The Indian newspapers have said that the GST data base should be perused for increasing the tax revenue. Dailies have said the suspension and penalty imposed on well known auditors Price Waterhouse (PW) by SEBI is a welcome move. The setting up of a Special Investigating Team (SIT) by the Supreme Court of India to reopen 186 cases relating to the 1984 carnage in Delhi has also been lauded by the print media.
THE ECONOMIC TIMES in an editorial PURSUE THE GST DATA TO BOOST TAX REVENUE writes, India’s net direct tax collections has grown by 18.2% in April-December 2017 from a year ago, with advance tax payments in December adding substantially to the kitty. This is welcome. But the improvement will be sustainable only if the government makes productive use of the audit trails created by the goods and services tax (GST)— that allows manufacturers to claim credit for the taxes paid on inputs across the production and income chain — to generate a unified base of tax potential that can be tapped. A mine of information is already available, post the GST rollout. Tax authorities must diligently follow the audit trails, supplementing them with big-data analytics. The gross value added in an economy is equal to gross profits (including depreciation) plus wages and salaries. This holds true at the enterprise level as well. Effectively, the tax base is taxed once with a comprehensive GST. The need is to track how much a company has paid and how much is the actual value addition that has been made.
FINANCIAL EXPRESS in an editorial AUDITING AUDITORS says though the Companies Act tried to address various issues relating to the role of auditors following scams such as the Satyam scam, it was always worrying that no serious action was taken against the auditors in India while the Securities and Exchange Commission (SEC) took action in the US—Mahindra Satyam, the new company, paid $10 million as a settlement; Indian affiliates of Pricewaterhouse Coopers’s (PwC) agreed to pay $7.5 million to the SEC and the Public Company Accounting Oversight Board (PCAOB). This lacunae has been addressed, albeit more than six years after the US action, with Securities Exchange Board of India (SEBI) asking Price Waterhouse (PW) to pay around Rs 27 crore of fines—this includes the interest costs—and also banning it from undertaking audits for two years. The Satyam scandal, as is known, revolved around Ramalinga Raju, who created fake receipts and, to cover this up, showed inflated deposits in various banks across the world. While PW has argued that it was not complicit and was the victim of Raju’s fraud, SEBI is of the opinion that PW never sought independent verification of the deposits from banks for over close to nine years. Similarly, PW was not able to catch the fact that fictitious receipts were being generated which it should have if it was doing the audit thoroughly—even if PW was innocent, the fact that a reputed auditor was not able to catch the fraud is worrying since it is really the first line of defence when it comes to highlighting the wrong-doings by a company.
THE INDIAN EXPRESS in an editorial A LONG WAIT opines, the Supreme Court’s decision to constitute a three-member Special Investigation Team (SIT) to reopen 186 cases related to the anti-Sikh violence of 1984 is yet another reminder that due process was not followed in probing these crimes. The apex court’s move comes after a supervisory panel it appointed in August last year recommended that these cases, among the 250 cases probed by a government-appointed SIT and recommended for closure, need to be reopened and re-investigated. The SC’s decision is welcome. Political parties have already started claiming credit for the SIT and apportioning blame on others for the miscarriage of justice. Many perpetrators of the heinous crimes have died or are too old for any punishment and evidence gathering may be difficult, but the process must not be abandoned. There needs to be serious reflection on why the authorities failed to book the guilty or pin responsibility on those who abdicated their responsibility in upholding the rule of law.
Script: Padam Singh, AIR: News Analyst