New Delhi: The Institute of Chartered Accountants of India (Icai) has said it will prepare guidance notes for chartered accountants involved in the implementation of the goods and services tax (GST) by May.
The regulator for chartered accountants will also present a complete set of new accounting standards compliant with International Financial Reporting Standards (IFRS) by June.
“The institute will come out with a complete guidance note on how to implement GST and how the government should work on GST, so that its implementation does not result in loss of revenues for it,” said Amarjit Chopra, Icai’s new president.
GST, India’s most ambitious indirect tax reform, seeks to stitch together a common market and reduce costs to replace the current fragmented regime. It was to be implemented on 1 April but this is now unlikely because the Centre and the states have not been able to agree on the tax rate or a format. A new deadline has not yet been finalized.
“Icai’s preparedness for GST through a guidance note is critical as it will spell out the details on its (GST’s) implementation,” said S. Madhavan, executive director, tax and regulatory services, PricewaterhouseCoopers Pvt. Ltd.
As for the new accounting standards, India is committed to align with IFRS from April 2011. Chopra said there would be no delay on Icai’s part on converging with IFRS.
Some big differences between Indian accounting standards and IFRS relate to accounting for acquisitions, accounting for financial instruments such as investments and provisions for loans, and how fair value is interpreted.
“In three months’ time, the accounting standard board of the institute will be able to give the new standards to Nacas (National Advisory Committee on Accounting Standards),” said Chopra.
Nacas is a government-appointment body to advise on accounting standards.
Chopra also said Icai will create awareness on both GST and IFRS through seminars and conferences.
Icai is already conducting an 80-hour course for chartered accountants on IFRS.
“Icai’s efforts towards making Indian accounting standards compliant with IFRS has been commendable,” Jamil Khatri, head of accounting advisory services at KPMG India, recently told Mint.
“There are certain areas of divergence which it needs to address, which I am sure will happen much before the first phase of convergence begins in April 2011,” he had said.