SMEs to be exempt from IFRS Move Will Save Significant Cost Of Switching To New Standard
SMALL and medium enterprises (SMEs) in the country will not have to prepare their accounts as per the International Financial Reporting Standards (IFRS) from April 1, 2011, saving them significant cost of switching to the more rigorous accounting standard.
A government-constituted core committee on IFRS roadmap has decided to exempt SMEs from the first phase of convergence due in 2011. “SME sector, which contributes significantly to the Indian economy, will continue to follow existing Indian accounting standards and the same may be modified from time to time to make the sector more competent in the international arena,” said Institute of Chartered Accountants of India (ICAI) president Uttam Prakash Agarwal.
Convergence to IFRS is a costly exercise which includes an overhaul of operational and IT processes apart from training costs. A small enterprise for this exemption is likely to be one where the investment in plant and machinery is more than Rs.25 lakh but does not exceed Rs.5 crore. A medium enterprise is one where investment in plant and machinery is more than Rs.5 crore, but does not exceed Rs.10 crore.
In November last year, the government had hinted at preparing a watered-down version of IFRS for the SMEs “Industry preparedness in converging with IFRS is a key factor, specially for SMEs who may feel the convergence as cost-prohibitive,” R.Bandopadhyay, secretary in the ministry of corporate affairs, had said..
Starting company’s accounts as per IFRS will involve huge cost and is being considered world wide as a hurdle for SMEs. Recently, a core committee of the government finalized the roadmap for IFRS convergence in India.
The ICAI has said that all entities having networth in excess of Rs.1,000 crore will have to follow IFRS. The list also include all NSE and BSE listed companies, entities having foreign borrowings of more than Rs.500 crore, insurance entities, mutual funds, venture capital funds and all scheduled banks having operations outside India.
(Economic Times 20th January 2010)
------------------------------------------------------------------------------------
Karnataka unveils semicon policy at ISA Vision Summit
Source: EETimes, February 4 2010 www.eetindia.co.in ((ISAWINWIRE-India Semiconductor Association)
The government of Karnataka, in association with IT department and the India Semiconductor Association (ISA), rolled out the state semiconductor policy at the 5th ISA Vision Summit 2010. The policy was released by Karnataka chief minister B. S. Yeddyurappa in the presence of the state's IT & BT Minister, Katta Subramsanya Naidu, ISA chairman B.V Naidu, India government DIT additional secretary Rakesh Singh and other dignitaries from the government and the industry.
------------------------------------------------------------------------------------
Semiconductor policy on the anvil
Source: The Hindu, January 28 2010 www.hindu.com (ISAWINWIRE-India Semiconductor Association)
A comprehensive policy that introduces measures at the State-level to retain a competitive edge in semiconductor design, hardware manufacturing and accelerate investments, is on the anvil. Aravind Jannu, Director of the Department of IT/BT, reflected on the need for such a policy at a press conference held here on Wednesday to announce the fifth edition of the Indian Semiconductor Association (ISA) Vision Summit. The hi-tech industry market is expected to touch $ 400 billion by 2020. “The policy is at the discussion level and the State Government is eager to come out with the policy to encourage growth of the electronics systems design and manufacturing industry,” he said.
------------------------------------------------------------------------------------
GOODS AND SERVICES TAX
The 13th Finance Commission task force has suggested that the Centre must be more pro-active in ensuring that the proposed goods and services tax (GST) maximally captures the supply chains and is levied only on pure value added. A structurally sound GST wqould be the biggest stimulus to the economy. Finance Minister Mr.Pranab Mukherjee must use the sharp tool of the task force report to cut through the clutter. For India’s federal GST to be a high-utility tax reform, it should have a very broad base, subsume most central and state taxes and levies and be extremely circumspect about exemptions. Exports should be zero-rated and inter-state transactions too must effectively have this benefit. In short, the system should militate against cascading of taxes in B2b transactions.
(FE Jan 14, 2010, Electronics Outlook, ELCINA)
------------------------------------------------------------------------------------
Tax Code likely in Budget 2010-11
The government looks all set to introduce the new Direct Taxes Code in the forthcoming budget session. Finance Minister Pranab Mukherjee met PM Manmohan Singh on 5th Jan/. 2010 to discuss the contours of the new code, billed as the major reform of the direct tax structure being undertaken by the UPA government in its second tenure. A detailed presentation on the tax code was also made by the Finance Minister to the PM. The Finance Minstry has already held extensive consultations with all the stakeholders on the draft code and has also initiated an exercise to make appropriate changes and prepare the relevant legislation.
(ET Jan 6, 2010)
------------------------------------------------------------------------------------
Centre aims to cut imports, make 70% defence equipment at home
With India currently procuring approximately 70% of its defence equipment from abroad, the Centre aims to reverse this balance and manufacture 70% or more of its defence equipment needs in India. The defence industry in the country is poised at an inflection point in its expansion cycle, driven by modernization plans, an increased focus on homeland security, and India’s growing attractiveness as ‘home makret’ defence sourcing hub. The government has put in place building blocks to incentivise the growth of a domestic defence industry. In a study done by KPMG and CII, which will be released next month, several factors that are likely to influence the future growth trajectory, including further development of defence procurement process, forming and auctioning of defence industrialization strategy to coordinate the use of offsets, transfer of technology and FDI, have been identified. Other key areas of focus are the public and private sector defence industries in India and further changes in the taxation regime and incentives.
(FE December 22, 2009, Electronics Outlook, ELCINA)
------------------------------------------------------------------------------------
Zero import duty only for some sectors – India
India is open to committing zero import duty on sectors like gems and jewellery at the Doha Round of global trade talks, but has ruled out doing the same for sectors like chemicals, industrial machinery, electrical and electronic goods as well as health care equipment. The country is also opposed to the proposal on liberalizing trading of second-hand goods, but is willing to explore the issue once the Doha Round is concluded. According to a proposal in the Doha Round talks, countries will have to undertake heavy duty cust in about 14 industrial sectors under the provisions of the ‘sectoral’ talks. These cuts will be over and above the ones committed in the global trade deal, India has opposed the mandatory nature of sectorals and has been maintaining that countries should volunteer for it.
(FE December 10, 2009, Electronics Outlook, ELCINA)
------------------------------------------------------------------------------------
|
