Supporting clients to represent before Senior Government authorities
Often businesses may need some representation and advocacy to articulate the genuineness of their application of claim. It could be a licence, a special permission, a classification issue holding up customs clearance or a consent for an exemption etc. Such delays can lead to delay in executing the project and ultimately increase costs.
- Tax Quotient with its expertise and experience can support and guide you to articulate the your business plans with justification for the government concurrence. We could also conduct research to identify precedents of a similar nature if any to provide the necessary assurance to the Government authorities.
Business structuring and tax planning
Setting up a new business, expanding an existing business, mergers or de-mergers of entities invariably creates significant indirect tax implications. If done right, tax inefficiencies due to inappropriate structuring can be minimized. In Indian taxes, especially in indirect taxes, we encounter overlapping Central and State tax levies which may lead to double taxation, loss of credit or a higher tax rate. Business structuring can be planned to ensure tax efficiency within the legal framework without violating or breaking any law. The aim is always to comply 100% yet adopt the most efficient tax route available within the framework of the tax laws.
Tax Quotient will essentially provide the following services:
- Analyses of the proposed transactions taking into account tax levies at central, state and local levels. Including stamp duties and EXIM implications under the Foreign Trade Policy.
- Bringing tax efficiency in terms of the one time taxes payable on the transaction and future recurring taxes payable paid and credits availed/available. Carrying out legal research to identify similar if not identical situations both nationally and internationally to either rule out or adopt tax position.
- Vetting/reviewing business transfer agreements or other such agreements for proposed transactions to ensure there are no latent / hidden tax risks due to loosely worded agreements.
Health checks and end-to-end business processes reviews for indirect taxes
Indirect tax laws in India are complex, dynamic and administered by an aggressive tax administration. Since indirect taxes apply on transactions they apply on innumerable transactions in business operations. Usually the tax computation is embedded as a part of the accounting system. The accounting system to accurately compute taxes should be configured with the right value, tax rates etc. Sometimes tax law changes don’t get incorporated into the tax computing system/engine creating potential tax risks. Regular (annual or bi-annual) end-to-end reviews of business processes including ‘order-to-cash’ and ‘purchase-to-pay’ and tax and FTP benefits claimed will minimize risks and ensure that opportunities are not missed.
Tax Quotient undertakes to review the following checks and reviews covering the following:
- Review taxability, rate of taxation and taxes paid for goods and services and identify inaccuracies and inefficiencies.
- Review eligibility to indirect tax credits (VAT and CENVAT) and FTP benefits for exports.
- Identify indirect tax risks and evaluate them.
- Provide advice on introducing tax controls and reports for future monitoring
Strategy to prevent litigation, representations and litigation support
Indirect taxation in India is prone to disputes and litigation. This means most Companies receive notices to explain their tax positions claiming a lower tax rate, an exemption or some benefit. Litigation in India is usually long drawn and often gets settled satisfactorily only in the Tribunal or Courts. However, in the meanwhile to purpose appeals under many indirect tax laws, one is called upon to make a pre-deposit of the tax amount upfront. This adds to the stress on cash flow for companies. There are situations where an “advance ruling” can be sought upfront from tax authorities before proceeding with a major transaction or business proposal. Tax Quotient can help the tax payers to handling and early closure of such matters.
Our services cover the following:
- Drafting replies to notices and appeals against orders before adjudicating and appellate authorities and advising on other legal proceedings including summons, investigations etc.
- Making applications before Advance Ruling Authority
- Determining the strategy to represent/escalate issues and make representations before senior officials of the Finance Ministry including the Commissioners, Chief Commissioner and the Central Board of Excise & Customs
- Draft the applications to Settlement Commission for settlement of cases
Tax compliance and tax control framework
Since indirect taxes are transaction taxes, business processes need to be robust to ensure correct taxes are paid and at the right time. This requires a robust system in operation and adequate processes to monitor and provides information from time to time on the status of compliance across geographies within India. Often such processes end up as bureaucratic form filling or certifications with no capability to prevent tax risks. Real risk prevention would need a framework with few but critical controls at appropriate levels together with a risk proofing mindset in management. The risks are enormous in terms of financial, operational and reputational risks.
Our services and report would broadly cover the following:
- Studying and mapping the business processes, identifying critical processes and control points to set off alerts and exceptions
- Designing a control report which is minimal yet focused on critical aspects of the tax processes to provide a dashboard for the Senior Management periodically.