It is very interesting to observe how India as a country is
shaping up in the regulatory and compliance domain in the recent times. The
evolution of laws which was expected to happen gradually through amendments and
case laws have suddenly picked up such a pace that we are now forced to sit up,
take notice and start updating ourselves in almost all the laws that have to do
with the economy of our nation.
It all started with a small change in a small law called
Sales Tax. We saw, for the first time in India sheer political will succeeded
in changing Sales Tax into VAT. All the states agreed and complied with the
same. Since that time onwards there is no looking back. The following is an
interesting list, which forces one to reflect, that how many of these I
personally have to learn or update myself with:
1.
State
Sales Tax becomes VAT: The concept of levy itself has changed. The regime
of one point levy became multi-point levy. Thus, the concept of Tax credit
which was restricted to excise earlier now became a term of a common business
person in the country. This change triggered what we call as the “Renaissance in the Financial World…”
2.
Accounting
Standards becomes IFRS: All the Indian Accounting Standards also known as
Indian GAAPs are now becoming IFRS (International Financial Reporting Standards)
starting from 2011-12 to 2013-14. This has actually led to globalization of
Indian financial statements. So apart from having Balance Sheet, P&L, Cash
Flow and Summary notes, now we shall have SCIE (Statement of Changes in Equity), Statement of Comprehensive Income
and Extensive Notes to accounts including points like Critical Judgments,
Estimation Uncertainties, etc. The Good News is that the Balance Sheet is to
have some logical format.
3.
Companies
Act Getting Leaner: With Companies Amendment Bill coming out this year, The
New Companies Act will offload its excess baggage i.e. the Rules, the forms etc
and the main provisions of the Act will reside in the Act and all the balance
stuff will be logically dissected.
4.
Indirect
Taxes taking the shape of GST (Goods
& Services Tax): The latest amendment on the Cards is the Excise
and the Customs and the Service Tax is taking a new shape and are coming to us
as one common Goods and Services Tax, which is promising to remove a lot of
anomalies in the current taxation regime.
5.
Income
Tax Act, 1961 to become DTC (Direct Tax
Code): This Law was considered to be one of the most unchangeable laws
in the country. It came to all as a surprise when government decided to
overhaul the law which was affecting the common man in the nation. DTC promises
to be fair, user friendly, simplified and considers the ability to pay of today’s
time.
The
current government has fostered a lot of courage to overhaul the laws governing
our economy at a stroke. One would actually have to consider updating on the
sample list of changes captured above and much more to come. From an organization’s
perspective a company would have to now get evaluated with newer set of
parameters than earlier. From a professional’s perspective, self development
would be the mode that one would have to get into.
Revolutions
like these create a lot of opportunities for industry professionals in the
country. They also create threats for a lot of people. One thing is for sure,
we all would have to fasten our seat belt and take the ride to a newer world,
which is hope fully more integrated and more simplified for our fellow
countrymen.
Vishal
Thakkar
Brianna
Knowledge Resources Pvt Ltd
