The Institute of Chartered Accountants of India (Setup by...

TheInsightTheInsight

The Institute of Chartered Accountants of India(Setup by an Act of Parliament)

BARODA BRANCH OF

WESTERN INDIA CHARTERED ACCOUNTANTS

STUDENTS ASSOCIATION OF

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

(WICASA)

VOL. XII JANUARY 2013l

“Leveraging Strength, Catalyzing Tomorrow”

e-NewsLettere-NewsLetter

e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”

Baroda Branch of WICASA

of The Institute of

Chartered Accountants of India

VOL. XII JAN. 2013l “Hard work beats talent, when talent doesn't want to work”

PRINTED AND PUBLISHED BY

Designed at

“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012.

Telefax : +91 (265) 2680593, 2681115 E-mail: [email protected] Web : www.baroda-icai.org

Multiprints, 30/B, Gandhi Oil Mill Compound,

Near BIDC, Gorwa, Vadodara - 390 016.

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

WESTERN INDIA CHARTERED ACCOUNTANTS STUDENTS

ASSOCIATION

BARODA BRANCH OF WICASA

ICAI Bhawan, Post Box No. 7100, Indraprastha Marg,

New Delhi - 110002. Tel. : +91 (11) 39893989

E-mail : [email protected] Website : www.icai.org

ICAI Bhawan, 27, Cuffe Parade, Post Box No. 6081, Colaba,

Mumbai - 400 005. Tel. : +91 (22) 39893989

Email : [email protected] Website : www.wirc-icai.org

“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012.

Telefax : +91 (265) 2681115, 2680593

E-mail: [email protected] Web : www.baroda-icai.org

�

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Managing Committee Members

CA. Ashish Parikh Chairman 9825231545

Mr. Sharukh Pathan Vice Chairman 8905094384

Ms. Hiral Jethva Secretary 9714778552

Mr. Mehul Thakkar Treasurer 8905564940

CA. Nayan Kothari Ex-officio 9824433445

Mr. Kanji Hadiya Member 9687969764

Mr. Mohd.Atiq Qureshi Member 9998570095

Mr. Dipesh Thakkar Member 9898940652

CA. Ashish Parikh Editor

Mr. Mohd.Atiq Qureshi Joint Editor

Ms. Hiral Jethva Member

Editorial Board

DISCLAIMER :

WICASA COMMUNITY :

STUDENTS’ STUDY CIRCLE :

BRAIN TRUST SESSION :

SPORTS ACTIVITIES:

WICASA HELPLINE :

The views and opinion expressed or implied in the Newsletter are those of the

authors/contributors and do not necessarily reflect those of ICAI. Unsolicited articles and

transparencies are sent at the owner's risk and the publisher accepts no liability for loss or

damage. Material in this publication may not be reproduced, whether in part or in whole, without

the consent of ICAI.

Students are requested to kindly send article / paper of interest to [email protected].

The same may be published in the newsletter subject to availability of space & editing.

Be a part of the “WICASA Baroda” now also on FACEBOOK Community. Exchange views and

news. Be updated about forthcoming events of WICASA.

Join now .... where in students can exchange knowledge with the help of group discussion.

Contact Mr.Kanji Hadiya-9687969764

Join now… where a group of students can discuss on predetermine questions and moderator

(from CA fraternity) will elaborate the discussion and conclude. Contact Ms. Hiral Jethva-

9714778552

Join now…where in students can participate in Indoor-Outdoor games for overall development.

Contact Mr. Dipesh Thakkar-9898940652

Students are invited to send their feedback suggestions or grievances to

[email protected] or contact Mr. Sharukh Pathan-8905094384, Mr. Mehul Thakkar-

8905564940

Chairman’sCommunication

2

Dear Students,

If our vision is for a year, plan wheat, if our vision is for a decade,

plant tree, if our vision is for a lifetime, plant students. With this

VISION… and imparting the education, sharpening their

knowledge & taking students with newer heights with excellence

as MISSION…… and independence, integrity and impartiality

professionalism as VALUES in life …..

WICASA Baroda has successfully completed its 44th year, with

12000+ students. Baroda Branch of WICASA is known for his

youthful, energetic and dynamic working style, his reformist zeal

and result oriented approach with proven track record of its earlier

accomplishments. Without breaking this tradition, WICASA-2012

had adhered the guidelines, suggestions and proposition issued by

ICAI and WIRC of ICAI and conducted educational, social and

cultural activates for the betterment of students, adding the Brand

value of our mother Institute, paying back the obligations to the

society at large and serving to the city, state and nation.

The theme for the year was “Leveraging Strength, Catalyzing

Tomorrow”. It signifies that make use of our strength utmost as we

the youth of the country, have capability of changing the world.

Our Positive efforts will shape the future not only of ours but of the

country too……

The year 2012 was full of challenges, creativity and innovations.

Youth strengths represented the unique combination of talents,

skills, and qualities. Leveraged traditional knowledge with modern

science and exploited unique way of organising versatile activities.

Our endeavour at WICASA - Baroda was always to give the students

a maximum exposure on day to day development and current

scenario on economy, law, commerce etc. by organising innovative

programs. WICASA-2012 programs consist of wide range of

conferences, seminars, workshops, study circles, thrilling sports

events, unique and innovative cultural events and social events

etc.

Last but not least…a very special gratitude to President, Vice

President, Chairman Board of Studies and all the family members

of mother ICAI who have been my good fortune ,who truly walked

with me as noble being, philosopher and true friend of mine. Your

influence upon my professional, social and spiritual life was

profound. Your vision opened up new horizons before me,

enlarging and unifying my professional ideals; teaching me a

broader understanding of truth. My soul will bear your good-selves

eternal gratitude.

With Regards

“Leveraging Strength, Canalizing Tomorrow”

From bottom of my heart…

CA Ashish Parikh



of The Institute of


VOL. XII JAN. 2013l “Don't plan to succeed, work to succeed”

Forthcoming EventsForthcoming Events

3

Evening Talk & introduction of WICASA 2013

(Kuch Acha Hai Sunna Aaj Pehli Tarik Hai)

Date

Topic :

Speaker :

Venue

01.01.2013

How to Maximize usage of our Social Media.

Animesh Bhatt

ICAI Bhawan

:

:

Social Activity

Date

Topic :

Speaker :

Venue

02.01.2013

Laser show on life of Swami Vivekanand

Manik Sorcar

Sir Sayaji Nagar Gruh, Akota

:

:

Social Activity

Date

Topic :

Venue

03.01.2013

Tribute to Delhi brave heart

:

: ICAI Bhawan

Career Counselling Program

Date

Venue

10.01.2013:

: Nutan Vidhyalaya

Social Activity

Date

Topic :

Venue

12.01.2013

Procession & Youth Convention Seminar

:

: ICAI Bhawan

Awareness Week & Celebration of Republic Day

Date

Topic :

Venue

21-26.01.2013

Know Your Nation & 26th Jan : Republic Day

Celebration

:

: ICAI Bhawan

Open Day House

Date

Venue

27.01.2013:

: ICAI Bhawan

Essay Competition

Date

Venue

28.01.2013:

: ICAI Bhawan

Book Review Programme

Date

Venue

30.01.2013:

: ICAI Bhawan

Pa

st E

ven

ts :

Dec

embe

r2012

Pa

st E

ven

ts :

Dec

embe

r2012

DATE NAME OF EVENT ATTEN.

03.12.2012 WICASA Committee Meeting 7

03.12.2012 Commencement of "37th Orientation Batch" 50

06.12.2012 Industrial Visit Jointly with Surat Branch of WICASA at Hindustan Pharmaceutical, GIDC Por, Baroda 57

07.12.2012 Industrial Visit to Baroda Diary 7

07.12.2012 Industrial Visit to State Load Despatch Centre (SLDC), Gujarat 30

11.12.2012 Career Counselling Programme at Kelavani Vidhyalay by CA Tejal Parikh 50+

11.12.2012 Commencement of "38th G.M.C.S. Batch" 51

14.12.2012 Inauguration of Phase II of ICAI Bhawan by hands of President CA Jaydeep Shah 100+

15.12.2012 Annual Sports Festival at Baroda Presidency Club & Kanha Kalali Club House 200+

16.12.2012 Career Counselling at Kutch Kadava Patidar Samaj by CA Manilal Parsiya,

Jayshree Party Plot, Bajwa-Undera Road, Undera, Vadodara 1000+

17.12.2012

19.12.2012 Cold Storage Room, GIDC 8

20.12.2012 Career Counselling Programme at Mavlankar Vidyalay by CA Tejal Parikh 50+

20.12.2012 Commencement of "104 ITT Batch" 38

20.12.2012 Selection of WICASA Committee - 2013 6

21.12.2012 Hotel Industry Visit at Furrat Hotel International 15

21.12.2012 Career Counselling Programme at G.E.B by CA Rahul Parikh 50+

21.12.2012 Career Counselling Programme at Sayaji Vidyalay by CA Nirav Shah 50+

21.12.2012 Career Counselling Programme at Sevasi Higher Educational School by CA Ashish Parikh 50+

22.12.2012 "XITIJ-2012 Youth Festival" at Corporation Ground, Akota 4000+

24.12.2012 Visit to INOX Multiplex 15

24.12.2012 Commencement of "38th Orientation Batch" 54

24.12.2012 Commencement of "105 ITT Batch" 38

28.12.2012 Medical Checkup for CA Students 15

28.12.2012 Career Counselling Programme at Gujarat Public School, Near Vadsar Bridge, Vadodara 50+

30.12.2012 Commencement of "39th G.M.C.S. Batch" 50

30.12.2012 An Initiative to Save Plastic 20

31.12.2012 Blanket Distribution to Needy 7

Missionaries of Charity by GMCS Batch-38 (19.12.2012) 21



of The Institute of


VOL. XI l DEC. 2012 “A smile will carry you a mile”4

Professional Opportunties in Service TaxContributed by : (CA Final Student)Kshama Hastak

As the gamut of service tax expands, there is going to be ever

increasing need for professionals to advise and assist the

assessee. Professionals (Chartered Accountants, Advocates, CS

etc.) with proper training and experience are considered to be

well equipped to position in the dynamic role as an advisor and

facilitator for compliance under the service tax law.

Professionals can find various emerging opportunities in

relation to following areas of practice in indirect taxation and

particularly in Service tax-

1. Providing tax planning in Government / Commercial

projects/investments / IPRs having substantial investment

2. Registration of assessee

3. Disclosures and submissions to Department

4. Compliance of procedural aspects

5. Computation of monthly/ quarterly payment of tax/

duties

6. Return verification / filing of returns

7. Service tax review and quarterly audit

8. Review of systems and procedure before Departmental

audit

9. Assistance during Departmental IAP or CAG audit

10. Opinions/ Clarifications

11. Transaction planning and structuring

12. Guidance on understanding of effect of budget/recent

changes on activities

13. Filing of Refund claims of Service Tax

14. Departmental representation

15. Reply to Show Cause Notice (SCN)

16. Representation before Adjudicating Authority

17. Drafting of representation at Appellate Forums

18. Facilitation to Advocates at High Court/ Supreme Court

19. Outsourcing of Service Tax compliance activities

20. Other areas such as training / teaching, writing articles,

submission / representation to the Government, etc.

Service Tax: Gateway to new Professional Opportunities.

ROLE OF PROFESSIONALS UNDER SERVICE TAX

* Proper classification of taxable services (Section65A [1])

* Timely and correct feedback on provisions of law

* Help in understanding law and its correct interpretation

The areas for professionals exist both in practice as well as

employment. Now companies and business houses have started

recruiting professionals to manage and comply with the indirect

tax compliance.

Key Highlights Companies Bill, 2012Contributed by : (CA Final Student)Mansi Patel

1. Incorporation of a One Person Company has been

permitted.

2. Numbers of permissible members in private company has

been raised to 200 as against existing limit of 50 members.

3. Listed companies shall have at least 1/3rd of the total

number of directors as Independent Directors and the

Central Government may prescribe the minimum number

of Independent Directors for any class of public

companies.

4. Nominee director cannot be regarded as Independent

Director.

5. Maximum term of Independent Director has been

restricted to five years at once subject to a maximum of

two such terms.

6. Appointment of at least one woman director on the board

of prescribed classes of companies has been made

mandatory.

7. Appointment of at least one director resident in India, i.e.

a director who has stayed in India for at least 182 days in

the previous calendar year, is made mandatory for all

companies.

8. Maximum number of directors has been increased from

12 to 15 directors. Further no Central Government

approval is required to increase the maximum no. of

directors beyond 15. Shareholders of companies may do

so by passing a special resolution.

9. A person can hold directorship of up to 20 companies, of

which not more than 10 can be public companies.

10. No listed companies shall appoint-

i. an individual as auditor for more than one term of five

consecutive years, and

ii. an audit firm as auditor for more than two terms of

five consecutive years

11. Shareholders are at liberty to decide by passing resolution

that audit partner and the audit team, be rotated every

year

12. CSR has been made mandatory for a company having net

worth of Rs. 500 crore or more, or turnover of Rs. 1,000

crore or more or net profit of Rs. 5 crore or more during

any financial year.

13. Such company is required to constitute a Corporate Social

Responsibility Committee of the board(CSRC) which shall

consist of three or more directors , out of which at least

one director shall be an independent director.

14. Such company shall spend, in every financial year, at least

2 % of the average net profits of the company made during



of The Institute of


VOL. XII JAN. 2013l “Dedication is a bridge to achievement”5

three immediately preceding financial years, in pursuance

of its Corporate Social Responsibility Policy (CSRP).

15. The provision for establishment of Serious Fraud

Investigation Office (SFIO) by the Central Government is

another significant feature of the bill.

16. SFIO is empowered to arrest in respect of certain offence

involving fraud.

17. Changes have also been made to the grounds for winding

up a company.

18. Some other features of the bill include :

i. Financial year will be uniform for all companies i.e.

April-March.

ii. Restriction on buyback of shares within one year

from the last buy back.

iii. Voting through electronic means.

iv. Capping director’s remuneration at 5% of the net

profits of the company.

v. The concept of Dormant Company has been

introduced.

vi. Special courts for speedy trials.

Conversion of A Partnership Firm Into

A Company Under Part IX of The

Companies Act, 1956Contributed by : (CA Final Student)Suman Virwani

Section 565 to Section 581 under Part IX of the Companies Act,

1956 deals with such conversion

(i) Minimum seven number of members

(ii) A company should be a joint-stock company as defined in

Section 566

(iii) Majority of members should give their assent for the

proposed conversion.

For the purposes of Part IX, as far as the registration of

companies as companies limited by shares is concerned, a joint-

stock company means a company

- having a permanent paid up or nominal share capital of

fixed amount divided into shares, also of fixed amount, or

held and transferable as stock, or divided and held partly in

the one way and partly in the other,

- formed on the principle of having for its members the

holders of those shares or that stock, and no other

persons.

Such a company, when registered with limited liability under

Part IX of the Companies

Act, shall be deemed to be a company limited by shares.

Eligibility

Meaning of a ‘Joint Stock Company’ as per Section 566

Advantages of converting the Partnership Firm into Private

limited company: Stamp Duty

All movable and immovable properties of the firm automatically

vest in the Company. No instrument of transfer is required to be

executed and hence no stamp duty is required to be paid.

No Capital Gains tax shall be charged on transfer of property

from Partnership firm to Company.

1. Separate legal entity.

2. Perpetual succession

3. Easy transferability of shares

4. Distribution of profits by way of dividends

5. Remuneration to directors.

6. Limited liability of members

7. Raising of capital through Issue of equity/ preference

shares and debentures

8. Favorable attitude of financial Institutions while granting

various facilities.

1. Interest on capital cannot be paid.

2. Deposits can be accepted only from Members, Directors

and their relatives

3. All legal proceedings by and against the company remain

continued even after the conversion.

List of Documents to be submitted for proposed conversion

1. Form 1A – along with necessary annexure

2. Memorandum and Articles of Association

3. Form 32 for the appointment of directors

4. Form 18 for The place of Registered Office of the Company

5. Form 1 on a Stamp Paper of Rs. 100/-

(Declaration by the proposed director for compliance of

provisions under the Companies Act, 1956)

6. Form 37 on a Stamp Paper of Rs. 100/-

(Application for registration as a limited / a private limited

Company)

7. Form 39 on a Stamp Paper of Rs. 100/- (List of members)

8. Power of Authorization on a Stamp Paper of Rs. 100/-

9. Affidavit on a Stamp paper of Rs. 100/- for declaration by

directors for giving list of pending suits against the

Partnership Firm

10. Certified as true copies of the Partnership Deeds entered

Capital Gain Tax

Other Advantages

Precautions

CHECKLIST FOR CONVERSION OF A PARTNERSHIP FIRM

INTO A PRIVATE LIMITED COMPANY

No. Particulars



of The Institute of


VOL. XII JAN. 2013l “An artist is not paid for his labor but for his vision.”6

into by the partners of the Company since formation of

such Partnership Firm

11. Certified Copy of the Partnership Registration Certificate

12. Certified as true copy of the resolution for conversion into

a limited company (On the letterhead of the firm)

13. Certified as true copy of the Minutes of the meeting for

considering the proposal of conversion into a limited

company (On the letterhead of the firm)

14. Consent of all the Partners to convert the firm into a

Company

15. Certified Copy of the Latest Income Tax Assessment Order

OR Certified True Copy of the Income Tax Return

Acknowledgement

16. Certified Copy of the latest Audited Balance Sheet of the

firm

17. Certified Copies of The Sales Tax Registration Certificates

under CST & BST

(i) Instructions for filing of e-forms 37 & 39 do not

provide any instruction as to the payment of stamp

duty on the same unlike it is specifically given in e-

forms 1 and 5. These forms are in the nature of

Declaration and Verification respectively, hence it is

suggested to get these forms stamped in accordance

with the local stamp acts and to forward the

same to the Registrar of Companies along with

Form 1.

(ii) Erstwhile Form Nos. 40 (Statement specifying

certain particulars with reference to the Capital

structure) & 41 (Copy of resolution assenting to

registration with the limited liability under

Section 565 (1)) as per the Companies (Central

Government) General Rules and Forms Rules, 1956

are clubbed in Form 39 prescribed under the e-forms.

Documents/ Information required No.

• Full Name of the Applicant —

• Full name of the father (in case of married

woman's also this is compulsory) ---

• Date of Birth —

• Place of Birth —

• Full present residential address —

• Full permanent residential address, if the

present address is not permanent

residential address —

• Phone number available at both the address. —

• Personal e mail id, if any —

• Occupation —

Notes:

Form 1A – Application for availability of name

Names of promoters

DIN Form/ Form 32/ Form 1

Proposed Name containing the name of the

partnership firm proposed to be converted —

Proposed Main Object clause –

in consonance with the partnership firm to

be converted —

Proposed Authorized Share Capital —

Details of the Directors and Subscribers to the

memorandum of Association

• Full name of the person proposed to be

appointed as director and subscriber to the

Memorandum and Articles of Association —

• Full name of the father. (in case of married

woman's also this is compulsory) ---

• Date of Birth —

• Place of Birth —

• Full present residential address —

• Full permanent residential address,

if the present address is not permanent

residential address —

• Phone number available at both the address. —

• Personal e mail id, if any —

• Occupation —

• Nationality —

• Photo copy of proof of identity: i.e.

1. Passport 2. Election (voter identity) card

3. Driving license 4. Income-tax PAN Card 3

• Photo copy of proof of residence: i.e.

1. Passport 2. Election (voter identity) card

3. Driving license 4. Ration Card

5. Electricity bill 6. Telephone bill

7. Bank account statement 3

• Latest passport size photograph. 3

• Details with reference to following

¾ Directorships in other companies –

Names of such companies and their CIN

Numbers and designation of a person

¾ Partnership in any firm – Name/ Address/

City / State and Country in which such

partnership exists

¾ Owner of any Sole proprietary concern –

Name of sole proprietary/ Address/ City/

State and Country where the said

concern carries on its business —

• Consent letter from the director to act

as such director in the proposed company —

proprietary



of The Institute of


VOL. XII JAN. 2013l “Don't impress the boss, impress yourself”7

Form 18

Form 37

Form 39

Procedure for the conversion of a Partnership into a company

under Part IX:

a. Permanent paid up or nominal share capital

• Full Address where the proposed Registered

office of the company is proposed to be situated —

• Full Address of the Police station within whose

jurisdiction the registered office of the

company is situated —

• Date of execution of the latest Partnership Deed —

• Copy of the Latest Partnership Deed 2

• Number of shares taken up as on the

execution of Memorandum of Association

• Amount paid on each Equity as well

Preference Share

• List of members as on the date of execution

of the Memorandum of association along with

the following details

¾ Full Name

¾ Address

¾ Occupation

¾ Number of shares or amount of Stock held

¾ Face Value of shares/ debentures

¾ Type of share – equity/ preference 2

1. Prepare a draft of Partnership deed which shall contain

following details along with the other necessary details to

regard the Partnership firm as an existing Joint Stock

Company as per the provisions of Section 566 of the

Companies Act, 1956;

i of fixed amount divided into shares of fixed amount or

ii. held and transferable as stock or

iii. divided and held partly in one way and partly in the other

way

The Fixed Capital mentioned in the Partnership Deed shall

be the initial paid up capital of the company in order to

meet the criterion of Minimum Paid up Capital as

applicable to the company

b. The clauses of Main Object, Objects ancillary to the

attainment of Main Objects and Other Objects

c. The Deed shall be entered into in between the persons

who will be the proposed members of the company.

In order to convert the partnership into a company as per

Part IX there should be at least 7 members/ subscribers to

the Memorandum of Association of the proposed

company.

date of

2. File the Partnership Deed with the Registrar of Firms

7. After obtaining the Name Availability Letter, prepare

Memorandum & Articles of Association and rest of the

documents necessary for the purpose of proposed

conversion

3. Convene a Meeting of the Partnership Firm and pass the

resolution for the conversion of the partnership into a

company and for giving the authority to any two partners

of the company to take the necessary steps for the

proposed conversion.

4. Obtain DIN for the proposed directors

5. Obtain DSC for at - least two directors as Form 39 needs to

be digitally signed by two directors

6. File Form No. 1A for the availability of Name with the

concerned Registrar of Companies. The proposed name

shall contain the name of the partnership firm, which is

proposed to be converted into a Company under Part IX

of the Companies Act. The Form shall be accompanied by

the following documents;

a. Annexure containing the Main Object Clause

b. Certified copy of the resolution passed by the Partnership

Firm along with the consent signed by all the partners to

convert the said partnership into a Company (On the

letterhead of the partnership firm)

c. Certified as true copy of the Minutes of the meeting

held by the partnership firm for considering the

proposal of conversion (On the letterhead of the firm)

along with the names and signatures of the partners

present at the meeting

d. Certified copy of Partnership Registration Certificate.

e. Certified copy of Income Tax Assessment Order. OR

Certified copies of Income Tax Return Acknowledgement.

f. Certified copy of latest balance sheet of the Firm.

g. Certified copies of BST Registration certificate of the Firm.

The Memorandum of Association shall contain

- the names of the subscribers/ members who shall

execute the same as parties to the said document

- details of the existing activity carried on by the partnership

firm

- details of all the partnership deeds entered into by the

partners with effect from its formation along with the

changes in the structure of the firm

- details of the resolution passed by the firm for converting

the partnership into a limited company

- details of shares proposed to be acquired by the partners

and their share in Profit/ Loss

- Name clause

- Domicile clause



of The Institute of


VOL. XII JAN. 2013l “Excellence is not a skill. It is an attitude.”8

- Main Objects, Ancillary Objects, Other Object clause

(These clauses should be the same clauses which were

mentioned in the Partnership Deed entered into between

the partners for converting the firm into the existing joint

stock company)

- Liability clause

- Capital clause

It is to be noted that the Memorandum of Association

starts with the clause pertaining to the execution of the

Memorandum of Association by the subscribers to it.

While putting the date of such execution, following points

should be considered;

a. The date should be any date after the date of stamping

b. The date should not be the date more than Six Clear Days

before the date of registration as per Section 567 (a) of

the Companies Act. Thus such date shall not be more than

6 clear days before the date of filing of all the documents

with the concerned ROC.

c. The same date should be put on the subscription

pages to the Memorandum and Articles of Association.

d. The same date shall be mentioned in Form 39

- at item no. 3 (a) - date upto which the shares have been

taken up by the members

- at item no. 4 –date of List of members

- Form 1

- Form 37

- Form 39

- Memorandum and Articles of Association

Accountant/ Cost Accountant in whole time practice

Following documents should be submitted to the

concerned ROC for the purpose of getting proposed

conversion.

i. Two copies of Memorandum and Articles of

Association duly signed and stamped.

ii. Form No. 1 on a stamp paper of Rs. 100/-

iii. Form No. 18

iv. Form No. 32. (in duplicate)

v. Letter of Authority on a stamp paper of Rs. 100/

vi. Original Name Approval Letter.

vii. Form No. 37 on a stamp paper of Rs. 100/- along with a list

of annexure

viii. Certified as true copy of all the Partnership deeds entered

8. Make Payment of stamp duty on the following

documents and get all the documents signed from the

authorized persons

9. Get form 18 and 32 duly certified by the Company

Secretary/ Chartered

10. Filing of documents

into by the partners with effect from the formation of such

partnership till the date of conversion.

ix. Form No. 39 on stamp paper of Rs. 100/- along with list of

members as annexure

x. An Affidavit on a Stamp Paper of Rs. 100/- for giving

declaration that there or no legal suits pending against the

partnership OR alternatively the declaration giving the list

of the suits pending against the Partnership firm. Any two

directors of the company shall sign the declaration. The

affidavit shall have to be notarized from the Notary Public

before submitting to the concerned ROC.

xi. Document evidencing payment of necessary registration

fees to the Registrar of Companies

Copies of duly stamped e-form 1, 37 and 39 are required to

be submitted physically to the concerned Registrar of

Companies

After getting a Certificate of Incorporation. Make

necessary arrangements for obtaining the Common Seal,

Share Certificates, Loose Leaf Binder, Statutory Register

etc.

Editorial Desk

Being the last Edition by Baroda Branch of WICASA-2012 e-

Newsletter of January, 2013

Baroda Branch of WICASA-2012 took forward leaps in

terms of variety of programs and events that created

footprints for others to follow. We all know that we don't

accomplish anything in this world alone and the tapestry of

the successful year is put together with all the weavings of

individual threads from one to another in the form of

meticulous efforts of all the Students & Members.

“Imagination leads to creativity, creativity leads to thinking;

thinking provides knowledge and knowledge make you

great.”

Knowledge is a liberating force and in our age it has

metamorphosis into a democratizing force, cutting across

the barriers of prejudice and ignorance, smoothing out the

various disparities between human beings, giving us a

platform for demonstrating our skills. I urge all of us

wherever, whenever, whatever, we are doing, do it from the

seed level visioning the outcome of a big tree.

This Year-2013 rings to announce endings and beginnings.

And it rings because there is fresh promise and wonder in

the skies. Youth’s versatility, dynamism & spirit can charge

the future torch bearers of CA profession with tremendous

energy & zeal.

Committee Member of WICASA-2012

Mohd. Atiq Qureshi



of The Institute of


VOL. XII JAN. 2013l “You cannot believe in God until you believe in yourself.”9

Accounting for Service Tax under point of taxation regimeContributed by : (CA Final Student)Aesha Parikh

Background

Case study

Date Transactions

Date Particulars Debit Credit

Liabilities Amount Assets Amount

Current Liabilities and provisions : Current Assets, Loans & Advances :

The Ministry of Finance has brought into force the Point of Taxation Rules 2011 from July 2011. Although it has been nearly a year

since these rules have been brought into effect, many of the clients find it difficult even today to keep track of service tax liability in

their books of accounts. Prior to the introduction of said rules, service tax was payable on receipt basis. Consequently whenever, an

invoice was raised, service tax portion of the invoice would be transferred to “Deferred Service Tax” account. Whenever collections

are made against the invoice, the service tax pertaining to collections will be transferred from “Deferred Service tax ledger” to

“Service Tax Payable” ledger. The latter showed the service tax actually payable to revenue authorities on account of collections.

However, there were accounting issues (which continues even today with small scale entrepreneurs) when the amount was

collected in advance. In most of the cases, service tax liability on advances has been debited the “Deferred Service Tax” ledger or

“Service tax payable” ledger. This practice portrays erroneous balances of service tax dues. However, as per the Provision of Point of

Taxation Rules 2011, service tax, in short, has to be paid at the time of Invoicing or collection whichever is earlier.

Mr. X, a Consultant enters into the following Service related transactions in the month of March 2012:

01-03-2012 Raises an Invoice of Rs 1,00,000 + Service tax of Rs 12,360 on Mr. A

02-03-2012 Receives an advance of Rs 2,00,000 from B for an invoice to be raised in subsequent months

03-03-2012 Receives an Invoice for input services of Rs 80,000 plus service tax of Rs 9,888 from C

He should make the following journal entries:

01-03-2012 Mr. A 1,12,360

To Consultancy Charges 1,00,000

To Service Tax payable 12,360

02-03-2012 Bank A/c 2,00,000

To Mr. B – Advance ledger 2,00,000

03-03-2012 Service expenses 80,000

Service tax payable 9,888

To Mr. C

It should be noted that at this stage, his “service tax payable” ledger will show a balance of Rs 2,472. However this does not take into

account the service tax liability of Rs 22,000 – being service tax payable on advance received (Rs 2,00,000 x 12.36/112.36). To

overcome this limitation, the following journal needs to be passed on 2nd March 2012

02-03-2012 Advance Service Tax 22,0000

To Service Tax Payable 22,000

The extract of Balance sheet (not as per Revised Schedule VI) on 31st March 2012 is as follows assuming that the service tax liability

of Rs 24,472 is being paid in April 1st (Ignoring interest):

Service tax payable 24,472 Advance service tax 22,000

Mr. B – Advance Ledger 2,00,000

Let us assume that the service tax of Rs 24,472 gets paid in 1st April 2012 and that there are no other service related transactions till

31st May 2012. The following transactions (Portrayed as Journal entries) occur in the month of June. It should be noted that the

payment has not been made with respect to input services received from C till 30th June 2006.

(Being invoice raised)

(Being advance received from Mr. Z)

(Being input services invoice received) 89,888

(Being service tax payable on advance received on 2.3.2012 from Mr. B)



of The Institute of


VOL. XII JAN. 2013l “You cannot escape the responsibility of tomorrow by evading it today.”10


Total 86,767


Liabilities Amount Assets Amount

Current Liabilities : Current Assets :

Other Important Points to be noted:

01-06-2012 Mr. D 3,37,080

To consultancy charges 3,00,000

To Service tax payable 37,080

(Being invoice raised on Mr. D)

02-06-2012 Mr. B – Debtors ledger 3,61,800

Mr. B – Advance Ledger 2,00,000

To Consultancy Charges 5,00,000


(Being invoice raised on Mr. B after setting off the advance received)

It should be noted that at this stage, the service tax payable ledger shows a balance of Rs 98,880. But the actual amount payable

works out to Rs 86,767 as follows:

Service tax on Invoice raised on Mr. D 37,080

Balance Service tax on Invoice raised on B after adjusting advance service tax paid

(561800-200000)*12.36/112.36 39,799

Reversal of Input credit taken on March month * 9,888

* If payment is not made within 3 months, the CENVAT taken earlier shall be reversed

To ensure that the books show Rs 86,767 as service tax payable on 30.6.12 the following entries are to be passed on 30.6.12:

30-06-2012 Service tax payable 22,000

To Advance Service tax 22,000

(Being service tax paid in month of March 12 on account of advance

received now reversed)

30-06-2012 Un-paid CENVAT (Current asset) 9,888


(Being CENVAT credit reversed on account of non-payment)

On 30th June 2012, the extract of balance sheet is as follows:

Service tax payable 86,767 Un-Paid CENVAT credit 9,888

The unpaid CENVAT credit of Rs 9,888 can be set off against liability once the payment is being made towards the input services.

If the audit of the client gets completed only in say August 12 for Fyr 11-12, the auditor should look for the subsequent payment

being made with respect to Input service from C. Since the input service has been subsequently reversed, the said item should be

dealt with under AS 4 – Contingencies and Events Occurring after Balance sheet date. The fact of reversal of CENVAT in June 12 for

credit taken on 31.3.12 is not an adjusting event because, the Service Tax liability to the extent of Rs 9,888 arises only in June and not

in March 12. Consequently no adjustment needs to be made for this in march 12. However, if the subsequent reversal of CENVAT

credit is so material, the auditor should insist on disclosure to that extent

The Un-paid CENVAT credit represents the future savings in Service Tax liability that will crystallize in the month in which the same

will be paid. However, if the client decides not to make payment to Mr. C or write back the entry made on 31.3.12 for the expenses

booked, the Unpaid CENVAT credit ledger should also be correspondingly written off. Let us assume that client writes off this unpaid

CENVAT credit. However after 5 month he makes payment to Mr C. It should be noted that he will not have an “Unpaid CENVAT

Credit” asset to set off service tax liability because, he has already claimed IT deduction to the extent of Rs 9,888 by writing off the

CENVAT credit.



of The Institute of


VOL. XII JAN. 2013l “Whenever we attain a higher vision, the lower vision disappears of itself.”11

ANNUAL SPORTS FESTIVAL 2012 ON 15 & 16.12.2012

Winning Team of Volleyball Tournament (15.12.2012) Winning Team of Cricket Tournament (15.12.2012)

YOUTH FESTIVAL XITIJ-2012

DJ in Youth Festival XITIJ-2012 Garba in Youth Festival XITIJ-2012 Inauguration of Youth Festival XITIJ-2012

Past Chairman Valedictory Ceremony of Youth Festival XITIJ-2012 WICASA Committee - 2012



of The Institute of


VOL. XII JAN. 2013l “It is better to make someone smile, Rather than to laugh at someone”12

PHOTOFLASH

Industrial Visit Jointly with Surat Branch of WICASA at

Hindustan Pharmaceutical, GIDC Por, Baroda (06.12.2012)Industrial Visit to Baroda Diary (07.12.2012)

Industrial Visit to Cold Storage Room at GIDC (19.12.2012)

Counseling at Mavlankar School (20.12.2012) Hotel Industry Visit at Furrat Hotel International (21.12.2012)

Career Counseling at GEB School (21.12.2012) Visit to INOX Multiplex (24.12.2012)

Missionaries of Charity by GMCS Batch-38 (19.12.2012)

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