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Page 1: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >

Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants

February 2018 Volume 4, Issue 12

FOCAL POINT Newsletter from Raju and Prasad Chartered Accountants

Contact us:

Email : [email protected]

Website: www.rajuandprasad.com

Page 2: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

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Page 1 Raju and Prasad Chartered Accountants

Dear Reader,

Our editorial comments for this month are on “New Resolution

Plan for Non Performing Assets”

This month we have covered “Computer Industry” in our

Industry Review.

Please give your views and also send this newsletter to your

friends.

Regards

For Raju & Prasad

Chartered Accountants

M Siva Ram Prasad

Partner

Page 3: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

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Page 2 Raju and Prasad Chartered Accountants

Contents Contents ............................................................................................................................................................................................................. 2

Editorial ............................................................................................................................................................................................................... 3

New Resolution Plan for NPA .................................................................................................................... 3

Industry Review ........................................................................................................................................................................................... 5

Computer Industry ......................................................................................................................................... 5 Evolution of Computers ........................................................................................................................................................................................ 5 Computer Software .................................................................................................................................................................................................. 9 Programming languages ...................................................................................................................................................................................... 9 Operating systems ................................................................................................................................................................................................. 10 Indian Story ................................................................................................................................................................................................................. 11 Post liberalisation .................................................................................................................................................................................................... 13 Present status ............................................................................................................................................................................................................ 14 Problems and Challenges .................................................................................................................................................................................. 16

Policy Watch ................................................................................................................................................................................................. 18

Indirect Taxes ................................................................................................................................................. 18 Postponement of implementation of E Way Bill Rules .............................................................................................................. 18 Notifying renting service under reverse charge mechanism ............................................................................................... 18 Reduction of late fees for various returns .......................................................................................................................................... 18

Company Law .................................................................................................................................................. 18 Non-applicability of Accounting Standard 22 or Indian Accounting Standard 12 .............................................. 18 Reservation of Unique Name (RUN) facility....................................................................................................................................... 19

SEBI ...................................................................................................................................................................... 19 The change in disclosure of Total Expense Ratio (TER) .......................................................................................................... 19

Verdicts ............................................................................................................................................................................................................ 20

Direct Tax .......................................................................................................................................................... 20 Where assessee, a trust registered under section 12AA, was running various educational institutions,

in view of fact that it collected huge capitation fees from students for admission to various medical

colleges under the name of 'anonymous donations', the order passed by Director General (Inv.)

withdrawing approval granted to assessee-trust for exemption under section 10(23C)(vi), was to be

upheld ............................................................................................................................................................................................................................... 20 The principles for the coupled purpose of section 14A and Rule 8D of income tax law are applicable

prospectively, not retrospectively ............................................................................................................................................................. 20 The assessee cannot be denied certificate under section 197 on account of the fact that it is suffering

huge carried forward of losses ..................................................................................................................................................................... 20

Photograph of the Month……………………………………………………………………………………………………………………………21 Little Grebe in its nest at Bharatpur Bird Sanctuary ……………………………………………………………………21

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Page 3 Raju and Prasad Chartered Accountants

Editorial

New Resolution Plan for NPA

n the last working hours of 12th February,

RBI has issued new Resolution Plan (RP)

for solving the NPA problem of Banks. This

is done to have a simplified, harmonized

generic framework for stressed assets

especially in view of the IBC (Insolvency

and Bankruptcy) Code 2016.

The framework is more or less same as

before. Only thing is other restructuring

plans like Corporate Debt Restructuring

(CDR), Strategic Debt Restructuring (SDR),

Scheme for Sustainable Structuring of

Stressed Assets (S4A), Flexible structuring of

existing long term project loans, change of

ownership outside SDR stand withdrawn.

The Special Mention Account (SMA)

identification to facilitate the early

detection of potential NPAs continues with

a monthly reporting to Credit Repository

Information on Large Credits (CRILC).

Default in case of 5 Crore and above

exposure of entities should be reported on

a weekly basis to CRILC. Earlier reporting to

CRILC was not on weekly basis for

defaulters.

The resolution plan can be initiated by any

or all lenders jointly but documentation

should be done by all the lenders.

Resolution can be implemented only

when the activity is not in default with any

I

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of the lenders. Lenders shall engage Credit

Rating Agencies to do Independent

Credit Evaluation (ICE) in case of

restructuring or change of ownership. If the

residual debt is 50 crores and above, two

credit agencies must be involved. ICE is a

must for already restructured accounts

also.

Large accounts of 2,000 crores and above

as on 1-3-2018 shall be referred to under

IBC Code if in default (means atleast 20%

principal and interest outstanding or

interest capitalization sanctioned is to be

paid as per RP) on or after 1-3-2018. The

reference must be made if the default is

persisting for 180 days and application

must be filed under IBC within 15 days of

180 days period ending. If a resolution plan

is not implemented within the time limit

also, reference must be made under IBC.

In case of accounts with outstanding

amount less than 2000 crores but above

100 crores RBI will announce two year time

bound resolution plan.

Where already instructions have been

given by RBI to banks for reference under

IBC, transition arrangement is not

available.

These guidelines show the anxiety of RBI in

resolving the NPA problem of large

accounts under IBC so that the change of

management can be done by getting

bids from intending buyers.

Intention of the guidelines are positive,

provided decisions by courts under IBC

can resolve faster with the present number

of benches.

Where ever 100% lenders have to agree to

refer a case under IBC, is it practical and

time bound specially when Joint Lenders

Forum is withdrawn?

What is the sacrifice the banks can

maximum allow taking the provisions

already made?

Are there any incentives that can be

offered to buyers for reviving the sick

industries in the interest of the general

economy?

Is there any check that buyers are not

depending on fresh loans from banks?

The new guidelines may hasten the

process and revive the growth in general

and resolve the problem of NPAs.

-M Siva Ram Prasad

“Is it practical and time bound for 100% lenders approval to refer a case

under IBC?”

“Intention of the guidelines are positive provided decisions by courts under IBC can resolve faster with the present number of benches.”

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Page 5 Raju and Prasad Chartered Accountants

Industry Review

Computer IndustryEvolution of Computers

ver 7 to 8 decades computers have

contributed to many sectors in

changing education, science, technology,

health, defence etc., They have crept into

every walk of life and has become a

catalyst for general economic growth. The word Computer is derived from the Latin

words “Com” which means “with” and

“Putare” means “to settle”, “clear up”,

“reckon”. Both words put together may

mean to settle things or to reckon with

something. Reckon also means to count, to

calculate, to figure etc.

A device to count, calculate is called a

computer in usage. Perhaps this is the

reason Abacus which is used even today as

a toy to teach counting, is treated as the

earliest computer with a history of about

2500 years.

O

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Calculations what were done by humans

with their self skills were later done by

electrical calculating machines arrived in

1642, and later by electronic calculating

machines. Finally digital computers were

invented.

Pascal’s Calculator

The sector can be broadly divided into

hardware and software segments. The

hardware and software co-exists.

The first generation computers (1940-56)

were built with magnetic drums and

vacuum tubes with a disadvantage of

getting heated. Second generation

computers (1956-63) had used transistors.

Third generation computers (1964-71)

replaced them with integrated circuits. For

fourth generation computers (1971-2010),

microprocessors were used.

The computer remained no more a

calculator and extended to perform data

processing, storing, and retrieving data as a

programmable device.

The computers that have started with punch

card system and automatic loom have

undergone tremendous technological

advancements and mainframe computers

have become desktops with better

configuration and processing capacities,

with communication technology further

moving into networking. Invention of

internet made computer a knowledge hub

and communication giant.

Punch Card System

Future is with the next generation computers

with technological advances in Artificial

Intelligence, Nano Technology, and

Quantum Computing etc.

“The most celebrated marriage of the 20th century is the marriage between computers and communication”

- James Martin

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The computers can be classified on the

basis of processing capacity and their

functions. Broadly they can be classified as

Super Computers, Mainframe Computers,

Mini Computers, Micro Computers and

Portable Computers

Chronological events in the history of computer are given below

Year Events

1801 Joseph Marie Jacquard invents an automatic loom controlled by punch

cards

1822 Charles Babbage conceives of a steam-driven calculating machine that

would be able to compute tables of numbers

1848 Boolean algebra is invented by George Boole

1890 Herman Hollerith designs a punch card system to calculate the 1880 census

1936 Alan Turing invents universal machine, later called the Turing machine,

capable of computing anything that is computable.

1937 J.V. Atanasoff at IOWA State University, attempts to build the first computer

without gears, cams, belts or shafts.

1938 Konard Zuse created the Z1 computer, a binary digital computer using

punch tape

1939 Bell telephone laboratories completes Complex Number Calculator (CNC)

1941 Konard Zuse completed Z3, an early computer which was used for

aerodynamic calculations

1942 The first electronic computer "ABC - Atanasoff Berry Computer" was built by

John Vincent Atanasoff

1943

-44

Professors John Mauchly and J. Presper Eckert, built the Electronic Numerical

Integrator and Calculator (ENIAC) which was considered the grandfather of

digital computers.

1947 William Shockley, John Bardeen and Walter Brattain of Bell Laboratories

invented the transistor.

1951 John Mauchly and Presper Eckert had built the first UNIVAC (Universal

Automatic Computer)

1955 The FORTRAN programming language was developed by a team of

programmers at IBM led by John Backus

1955 The Computer age in India began with the installation of HEC-2M at the

Indian Statistical Institute (ISI) at Calcutta

1958 Jack Kilby and Robert Noyce unveil the integrated circuit, known as the

computer chip.

1959 Grace Hopper develops the computer language, which eventually known

as COBOL.

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1962 First computer game “Spacewar” is invented by Steve Russell and MIT

1963 The first mouse is invented by Douglas Englebart

1964 The first word processor is introduced by IBM

1969 UNIX, an operating system which was written in the C programming

language was developed at Bell labs

1970 Intel unveils the Intel 1103, the first Dynamic Access Memory (DRAM) chip.

1965

-70

MULTICS operating system was developed at Massachusetts Institute of

Technology (MIT) as a computer utility

1971 Alan Shugart and team of IBM engineers invented the "floppy disk," allowing

data to be shared among computers.

1971 Roy Tomlinson invents E-Mail

1973 Robert Metcalfe develops Ethernet for connecting multiple computers and

other hardware.

1974 IBM develops SEQUEL (Structured English Query Language) now known as

SQL

1975 Altair introduces the first portable computer

1981 The first IBM personal computer is introduced, which used the MS-DOS

operating system.

1983 Apple's Lisa is the first personal computer with a GUI (Graphical User

Interface)

1985 Microsoft announces Windows operating system.

1985 The first dot-com domain name is registered

1990 Tim Berners-Lee developed HyperText Markup Language (HTML), giving rise

to the World Wide Web (Internet).

1991 The World Wide Web is launched to the public

1998 Sergey Brin and Larry Page founded search engine “Google”

1999 The term Wi-Fi becomes part of the computing language and users begin

connecting to the Internet without wires.

2007 The iPhone brought many computer functions to the smartphone.

2011 Google releases the Chromebook, a laptop that runs the Google Chrome

OS.

2015 Microsoft releases Windows 10.

2016 The first reprogrammable quantum computer was created.

2017 The Defence Advanced Research Projects Agency (DARPA) of United States

is developing a new "Molecular Informatics" program that uses molecules as

computers. Computers of the Future May Be Minuscule Molecular Machines

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Computer Software

According to Techopedia, Software

means in general sense, is a set of

instructions or programs instructing a

computer to do specific

tasks. This word is used

to describe computer

programs, scripts,

applications etc.

System software includes device drivers,

operating systems, compilers, disk

formatters and text editors. This is the base

for Application

software.

Application

software is meant to

perform specific

tasks. Program

softwares are

software tools.

The software

industry can be divided into Business

Process Management (BPM), Information

Technology Enabled Services (ITES) and

Product Development.

Programming languages

Computational processes are

systematically programmed to enable the

performance of tasks through commands

is called a programming language.

Though punch card system was existing

two centuries ago, it was not considered

as a language, but this has led the way

to Analytical Engine by Charles

Babbage. First generation

computers were using machine

language which were very slow for

completion of tasks and many languages

were developed over years. Some of the

major developments in this direction are

1955 - FORTRAN (Formula

Translation)

1958 - LISP (List Processing)

1958 - ALGOL (Algorithmic

Language)

1959 - COBOL (Common

Business Oriented Language)

1964 - BASIC (Beginners All-

purpose Symbolic Instruction

Code)

1970 - PASCAL

1972 – C

1972 - PROLOG (Programming in

Logic)

1978 - SQL (Structured Query

Language)

1983 – C++

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1987 – PERL

1991 - PYTHON

1991 - VISUAL BASIC

1993 – RUBY

1995 - JAVA

1995 - JAVASCRIPT

2000 - ACTIONSCRIPT

2001 - C#

2003 - GROOVY

2009 - GO (Golang)

2014 – SWIFT

The programming languages can be

further classified into

Machine languages which are

interpreted in hardware

Assembly languages supplement to

machine language

High level languages which are

machine independent

System languages which are designed

for low level tasks

Konard Zuse with Z3 Computer

Scripting languages which are meant

for high level tasks

Domain specific languages which are

meant for special purpose

Visual languages which are non-text

based

Esoteric languages which have more

educational value

Operating systems

To provide interface between the user and

the computer hardware, operating system

is used which is a set of program modules.

This exploits resources like processors,

manage primary memory, secondary

memory and input/output devices

The operating systems evolved over last

seven to eight decades and are classified

as

o Serial processing systems

o Simple batch systems

o Multi programmed batch systems

o Time sharing systems.

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Page 11 Raju and Prasad Chartered Accountants

Example: IBM’s OS/360

o Personal computer systems

Example: MS-DOS, Microsoft

Windows and Apple Macintosh

o Parallel systems

o Network operating system

Example: Microsoft Windows Server

2008, UNIX, LINUX

o Symmetric multiprocessing model

o Asymmetric multiprocessing model

o Distributed systems

o Real time systems

Example: Scientific experiments,

medical imaging systems

Indian Story

In 1955, Indian Statistical Institute deputed

scientists to UK to familiarize with computer

science, when a computer imported from

British Tabulating Machines Limited (BTL)

was sold to India without technical

assistance.

The computer industry had its beginnings

with the scientific policy resolution passed

in parliament in 1958 which had

emphasized on science and technology.

This was further strengthened with the

experience after Chinese war in 1962,

where Government of India understood

the need for computers and electronics in

warfare and defence equipment. In 1963,

Government of India constituted a

committee under the leadership of H.J.

Bhabha for studying and preparing a plan

for the development of electronics in the

country.

On the recommendations of this

committee, Department of Electronics

(DOE) was started in Government of India

and Electronics Commission is also a part

of these recommendations. Incidentally, it

was Atomic Energy Commission where H.J.

Bhabha had already started his work in

computer electronics along with the Tata

Institute of Fundamental Research (TIFR),

who were the pioneers in building the first

computer and was named as Tata

Institute of Fundamental Research

Automatic Calculator (TIFRAC).

In line with government policy, Electronics

Corporation of India (ECIL) was

incorporated which was fully funded by

Government of India.

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In the initial years, the country was facing

foreign exchange problems and it was

very difficult to spend on import of

computers which was not a priority at that

time. The first generation computers were

imported with United States Agency for

International Development (USAID).

ECIL was given the responsibility of building

India’s computers as well as

commercializing the same. First indigenous

second generation computer TDC-12

(Trombay Digital Computer) was a

product of ECIL (1970).Subsequently 3rd

generation computers TDC 312 and TDC

316 were also the products of ECIL. A good

number of used and refurbished IBM 1401,

1620 and ICL 1900 were

brought into the

country by IBM.

Another committee was

formed under the

chairmanship of Shri R.

Venkataraman, a member of Planning

Commission (later President of India) to

study the impact of automation on

employment. Slow implementation of

computerization in the country was largely

due to a general impression that the

computers reduce the human

employment.

Mechanical Calculator

It was in 1978 when IBM was not willing to

dilute its equity under FERA dilution and

closed their operations in India, then a

space was created for Indian computer

companies. The Mini Computer Policy was

made in the same year and the

Department of Electronics has played an

important role in establishing the

electronics and computers, by

setting up National Center for

Software Development and

Computer Techniques (NCSDCT) in

1972, Air Defence Ground Environment

System (ADGES) in 1973, Computer

Maintenance Corporation (Previously

Computer Management Corporation) in

1975, National Informatics Centre (NIC) in

1976, and established regional computer

centres, National Center for Software

Technology (NCST) in 1983.

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The self-reliance and self-sufficiency goals

of Government of India started fructifying

between 1978 to 1990. Pioneers in

computers in the country were ECIL, DCM

Data Products and later ORG, Hindustan

Computers Limited and subsequently

WIPRO technologies, IDM etc.

India started developing and exporting

software and government encouraged

the exports and a policy for software

exports was made in 1986. Software and

Hardware parks were setup across the

country. Foreign Direct Investment in Mini

Computer manufacturing is allowed up to

40% and imports of hardware was

liberalized. Body shopping was also

considered as export. Offshore

development was given encouragement.

These two policy decisions have provided

opportunities for technical manpower.

Simultaneously communication networks

were improved by the efforts of

Mahanagar Telephone Nigam Limited

(MTNL) and Videsh Sanchar Nigam Limited

(VSNL). Later Centre for Development of

Telematics (CDOT) was established which

has spread the telephone communication

to rural areas with small exchanges. The

communication revolution made the

computer industry grow at a rapid speed.

The railway reservation system and public

call offices with microprocessor

generating bills immediately etc.,

enhanced the prestige of computer in

public eye. On the basis of Rangarajan

Committee recommendations

computerization started in Banks.

Apprehensions on reduction of

employment through computerization

diluted. In the year 1986, software

development was recognised as an

industry.

Networking initiatives commenced with

involvement of five IITs at Bombay, Delhi,

Kanpur, Kharagpur and Madras.

NASSCOM was formed in 1988.

Tim Berners Lee - Inventor of internet

Post liberalisation

Liberalisation in 1992 brought further

progress in this sector in the next quarter

century. Private sector participation was

allowed in tele communication sector and

Government of India started disinvesting its

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equity in MTNL, VSNL. Telephone Services

were privatized. VSNL started internet

services in 1995. In 1998, Government of

India had setup a Task force for the

development of this sector. About 108

recommendations were made by the task

force. 100% FDI in the sector was allowed

in 1999 and green flag was shown to

ecommerce by an enactment in

parliament in 2000. IBM has come back to

India. Y2K was another breakthrough for

the software companies in India.

NASSCOM initiated setting up of National

Institute for Smart Governance in

Hyderabad in 2002. Some of the

international majors started operating in

India include HP, IBM, Microsoft,

Accenture, Oracle, Intel etc.

Present status

As per the Ministry of Electronics and

Information Technology (MeITY), presently

there are 15,000 firms in this sector, out of

which about 1,000 firms are large.

The industry operates about 600 offshore

development centres in 78 countries. The

industry has tremendously grown over the

past 5 decades in the country with a

CAGR of 9.94% and expected to grow at

10.7% over 2016-17 and has a global

market share of 7% with the export

performance.

Software industry exports accounts to 38%

of total service exports from India with US $

117 billion consisting of IT Services US $ 65

billion, BPM US $ 26 billion and Engineering

and R&D services US $ 25 billion.

The exports of IT Industry across the globe in 2016 are as follows

(Source: Ministry of Electronics and Information Technology)

USA

62%

UK

17%

Europe

(Excluding UK)

11%

Asia

8%Rest of the

world

2%

“The growth in this industry is due to the increased market size, usage of technology, spending on R & D, trained workforce, and government policies”

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Software sector is contributing to 9.3% of

our GDP and providing direct employment

for 36,80,000 and stands as the largest

private sector employer.

The growth in this industry is due to the

increased market size, usage of

technology, spending on R & D, trained

workforce, and government policies.

FDI is allowed upto 100% under automatic

route in the industry except inventory

based model of ecommerce.

Government of India is also laying National

Optic Fiber Network (NOFN) to increase

the connectivity of about 22,000 Gram

Panchayats in the country

(Source: Ministry of Electronics and Information Technology)

The production of software in the year

2015-16 is amounting to Rs. 1,02,673 crores

while hardware is Rs.19,885 crores.

The imports of hardware is US $ 144.08

crores while the exports stood only at US $

35.85 crores

Production of hardware and software in India (Rs in Crore)

Year Software Hardware

2012-13 147,143 9,376

2013-14 173,176 17,484

2014-15 190,366 18,691

2015-16 102,673 19,885

Source: Ministry of Electronics and Information technology and Ministry of Statistics and Programme

Implementation

76.587.3 97.8

107.8 117

19.219

2121.7

24

0

50

100

150

2012-13 2013-14 2014-15 2015-16 2016-17

Revenue of IT-ITES Industry over years

Exports in US $ billions Domestic In US $ billions

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The National Policy on Information

Technology 2012 fixed a target of US $ 300

billion revenue from IT and BPM segment of

the industry by 2020. Also a target market

of US $ 225 billion by 2020 is fixed for Social,

Mobility, Analytics and Cloud (SMAC)

market which indicates the growth in

future years.

Problems and Challenges

1. The estimates of growth of exports for

2017-18 as per NASSCOM would be 7-8%

which is not an encouraging trend.

According to RBI, the declining trend in %

growth is continuing from 2012-13 20.8%,

2014-15 14.9% to 2015-16 7.3%. Software

exports has been a saving grace for India’s

trade deficit. If the sector shows signs of

deceleration, this may have an impact on

the economy in terms of growth and

employment.

2. Quality of education in the field is not

consistent and the exposure to latest

developments in the sector is not

commensurate at college level. University

industry dialogue in updating of skills needs

constant review.

3. As per the Fact Sheet of Ministry of

Electronics and Information Technology

(MeITY) 60% of revenue in the industry is

from testing IT services which is more than

product development in the country.

4. For a fast growth and meeting domestic

demands, imports were allowed liberally in

hardware which has hampered the

growth of hardware segment while China

is entrenched in a big way. Forex earnings

on one hand are spent with other.

“University Industry dialogue in updating skills needs constant review”

Page 18: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >

Page 17 Raju and Prasad Chartered Accountants

5. According to Economic Survey-II 2017,

European Union is introducing Data

Protection and Privacy Rules, which restrict

the services provided from India. Work visa

rules are being reviewed by countries like

USA, Australia and UK will impact the

employment abroad. According to

certain estimates, there are signs of the

degrowth in employment in the coming

years in the domestic market.

Inspite of the challenges faced by the

industry, the growth drivers like increased

telecom services, adoption of telecom

technology, global OEM, increasing

embedded software in their products,

National Optic Fiber Network (NOFN)

spreading to rural areas and efforts to

increase the e-governance are the

opportunities for the industry for meeting

the future targets

-Team at Raju and Prasad

Page 19: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >

Page 18 Raju and Prasad Chartered Accountants

Policy Watch

Indirect Taxes

Postponement of implementation

of E Way Bill Rules

The Central Board of Excise and Customs

vide notification no 11/2018 dated 2nd

February had postponed the

implementation of E Way Bill Rules by

rescinding the notification no 74/2017

dated 29th December 2017.

The date from which it comes into force

(Mandatory raising of E Way Bill) is yet to

be notified.

http://www.cbec.gov.in/resources//htdocs-

cbec/gst/Notification-11-2018-central_tax-

English.pdf

Notifying renting service under

reverse charge mechanism

The Central Board of Excise and Customs

vide notification no 3/2018 dated 25th

January 2018 has notified the service

provided by way of renting of immovable

property by Central government, State

government, Union territory or local

authority to any business entity located in

taxable territory as a supply covering

under reverse charge.

http://www.cbec.gov.in/resources//htd

ocs-cbec/gst/notfctn-03-2018-cgst-

rate-english.pdf

Reduction of late fees for various

returns

The Central Board of Excise and Customs

vide notification no’s 04/2018, 05/2018

and 06/2018 dated 23rd January 2018 has

reduced the late fees for filing of various

returns which is as follows

http://www.cbec.gov.in/resources/htdocs-

cbec/gst/Notification-4-2018-central_tax-

English.pdf

http://www.cbec.gov.in/resources//htdocs-

cbec/gst/Notification-5-2018-central_tax-

English.pdf

http://www.cbec.gov.in/resources//htdocs-

cbec/gst/Notification-6-2018-central_tax-

English.pdf

Company Law

Non-applicability of Accounting

Standard 22 or Indian Accounting

Standard 12

The Ministry of Corporate affairs vide

Notification no SO 529(E) F.NO.17 / 32 /

2017-CL-V dated 5th February 2018 has

exempted a government company of

S.No Name of the

Return

Revised

late fees

1 Form GSTR -1

(Return showing

outward supplies)

Rs 50 per

day

(Rs 25 CGST

and Rs 25

SGST)

2 Form GSTR – 5

(Non-Resident

Return Filing)

Rs 50 per

day

(Rs 25 CGST

and Rs 25

SGST)

3 From GSTR – 5A

(Non-Resident

OIDAR)

Rs 50 per

day

(Rs 25 CGST

and Rs 25

SGST)

Page 20: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >

Page 19 Raju and Prasad Chartered Accountants

following classes from applicability of

Accounting Standard 22 or Indian

Accounting Standard 12 relating to

deferred tax asset or deferred tax liability,

for seven years with effect from 1st April,

2017.

(a) Public financial institution under

sub-clause (iv) of clause (72) of

section 2 of the Companies Act,

2013 such as Industrial Investment

Bank of India, National Housing

Bank, Small Industries

Development Bank of India,

National Bank for Agriculture and

Rural Development and Export

Import Bank of India

(b) Non-Banking Financial Company

registered with the Reserve Bank

of India under section 45-IA of the

Reserve bank of India Act, 1934;

and

(c) Company engaged in the

business of infrastructure finance

leasing with not less than seventy

five per cent of its total revenue

being generated from such

business with Government

companies or other entities

owned or controlled by

Government.

https://www.taxmann.com/filecontent.aspx

?Page=CIRNO&id=104010000000054800&isx

ml=Y&search=&tophead=true&tophead=true

Reservation of Unique Name (RUN)

facility

The Ministry of Corporate Affairs vide

notification no SO 351(E) [F.NO. 1/1/2018

-CL.I] dated 23rd January 2018 has

amended Section 4 of the companies

act and provided the facility of RUN in its

website. Now, any person intending for

incorporation of a new company can

use such facility and if the name is

available, it will be reserved for a period

of 20 days. In case of application by

existing company for reservation of name

or change in name, it will be reserved for

a period of 60 days. This will be

applicable from 26th January 2018.

https://www.taxmann.com/filecontent.aspx

?Page=CIRNO&id=104010000000054548&isx

ml=Y&search=&tophead=true&tophead=true

SEBI

The change in disclosure of Total

Expense Ratio (TER)

The Securities and Exchange Board of

India vide circular no SEBI/ HO / IMD /DF2

/CIR /P/2018/18 dated 5th February 2018

has issued following guidelines to all

Mutual Funds/Asset Management

Companies (AMCs)/ Trustee Companies/

Board of Trustees of Mutual Funds

i) AMCs shall disclose prominently, on a

daily basis, the TER of all schemes under a

separate head “Total Expense Ratio of

Mutual Fund Schemes” on their websites

ii) Any increase in the Total Expense Ratio

(TER) of any scheme shall be

communicated to investors of the

scheme through notice via email or SMS

at least three working days before such

change and the same is to be disclosed

in their website prior to such change.

https://www.sebi.gov.in/legal/circulars/feb-

2018/total-expense-ratio-change-and-

disclosure_37707.html

Page 21: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >

Page 20 Raju and Prasad Chartered Accountants

Verdicts

Direct Tax Where assessee, a trust registered

under section 12AA, was running

various educational institutions, in view

of fact that it collected huge capitation

fees from students for admission to

various medical colleges under the

name of 'anonymous donations', the

order passed by Director General (Inv.)

withdrawing approval granted to

assessee-trust for exemption under

section 10(23C)(vi), was to be upheld

-Vide decision of High Court of Karnataka vide

Navodaya Education Trust Vs. Union of India

The Honorable High Court of Karnataka

vide Navodaya Education Trust V. Union

of India stated that the approval under

10(23C) can be canceled on the

ground of receipt of huge capitation

fees from students under “anonymous

donations” as the trust registered under

section 12AA is not satisfied the

conditions stated in approval.

https://www.taxmann.com/filecontent.aspx?Pa

ge=CASELAWS&multipage=false&id=1010100000

00179187&isxml=Y&search=&tophead=true&top

head=true

The principles for the coupled purpose

of section 14A and Rule 8D of income

tax law are applicable prospectively,

not retrospectively

- Vide Decision of Supreme Court of India vide

Commissioner of Income tax, 5-Mumbai Vs.

Essar Teleholdings Ltd

The Honorable Supreme Court of India

vide commissioner of income tax,5-

mumbai Vs Essar Teleholdings Ltd held

that the provisions of section 14A and rule

8D regarding the disallowance of

expenses relating to exempt income will

apply prospectively i.e., from the

assessment year 2008-09 and not prior to

that and it can’t be interpreted

otherwise.

https://www.taxmann.com/filecontent.aspx?Pa

ge=CASELAWS&id=101010000000178934&isxml=

Y&search=&tophead=true&tophead=true

The assessee cannot be denied

certificate under section 197 on

account of the fact that it is suffering

huge carried forward of losses

-Vide decision of High Court of Bombay vide Tata

teleservices (Maharashtra) Ltd vs. Deputy

Commissioner of Income tax - (TDS) – 2(3)

The honorable High Court of Bombay

vide Tata Teleservices (Maharashtra) Ltd

Vs. Deputy Commissioner of Income tax -

(TDS) – 2(3) stated that the assessee

cannot be denied certificate under

section 197 (lower TDS deduction

certificate) on account of the fact that it

is suffering huge carried forward of losses

in the business and there is no likelihood

of any tax becoming payable in the

future

https://www.taxmann.com/filecontent.aspx?Pa

ge=CASELAWS&id=101010000000178928&isxml=

Y&search=&tophead=true&tophead=true

Disclaimer Information in this Newsletter, charts, articles, or

any other statements regarding market or any

other financial information, is obtained from the

sources, which we feel reliable. We do not

warrant or guarantee the timeliness or

accuracy of the information. The reader shall

not take any decision based on the facts or

figures of the newsletter without professional

advice.

Page 22: Newsletter from Raju and Prasad Chartered Accountants · Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants ` February 2018 Volume 4, Issue 12 FOCAL POINT

<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >

Page 21 Raju and Prasad Chartered Accountants

►►► PHOTOGRAPH OF THE MONTH Little Grebe in its nest at Bharatpur Bird Sanctuary

- Clicked by M Siva Ram Prasad

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