COST ACCOUNTANTS ARE THE EYES & EARS of Government of India
GST is big boon for the Cost
Accountancy profession but on a limited scale compared to peer profession. GST will transform unorganized
players into organized hence the number of SME will simply amplify over the coming
few years. Those who were not under proper
service tax ambit and were scaling business will come under GST ambit. Their
book keeping work will be regularized and once the PAN and Adhar are getting
linked, will further block the loopholes of tax evasion. In continuation to my
previous note on High time for COST
Audit and Cost Record Applicability it’s being found that SME industry
needs our assistance on a high level. Now
SME segment coming under compliance ambit will grow up in the long term to
expand its growth and revenue and this is the place where the government might
not be able to measure the type of benefits and support it needs. Since cost
audit and cost record used to be the EYES & EARS of the government. Now
with the mandate of below Rs 50cr turnover or Rs.100 cr turnover most of these segments
will not come under the applicability of cost audit and cost record where as other
professions will get tax audit and book keeping work which will be less importance
for this industry to grow.
We need to believe that we have a
new government in place which is very progressive and its reform policies have
already shaped the Indian GDP growth 10 7% and its being envisaged that by
2019-2020 we will be near to 9% GDP growth riding on GST reforms. Under the previous government it was well clear
that policy logjams and inability to understand the bottle necks and place solutions
accordingly slowed the GDP growth and investment climate and business climate
within the economy. This government will hear out based on the current economic
situation about the applicability of the Cost Audit and Cost record for the SME
segment. Its not like the previous government
under which we lost many precious positions where the profession was ruling in
its fields. One of this most important things we lost in 2009 as like Special
Audit under Section 14A & 14AA of the Central Excise
Act, 1944 (check the FM during that time). The most important aspect of this government
is that they are policy driven growth focused economy and have not kept any
stone unturned for not getting growth. They will adopt and change any policy
which is beneficial for the Indian economic growth. We are EARS and EYES of the
Government.
Industry body FICCI's latest
Economic Outlook Survey has pegged India's gross domestic product (GDP) growth
at around 7.4 percent for the fiscal year 2017-18. The pick-up in overall GDP growth
will also be supported by an improvement in industry and services sector
growth. This growth needs guidance which the profession can provide.
The Government of India is focusing on Startup and Make in India. But Make in
India and Startup India is not possible without contribution from SMEs of India.
Small and medium scale
enterprises (SMEs) are understood in India as enterprises where the investment
in plant and machinery or equipments is between Rs. 25 lakhs ( US $ 0.04
million) to Rs. 10 to Rs. 5 Crore ( US $
0.8 million) in case of a service sector enterprise. This definition is
provided in Section 7 of Micro, Small & Medium Enterprises Development Act,
2006 (MSMED Act) and was notified in September 2006.
Now under the
current cost audit and cost record applicability the current ruling of slabs
creates scope of opportunity as most of the SME are below the turnover level of
Rs 50cr or Rs.100cr. Overall, the MSME sector accounts for 45 percent of Indian
industrial output and 40 percent of exports.
This itself is a big opportunity
which will growth the business of practicing and employment once cost audit
applicability and cost record maintenance is implemented. Now the profession already
knows that we have lost the ground but the current economic imbalances and
exploring new opportunities of growth they need the support of the cost record
and cost audit applicability aspect since they needs revise prices and revised
cost estimation polices which will guide them for exploring market share in
these new markets. Rising international commodity prices make the sector under extensive
demand for various type of benefits and concession. Now cost audit and cost records could have
helped the government to access the prevailing problems for the industry.
Hence having a progressive government
in one place who envisages double digit growth for the Indian economy the cost
accountant fraternity cannot be left alone without having access to the SME
below Rs 50cr turnover or what so ever turnover level..