court/ Supreme Court: As the professionals cannot
represent they can play the role of advising the advocates.
20. Outsourcing of the Function: Many MNC would be keen to outsource this uncertain
law to professionals who would account, file returns, litigate if necessary. In other words, it is
the professional who would take responsibility and own this function for the client.
21. Other Area: These could be in training/ teaching, writing articles, assisting in drafting
the notification or authoring. Training could be like weekly training sessions to the clients,
altering the transaction structuring due to change in the law.
However, before making his/her selection, the professional should remember that the subject
of service tax is quite complex, as compared to central excise which is a well settled law,
he/she should first of all have exposure to this area plus proper training for desired results.
The knowledge of central excise can be useful. Practically working under a CA in indirect
practice or an advocate can give an edge.
The formula for success for the practitioner is that he/ she should provide quality, at the
appropriate price with grace and affection and there should be service in the practice.
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