The Institute of Chartered Accountants of India (ICAI)’s Western Regional Council wrote a letter to the Chief Minister of Maharashtra, Mr. Uddhav Thackeray, stating that the services provided by the members of the Institute, the Chartered Accountants, should be considered as an “essential service” amid the lockdown started because of the outbreak of the coronavirus.
The letter detailed the importance of the Goods and Services Tax (GST) and read, “Goods and Services Tax (GST) has become the primary source of revenue of the Indirect Taxation for the Central Government and the State Governments/Union Territories.
Thus, the compliance of the GST Act/Rules and collection of the GST is of paramount importance for the Central Government and State Governments in India not only for funding not only their administrative and manpower expenses but more importantly, the various developmental outlays and ongoing projects/expenses towards social and welfare of the poor and economically backward population”.
The letter also stated that the revenues generated from the collection of TDS (Tax Deducted at Source), SAT (Self-Assessment Tax) and Advance Tax, under the Income Tax ACt, 1961, is a major source of revenue for the government of Maharashtra. The CAs of the country helps in generating such revenues for the government and hence should be categorised as essential service during the lockdown.
The ICAI also threw the light on the other facts in the letter that help in generating revenues for the government. The letter read that the CAs help their clients in determining the true and correct values of income taxable under the GST Act, 2017 and Income Tax Act 1961 and help their clients in compiling to the provisions of these acts precisely. Advisory on TDS and other acts are also provided by the CAs.
These compliances and advisories provided by the CAs help the government in achieving their targets of revenues and help in generating more revenue for the government.
The letter said, ““It is not practical and possible for the CA fraternity and their staff members to render these services from their home since the client data is not available on the cloud beside the computation, compliances and payment of Indirect and Direct Taxes require extensive communication and in-house discussion.
Any delay in the determination and payment of the taxes on a large scale by the clients due to the shut-down of offices of the CA fraternity will affect the on-time revenue collections of the direct and indirect taxes. On the other hand, the additional burden due to levy of interest and penalty for belated return filings and payments will precariously affect the financial position of the MSME clients already reeling under the impact of the COVID-19”.
The institute said that during the lecture presented by the former President of India, Mr. APJ Abdul Kalam, during the International Conference on Accounting Profession- Adding Value to New Horizons of Economic Growth, said that the CAs of the country and abroad are partners in the development of the nation. He said that they help in the upliftment of those people who are below poverty line, on the border of poverty line and just above the poverty line.
The Prime Minister of India, Mr Narendra Modi has also said that the CAs have a great role in the development of the country. Other prominent ministers have also appreciated the services provided by the CA community from time to time. Mr. Modi has also motivated the CAs to play an even greater role in the development of the country. So, the CA services should be made essential during the lockdown.
The letter also stated, “In the backdrop of the far-reaching and value additive impact of the services rendered by the CA fraternity on the economic and social fabric of the country and the greater aspirations expected of the CA fraternity, it will be desirable that the services rendered by the practicing CAs be classified as ‘Essential Services’ under the guidelines expected to be issued by the Home Ministry for granting exemption or relaxation in the matter of the operation of offices and staff attendance in the offices of the practicing CAs, of course, subject to adherence to guidelines/instructions/restrictions issued and applicable to other providers of other essential services in this respect”.
The government of Maharashtra is considering the suggestion made by the institute and will be announcing regarding any inclusions or exclusions in the “Essential Services” list as soon as possible.