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
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“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012.
Telefax : +91 (265) 2680593, 2681115 E-mail: [email protected] Web : www.baroda-icai.org
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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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
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Dec
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Pa
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Dec
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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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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)
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. XII JAN. 2013l “You cannot escape the responsibility of tomorrow by evading it today.”10
Date Particulars Debit Credit
Total 86,767
Date Particulars Debit Credit
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
To Service tax payable 61,800
(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
To Service tax payable 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.
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
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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