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EIRC NEWSThe Institute of Cost Accountants of India

` Annual200/-Vol. 9 No. 05 June, 2016

ISSN 2320 –1584 EIRC News

Goods

&

Services

Tax

(GST)

in India

Dignitaries on the dias - CEP on Standards on Cost Audit & CAS”organized by EIRC on 17 May 2016 at EIRC Auditorium.

(L/R) CMA Vijendra Sharma, CCM, ICAI, CMA Raju Iyer, CCM, ICAI,& CMA J K Budhiraja, Senior Director (Technical), ICAI.

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CMA Bibekananda Mukhoapdhyay Vice Chairman, EIRC presenting memento toCMA Balwinder Singh, CCM, ICAI - CEP on Standards on Cost Audit & CAS”

organized by EIRC on 17 May 2016 at EIRC Auditorium.th

Dignitaries on the dias - CEP on “The Companies Act 2013” organized by EIRCon 20 May, 2016 at EIRC's Auditorium. (L/R) CMA Dr. P.V.S. Jagan Mohan Rao,

CCM, ICAI, Mr B Mohanty, ROC Kolkata & CMA Biswarup Basu, CCM, ICAI.

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Lighting of lamp by Mr B Mohanty - CEP on “The Companies Act 2013”

A cross of Members, Employees with CMA Dr. P.V.S. Jagan Mohan Rao, CCM, ICAI & CMA Arundhati Basu, RCM, EIRC

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CHAIRMAN’S COMMUNIQUE 4

MEMBER’S SECTION

STUDENT’S SECTION

Quiz Master Page 32

ChapterActivities 33

EIRCActivities 34

CMAAjay Deep Wadhwa

SECRETARY’S COMMUNIQUE 6

NEWS

Some key issues of Goods and Services 8Tax (GST) in India

Goods and Services Tax (GST) - Emerging 16Indirect Tax Reforms in India

Problems & Prospects of Surgical Instruments 20Manufacturing Industry in Special EconomyZone (SEZ): A Study with reference to Baruipur(South 24 Parganas) Municipality

Foreign Direct Investment - A Key Tool to 28Measure Investment Climate- Compliancesand Formalities

Biswajit Paul

Mr. Pema Lama

Sudipta Halder

Timir Baran Chatterjee

CHAIRMAN’S COMMUNIQUE

EIRC NEWS 4

Vol. 9 No. 05 June, 2016

Respected members & Beloved Students,

Organising CEPs for members at EIRC is very frequent now. During this month we have organized several programmes. CEP

on Standards on Cost Audit & CAS” was organized by EIRC on 17 May 2016 at EIRC Auditorium. CMA Raju Iyer, CCM,

ICAI, CMABalwinder Singh, CCM, ICAI & CMAJ K Budhiraja, Senior Director (Technical), ICAI CEP

on “The CompaniesAct 2013” was organized by EIRC on 20 May, 2016 at EIRC'sAuditorium. CMADr. P.V.S. Jagan Mohan

Rao, CCM, ICAI & CMA Biswarup Basu, CCM, ICAI were the speakers. Mr B Mohanty, ROC Kolkata was the Chief Guest

on the occasion. On 20 May 2016, Anti Terrorism Oath was taken by Members, Employees, CCMs & RCMs at EIRC. EIRC

jointly with Damodar Valley Corporation organized a CEP on “Service Tax & Related Issues” at Chandrapura Training

Institute, DVC, Bokaro on 4 June 2016. CMA Mrityunjay Acharjee, Sr. Vice President, Balmer Lawrie & Co. Ltd was the

Speaker.

We have organized a Mega event i.e. 37 Cost Conference at Science City, Kolkata on 11 and 12 June, 2016. The Conference

was inaugurated by Shri Sobhandeb Chattopadhyay, Hon'ble Minister in-charge, Power & Non-Conventional Energy

Sources, Government of West Bengal on 11th June, 2016 (Saturday). Rear Admiral A K Verma, CMD of Garden Reach Ship

Builders & Engineers Ltd. was Guest of Honour. Shri Amit Sinha, Executive Vice President of NSDL and Swami

Suparnananda ji Maharaj, Secretary of The Ramakrishna Mission Institute of Culture, Kolkata were the special guests. CMA

Manas Kumar Thakur, Vice President of ICAI also addressed the participants in the inaugural session. The 2-day Conference

was focused on the theme “Managing cost and taking successful business decisions - Competency of CMAs" and had the

deliberations by the eminent experts from different sectors on Manufacturing, Mining, Service, MSME and Power Sectors

apart from a CFO Meet and Panel discussion on GST.

CMA H Padmanabhan, CCM, ICAI, CMA (Dr.) I Ashok, CCM, ICAI, CMA Avijit Goswami, CCM, ICAI, CMA Biswarup

Basu, CCM, ICAI, CMA A B Nawal, Chairman, Indirect Taxation Committee, ICAI, CMA Raju Iyer, CCM, ICAI, CMA

Niranjan Mishra, CCM, ICAI, CMA Sanjay Gupta, CCM, ICAI CMA Cheruvu Venkatramana, RCM, EIRC, CMA CMA

Bibekananda Mukhopadhyay, Vice-Chairman, ICAI-EIRC, CMAAshis Banerjee, Treasurer, ICAI-EIRC &

CMAB K Dash,AGM (Finance), NALCO Ltd., Bhubaneswar, CA. CMAS B Mahapatra, Consultant and Sr. Faculty of IICM,

Ranchi, CA. CMA CS Arun Kedia CFO, EMC Ltd., Kolkata, Shri Saumyajit Guha, COO, Calcutta Angels Network, Kolkata,

CA. CMA Kalyan Kar, Founder & MD, Inthink Knowledge Ventures, Kolkata &Ms. Ushoshi Sengupta, Founder & CEO,

TES, Kolkata, CMASabyasachi Mitra, Director (Finance), Howden Solyvent (India) Pvt. Ltd. & CMASudip Datta, COO, IL

&FS IDC Ltd., Kolkata, Janab KhalidAnwar, Joint Commissioner, Directorate of Commercial Taxes, Govt. of W.B., CMAT B

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were the speakers.

CMA Shyamal

Bhattacharyya, Member, ICAI-EIRC were also present.

EIRC NEWS 5

Vol. 9 No. 05 June, 2016

Chatterjee, Sr. Vice President & Company Secretary, DIC India Ltd., Kolkata, CMA Debasis Ghosh, Director, Deloitte

Haskins & Sells LLP, Kolkata, CMA Mrityunjay Acharjee, Sr. VP, Balmer Lawrie & Co. Ltd., Kolkata, Shri Amit Sinha,

Executive VP, NSDL, Mumbai Dr. Jayanta Kumar Seal Associate Professor, IIFT, Kolkata Shri Vibhor Tandon, Asst. VP,

MCX India Ltd. & Shri Diptendu Moulik, Sr. Executive, MCX of India Ltd, CMA K P.Gupta, GM (Finance), Cost & Budget,

NTPC Ltd Shri Debashis Mukherjee, General Manager (Credit), UBI, Kolkata & (Dr.) D P Nandy, Director (Research &

Journal), ICAI were the speakers.

More than 300 participants from industry, practitioners, corporate houses, government departments & academicians attended

the Conference.

CMA Tapas Paul, a member of the Institute was felicitated on the occasion for his yeomen service to the CMA profession

through his initiative CMA Next Step. Asansol Chapter was also felicitated for excellent performance for organizing campus

placement & placing the qualified students in different MNCs.

I extend my whole hearted thanks to all the sponsors, advertisers for extending their support & making the conference a grand

success.

With Best Wishes,

CMA Shiba Prasad PadhiChairman, EIRC of ICAI

SECRETARY’S COMMUNIQUE

EIRC NEWS 6

My dear professional colleagues,

National Company Law Tribunal & National Company LawAppellate Tribunal has been introduced in the CompaniesAct, 2016.It

is expected that those tribunals will be constituted by the end of 2016. Powers from various authorities and judicial forums have

been transferred including oppression & mismanagement, investigation, repayment of deposits , Winding up, reduction of capital,

rehabilitation etc. The revival of sick companies which was earlier under the jurisdiction of BIFR will also be shifted to NCLT.

Insolvency & Bankruptcy code will also play a vital role under NCLT. Cost Accountants in practice may represent any proceeding

before the Tribunal on behalf of its clients.

Our Institute has approved the following CostAccounting Standards/ Guidance Note.

CostAccounting Standard (CAS-23) on Overburden Removal Cost

CostAccounting Standard (CAS-24) on Treatment of Revenue in Cost Statements

Guidance Note on Treatment of Costs Relating to Corporate Social Responsibility (CSR)Activities

I on behalf of EIRC, am requesting all the members to make this 37 Regional Cost Conference (RCC) on the theme “Managing

Cost and taking successful business decisions –Competency of CMAs” on 11 & 12 June,2016 at Science City Mini Auditorium,

Kolkata a grand success..

Foundation Day of the Institute was observed on 28 May, 2016 by the different Chapters in this region. Members of chapters have

attended at their Chapter premises and discussed issues on professional interest.

During this month, EIRC has organized the following workshops at its premises on 4 May,'16 on “Union Budget - applicable

provisions for Service Tax ,Excise & Customs , on 9 May,2016 on “ Commodities & derivatives Markets” on 17 May'2016 on

“Standards on Cost Audit & CAS “.The key speaker was CMA Balbindar Singh ,CCM and CMA Bijender Sharma ,CCM , another

workshop on “Companies Act,2013 and Internal Audit” on 20 May'16 wherein the key speaker were CMA Jagan Mohan Rao,

CCM and CMABiswarup Basu ,CCM of the Institute .

In the event of 2 year of collaboration with NISM, Institute at its Headquarter in Kolkata at Sudder Street had arranged National

Seminar jointly with them on Capital Market on 14 May, 2016 themed “Securities Markets in India – unleashing start-up potentials

Activities of the Chapter & the Region:

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Vol. 9 No. 05 June, 2016

EIRC NEWS 7

“. Panellist were from eminent personalities from different Sector .A good gatherings from members have enriched their

knowledge from the discussions on academic interest.

It was my proud privilege to attend the workshop organized by the Howrah Chapter on the theme “National Company Law Tribunal

– role of CMAs and Insolvency & Bankruptcy code “on 18 May, 2016 .The key speakers were CMA Jagan Mohan Rao, CCM and

Chairman Coporaw Law Committee. CS Haransraj Jaria, Company Secretary, Tata –SAIL Jt.Venture Ltd thereafter delivered on

“CSR” under the CompaniesAct'13.On 28 May'2016 they have organized workshop on “ ForensicAudit & CostAudit Standard” .

A good number of gatherings shared their knowledge in those workshops. Moreover, they have also organized one workshop on

“InvestorsAwareness “on 29 May'16 as per programme schedule of Ministry of CorporateAffairs, GOI.

Campus Placement Programme conducted at EIRC for the qualified students were conducted successfully in May'16 wherein 6

Final pass out and 8 Intermediate pass out got selected. Heartiest congratulations to all the successful candidates. EIRC also

requested all interested passed out candidates to forward their CV for suitable placement in different Industries.

Myself along with CMA Cheruvu Venkataramana, RCM visited Jamshedpur & Ranchi Chapter in May'16 and meet their

committee members for the best activities and ensure facilities to the members & Students of those chapters. EIRC also planned to

interact with other chapters in this region in phases and concentrates in improving the best services to the Members & Students of

the Institute.

I heartily welcome all new associate and fellow members of the Institute who have enrolled themselves during this month. We

highly appreciate this initiative of applying for Membership (Associate & Fellow) as it gives a proud feeling of being a part of the

profession, also through this move we grow in numbers which in turn strengthens our professional hold over the industry as well as

the ministry.

Let us live together with love, peace and harmony.

I once again extent my warm regards and best wishes to all the members and their families.

With warm regards.

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CMA Pranab Kr. Chakrabarty

Secretary, EIRC of ICAI

Vol. 9 No. 05 June, 2016

EIRC NEWS 8

Introduction

In India, first time proposal for introduction of Goods andServices Tax (GST) was made on 28th February 2006 by Sh.P.Chidambaram, the then Hon'ble Finance Minister in hisBudget Speech for the year 2006-07. The Hon'ble FinanceMinister, Sh. ArunJaitley in his Budge Speech dated 28thFebruary 2015 for the financial year 2015-16 has stated thatintroduction of GST is eagerly awaited by Trade and Industryand GST will put in place a state-of-the-art indirect tax systemby 1stApril, 2016.

Introduction of GST in India Would be a biggest indirect taxreform. It would probably change the tax administration andthe manner of conducting business in India. Initially, it wasconceptualized that there would be a national level Goods andServices Tax, however, with the release of First DiscussionPaper by the Empowered Committee of the State FinanceMinisters on 10.11.2009, it was made clear that three would bea "Dual GST" in India, having taxation power - both by theCentre and the State to levy the taxes on the Goods andServices. The Hon'ble Finance Minister Sh. PranabMukherjee on 10.11.2009 had clearly stated that by detaileddiscussion on the First discussion paper released by theEmpowered Committee will help to refine the design andconcept further. The 13th Finance Commission headed by Dr.Vijay Kelkar constituted the Task Force of Goods andServices Tax (GST), which had released its Report on15.12.2009 and suggested the total GST rate of 12% - 5% atthe Centre and 7% at the State levy and exemption from tax toeducation and health sector, public services provided by theGovernment and unprocessed food, however, suggested tobring the Real Estate transactions under the tax net. TheReport of the Task Force had suggested the taxation of inter-state transaction from different fashion then what has beenrecommended in the First Discussion Paper released by theEmpowered Committee of the State Finance Ministers. Thusdesign and structure of GST envisages in the Report of theTask Force is different from as suggested in the FirstDiscussion Paper released by the Empowered Committee.Further, the Prime Minister's Economic Advisory Committee

(PMEAC), Chairman C.Rangarajan, as per TIO/ET dated21.12.2009 has said, "The Centre could follow the pattern inwhich there is only one rate for goods and one rate forservices, or one rate which is common to both goods andservices". It did, however, trigger the debate on the structureand design of the GST. As per the report dated 22.07.2010published in various newspapers, the Central Governmenthas proposed the GST tax rates viz., 20% on standard goods,lower rate of 12% on merit goods and 16% on services.However, in future it is proposed to have a single rate of 16%.Further as per the news items published in variousnewspapers in November 2014, a sub-committee comprisingcentral and state government officials has recommended arevenue-neutral rate (RNR) - a rate at which there will be norevenue loss of the states after the adoption of GST - of almost27% under the proposed GST regime. While the state GST(SGST) component5 is proposed to be 13.91%, the centralGST component is proposed at 12.77%. The committee hasalso proposed a narrow band for the SGST component.

To understand the concept of GST.

To compare the present tax system and proposed taxsystem in our country.

To explore the need and significance (benefits) of reformin Indirect Taxation in India.

To know the necessary steps to be taken forimplementing GST in near future.

To study some key issues related with GST

To suggest the future prospects of GST in India.

The present study is absolutely descriptive in nature. The dataused for the study is secondary in nature and has beencollected from different Books, Magazines, Newspapers,Research Articles, Research Journals, E-Journals, andwebsites. In this article, I have started with the introductorydiscussion on GST and have tried to highlight the objectivesand benefits of the proposedGST which we aretrying toachieve. Also it has been tried to analyse the proposed

Objectives of the study

Methodology of the study

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MEMBER’S SECTION

Some key issues of Goods and Services Tax (GST) inIndia

Biswajit Paul

Department of Commerce (Post Graduation under Calcutta University)Naba Ballygunge Mahavidyalaya, Bosepukur, Kolkata

biswajitpaul88@yahoo.com

Vol. 9 No. 05 June, 2016

EIRC NEWS 9

expectations from coming GST. Thereafter, I have discussedsome key issues of GST that would highlight the ponderosityof this tax reform.

The GST is to cover all goods and services; it is however,proposed that there would be a small negative list of goods andservices which will not be taxed under GST.All other suppliesof goods and services would be subject to tax. There will betwo taxes levied on each such supply - one as a part of theCentral GST andthe other as a part of the State GST. It isproposed that the GST regime would have two rates of tax, alower rate for supply of specially identified goods andservices and the rest of the supplies would be taxable at astandard rate.a) Some supplies that are to remain outside thebase for GST are petrol, diesel, ATF, crudepetroleum, naturalgas, alcoholic beverages for human consumption, real estateand electricity.b) The constitutional amendment allows for theincorporation of petrol, diesel,ATF and crudepetroleum in thebase at a subsequent date. GST is to be administeredseparately by the Central and State Tax Administrations. It isproposed that there would be common registration andcommon portal for filing of returns. There are no cleardecisions available in the public domain on whether therewould be further coordination between the two sets of taxadministrations. In the proposed system of GST both Centraland State Government will have concurrent taxation power ofgoods and services at all stages of value addition (productionand distribution or trade). The proposed system is animprovement over the present system as it will reduce thecascading of taxes.

GST is a multi-tier tax where ultimate burden of tax fall on theconsumer of goods/services. It is called as value added taxbecause at every stage, tax is being paid on the valueadditional. Under the GST scheme, a person who was liable topay tax on his output, whether for provision of service or saleof goods, is entitled to get input tax credit (ITC) on the tax paidon its inputs, i.e., for purchase of goods or services, thus

Concept of GST

Figure 1: The present Goods and Service Tax Structure

Source: Why India needs GST?,Vinod Kothari.

ultimately tax is being paid on the value additions, which isbeing paid to the Government. In a situation, where output taxexceeds the input tax, the person is entitled to refund for thedifference or same may be carried forward.

Table 1: Some important dates related to GST

Dates Events

28.03.2006 FM announces GST in India from01.04.2010

10.05.2007 Joint Working Group set up by EmpoweredCommittee of State Finance Ministers.

19.11.2007 Joint Working Group submitted Report toEmpowered Committee.

28.11.2007 Report of Joint working Group discussedby Empowered Committee and somechallenges made.

30.04.2008 Views of Empowered committee was sentto Government of India.

12.12.2008 Comments received by Empoweredcommittee from government of India.

16.12.2008 Comments of Government of Indiaconsidered by Empowered Committee andCommittee was constituted to considerthese comments.

21.01.2009 Views received by Empowered Committeeand principally accepted by EmpoweredCommittee, a Working group was formedby State/Central Government Officers tosubmit recommendations of structure ofGoods and Services Tax.

19.10.2009 Interaction between Finance Minister andEmpowered Committee for compensationfor loss of revenue to the State for phase outof the Central Sales Tax.

10.11.2009 First discussion Paper released byEmpowered Committee.

15.12.2009 Report of the Task Force on Goods andServices Tax constituted by the 13thFinance Commission.

21.12.2009 The Prime Minister's EconomicAdvisoryCommittee (PMEAC), Chairman C.Rangarajan, has said, "The Centre couldfollow the pattern in which there is only onerate for goods and one rate for services, orone rate which is common to both goodsand services".

Vol. 9 No. 05 June, 2016

EIRC NEWS 10

22.03.2011 The Constitution (One Hundred andFifteenthAmendment) Bill, 2011ntroduced in Parliament.

19.12.2014 The Constitution (One Hundred andTwenty-secondAmendment) Bill, 2014,ntroduced in Parliament.

06.05.2015 The LokSabha (Lower House of theParliament) passed the Bill andpassed thesameto RajyaSabha (Upper House of theParliament) for consideration.

14.05.2015 The RajyaSabha referred the Bill toitsSelect Committee.

22.07.2015 The Select Committee of RajyaSabhasubmitted their report onthe Bill.

21.07.2015 to The Committee accepted majority of13.08.2015 provisions of the Bill and recommended

thata few changes. However, the Bill cannotbe taken up for voting in the monsoonsession of the Parliament.

Our current structure of indirect taxes is driven by amultiplication of taxes-some levied by the Centre and othersby the States. Each of these taxes applies to a narrow base bothin terms of the economic activity it covers e.g. manufacture,sale entry, entertainment etc. and the range of goods andservices it applies to. While the base for many of these taxesoverlaps, each is an island in terms of flow of input credit. Theoutput tax is allowed to be adjusted against tax already paid oninputs only in a few case. For instance, for which no credit isallowed for Central Sales Tax (CST). Then, there is a varietyexemptions meant to serve multiple socio-economicobjectives. As a consequence, high rate of tax are required tobe imposed to generate a given amount of revenue. There is ahidden burden of taxes in the form of cascading and doubletaxation and our present tax structure is complex and prone todisputes and litigation. Therefore, by implementing GST, it isexpected that, our Country will overcome the deficiency ofexisting taxation system.

Although introduction of VAT has been successful in India,there continue to be certain shortcomings in the VAT structureboth at Central and State level. For instance, CENVAT doesnot include many Central taxes such as additional customduty, surcharge etc. As a result, the benefit of comprehensiveinput tax and service tax set off is still not available to themanufacturers and dealers. Further, the value added chain inthe distribution trade below manufacturing level has not yetbeen captured by the government in the existing CENVATscheme. This means a loss of opportunity of revenue gain forthe Centre.

Source: Compiled by author

Why GST in India?

Similarly, at the state level VAT structure, many taxes such asluxury tax, entertainment tax etc. are not a part of VAT and donot provide set off relief. Further, the CENVAT paid on thegoods remains included in the value of goods to be taxedunder the State VAT which leads to a cascading effect.

In this way the GST at the Central and State level will providemore relief to the trade, industry through a morecomprehensive and wider crush of input tax and service tax,set off relief, further removal of cascading effects and morepowers of taxation to the Centre and States.

The benefits of long-awaited reform in our indirect taxationpromises to all of us are:

Our current structure of indirect taxes is driven by amultiplicity of taxes-some levied by the Centre andothers by the States.

Each of these taxes applies to a narrow base both interms of the economic activity it covers e.g.manufacture, sale entry, entertainment etc. and the rangeof goods and services it applies to.

While the base for many of these taxes overlaps, each isan island in terms of flow of input credit.

The output tax is allowed to be adjusted against taxalready paid on inputs only in a few cases.

Then, there is a variety of exemptions meant to servemultiple socio-economic objectives.

As a consequence, high rates of tax are required to beimposed to generate a given amount of revenue.

The positive sides of GST are well-known. The GST hasvarious advantages as compare to the existing indirect taxessystem in India, some of them are:

It will re-distribute the burden of taxation equitablybetween manufacturing and services bringing about thequalitative change in the tax system.

With the maximization of exemptions, it will burden thetax base and lower the tax rates.

By switching to the destination principle, the distortionswill be reduced fostering a common market across thecountry.

The compliance cost will come down and our trade andindustry will become more competitive leading to anincrease in exports and lower prices for domesticconsumers.

There is enormous scope for augmenting revenuecollections by improving our tax collection machineryand the delivery of taxpayer services.

There is ample evidence to show that lower taxes lead tobetter compliance and higher revenues.

GST gives us an opportunity to ring together the

Benefits of Reform in Indirect Taxation

Advantages of GST

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Vol. 9 No. 05 June, 2016

EIRC NEWS 11

machinery of the Centre and the States to jointly workfor better enforcement.

GST has a simple tax structure. Only one or two rates arechanged on all goods and services and it is a uniformsingle tax across the entire supply chain.

GST increases tax revenue due to a wider base and bettercompliance. It allows full credit for all input taxes acrosssupply chain and across States.

It reduces distribution cost as there is no tax barrier inGST for inter-State movement of goods.

It is an unbiased tax as it is neutral to business processes,organization structures, product substitutes andgeographic locations.

It will facilitate investment decisions being made onpurely economic concerns, independent of taxconsiderations.

What we expect from coming GST that is very importantissue. The proposed Goods and Services Tax (GST) candeliver on all these promises only if it has the followingessential features:

It is comprehensive in scope and applies to as larger arange of goods and services as possible by minimizingthe number of exemptions to a small list of essentialitems which Impact the common man. To the extentpossible, the exemption lists of the States and the CentralGovernment are in alignment.

The rates of tax of CGST and SGST taken together aremode rate.

The rates of tax of SGST and exemptions from SGST areuniform throughout the country so that a given set ofgoods and services invites the same tax treatment inevery State.

The input credit chain is seamless covering the entirevalue chain from manufacturing to retail without breaksregardless of whether goods or services are suppliedwithin a State or across State boundaries.

As far as possible, every transaction in the tax net bearsboth CGST and SGST.

The tax treatment of goods and services is similar.

The central and State levies are fully neutralized in thecase of exports (out of India).

The procedures are simple and harmonized between theCentre and the States.

The Hon'ble Finance Minister (Ex), Mr. Pranab Mukherjee inhis speech dated 10.11.2009 had said, "I notice that significantprogress has been made in developing a consensus on variousissues".

Now we must ensure that settled issues are not re-opened

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Expectations from proposed GST

What needs to be done for arriving at GST

and we move forward at a first pace.

Once we decide on the rate structure and agree on the listof exemptions there should be no deviation in the pursuitof short-term interests.

All of us will have to keep the long-term interests of theeconomy in view by taking carefully through-outdecisions in consultation with each other before makingany deviations.

This spirit of co-operative federalism is the essence ofGST and the only feature that would ensure that anational market with free movement of goods andservices across State boundaries develops, in the truesense.

There is a view that insistence on strict adherence ofmutually-agreed rates would impact the fiscal policy ismuch wider than taxation and goals of public policy areas effectively met through the expenditure side of thebudget.

Even within the realm of taxation, the belief that the onlydegree of freedom available to us for enhancingrevenues is by changing the rates of tax is a somewhatlimited view.

To improve the quality of our tax payer services, wehave to focus more closely on the benefits of workingcollaboratively with the taxpayer community toimprove our outreach and assist them in the duedischarge of their tax liability. This is an area where thepolicy options are many and the freedom to make adifference immense.

Amongst the administrative actions that are critical forthe success of GST is the creation of a strongInformation technology Infrastructure both of theCentre and the states. Many of the issues, I havementioned earlier are easily amenable to IT-basedsolutions. Besides, such an infrastructure is required forreducing the physical interface between the taxpayerand the department so that compliance costs arecurtailed. Some other measures for improving internalefficiency with in tax departments include quick andtimely exchange of data between the Centre and theStates for risk-profiling, audit etc.

I. As per the Constitution (One Hundred and Twenty-second Amendment) Bill, 2014, the following taxes tothe subsumed under GST.

A. Central taxes to be subsume[on the basis of amendmentsin Entry 84, Entry 97 of Union list andArticle 271]

Central Excise Duty.

Additional Excise Duties.

Excise Duty levied under the Medicinal and ToiletriesPreparations (Excise Duties)Act, 1955.

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Taxes expected to be subsumed in GST

Vol. 9 No. 05 June, 2016

EIRC NEWS 12

Service Tax.

Additional customs duty, commonly known asCountervailing Duty.

SpecialAdditional Duty of Customers.

Central Surcharges and Cessesso far as they relate to thesupply of goods and services.

B. State Taxes to be subsume[on the basis of amendments inEntry 52, Entry 54, Entry 55 and Entry 62 and Article269]

State ValueAdded Tax/Sales Tax.

Entertainment Tax (other then the tax levied by the localbodies).

Central Sales Tax (levied by the central and collected bythe States).

Octroi and Entry Tax.

Purchase Tax.

Luxury Tax.

Taxes on lottery, betting and gambling.

State Cesses and Surcharges in so far as they relate tosupply of goods and services.

II. As per the First Discussion Paper on GST released byEmpowered Committee, the following taxes to thesubsumed under GST.

The First Discussion Paper on GST released byEmpowered committee has given its recommendationsthat the following Central Taxes should be, to being with,subsumed under the Goods and Services Tax;

Central Excise duty.

Additional Excise Duties.

The Excise Duty levied under the Medicinal andToiletries PreparationAct.

Service Tax.

Additional customs duty, commonly known asCountervailing Duty (CVD).

SpecialAdditional Duty of Customers - 4% (SAD)

Surcharges.

Cesses.

Following State taxes and levies would be, to being with,subsumed under GST;

VAT/Sales tax.

Entertainment tax (unless it is levied by the local bodies).

Luxury tax.

Taxes on lottery, betting and gambling.

State Cesses and Surcharges in so far as they relate tosupply of goods and services.

Entry tax not in lieu of Octroi.

The Report of the Task Force on goods and Services Tax setup

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by the 13th Finance commission in its Report dated18.12.2009 has suggested that the Real Estate transactionsalso should be brought under the GST. The Trade has alsodemanded that Electricity duty should also be brought underthe proposed GST. However, in the present the Constitution(One hundred and Twenty-second Amendments) Bill, 2014,there is no such proposal to bring real estate transaction andElectricity duty under the GST.

However, in First Discussion Paper, it has been suggested thatalcoholic beverages would be kept out of the purview of GST.Sales Tax/VAT can be continued to be levied on alcoholicbeverages as per the existing practice and tobacco productswould be subject to GST with input tax credit (ITC). The FirstDiscussion Paper also suggested that basket of petroleumproducts i.e. crude, motor spirit (including ATF) and HSDwould be kept outside GST as is the prevailing practice inIndia. Sales Tax could continue to be levied by the States onthese products with prevailing floor rate. Whether Naturalgas should be kept outside the GST will be taken after furtherdeliberations. As per the Constitutional (One hundred andTwenty-second Amendments) Bill, 2014, in case ofpetroleum and petroleum products, it has been provided thatthese goods shall not be subject to the levy of Goods andServices Tax till a date notified on the recommendation of theGoods and Services Tax Council.

There will be a huge change in tax events. The proposed GSTregime would be entirely on different taxing principal thanthe existing taxation system, where the law was settled thatfor levy of duty of excise taxable event shall bemanufacturing or the production of goods, through there isnot such clarity in service tax. As, in GST there would be taxon supply on goods and services it would be difficult todetermine the taxable event for services being provided oncontinuous basis, similarly when the amount charged withoutproviding any services. Therefore, while drafting theprovisions these factors should be taken into account to bringclarity about the taxable event both for supply of goods andservices.

Under the GST regime, it would be necessary that thevaluation provisions are made in such a manner where therechances of disputes are minimal. The valuation provisionsshould take care and spell out the mechanism for valuations incase of related party transactions, avoid tax onreimbursement of expenses, valuation for branch transfer, incase same is proposed to be taxed. The valuation provisionsalso should take care where the supplier of goods separatelycharged amount for incidental services such astransportation, courier, printing, stationery etc. The lawshould also take into account the provision for service free of

Some Key Issues of GST

Taxable Event in GST

Valuation - a tough task

Vol. 9 No. 05 June, 2016

EIRC NEWS 13

cost or supply of goods on concessional rate or free sample.

Under the existing law services are being taxed by Centretherefore ordinarily it does not matter the place of supply ofservices. However the dispute has been seen when the servicehas either originated or destination is in Jammu & Kashmir,similarly where the services are availed outside India or fromoutside India. Since, under GST the services now would betaxed by States also. Therefore, it cannot be ruled out thatthere would be disputes on account of place of supply ofservice, which will be determine the taxing jurisdiction of theStates. There are many services such as telecommunication,transport, insurance stock broker, banking services and otherweb based services, where service provider may be in onState, the person who rendered in one or more Statessimultaneously. Therefore, it would be necessary that theplace of supply of services rules/provisions should be draftedtaking into account the above mentioned situations to avoidpossible disputes.

It would be important to define taxation of services at the Statelevel in the interest of the success of dual GST. There is likelyto be a lot of confusion about the taxation of inter-Stateservices and so this aspect needs to be addressed with utmostcare. Several local services could also have inter-state andcross border implications leading to disputes between variousStates on jurisdiction to tax such services. It may be difficult todefine the place of supply or consumption of service.

The proposed GST regime, goods or services may be givensame treatments, however, the person who are engaged insupply of goods and the person, cannot be treated equally, soare as timing of payments of tax is concerned. In the servicetax, initially tax was required to be paid only on realization ofvalue of taxable services, which is now being limited to onlylimited category of person such as Individual or partnershipfirm having turnover only upto Rs. 52 lacs, whereas for goods(both in excise and VAT), tax are required to be paid only afterremoval or sale of goods, irrespective of realization ofpayments. In fact, services provided by professionals likeChartered Accountants, Lawyers, Company Secretaries,Architects, etc. not only there are time gaps between therendering of services and realizations of payments, but alsomany times payments are made less than the billed amounts.In views of the same, under the Income Tax Act also optionhave been given to keep the books of account either on accrualbasis or cash basis, and such professionals always keeps therebooks of account on cash basis of accounting systems. Inviews of the above mentioned facts and circumstances, itwould be necessary, while draft the rules/provisions forpayments of tax, appropriate provisions should be made fortiming of payments tax by the services provided by

Place of supply of services

Taxation of Services and Inter-State Services

Time if making payment of tax

professionals.

Generally, indirect taxes are paid by the person who producedor supply goods/services. However, in case of services, thereare provisions of payments of services tax on the reversecharge basis by the recipient of services. Similarly, underVAT, on selected transactions, provisions have been made byrecipient by some state, for payments Works Contract Taxes(WCT) is being paid by recipient. Under Excise duty also onthe molasses procurement, duty is being discharged by theprocurer/buyer. Therefore, under GST, there may beprovisions for payments of service tax on reverse chargesbasis for the administration of taxes on certain transactions,though, ordinarily, the payment of tax would be made by theregistered dealer who shall supply the good or service.

Under GST, in the First Discussion Paper released byEmpowered Committee there is no clarity about the taxationtreatment for the work done on job work basis. As whileperforming the job on job work basis, sometime, person alsouses substantial material, therefore, whether it is a service orgood or both. Further, sometime the job work itself in theexisting law is amounting to manufacture. As it expected thatthere would be one rate of tax for services whereas for goodsthere would be more than one rate of tax. In such acircumstance it would be necessary to make a clear cut policyto levy a tax on job work transactions with clarity thatwhether such a transaction would be treated as service orservice and goods both. Further when the principal suppliescertain material to the job worker, who shall be entitled to taxcredit on such input, it also needs to be clearly spelt out.

In the proposed GST, inter-state transfers are proposed to betaxed under IGST scheme. However, there is no claritywhether the stock transfers to the branch on consignment salewould be covered under the said scheme. Different views anemerging, one school of thought says there should not be anytax on branch transfer and other view is that it should be taxedlike the sale to the other party and such tax should be allowedas credit. But, in that case, what shall be the value on whichtax shall be levied is a question to be answered? However,there are broad consensuses that when there would be inter-branch transfer with in the same state there would no be anylevy of the tax.

After 44th Amendment in the Constitutional maytransactions have been covers by Article 366 (29A) bytreating the same as 'deemed sales' which fall within thedomain of the State to levy tax on the same. Now the questionarises under the GST regime, such transactions shall betreated as sale or service, this question assume significancewhen it has been predicted that there would be different rate

Who should be liable to pay tax

Levy of tax on job work

Levy of taxes on stock transfers

Transactions covered byArticle 366 (29A)

Vol. 9 No. 05 June, 2016

EIRC NEWS 14

of tax on the sale and services. While in the Constitution (OneHundred and Fifteen Amendment) Bill, 2011, the aforesaidclause (29A) was proposed to be deleted, but in theConstitution (One Hundred and Twenty-second Amendment)Bill, 2014, said clause (29A) has been retained. Therefore, ithas given speculation that transaction covered by the saidclause such as works contract, hire purchase, right to use,serving of foods in a restaurants, etc. even under GST, how tolevy taxes on such transactions, would be creating confusion.

The First Discussion Paper released by EmpoweredCommittee is silent about whether the State of Jammu &Kashmir shall be covered under GST or not.At present, exciseduty provisions are extended to State of Jammu & Kashmirbut service tax provisions are not applicable to it. To have theuniformity it is necessary that the provisions of GST shouldextend to the State of Jammu & Kashmir, but that wouldrequire change in the laws of State of Jammu & Kashmirbecause presently this State levies tax on services under theirown law.

At present, there are many exemptions and incentivesavailable to the industry which is bound to be affected as wemake a transition from current system on taxation to the GSTstructure. In the First Discussion Paper released by theEmpowered Committee, there is no indication about the taxtreatment in GST when the industry at present enjoying thearea based exemptions. Through, discussion taken place atvarious platforms after the discussion of First DiscussionPaper, there are indication that such exemption shall continuefor the stipulated period. The Government should honour itscommitments in terms of providing incentives andexemptions because huge investments have been made by theindustry on the basis of the concessions available and anywithdrawal of concession would lead to huge losses.Therefore, to facilitate smooth transition to the GST, it wouldbe important to have appropriate transitory andimplementation provisions in place and a minimum sixmonths transition period should be given to the trade andindustry. The following aspects would particularly needattention:

Credit for Stocks: It would be important to provide credit fortax paid stocks at the time of implementation.

Partly completed contracts: The position of contracts whichhave been partly completed and are in transaction would needto be clarified.

Administration: There should be clarity about the respectiverole of Centre and State in administering the GST and theflexibility will they have in making changes to the taxes infuture.

GST Legislation six months before Implementation:It wouldbe important that the complete legislation on GST should be

GST in State of Jammu & Kashmir

Current Exemptions/Transitory Provisions

ready and in place at least six months before theimplementation of GST regime so that the industry canaccordingly plan its business. Further, the draft legislationshould first be circulated or put in public domain for seekingviews.

Training of Personnel:Training of the personal implementingthe new tax structure would be of utmost importance.

Harmonised law:GST legislation and rules should beharmonized across all States and have uniform classificationas per ITC (HSC).

Computerisation and IT infrastructure: An efficientcomputerized infrastructure and clearing-house mechanismwould be necessary because substantial use of informationtechnology would be needed for tax information exchangeframework, monitoring, streamlining the procedures,bringing uniformity as also facilitating transfer of funds.

Phasing out CST: Central Sales tax would ultimately have tobe reduced to zero.

It is obvious that once a new system of indirect tax would beintroduced in the country, there would be new kind ofdisputes. It is also quite obvious that once a new system isimplemented the tax payer may face difficulties whileunderstanding the new provisions, procedures and the rules.In the proposed GST, the States would be empowered to levytaxes on services, therefore, there is a possibility that therewould be dispute regarding place for supply of serviceparticularly in regard to telecommunication, transport,insurance stock broker, banking services and other web basedservices. Thus, there would be a surge in litigations anddisputes. It is also likely that there would be dispute betweenCentre and State or among States, therefore, there would beurgent need to evolve a mechanism to resolve such disputes.There is an estimate that by implementing GST, tax base willbe widened and the assesse will increase manifolds, theexisting infrastructure created in the form of tribunal etc.would not be insufficient to deal with such disputes. To takeon such new kind of disputes as well as increase indisputes/litigations, there would be need to setup amechanism and the infrastructure to resolve such disputesincluding strengthening the Settlement Commission andAdvance Ruling mechanism.

As, the existing system of taxation will move to GST, whatwould happen to pendingcases under the existing law such asexcise, service tax etc. is a cause of concern. There is ademand that there should be a settlement mechanism forsettling the pending disputes. On the other hand there couldbe a possibility that the pending disputes to be decided as perthe existing provisions.

As soon as, the industry has to switch over to the GST, there is

Disputes Resolution Mechanism under GST

Dispute Settlement Mechanism for pending disputes

Treatment of accumulated credit

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EIRC NEWS 15

a cause of concern for available accumulated credit, whether itwould lapse or would allow to be utilize release of FirstDiscussion Paper, indication has come that some transitoryprovision shall be made to deal with the situations, thoughthere is no clarity.

Under the GST regime what shall be the tax treatment underthe industry STPI/EOU, there is no clarity. The discussiontakes place at various for a, after the release of FirstDiscussion Paper on GST, the Central Government shouldcome on the proposals at the earliest to give clarity to theindustry on this matter.

It is expected that under the GST registration shall be linked toPAN or it would be a PAN-based registration. Discussion isgoing on whether to have a single registration or two/multipleregistrations for SGST and CGST. Similarly, whether, theregistered dealer would be required to file a single return forboth or a single return for SGST and CGST, the decision is yetto be taken. However, such a decision needs to be taken on thebasis of the taxpayer's convenience. But, efforts are beingmade to have one registration application for grantingregistration for CGST, SGST and IGST.

The Empowered Committee of State Finance Ministers hasrecommended the there should be a compounding/composition rate of tax for the small taxpayer having turnovernot exceeding Rs. 50 lakhs. Since, by the introduction of theGST, is expected that it will broaden the tax base and manydealers which hitherto no with in the tax net, would come,therefore, to make the taxation simpler for then such a schemeenvisages.

The Empowered Committee of State Finance Ministers hasrecommended uniform State GST threshold of gross annualturnover of Rs. 10 lakh both for goods and services for all the

Tax treatment of STPI/EOU

Registration, Return, Forms etc.

Taxation of Small Taxpayers

Threshold

States and Union Territories. Through it has beenrecommended that for CGST, threshold for goods may bekept at Rs. 1.5 crores and for service may be higher than thepresent level at Rs. 10 lakhs. However, there is no decisiontaken by the Centre on this issue.

Legislation Drafting will play a big role in successfulimplementation of GST dispute arises because ofcomplicated procedures and provisions prone to variousinterpretations. Stringent prosecution provisions and powerof arrest would give rise corruptions and which in turn wouldaffect the revenue collection.

If we think about GST then it would be the most logical stepstowards the comprehensive indirect tax reform in ourcountrysince independence. GST is leviable on all supply ofgoods and provision of services as well combination thereof.All sectors of economy whether the industry, businessincluding Govt. departments and service sector shall have tobear impact of GST and they will get benefit. GST will havedirect impact on all sections of economy viz., big, medium,small scale units, intermediaries, importers, exporters,traders, professionals and consumers. One of the biggesttaxation reforms in India - the Goods and Service Tax (GST) -- is all set to integrate State economies and boost overallgrowth. GST will create a single, unified Indian market tomake the economy stronger. GST is likely to improve taxcollections and boost India's economic development bybreaking tax barriers between States and integrating Indiathrough a uniform tax rate. Under GST, the taxation burdenwill be divided equitably between manufacturing andservices, through a lower tax rate by increasing the tax baseand minimizing exemptions. At last, obviously I would saythat the success of the proposed GST system in terms ofcompliance and revenue mobilization will largely depend on- a) provision of incentives for tax invoice based transactionsand b) simplification of tax calculation and administration.

Legislation Drafting and penal provisions

Concluding Observations

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EIRC NEWS 16

Background

Survey of the Literature

Objectives of the study

The Kelkar task force on the implementation of fiscalresponsibility and budget management (FRBM) Act, 2003had pointed out that the existing system of taxation on goodsand services suffers from many problems and thereforesuggested a comprehensive Goods and Services Tax (GST).The proposed GST system is targeted to be a simple,transparent and efficient system of indirect taxation whichinvolves taxation of goods and services in an integratedmanner in order to improve the international costcompetitiveness of native goods and services which directlyaffects all sectors and sections of our economy and aimed tocreate a single, unified market that will benefit bothcorporates and the economy. In GST scheme, a person whowas liable to pay tax on his output, whether for provision ofservice or sale of goods is entitled to get input tax credit (ITC)on the tax paid on its inputs.

Halakhandi (2009) focuses on how GST will work anddiscusses the problems likely to be faced by the centralgovernment while introducing this tax. He also highlights thatat present the goods and services are taxed separately but inGST the differences will be vanished.

Vasanthagopal (2011) found that GST would be a big leap inthe indirect taxation system and also give a new impetus toIndia's economic change. It is also noted that, buoyed by thesuccess of GST more than 150 countries have introduced GSTin some form to other and is fast becoming the preferred formof indirect tax in theAsia Pacific region.

Garg (2014) analysed that GST is the most logical stepstowards the comprehensive indirect tax reform in our countrysince independence. Under GST, the taxation burden will bedivided equitably between manufacturing and services,through a lower tax rate by increasing the tax base andminimizing exemptions to create a single, unified Indianmarket to make the economy stronger.

The objectives of the study are as under -

to understand the conceptual framework of Goods andServices Tax.

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to know the benefits and key challenges of Goods andServices Tax in adopting GST.

Finally, to make some recommendations for effectiveimplementation of GST in India to strengthen our freemarket economy.

This study is descriptive in nature and based on secondarydata. The required data were collected from standard books,reputed journals and magazine, research papers and mediareports.

Goods and Services Tax is a single comprehensive tax leviedon goods and services consumed in an economy which isleviable at each point of sale or provision of service, in whichat the time of sale of goods or providing the services the selleror service provider may claim the input credit of tax which hehas paid while purchasing the goods or procuring the service.It is basically a tax on final consumption.

France introduced GST in 1954 being the first country tointroduce it. As of now, it is prevalent in more than 150countries, including Canada,Australia, UK, China, Germany,New Zealand and Singapore. Most countries introduced asingle GST while Brazil & Canada have a dual GST.Singapore and New Zealand tax virtually everything at asingle rate. In China, GST applies only to goods and theprovision of repairs, replacement and processing services.

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Research Methodology

Goods and Services Tax - Conceptual Framework

Table 1: Roadmap to GST in India

MEMBER’S SECTION

Goods and Services Tax (GST) - Emerging Indirect TaxReforms in India

Mr. Pema Lama

Assistant Professor, Department of Commerce, University of Calcutta

Vol. 9 No. 05 June, 2016

Year Developments2004 Dr. Kelkar Task Force recommended the need of a National GST

Jan, 2007 First GST study released by Dr. Shome

2007 Consultation with stake holders on GST Model

April 1, 2007 CST phase out started

May, 2007 Joint Wor king Groups appointed by E.C.

Nov, 2007 13th Finance Commission Constituted.Joint Working Groups submitted report

Feb, 2008 F.M. announced introduction of GST from 1.4.2010 in budget speech 08 -09

April, 2008 Empowered Committee finalized its views on GST structure

Nov, 2007 13th Finance Commission Constituted.Joint Working Groups submitted report.

July, 2009 F.M. announced Dual GST from April 1, 2010 in Budget speech 2009 -10

Oct, 2009 13th Finance Commission to submit its report

Nov, 2009 Release of First Discussion paper on GST.

Consultation on model of inter-state transactions, RNR and other issues – in progress

2014 Follow up measures by the new Government

Source: Compiled by author

EIRC NEWS 17

Figure 1: Prime Models of Goods and Services Tax (GST)

Subsuming of Central and State Indirect Taxes underGST

Table 2: Taxes subsumed under GST

Taxes which are out of purview of GST

Table 3:Applicability of CGST and SGST

Exempt Goods and Services

To enable the free flow of tax credit in intra and inter-statelevels, several Central and State taxes will be identified to besubsumed under GST, though with some exception as shownin Table 2.

There are a few other indirect taxes that are out of purview ofproposed GST regime due to no consensus among betweenthe Centre and the States. These indirect taxes includepurchase tax, stamp duty, basic customs duty, tax on itemscontaining alcohol, tobacco products, petroleum products,electricity duty and other entry taxes and octroi.

Some goods and services are exempt from GST in order tokeep some goods and services cheaper for lower-incomegroup. In this case, no GST is charged on your supplies ofgoods and services and input tax credits is claimed.

There are two types of GST exclusions-

I) Tax-exempt - It consist of goods and services that arecharged with GST at the production and distributionstages but not at the final retail stage. Manufacturers,

wholesalers, and retailers can't claim an input tax credit.E.g. - residential rents, health and dental care,educational services etc..

ii) Tax-free - It cover goods and services that are not withGST throughout the life of the product. Final consumersare not charged GST while purchasing these productsfrom distributors. E.g. - basic groceries, prescriptiondrugs and medical devices.

I) Taxation of Goods -Atwo tier rate structure will apply atboth CGST and SGST levels. According to empoweredcommittee, characteristics of the rate structure will be -a) lower rate for necessary items and goods of basicimportance, b) standard rate for goods in general and c)special rate for precious metals.

ii) Taxation of Services - One rate services is expected toapply at the central and state levels.

iii) Exports - Exports would be zero rated.

iv) Imports - Both CGST and SGST will be levied on importof goods and services into the country, with provision offull and complete set-off.

( Tax rates are still not notified as there is noconsensus among the states and centre on these rates.)

I) It will cover all types of persons (i.e. manufacturers, job-workers, traders, importers, exporters, all types ofservice providers etc.) carrying on business activities.

ii) If a company is having four branches in four differentstates, then all the four branches will be considered astaxable entities under each of the jurisdictions of stategovernments concerned.

iii) All the dealers or business entities will have to pay boththe types of taxes on all the transactions.

GST Rate Structure

Comment:

Table 4: Present GST rate structure in both Centre andStates

Taxable Persons or Entities under GST

Vol. 9 No. 05 June, 2016

Central Taxes CGST→ State Taxes SGST→

? Central excise duty

? Additional Excise duties

? Additional Customs Duty, commonly known asCountervailing Duty (CVD)

? Special Additional Duty of Customs - 4% (SAD)

? The Excise Duty levied under the Medicinal andToiletries Preparation Act

? Service Tax

? Cesses and Surcharge

? VAT/Sales Tax

? Tax on Interstate sales (CST)

? Entertainment tax (unless it is levied by the

? local bodies)

? Luxury tax

? Tax on lottery, betting and gambling

? Entry tax not in lieu of octroi

? State Cesses and Surcharges in so far as theyrelate to supply of goods and services

Source : First Discussion Paper on GST (2009)

Under Turnover of Goods Applicable Taxes

Below Rs. 10 Lakhs. Neither State GST nor Central GST

Between Rs. 10 Lakhs and Rs. 150 Lakhs Only State GST

Above Rs. 150 Lakhs Both State GST and Central GST

Under Turnover of Services Applicable Taxes

Below Rs. 10 Lakhs Neither State GST nor Central GST

Between Rs. 10 Lakhs and β figure Only State GST

Above β figure Both State GST and Central GST

*Note: Figure β would be appropriately high, may be at or around Rs. 150 Lakhs.

GST Rate or RNR as suggested by various committee

(as on 10th

July, 2010)

Lower rate for goods

( necessary items and of basic

importance)

Standard rate for goods

(in general)

Services

Centre States Centre States Centre States

6% 6% 10% 10% 8% 8%

As per 13th

Finance Commission Task Force (October, 2009)

Centre States Combined (Centre+ States)

5% 7% 12%

As per Empowered Sub- Committee (November, 2014)

Centre States Combined (Centre+ States)

12.77% 13.91% 26.68%

? Present Tax Scenario in Centre : a) Median Excise Duty - 12%

b) Service Tax - 14% (W.e.f. June, 2015 onwards)

? Present Tax Scenario in States : Value Added Tax (VAT) - 4.5% & 12.5% (Some States have breached

12.5%)

Source: Ministry of Finance, Government of India, New Delhi (2015)

EIRC NEWS 18

iv) A dealer must get registered under CGST as it will makehim entitled to claim Input Tax Credit of CGST thereby,attracting buyers under business-to-businesstransactions.

v) Importers have to register under both CGST and SGST.

Generally, the GST registered dealers (manufacturers,wholesalers and retailers and service providers) charge GSTon the price of goods and services from their customers andclaim credits for the GST included in the price of their ownpurchases of goods and services used by them because GST isan indirect tax and ultimate burden of the GST has to be takenby the final consumer.

Limitations in centre VAT system - There is CENVAT butseveral taxes are still out of the ambit like surcharges,additional customs duties etc. In some goods, we getinput tax and not in others making the tax filing systemcomplex and cumbersome.

Limitations in state VAT system - The states also haveVAT but many taxes like luxury taxes, entertainment taxetc, are not included. There is no input tax credit in caseof CENVAT paid on certain items.

Interstate sales tax (CST) - Though it is an importantsource of revenue for states it is seen as very burdensomeby businesses. The companies make goods in one statebut on distribution inside the country, end up payingtaxes in each state. They are supplying goods within thecountry and should just be taxed at one place.

Inclusion of services in VAT system - Production ofgoods is because of both physical production andservices. But services are taxed only by centre and thattoo is done selectively. The services need to be taxed atstate level and integrated with the goods VAT system.

International Standard - GST is becoming aninternational standard. There are many factors beforeinternational companies while choosing a country for itsbusiness and taxation system is an important factor. Withother countries having GST and India not having one, the

How GST will perform?

Table 5: Illustration explaining the working of GST

Why GST when we have VAT?

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companies are likely to opt for former ahead of India forlocating their businesses. Likewise Indian companiesmay also prefer to increasingly set their bases in othercountries where tax system is more efficient.

Under the GST regime, a new statute known as IntegratedGoods and Services Tax (IGST) will come into place. Thescope of IGST model is that centre would levy IGST whichwould be CGST plus SGST on all inter- State transactions oftaxable goods and services with appropriate provision forconsignment or stock transfer of goods and services.

Dealer in state - I sells goods of value Rs.1000 to a dealerin state - II.

On the inter-state invoice generated by dealer in state - I.CGST = 10% & SGST = 10%.

Input tax credit lying CGST = 50 & SGST = 70.

So, IGST charged = Rs. 1000 X 20% = Rs. 200

Less: Input CGST = Rs. (50)

Less: Input SGST = Rs. (70)

The following benefits are expected to outpour with theimplementation of GST -

GDP Gains - Detailed study by the Task Force hasestimated that GST will provide gains to India's GDPfrom 0.9% - 1.7%.

Reduction in cascading taxes - Under GST, the tax iseffectively paid not on the value of the output, but on thevalue added to the output at that particular stage.

Reduction in prices of goods - The prices of goods areestimated to decline as cascading effect of taxes may beeliminated.

Gain in export & import - Export-oriented industrieswould become internationally more competitive asentire taxes in supply chain would be refunded/zero-rated. Import-substituting industries would also becomecompetitive as prices of Indian commodities wouldreduce.

Inter-State Transaction and GST

Integrated Goods and Services Tax (IGST) = Centre GST+ State GST

Box 1: Illustration explaining the working of IGST

Then,

IGST = CGST (10%) + SGST (10%) = 20%

Output GST= Rs. 200

IGST payable in cash = Rs. 80

Benefits of adopting GST

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Vol. 9 No. 05 June, 2016

Stages of

supply

chain

Purchase

value of

input

Value

addition

Value at

time of

transfering

the Goods

and Services

at next stage

Rate

of

GST

GST on

output

of Goods

and

Services

Input

Tax

credit

Net GST

Payable =

GST on output

tax – GST on

Input tax

credit

Manufacturer 100 30 130 10% 13 10 13-10 = 3

Wholesaler 130 20 150 10% 15 13 15-13 = 2

Retailer 150 10 160 10% 16 15 16-15 = 1

EIRC NEWS 19

Table 6: Impact of GST on Economy - InternationalExperiences

Key Challenges for GST

Certain difficult areas with respect to the effectiveimplementation of the GST are -

Constitutional amendments empowering states to levytax on services & empowering centre to levy tax on sales.

Drafting and implementation of central GST and stateGST laws.

Agreement on GST rates among centre and states.

Compensation to be given by the centre to statesincurring revenue losses on implementation of GST.

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Implementation of IT resources.

Standardization of systems and procedures.

Uniform dispute settlement machinery.

Adequate training for both tax payers and tax enforcers.

Setting up Goods and Services Tax Network-SpecialPurpose Vehicle (GSTN-SPV).

Uniform implementation of GST should be ensuredacross all states.

For a developing economy like India, it is desirable to becomemore competitive and efficient in its resource usage. Goodsand Service Tax (GST) - one of the biggest indirect taxationreforms in India is all set to integrate state economies andboost overall growth and will try to create a single, unifiedIndian market to make the economy stronger to bring manybenefits to the Indian economy. Implementation of acomprehensive GST across goods and services is expected,ceteris paribus, to increase India's GDR. However, given thechallenges in India, the policymakers are hoping GST willhelp ease state-wide inefficiencies and eliminate them over aperiod of time.

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Recommendations for effective implementation of GST

Conclusion

Vol. 9 No. 05 June, 2016

Particulars

Countries

New Zealand Canada Australia

Introduction 1986 1991 2000

Price

Changes

Short run spike inprices

Short run spike in prices Short run one off effect

Economic

Growth

Introduced at the end ofrecession,

subsequent upswing

Introduced in midst ofmajor recession

Introduced during

sustained economic

growth period

Revenue

Effect

Revenue exceededexpectations

Revenue exceededexpectations

Revenue exceeded

expectations

Current

Account

Rapid immediateimprovement

Dramatic improvementsince introduction

Slight improvement

since introduction

Rate of GST 15% 5% 10%Source: Tom Bolton and Brian Dollery (2004)

EIRC NEWS 20

Introduction

Past Events of Surgical Industry in Baruipur

A surgical instrument is a specially designed tool forperforming specific actions of carrying out desired effectsduring a surgery or operation, such as modifying biologicaltissue, or to provide access for viewing it. Over time, manydifferent kinds of surgical instruments and tools have beeninvented. These kinds of products play very important role inhealth & hospital industry. The cost & quality of productsdefinitely make a big impact on patients & the common household. India has different special economy zone to manufacturesurgical instruments. The surgical instruments manufacturingindustry in Baruipur, West Bengal, is losing out in thedomestic as well as the international market, according tolocal manufacturers. Pakistan& china has captured a majorchunk of the international market. Inadequate information orchanging customer's preference in the international market isanother problem. Middlemen and traders enjoy most of theprofit in the value change. The local industrialists are notaware about the market potentiality. Government on its part isapathetic towards this trade. Raw material & safety securitymanagement is essential part of this industry. But most of themanufacturing unit don't go through the industrial rules &regulation, safety security management and proper way ofmaterial handling. I have taken top five manufacturing unit(depending on turnover of their financial conditions) toidentify the problems of material management, safety &security management according to their production & marketsituation. The questionnaire has taken the answers of thematerial types, material purchase amount, man powermanagement, industry safety security conditions and labourdistribution policy. Using ABC analysis, I have shown theprocess to use the material management to get the best resultfor financial investment in material.

Baruipur is a city and a municipality in South 24 Parganasdistrict in the state of West Bengal, India. Baruipur is 25 kmfrom Sealdah Station.

In 1937, a few Karmakars (blacksmith) like PawanKarmakar, Gaur Karmakar and Nitai Karmakar startedmanufacturing surgical instruments at Baruipur. This tradeand expertise of manufacturing tools was passed on from onegeneration to the next. Today, around 15,000 individuals areearning their livelihood from this trade.

According to the data provided by Directorate of Micro, Smalland Medium Enterprises of West Bengal government, clusterof surgical instrument manufacturing units have throngedplaces like Kalyanpur, Khodarbazar, Dhopagachi andPurandarpur over the years in Baruipur subdivision. There areabout 400 households working in the trade in these areas. Andanother cluster of about 120 artisan families do the forgingjobs at Julpia, which is a few kilometres away from Baruipur.

In the 1980s, Paul Instruments-one of the larger units atBaruipur- exported its first consignment of instruments to theUnited States of America. Since then, the manufacturingunits in Baruipur have been exporting surgical tools tointernational clients through traders in USA, UK,Bangladesh, Nepal and Bhutan. But, this is only being doneby the larger units, which employ 50-55 individuals. Thesmaller units, which employ one to four people, are finding itdifficult to run their enterprises.

Workers in these units use mechanical tools like vice, file,handmade drill, anvil, hammer, tongs, daubing machine,blower, chisel, saw, and plus. With the help of these tools,they make surgical knives, surgical scissors, forceps, needleholder, clamps, refractors, curetter, elevators, chisels, gauges,osteotomies, probes, directors, rongeurs, nibbles, wheel,bone pin, delivery forceps, ovum forceps, branding iron,castrater, scalpel and a lot more.

Cluster of Surgical Instrument manufacturing units havethronged in places like Kalyanpur, Khodarbazar, Dhopagachiand Purandarpur over the years in Baruipur subdivision of thedistrict of South 24-Parganas. There are about 400households working in the trade in these areas. And anothercluster of about 120 artisan families do the forging jobs at

MEMBER’S SECTION

Problems & Prospects of Surgical InstrumentsManufacturing Industry in Special Economy Zone

(SEZ): A Study with reference to Baruipur(South 24 Parganas) Municipality

Sudipta Halder

Research Scholar, Department of Commerce & Management, West Bengal State University, Barasat,North 24 Parganas

Vol. 9 No. 05 June, 2016

EIRC NEWS 21

Julpia which is a few kilometre away from Baruipur. InSarsuna, Behala a group of artisans also started activities inthe line. In 1956 State Government in the Department ofIndustries had set up a service centre by the name and styleSurgical Instrument Service Station at Piyali Town, Baruipur.

In the later stage in 1990-2000 Govt. in the Department ofM&SSE got diagnostic survey conducted by two Govt. ofIndia agencies namely Central Mechanical EngineeringResearch Institute (CMERI), Durgapur and RDCIS, SAIL,Ranchi. Both the organisations stressed on the rejuvenation ofthe existing service station apart from making otherrecommendations with a view to giving impetus to the growthof Surgical Instrument Manufacturing units in the area. Govt.in the Department of M&SSE took up the matter with theDevelopment Commissioner (SSI), New Delhi under theMinistry of SSI, Govt. of India.

Surgical Instruments Service Station, Piyali Town, Baruipur,has been rejuvenated and converted into the Common FacilityCentre under MSE-CDP to fulfil the need of the natural clusterof surgical instruments manufacturing enterprises in andaround Baruipur, Sarsuna and Behala by providing moderntechnological service for sustenance in the present market andbuilding their capacity. Nearly 600 enterprises are likely to bebenefited through this project. State Government has providedthe infrastructure support in addition to the cost sharing ofRs.115.24 lakhs (25% of the project cost of Rs.461.07 lakhs)against the share of Rs.345.83 lakhs (75%) of Govt. of India.While State Government has released its full share, Govt. ofIndia has released Rs.245.35 lakhs as on date. MSME ToolRoom is implementing the Project. A forging line includingforging press, trimming press and heating furnace has beeninstalled. A Laser Embossing Wing has also been set up thathas started rendering service to the enterprises of the cluster.Special Purpose Vehicle (SPV) under the constitution of anassociation is formed [BASIMA] that will ultimately take overthe CFC and operate it. The stakeholders and experts of MSMETool Room, the implementing agency, are standardizing thesystem installed at site through trial run jointly.

In 1956, State Government in the Department of Industrieshad set up a service centre by the names Surgical InstrumentService Station at Piyali Town in Baruipur. In 1990-2000,Department of M&SSE got diagnostic survey conducted byCentral Mechanical Engineering Research Institute(CMERI), Durgapur and RDCIS, SAIL, Ranchi. Both theorganisations had stressed on the rejuvenation of the existingservice station apart from making other recommendationswith a view to giving impetus to the growth of SurgicalInstrument Manufacturing units in the area. Therefore,Surgical Instruments Service Station, Piyali Town has beenrejuvenated and converted into the Common Facility Centreto fulfil the need of the natural cluster of surgical instrumentsmanufacturing enterprises in and around Baruipur.

* Govt. listed Company for manufacturing surgical

instruments is almost thirty (30) in Baruipur.

** Non listed company for manufacturing surgicalinstruments is more than three hundred (300) inBaruipur.

Households manufacture the surgical instruments as per theircapacities of funding and capabilities of production in someplaces of Baruipur municipality.

There are several classes of surgical instruments:

Graspers, such as forceps

Clamps and occludes for blood vessels and other organs

Retractors, used to spread open skin, ribs and other tissue

Distractors positioners and stereotactic devices

Mechanical cutters (scalpels, lancets, drill-bits, rasps,trocars, Ligasure, Harmonic scalpel, surgical scissors,rongeurs etc.)

Dilators and specula, for access to narrow passages orincisions

Suction tips and tubes, for removal of bodily fluids

Sealing devices, such as surgical staplers

Irrigation and injection needles, tips and tubes, forintroducing fluid

Powered devices, such as drills, dermatomes

Scopes and probes, including fiber optic endoscopesand tactile probes

Carriers and appliers for optical, electronic andmechanical devices

Ultrasound tissue disruptors, cryotomes and cuttinglaser guides

Measurement devices, such as rulers and callipers

An important relative distinction, regarding surgicalinstruments, is the amount of bodily disruption or tissuetrauma that their use might cause the patient. Terms relatingto this issue are 'atraumatic' and minimally invasive.Minimally invasive systems are an important recentdevelopment in surgery.

Surgical Industry is different from other manufacturing units.The marketing of products are completely dependent onchannel distribution. The purchasing of materials is dependenton the quality. Human resources are dependent on skilledlabours, semi-skilled labours and unskilled labours. Financialmanagement is solely connected with marketing & purchasing.Production is connected with all of those. Operation ofindustry is everything to determine the production.

(i) Production Management: Production managementimplies planning, organising, directing and controllingthe production function so as to produce the rightgoods, in right quantity, at the right time and at the right

Classification:

Scope of Management

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Vol. 9 No. 05 June, 2016

EIRC NEWS 22

cost. It includes the following activities: 9 (a) Designingthe product (b) Location and layout of plant andbuilding (c) Planning and control of factory operations(d) Operation of purchase and storage of materials (e)Repairs and maintenance (f) Inventory cost and qualitycontrol (g) Research and development etc.

(ii) Marketing Management: Marketing managementrefers to the identification of consumers' needs andsupplying them the goods and services which cansatisfy these wants. It involves the followingactivities: (a) Marketing research to determine theneeds and expectation of consumers (b) Planning anddeveloping suitable products (c) Setting appropriateprices (d) Selecting the right channel of distribution,and (e) Promotional activities like advertising andsalesmanship to communicate with the customers

(iii) Financial Management: Financial management seeksto ensure the right amount and type of funds to businessat the right time and at reasonable cost. It comprises thefollowing activities: (a) Estimating the volume offunds required for both long-term and short-term needsof business (b) Selecting the appropriate source offunds (c) Raising the required funds at the right time(d) Ensuring proper utilization and allocation of raisedfunds so as to maintain safety and liquidity of fundsand the creditworthiness and profitability of business,and (e)Administration of earnings.

Thus, financial management involves the planning,organizing and controlling of the financial resources.

(iv) Personnel Management: Personnel managementinvolves planning, organizing and controlling theprocurement, development, compensation,maintenance and integration of human resources of anorganization. It consists of the following activities: (a)Manpower planning (b) Recruitments, (c) Selection,(d) Training (e) Appraisal, (f) Promotions andtransfers, (g) Compensation, (h) Employee welfareservices, and (i) Personnel records and research, etc.

As per the data, there are almost thirty (30) listedmanufacturing companies. I have taken their financial statusfor the financial year 2015-2016. I have broken in three partsas per their total business value.

Company type Avg.Annual Transaction for the

financial year 2015-16

CATEGORY--A 90 - 100 lakhs (INR) -- 13% of the total

companies

CATEGORY- B 50 - 60 lakhs (INR) -- 60% of the total

companies

CATEGORY-- C 20 - 40 lakhs (INR) -- 27% of the total

companies

Research Methodology

I have visited almost all factories to know about their materialmanagement. But it is unexpected that they have no such kindplan or never estimate about material handling. One companywas taken as standard. The situation is almost same to everycompanies situated & connected with this MSME.

I have taken Tirupati surgical which was established in 1994 &the Company has created a good market position in Baruipur.It mainly deals with microsurgery Instruments in the sector ofNeuro, Ophthalmic and ENT products. Also it manufacturesAnesthetic instruments like Oxygen flow-meter,MoxRegulator, DPC Adaptor etc. It has Clients all over India anddeals with major multi-specialty Hospitals like Apollo, Apex,Medica, Nightingle, Peerless etc . Abroad West Bengal thecompany provides business in the states of Tamil Nadu,Kerala, Karnataka,Andhra Pradesh etc. The Company has 30-40 skilled labours while Unskilled labours works on Contractbasis depending on Orders and ranges from 60-80. Companyimports its raw materials from quality suppliers from Mumbai,Bangalore and Salem. Eighty one (81) lakhs rupees was thebusiness transaction in the financial year 2015-16.

Tirupati Surgical Has approx. 40 skilled labours and 60Unskilled labours on Average, while in case of urgent workbasis or demand the number of labours is increased. Workinghours normally starts from 10 A.M. in morning till 7 P.M.shifting duty is also practiced during demand or urgentSupply. Training is given to unskilled labours.Alabour is saidto be skilled if he is in the industry for at least 3 to 5 years.

1. Polishing machine – 3 Nos.

2. Grinding Machine – 2 Nos.

3. Drill Machine – 1 Nos.

4. Blower – 1 Nos.

5. Lathe Machine – 2 Nos.

6. Microscope – 2 Nos.

1. Forging - 15 Nos.

2. Lathe – 2 Nos.

3. Milling – 3 Nos.

4. Viceman - 5 Nos.

5. Fitter – 4 Nos.

6. Welder – 3 Nos.

7. Chemical - 4 Nos.

8. Processing Packing

9. Electroplating - 2 Nos.

10. Electropolishing - 2 Nos.

11. Sand Blasting – 2 Nos.

12. Anodyzing – 2 Nos.

Company Management & Workers

Total No. & Types of Machines used

Human resource:

Production & Number of Workers in each Section

Vol. 9 No. 05 June, 2016

EIRC NEWS 23

13. Heat Treatment – 2Nos.

14. ETO Sterile – 4 Nos.

After Production, the finished product is examined by a "Head- Mistry" , who is in the industry for 20-25Years.

Steel material

Brass metal

Raw material Description:

Titanium

Copper metal

ETO sterilize packet

plastic packet

Aluminium

poly carbonate

Vol. 9 No. 05 June, 2016

Raw Material for production of surgical instruments

ABC analysis for the raw material

EIRC NEWS 24

% of raw material used for the finished goods.

Vol. 9 No. 05 June, 2016

CATHEGORY ITEMS

PERCENTAGE

OF

USAGE (%)

ACTION

Class A items Steel material , Brass metal , Titanium 76.08% Close control

Class B items Copper metal , ETO sterilize packet 16.90% Regular review

Class C items plastic packet ,Aluminium ,poly carbonate 5.75%Infrequent

review

Result & Discussion

Export product report:The export product item and its value for the month of January 2015 to July 2015 are taken. We can get thevalue and can make picture of surgical industry.

The value amount is given in Indian national rupee. The above amount is export of surgical instrument.

Material DescriptionJan

Quantity

Feb

Quantity

Mar

Quantity

Apr

Quantity

May

Quantity

Jun

Quantity

Jul

Quantity

Surgical BoneSaws,Drills,Trephines

And Burns3 15 18 730 3866 4786 11108

SurgicalKnives,Sciss0rs And

Blade

11153506

71461641061923

97852107 7212286 15574453 9206391

SurgicalFrcps,FrcpClmps,Clips,

NdleHolders,Introducers,Ce

phal

33970 118863 19261 148197 11054 119355 126039

Surgical,Chisel,Gauges,Elevatrs,Raspators,Osteotome,Cranioto

5 9 12001 4 12 1 5

SurgicalRetractors,Spatula

Probes,HooksDialators,Sounds

66 37 306 12 77 1 7

Other Surgical Tools 185955 476115 658094 3073470 852134 2372800 888402

Ent PrecisionInstruments

2001 8934 8450 905 7556 5646 16

TOTAL AMOUNT INQUANTITY

11375506

77501371131736

91107542

58086985 18077042 10231968

EIRC NEWS 25

The above amount is for export of surgical instrument.

The surgical instruments manufacturing industryin Baruipur, West Bengal, is losing out in the domestic as wellas the international market, according to local manufacturers.Cluster of surgical tools manufacturing unit. They aretechnologically advanced. They manufacture better tools 59than us. Pakistan has captured a major chunk of theinternational market," Kamal Das, secretary, BaruipurSurgical Instruments Manufacturers Association (Basima)told. Speaking about the problems faced by workers inBaruipur, Das said, We are losing ground in the internationalmarket. Inadequate information or changing customer'spreference in the international market is another problem.Middlemen and traders enjoy most of the profit in the valuechange. We are not aware about the market potentiality.Government on its part is apathetic towards our trade. Itshould have taken steps towards providing strong linkagesbetween SME s and Institutions. The government should haveworked towards creating a brand image for these units inBaruipur.? A worker in these units earns less than rupeeshundred in a day. The decline in demand of these tools in bothinternational and domestic markets has become a major causeof worry for these craftsmen. There are months when we sitjobless because the unit owner has no or very few orders. Wehave to look for alternatives then, said Ashok Mondal, aworker. The owners of the manufacturing units claimed thatthey are losing their hold in domestic market too. Hospitalsand medical units now use imported surgical tools. Theyfurther claimed that they receive no financial assistance fromthe state government. It gets difficult to get loans at lesserinterest rates or any other aid from the government. This tradeneeds promotion by government agencies. Otherwise, the dayis soon to come, when we will be forced to shut down all theseunits, added Mr. Das. There are several reasons why we haveto wake up from our reverie and try collectively to raise this

Problems :

industry to a higher Plane. To be very precise we must offsetthe problems for the greater Interest of these people connectedwith the industry. The problems are given here under:

1. The main constraintexperienced at Baruipur is for the instrument techniciansnot to get their emoluments commensurate with theircapabilities. It may appear a failure on the part of theworkshop owners.Adeeper study reveals that they cannotbe held responsible considering their small capital andmeagre profit. This results in dearth of really skilledtechnicians. Even Equipped with best techniquesavailable; they are compelled to engage in those jobs theywere not accustomed with. It is a danger signal for thefuture. Unless some effective steps are taken, this industrywill have to face a bleak prospect.

2. Oblate some technicians withmediocre calibre have started manufacturing instruments.They are not at all trained and the finished products are foundwithout proper specification. This is smearing the good nameassociated with Baruipur. A clear sign of degradation.Something fruitful step is very much needed right now.

3. So far as Raw Materialis Concerned viz Steel AISI - 410, its standard of Quality isbelow expectation. Evidently the instruments manufacturedwith this quality of steel cannot produce instrumentsadhering to international specifications. In most cases rustappear much to the dismay and dissatisfaction of thesurgeons. Over and above patients are faced to face danger.

1. The problems cited above may be solved to a larger extentif Electro Chemical Process is introduced. Withinadequate Technical know-how and research and dearthof fund surgical industry of Baruipur is yet to reachperfection.

Inadequate Wage Structure:

Self-Owned Factories:

Lower standard of Raw Materials:

Proposed Solutions to Problems

Vol. 9 No. 05 June, 2016

Material Description Jan Value

(INR)

Feb Value

(INR)

Mar Value

(INR)

Apr Value

(INR)

May Value

(INR)

Jun Value

(INR)

Jul Value

(INR)

Surgical Bone Saws,Drils,Trephines And Burns `209677 `761168 `412030 `639666 `2606684 `3373336 `2917572

Surgical Knives,Sciss0rs And Blade `103533397 `94529367 `119878624 `103232438 `96209481 `122921905 `123927074

SrgclFrcps,FrcpClmps,Clips,NdleHolders,Introducers,Cephal `5676159`9267681

`4767025 `7712886`4153163 `13759688

`8341817

Surgicl,Chisel,Gauges,Elevatrs,Raspators, Osteotome,Cranioto `262884 `37939 `696275 `8921 `14798 `19195 `4343

Surgical Retractors,SpatulaProbes,HooksDialators,Sounds,M `1100382 `1714097 `1231318 `1569530 `1248096 `92075 `514935

Othr Surgical Tools `67949747 `65475968 `59810933 `196498220 `64467129 `94074010 `116895520

Ent Precision Instruments `1512552 `2333871 `1500677 `174780 `1125831 `1465913 `319878

TOTAL AMOUNT IN INDIAN RUPEE `180244798 `174120091 `188296882 `309836441 `169825182 `235706122 `252921139

EIRC NEWS 26

2. What is needed at the moment is a fair safe planningcoupled with adequate funding if we are to forge aheadwith systematic production.

3. For Systematic and better growth of the surgical industry,the entire hub of surgical houses viz Baruipur andBishnupur areas should communicate with each other in aproper manner.

4. In Business, the external factors, Pressures and otherobligations should be managed unitedly by the Surgical Hub.

5. The Surgical Market should be expanded and organized ina proper structure so as to improve the hub environmentand productivity.

6. Standard Raw Materials (Steel) should be supplieduninterruptedly.

7. Technical lessons and more skilled technicians are expected.

8. If a fixed selling point in the form of a Surgical Hub iscreated for the finished surgical instruments, it might be aboon for the surgical businessmen.

9. A Co-Operative may be constructed under the SurgicalAssociation, which may produce tenders interconnectingall the big surgical companies, Government and PrivateHospitals and may create right standards and rates forfinished Surgical Instruments which will be profitable tothe surgical businessmen.

10. Still Government Aids will provide the Life-life ofSurgical Industry. The Government help, Cooperation andpreservations are very much required. If the Governmentlooks down upon the industry, it will be a great help for thesurgical Hub which will in turn help the Surgeons inMedical Line.

Workers andsuppliers each strive to improve company profitability andenhance customer (mainly Big Hospitals &Doctors)satisfaction. However, typical industry problems often hindertheir efforts. Store managers fill store fixtures, but notnecessarily with the products that the consumer demands.As aresult, products gather dust in the warehouse or stockroominstead of driving sales on the firm. Effective Resourcemanagement can overcome these obstacles to achievecorporate goals. Resource Planning enables quick analysis ofeach product with planograms for profitability, sales,movement, and an almost endless range of attributes.Inventory modelling determines target inventories for eachproduct, helping to reduce inventory costs and drive sales bykeeping the right amount of product stocked.

The distribution function creates time, place, andownership utility. Marketers contribute to the product'svalue by getting it to the right place at the time theconsumer wants to buy it and by providing the mechanismfor transferring ownership.

The Benefits of Resource Management:

Discuss the value created by the distribution function.l

The two major components of a distributionstrategy are distribution channels and physical distribution.Distribution channels are the paths that goods and servicesand title to them follow from producer to customer.Physical distribution involves the entire activities channelmembers perform in moving goods and services.

Distribution channels vary in length. Somechannels are short, with goods and services movingdirectly from manufacturer to customer. Others arelonger, involving channel members such as retailers andwholesaling intermediaries. Selecting a channel dependson various factors, including the product, market,producer, and competition.

Physical distribution is an important part of distributionstrategy. Because its objective is to maximize the level ofcustomer service, marketers must consider total costs. Thevarious elements in physical distribution include customerservice standards, transportation, warehousing, materialshandling, inventory control, and order processing.

Warehousing offers manyadvantages to the business community. Whether it is industry ortrade, it provides a number of benefits which are listed below.

Warehouseprovides necessary facilities to the businessmen forstoring their goods when they are not required for sale.It provides protection to the stocks ensures their safetyand prevents wastage. It minimizes lossestechnologies to avoid losses, as far as possible.

Many commodities like rice,wheat etc. are produced during a particular season butare consumed throughout the year. Warehousingensures regular supply of such seasonal commoditiesthroughout the year. 61

Warehouse enables themanufacturers to carry on production continuouslywithout bothering about the storage of raw materials.It helps to provide seasonal raw material without anybreak, for production of finished goods.

Warehouses are generallylocated at convenient places near road, rail orwaterways to facilitate movement of goods.Convenient location reduces the cost of transportation.

Modern warehouses are generallyfitted with mechanical appliances to handle the goods.Heavy and bulky goods can be loaded and unloadedby using modern machines, which reduces cost ofhandling such goods. Mechanical handling alsominimizes wastage during loading and unloading.

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Describe the various types of distribution channelsand discuss the factors that influence channelselection.

Discuss the role of the physical distribution function.

Advantages of Warehousing:

i. Protection and Preservation of goods -

ii. Regular flow of goods-

iii. Continuity in production-

iv. Convenient location-

v. Easy handling-

Vol. 9 No. 05 June, 2016

EIRC NEWS 27

Construction of ownwarehouse requires heavy capital investment, whichsmall businessmen cannot afford. In this situation, bypaying a nominal amount as rent, they can preservetheir raw materials as well as finished products inpublic warehouses.

Warehouses createsemployment opportunities both for skilled andunskilled workers in every part of the country. It is asource of income for the people, to improve theirstandards of living.

Various steps necessary forsale of goods such as inspection of goods by theprospective buyers, grading, branding, packaging andlabeling can be carried on by the warehouses.Ownership of goods can be easily transferred to thebuyer by transferring the warehouse keeper’s warrant.

Loans can be easily raisedfrom banks and other financial institutions against thesecurity of the warehouse-keeper?s warrant. In somecases warehouses also provide advance to thedepositors of goods on keeping the goods as security.

Goods in warehouses are wellguarded and preserved. The warehouses caneconomically employ security staff to avoid theft, useinsecticides for preservation and provide cold storagefacility for perishable items. They can install fire-fighting equipment to avoid fire. The goods stored canalso be insured for compensation in case of loss.

While doing the study, wegot the opportunity to segment the different raw materialsused at the surgical production house. They are:

Stainless Steel [ Grades - 304 , 310 , 320 , 420 ]

Titanium Steel

Brass

Aluminium

Copper

Poly-Carbonate

Plastic Packets

ETO Sterile Package

While calculating the material issued Quantity and totalamount, we had found the data for doingABCAnalysis.

While examining the readyfinished products, we had found the following items accordingto their Demand and applications, ready to be exported:

Surgical Sutures and Staples

Handheld Surgical Devices

(i) Scalpels

(ii) Forceps

vi. Useful for small businessmen-

vii. Creation of employment-

viii. Facilitates sale of goods-

ix. Availability of finance-

x. Reduces risk of loss -

Segmentation of Raw Materials

Segmentation of Ready Products:

Surgical Instruments by Demand

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(iii) Retractors 62

(iv) Scissors

Electrosurgical Devices

Others

Neurosurgery

Plastic and Reconstructive Surgeries

Wound Closure

Urology

Obstetrics and Gynaecology

Thoracic Surgery

Micro vascular

Cardiovascular

Orthopaedic Surgery

Laparoscopy

Others

In order to exercise effectivecontrol over materials,A.B.C. (Always Better Control) methodis of immense use. Under this method materials are classifiedinto three categories in accordance with their respective values.GroupA'constitutes costly items which may be only 10 to 20%of the total items but account for about 50% of the total value ofthe stores. A greater degree of control is exercised to preservethese items. Group Consists of items which constitutes 20 to30% of the store items and represent about 30% of the totalvalue of stores. A reasonable degree of care may be taken inorder to control these items. In the last category i.e. groupQ'about 70 to 80% of the items are covered costing about 20%of the total value. This can be referred to as residuary category.A routine type of care may be taken in the case of thirdcategory. This method is also known as stock control accordingto value method', selective value approach 'and proportionalparts value approach'. If this method is applied with care, itensures considerable reduction in the storage expenses and it isalso greatly helpful in preserving costly items.

(i) It ensures control over the costly items in which alarge amount of capital is invested.

(ii) It helps in developing scientific method of controllinginventories. Clerical costs are considerably reducedand stock is maintained at optimum level.

(iii) It helps in maintaining stock turnover rate atcomparatively higher level through scientific controlof inventories.

(iv) It ensures considerable reduction in the storageexpenses. It results in stock carrying stock.

(v) It helps in maintaining enough safety stock for Ccategory of items. The following graph demonstratesABC inventory classification.

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Surgical Instruments byApplication

Benefits of ABC Analysis :

Advantages ofA.B.C. method of Inventory Control:

Vol. 9 No. 05 June, 2016

EIRC NEWS 28

Foreign Direct Investment (FDI) is the major monetarysources for economic development in India. India hasreplaced China as top destination for FDI by attracting $ 63billion worth of FDI projects in 2015. Also there was an 8%increase in project numbers to 697. With ease of doingbusiness in India , US companies are taking keen interest to setup their manufacturing set up in India which is emerging as agood market.

Foreign investment is reckoned as Foreign Direct Investment(FDI) only if the investment is made in equity shares, fully andmandatorily convertible preference shares and fully andmandatorily convertible debentures with the pricing beingdecided upfront as a figure or based on the formula that isdecided upfront.

Partly paid equity shares and warrants issued by an Indiancompany in accordance with the provision of the CompaniesAct, 2013 and the SEBI guidelines, as applicable, shall betreated as eligible FDI instruments w.e.f July 8, 2014 subjectto compliance with FDI scheme. The pricing and receipt ofbalance consideration shall be as stipulated in terms of A.P.(DIR Series) Circular No.3 dated July 14, 2014 as modifiedfrom time to time.

Any foreign investment into an instrument issued by an Indiancompany which:

gives an option to the investor to convert or not toconvert it into equity or

does not involve up front pricing of the instrument as adate would be reckoned as ECB and would have tocomply with the ECB guidelines.

The FDI policy provides that the price/ conversion formula ofconvertible capital instruments should be determined up frontat the time of issue of the instruments. The price at the time ofconversion should not in any case be lower than the fair valueworked out, at the time of issuance of such instruments, inaccordance with the extant FEMA regulations [valuation asper any internationally accepted pricing methodology onarm's length basis for the unlisted companies and valuation interms of SEBI (ICDR) Regulations, for the listed companies]without any assured return.

An Indian company may receive Foreign Direct Investmentunder the two routes as given under:

What is FDI?

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I. Automatic Route

FDI is allowed under the automatic route without priorapproval either of the Government or the Reserve Bankof India in all activities/sectors as specified in theconsolidated FDI Policy, issued by the Government ofIndia from time to time.

ii. Government Route

FDI in activities not covered under the automatic routerequires prior approval of the Government which areconsidered by the Foreign Investment Promotion Board(FIPB), Department of Economic Affairs, Ministry ofFinance.Application can be made in Form FC-IL, whichcan be downloaded from http://www.dipp.gov.in. Plainpaper applications carrying all relevant details are alsoaccepted. No fee is payable.

An Indian company issuing shares /convertibledebentures under FDI Scheme to a person residentoutside India shall receive the amount of considerationrequired to be paid for such shares /convertibledebentures by:

(i) inward remittance through normal banking channels.

(ii) debit to NRE / FCNR account of a person concernedmaintained with anAD Category I Bank.

(iii) conversion of royalty / lump sum / technical know-howfee due for payment or conversion of ECB, shall betreated as consideration for issue of shares.

(iv) conversion of import payables / pre incorporationexpenses / share swap can be treated as consideration forissue of shares with the approval of FIPB.

(v) debit to non-interest bearing Escrow account in IndianRupees in India which is opened with the approval fromAD Category - I bank and is maintained with the ADCategory I bank on behalf of residents and non-residentstowards payment of share purchase consideration.

I. Reporting of Inflow

The actual inflows on account of such issuance of sharesshall be reported by theAD branch in the R-returns in thenormal course.

An Indian company receiving investment from outside

Reporting of FDI for fresh issuance of shares (AutomaticRoute)

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MEMBER’S SECTION

Foreign Direct Investment - A Key Tool to Measure InvestmentClimate- Compliances and Formalities

Timir Baran Chatterjee

Vol. 9 No. 05 June, 2016

EIRC NEWS 29

India for issuing shares / convertible debentures /preference shares/ warrants under the FDI Scheme,should report the details of the amount of consideration(including each upfront/call payment) to the RegionalOffice concerned of the Reserve Bank through it's ADCategory I bank, not later than 30 days from the date ofreceipt in the Advance Reporting Form (Annex - 6 ofMaster Circular No. 15/2015-16 dated July 1, 2015)

Non-compliance with the above provision would bereckoned as a contravention under FEMA, 1999 andcould attract penal provisions.

Indian companies are required to report the details of thereceipt of the amount of consideration for issue of shares/ convertible debentures/ warrants, through an ADCategory - I bank, together with a copy/ies of the FIRC/sevidencing the receipt of the remittance along with theKYC report (Annex - 7 of Master Circular No. 15/2015-16 dated July 1, 2015) on the non-resident investor fromthe overseas bank remitting the amount. The reportwould be acknowledged by the Regional Officeconcerned, which will allot a Unique IdentificationNumber (UIN) for the amount reported.

Annual Return on Foreign Liabilities and Assets - AllIndian companies which have received FDI and/or madeFDI abroad in the previous year(s) including the currentyear, should file the annual return on Foreign Liabilitiesand Assets (FLA) in the soft form to the Reserve Bank,Department of Statistics and Information Management,Mumbai by July 15 every year.

Time frame within which shares have to be issued- Theequity instruments should be issued within 180 daysfrom the date of receipt of the inward remittance or bydebit to the NRE/FCNR (B) /Escrow account of the non-resident investor.

In case, the equity instruments are not issued within 180days from the date of receipt of the inward remittance ordate of debit to the NRE/FCNR (B) account, the amountof consideration so received should be refundedimmediately to the non-resident investor by outwardremittance through normal banking channels or by creditto the NRE/FCNR (B)/Escrow account, as the case maybe.

Non-compliance with the above provision would bereckoned as a contravention under FEMA and couldattract penal provisions. In exceptional cases, refund /allotment of shares for the amount of considerationoutstanding beyond a period of 180 days from the date ofreceipt may be considered by the Reserve Bank, on themerits of the case.

Reporting of issue of shares-

After issue of shares (including bonus and shares issuedon rights basis)/ partly paid shares to the extent equity

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shares are called up/ convertible debentures /convertible preference shares/warrants to the extentequity shares are called up, the Indian company has tofile Form FC-GPR through its AD Category I bank, notlater than 30 days from the date of issue of shares.

Form FC-GPR has to be duly filled up and signed byManaging Director/Director/Secretary of the Companyand submitted to the Authorised Dealer of the company,who will forward it to the concerned Regional Office ofthe Reserve Bank.

The report of receipt of consideration as well as FormFC-GPR have to be submitted by the AD bank to theRegional Office concerned of the Reserve Bank underwhose jurisdiction the registered office of the companyis situated.

Issue of bonus or rights shares to persons residentoutside India directly or on amalgamation / merger withan existing Indian company, as well as issue of shares onconversion of ECB / royalty / lumpsum technical know-how fee / import of capital goods by units in SEZs has tobe reported in Form FC-GPR.

Details of issue of shares against conversion of ECB have tobe reported to the Regional Office concerned of the ReserveBank, as indicated below:

In case of full conversion of ECB into equity, thecompany shall report the conversion in Form FC-GPRto the Regional Office concerned of the Reserve Bank aswell as in Form ECB-2 to the Department of Statisticsand Information Management (DSIM), Reserve Bank ofIndia, Bandra-Kurla Complex, Mumbai - 400 051,within seven working days from the close of month towhich it relates. The words "ECB wholly converted toequity" shall be clearly indicated on top of the FormECB-2. Once reported, filing of Form ECB-2 in thesubsequent months is not necessary.

In case of partial conversion of ECB, the company shallreport the converted portion in Form FC-GPR to theRegional Office concerned as well as in Form ECB-2clearly differentiating the converted portion from thenon-converted portion. The words "ECB partiallyconverted to equity" shall be indicated on top of theForm ECB-2. In the subsequent months, the outstandingbalance of ECB shall be reported in Form ECB-2 toDSIM.

The SEZ unit issuing equity, should report theparticulars of the shares issued in the Form FC-GPR.

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Reporting of conversion of ECB into equity

Check List of documents to be attached with andinformation to be provided in each set of the ApplicationForm to Department of Industrial Policy & Promotion forconsideration of a proposal by FIPB IN CASE OFGOVERNMENTAPPROVALROUTE

Vol. 9 No. 05 June, 2016

EIRC NEWS 30

FIPB approval is required for all other proposals not eligibleforAutomaticApproval.

Applications are to be submitted in Form IL-FC or on plainpaper with full details to the Secretariat for IndustrialAssistance (SIA) for the cases involving NRI/OCBinvestment and 100% EOU. For remaining cases, theapplications may be submitted to Department of EconomicAffairs, Ministry of Finance. The proposals are considered bythe reconstituted FIPB in the Department of EconomicAffairs. IL-FC Form is available at Website in a downloadableformat on the DIPPWebsite (http://dipp.nic.in).

The applications will be accepted in FIPB format only. Theapplicants are requested to fill in all the relevant details in theFIPB format itself. The applications in plain paper will not beconsidered.

1. Filled up application form in 18 copies. A format isavailable at the following web address on thehttp://fipbindia.com/portal/forms/Fresh%20Application.pdf

2. Copies of Certificate of Incorporation (s) andMemorandum of Association of the (a) Foreigninvestor/collaboration (b) Indian Company (c)Indian Joint Venture Partners

3. Copies of certificates of incorporation(s) andMemorandum of Association of the downstreaminvestee company, if already formed

4. Details of the Indian joint venture partner(s)indicating their promoters, parentage, groupcompanies/ affiliates

5. The comments of the Indian partners/technical/trademark collaborators about the new venture, ontheir official letter heads, with full name and contactaddress of the signatory of the comments

6. The comments of the Indian partners/technical/trademark collaborators about the new venture, ontheir official letter heads, with full name and contactaddress of the signatory of the comments

7. In case of fresh issue of shares ? the board resolutionof the investee/issuing company to that effect

8. In case the proposed investment is in an investing(holding) company, the details/ information aboutthe activities of the downstream companies.

9. Copies of FIRC

10. Copies of relevant past FIPB/SIA/RBI approvals/RBI communications, connected with the currentproposal, including the copies of Form FCGPR

Sl No. Name of the Document/item of information

11. A copy of the JV agreement/Shareholdersagreement/technology transfer/trademark/brandassignment agreement (as applicable), in case thereare existing ventures

12. Pre and post investment, category wise detailedshareholding structure of the investee and investingcompanies.

13. Diagrammatical representation of the flow andfunds from the original investor to the investeecompany

14. In case of indirect foreign investment in the investeecompany through Indian companies, the details ofsuch indirect investment, mentioning the name offoreign companies and their shareholding

15. A statement, if applicable, indicating whether theamount to be invested by NRIs would be in foreignexchange or in INR.

16. The status of the compliance of the conditions if theproposal involves a sector with FDI-linkedperformance conditions (such as 'Non-BankingFinance Companies' or 'Development ofTownships, Housing, Built-up infrastructure andConstruction-development projects' etc.).

17. The status of the compliance of the conditions asmentioned in FDI policy for issue of shares againstpre-incorporation and preliminary expenses to beprovided in a tabular form

18. The status of the compliance of the conditions asmentioned in FDI policy for issue of shares againstimport of capital goods/machinery etc. to beprovided in a tabular form

19. Any other document relevant to the proposal

20. Provide any website link for more information

In addition to above, for FDI in single-brand productretail trading/ multi brand retail trading, theapplicants are requested to provide followingadditional information:

(i) The status of the compliance of the conditions asmentioned in FDI policy for single-brand productretail trading/multi brand retail trading.

(ii) The list of countries where the brand is beingsold internationally.

(iii) Documentary evidence (brochures etc.) insupport to show that brand, proposed to be sold, is aninternational brand

(iv) A declaration stating that the Indian Joint

Vol. 9 No. 05 June, 2016

EIRC NEWS 31

Venture partner company is controlled and owned bythe resident Indians.

(v) Existing activities and the existing capitalstructure of the Indian Joint Venture partnercompany.

(vi) Diagrammatic representation of flow of fundsinto the joint venture indicating the businessstructure, with all levels of companies/entitiesinvolved.

(vii) Exclusive license agreement, between theforeign investor and brand owner for compliance ofcondition 2(d) of paragraph 6.2.16.3(2) (d) ofConsolidated FDI Policy Circular of 2014.

(viii) sub-license/draft sub-license agreementbetween foreign investor and the investee /proposedIndian investee company

(ix) List of products proposed to be sold undersingle brand.

Vol. 9 No. 05 June, 2016

STUDENT’S SECTION

EIRC NEWS 32

Test

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!!Quiz Master PageCMA Ajay Deep Wadhwa, Former Chairman, EIRC of ICAI

Answers:

Vol. 9 No. 05 June, 2016

1.CabotagelawprohibitsforeignshipstooperatealongtheIndiancoastlinetoaggregatecargo.

2.$5noteofNewZealand

3.Mr.ChandrashekharGhosh

4.Alphabet

5.SachinTendulkar

6.DepartmentofInvestmentandPublicAssetManagement

7.Switzerland

8.SriAmitMitra,FinanceMinsterofWestBengal

9.Mineralsareusuallyextractedfrombelowtheearthafterremovingdifferentlayersofsoil,stonesetc.Thissoilandstonesarecalledoverburden.

10.Itisvirtualcurrencythatiscreatedfromcomputercode.UnlikearealworldcurrencysuchasINRorUS$,ithasnoCentralBank;thecommunityofuserscontrolandregulateit.

1. What is Cabotage Law?

2. Which currency has been declared as world's best Bank Note for the year 2015?

3. Who is the CEO and MD of Bandhan Bank?

4. Which is the parent company of Google?

5. Who has joined hands with Arvind Fashion Brands to launch a premium menswear apparel brand – “True Blue”?

6. Expand 'DIPAM'.

7. Which country does the company 'Nestle' originally belong to?

8. Who is the Chairman of empowered committee on GST?

9. What is “Over Burden” in CAS 23?

10. What is “Bitcoin”?

EIRC NEWS 33

Vol. 9 No. 05 June, 2016

Chapter Activities

Bhubaneswar Chapter of CostAccountants

Cleanliness Drive ( Swachh BharatAviyan) from 16-31st May,2016

Personality & Communication Skill Development Programme held on 22.05.16 Considering the need of students, this Chapter hasorganized one Personality & Communication Skill Development programme on 22.05.16 for pursuing final students at itspremises. Shri Amit Kumar Tripathy, One of the best Soft Skill Trainers at Odisha guided the students. Around 30 pursuing FinalStudents actively participated the Programme.

Celebration ofAnnual Day of the Institute and Students Seminar on Stress Management held on 28.05.16

In reference to the communication received from the Institute, this Chapter has celebrated the Annual Day on 28.05.16 at itsConference Hall. To mark the celebration of Annual Day, one student's seminar has been organized by the Chapter on the topic"Stress Management".

47thAnnual General Meeting of the Chapter and selection of New Office Bearer of the Chapter for the year 2016-17.

In reference to the provisions of Chapter Bye Laws (Appendix-7) farmed by the Council and clause No 18(1) this Chapter hasconducted it 47thAnnual General Meeting on 30.05.16. On the occasion 4th quarter news letter has also been inaugurated by CMAN.Mishra, Council Member & Chairman, RCs and Chapters Coordination Committee, ICAI, CMA S.P.Padhi, Chairman, ICAI-EIRC & Founder members like CMA D.K.Das, CMA K.K.Sastri & CMA N.Mohapatra in the presence of the members of theManaging committee and members of the Chapter.

Further, in Pursuance to the Appendix-7 of the Chapter Bye Laws framed by the Council under Regulation 146 and clause Number12(1) , the Existing members of the Managing Committee in its first meeting held on 30.05.16 at 9.00 P.M i,e just after the AnnualGeneral Meeting selected the following members as Office Bearers for theYear 2016-17

As per the instruction of Govt. of India and subsequent information received by the Institute this Chapters Students and employeeshave participated and taken pledge in the swachh BharatAviyan during the stated period. Apart from the mass pledge they have alsoinvolved in cleaning activities within the office premises. Some of the photos enclosed herewith for reference.

NEWS

Sl No Name of the Member Membership

Number

Portfolio

01 CMA Siba Prasad Kar

D.G.M (Finance), CESU2nd Floor, IDCO TowerBhubaneswar-22, OdishaM-8895995158Email: kar.sibaprasad@gmail.com

M/12875 Chairman

02 CMA Uttam Kumar Nayak

Practicing Cost AccountantsCMU & AssociatesPlot No-250, Sahid Nagar (Near IMFA Park)Bhubaneswar-07Mob:07504455724Email:unayak00@gmail.com

M/23918 Vice-Chairman

cum Treasurer

03 CMA Damodar Mishra

A.G.M (Finance)Odisha Power Transmission Corporation Ltd.(OPTCL)Janapath, Bhoi NagarBhubaneswar-22Mob:09438907920Email:fin.dmishra@rediffmail.com

M/23265 Secretary

EIRC NEWS 34

Vol. 9 No. 05 June, 2016

EIRC Activities

CEP on Standards on Cost Audit & CAS” was organized by EIRC on 17 May 2016 at EIRC Auditorium. CMA Raju Iyer, CCM,ICAI, CMA Balwinder Singh, CCM, ICAI & CMA J K Budhiraja, Senior Director (Technical), ICAI were the speakers. CEP on“The Companies Act 2013” was organized by EIRC on 20 May, 2016 at EIRC's Auditorium. CMA Dr. P.V.S. Jagan Mohan Rao,CCM, ICAI & CMA Biswarup Basu, CCM, ICAI were the speakers. Mr B Mohanty, ROC Kolkata was the Chief Guest. On 20May 2016 Anti Terrorism Oath was taken by Members, Employees, CCMs & RCMs at EIRC. EIRC jointly with Damodar ValleyCorporation organized a CEP on “Service Tax & Related Issues” at Chandrapura Training Institute, DVC, Bokaro on 4 June 2016.CMAMrityunjayAcharjee, Sr Vice President, Balmer Lawrie & Co. Ltd was the Speaker.

The Institute of Cost Accountants of India (ICAI) – Eastern India Regional Council had organizedthe 37 Cost Conference at Science City, Kolkata on 11 and 12 June, 2016. The Conference was inaugurated by Shri SobhandebChattopadhyay, Hon'ble Minister in-charge, Power & Non-Conventional Energy Sources, Government of West Bengal on 11thJune, 2016 (Saturday). RearAdmiralAK Verma, CMD of Garden Reach Ship Builders & Engineers Ltd. was Guest of Honour. ShriAmit Sinha, Executive Vice President of NSDL and Swami Suparnananda ji Maharaj, Secretary of The Ramakrishna MissionInstitute of Culture, Kolkata were the special guests. CMA Manas Kumar Thakur, Vice President of ICAI also addressed theparticipants in the inaugural session. CMAShiba Prasad Padhi Chairman delivered the welcome address.The 2-day Conference was focussed on the theme “Managing cost and taking successful business decisions - Competency ofCMAs" and had the deliberations by the eminent experts from different sectors on Manufacturing, Mining, Service, MSME, Powerand other service Sectors apart from a CFO Meet and Panel discussion on GST.The 1 Technical Session was on Manufacturing & Mining. The session was chaired by CMA H Padmanabhan, CCM, ICAI &moderated by CMA(Dr.) IAshok, CCM, ICAI. CMAShyamal Bhattacharyya, Member, ICAI-EIRC offered the vote of thanks.(a) Managing cost and taking successful business decisions – Best Practices in Aluminum Industry was addressed by CMA B K

Dash,AGM (Finance), NALCO Ltd., Bhubaneswar(b) Managing cost and taking successful business decisions – Best Practices in Mining Industry was addressed by CA. CMA S B

Mahapatra, Consultant and Sr. Faculty of IICM, Ranchi(c) Managing cost and taking successful business decisions – Best Practices was addressed by CA. CMA CS Arun Kedia CFO,

EMC Ltd., Kolkata.The 2 Technical Session was on MSME. CMA Avijit Goswami, CCM, ICAI was the Chairman of the session & CMA CheruvuVenkataramana, RCM, ICAI introduced the dignitaries. The session was moderated by CMA(Dr.) D P Nandy, Director (Research &Journal), ICAI. Shri Saumyajit Guha, COO, Calcutta Angels Network, Kolkata, CA. CMA Kalyan Kar, Founder & MD, InthinkKnowledge Ventures, Kolkata & Ms. Ushoshi Sengupta, Founder & CEO, TES, Kolkata (also the Miss India Universe of 2010) werethe panelists.At the end of session CMABibekananda Mukhopadhyay, Vice-Chairman, ICAI-EIRC offered the vote of thanks.The 3 Technical Session was on CFOs Meet. The Session was chaired by CMA Sanjay Gupta, CCM, ICAI and moderated by CMABiswarup Basu, CCM, ICAI. CMASabyasachi Mitra, Director (Finance), Howden Solyvent (India) Pvt. Ltd. & CMASudip Datta, COO,IL&FS IDC Ltd., Kolkata addressed the session as speakers. CMAAshis Banerjee, Treasurer, ICAI-EIRC proposed the vote of thanks.The 4 Technical Session was a Panel Discussion on GST. CMA A B Nawal, Chairman, Indirect Taxation Committee, ICAImoderated the session. Janab Khalid Anwar, Joint Commissioner, Directorate of Commercial Taxes, Govt. of W.B., CMA T BChatterjee, Sr. Vice President & Company Secretary, DIC India Ltd., Kolkata, CMA Debasis Ghosh, Director, Deloitte Haskins &Sells LLP, Kolkata and CMA Mrityunjay Acharjee, Sr. VP, Balmer Lawrie & Co. Ltd., Kolkata were the panelist. Vote of Thankswas offered by CMA(Dr.) Umar Farooque, Member, ICAI-EIRCThe 5 Technical Session was on Power & Services Sector. CMA Niranjan Mishra, CCM, ICAI was the Chairman of the session.CMARaju Iyer, CCM, ICAI moderated the session. ShriAmit Sinha, Executive VP, NSDL, Mumbai addressed on NPS. Dr. JayantaKumar Seal Associate Professor, IIFT, Kolkata addressed on Cost and Management Accounting practices followed in Ports. ShriVibhor Tandon, Asst. VP, MCX India Ltd. & Shri Diptendu Moulik, Sr. Executive, MCX of India Ltd. addressed on CommodityFutures & Derivatives, CMA K P.Gupta, GM (Finance), Cost & Budget, NTPC Ltd. addressed on Power & Shri DebashisMukherjee, General Manager (Credit), UBI, Kolkata addressed on Cost and ManagementAccounting practices followed in Banks.CMA Bibekananda Mukhopadhyay extended his whole hearted thanks to all the speakers, Guests, Delegates, Past Chairmen, PastPresidents, CCMs, RCMS, Vice President, Presidents, sponsors, advertisers, Institute Officials for extending their support &making the conference a grand success. More than 350 participants from industry, practitioners, corporate houses, governmentdepartments, Chapters representatives and academicians attended the Conference. CMATapas Paul, a member of the Institute wasfelicitated on the occasion for his yeomen service to the CMA profession through his initiative CMA Next Step. Asansol Chapterwas also felicitated for excellent performance for organizing campus placement & placing the qualified students in different MNCs.

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37 Cost Conference – 2016 :th

Personality and Communication Skill Development Program organized by theBhubaneswar Chapter on 22.05.16.

Celebration of the Annual Day of the Institute and Students Seminar on the topic held on“Stress Management” organized by the Bhubaneswar Chapter on 28.05.16 at its conference

hall. (L/R) CMA B.B.Nayak: Prof (Dr.) Ashok Kumar Sahu, Ex Executive Director (HR &Administration), NALCO Ltd. and Resource Person on the occasion & CMA Damodar Mishra,

the then Students Training & Development Committee of the Chapter.

Observance of Anti-Terrorism Day on 20th May 2016

Inauguration of 4 quarter News Letter of the Bhubaneswar Chapter on the occasion47 Annual General Meeting held on 30.05.16. (L/R)CMA N.Mohaptra, Past Chairman

& One of the Founder Members of the Chapter, CMA N.Mishra, Council Member &Chairman, RCS and Chapters Coordination Committee, ICAI,CMA S.P.Padhi, Chairman,

ICAI-EIRC, CMA K.K.Sastri, Past Chairman & One of the Founder Members of theChapter & CMA D.K.Das, Past Chairman & One of the Founder Members of the Chapter

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Staffs & Students of the Chapter talking pledge during Swatch Bharat Aviyan16-31 May, 2016st

Printed & published by CMA Shiba Prasad Padhi on behalf of owner EIRC of ICAI, printed at Moodran Graphica,41, Gokul Boral Street, Kolkata - 700 012. Published at 84, Harish Mukherjee Road, Kolkata - 700 025.

Editor’s name : CMA Arundhati Basu

RNI No. WBENG/2008/24583

Publication Date : June 2016

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Eastern India Regional CouncilThe Institute of Cost Accountants of India (EIRC of ICAI)

[Statutory Body under an Act of Parliament]

CMA Bhawan, 84, Harish Mukherjee Road, Kolkata- 700 025

Telephones: (033) 2455-3418/5957/6666/9999, 6456 3600-03; 6450 4305

Fax: +91-33-2455-7920 e-mail: eirc@icmai.in Website : www.eircoficwai.com

About EIRC of ICAI

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8000 members

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STRATEGY ----- MANAGEMENT ---- FINANCIAL REPORTS ----- REGULATORY

Role of CMAs

Introducing Cost Competitiveness

Resource Management

Performance Management

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Risk Management & Mitigation

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