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Discussion < Service Tax < Professional Opportunities in indirect tax (service tax)
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students zone,CA Students
CA. KRISHAN KUMAR SAINI


[ Scorecard :7829 ]

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.








CA. KRISHAN KUMAR SAINI


[ Scorecard :7829 ]

if any one know more opportunity ....plz tell me

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