Ignorance of law is not excused. We know this preamble. Everybody is bound to abide by law of the land. In
India hardly few people would be knowing the total number of laws or Acts governing on today’s date.
So, compliance of any law is the duty of every citizen of the country as those are made for good governance.
There may be controversy of opinion of about any particular law by different people, however so long as the
law is applicable it is to be followed until it gets abolished or amended. As far as Tax laws are concerned the
compliance becomes very important because it has direct impact on the revenue of the government. Revenue
is nothing but Economy of a state.
The law makers expect that it is to be followed by every person whom it becomes applicable. They try to
ensure that it is been followed as required. They monitor the compliance of the provisions of the law. In
absence of the compliance the law has penal provisions like interest, penalty, prosecution and so on.
A common man usually unaware or uneducated about majority of the laws. He goes on making earnings and
one day surprisingly comes across the provision of certain law and gets caught. He gets scared about the
consequences and runs to an expert basically a lawyer or a consultant who happens to be an expert about the
law applicable. The lawyer or the consultant happens to be a knowledgeable and experienced person of the
various laws applicable.
A practicing Chartered Accountant is supposed to be one of such experts. It is apart that every practicing
Chartered Accountant not necessarily be an expert in the laws because many of the Chartered Accountants do
not work or operate in law areas.
The origin of the practice of a Chartered Accountant lies in accounting and tax matters. Basic laws like Income
Tax Act, Excise and Customs Act, The Companies Act, The Sales Tax Act and so on were the dominance of
practice of a Chartered Accountant for decades together. The law practice went on increasing year on year and
more and more complicated. The number of laws went on increasing simultaneously the execution of the
provisions went on stringently.
The need of an expert of law was on high level during 1980 to 2010. The economy was growing and the
business was touching the sky. The law makers were in full swing to pass more and more Acts, implement
them rigorously and generate more revenue for the government. It would not be a surprise the law expert
fraternity would have not been emerged for the rescue of the Industry.
Till 1991 the Indian Economy was protected rather restricted. Till that time the Chartered Accountants were
finding bit difficult good opportunities and also ample of employment. Comparatively, the practicing Chartered
Accountants were having large scope for self-employment. The scope for tax practice was tremendous. The
requisites were the good knowledge of laws and patience to settle down. Practically we have seen second and
in few cases third generation Chartered Accountants continuing in the tax practice. The businesses were also
loyal enough to continue with the same advisory family generation after generation. This was nothing but the
result of dedicated and honest service by the Chartered Accountants over the decades and generations.
Both the businessmen and the consultants were loyal to each other and happy with mutual association. Both
experienced and enjoyed carrot of the association. Being in the law practice day in and day out for years
together the Chartered Accountants were becoming masters of the law. They were being honored not only by
their clients but also by the law makers too. The law makers started taking these experts on the advisory
committees of the government to draft the provisions of the law, rules, and regulations. The opinion of these
experts was being sought in complicated law issues by the government authorities. These experts were being
recognised in the industry, society and in overseas world also. With the recognition and demand they were also
being highly paid for their expert services. A specialized sector of the fraternity got established rendering
exclusively law services. Large firms established exclusive divisions for direct taxes, indirect taxes,
international taxation, corporate laws and so on.
Contributed by :- CA. Vijay Ashtekar
Email :- ashtekar@ashtekarca.com
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After 1991 i.e., exposure of Indian economy to the world the multinational opened their shops in India and
these experts got huge opportunity for their knowledge and expertise. Some of them started getting fees in
dollar and euro terms.
Micro, Small and medium organizations were more keen about getting the service of these experts mainly for
their legal or tax requirements. They were least interested about other areas of business. The large
organizations including multinationals were having their own workforce for other functions other than legal
aspects including taxation. These people were looking at these experts as trouble shooters.
More and more technology development day by day reduced the human intervention in implementation
process of laws one by one. Slowly the Acts started getting digitized. The governance of law became more and
more e-governance.
The intervention of the authorities in procedure and execution got reduced. E-filing became so easy and
common for the people that the need of an expert started getting reduced.
The increase in the threshold limits of audit, reduction in compliance, merger of various laws like emergence of
GST reduced the dependency of business and industry on experts.
The simplification of tax laws and other Acts reduced the demand of experts. On one side government made
more and more simplification of laws on the other side it started putting more and more responsibility on
experts. The governance became more stringent. The penal provisions including prosecution compelled the
experts to rethink about their core area of practice.
The industry and the businessmen started treating these experts as middlemen between tax authorities and
them.
On one side the reducing demand by the industry and on the other side the increasing compliance made the
experts to revisit their interest and opportunities. It was being observed even today by the experts working
exclusively in direct tax areas that they had lien period about 4 to 5 months in a year especially after due date
of returns. Especially a large section of secretarial practice experts observed a lien period after the due date of
filing.
The industry was experiencing stiff competition and threats due to globalization. It was keener on getting
more contribution from these experts over and above compliance services. The compliance service was
becoming more of an obligation and sort of mechanical. It was not adding any value to the business hence the
owners, managers were least interested in engaging experts for compliance requirements.
The glory of the compliance practice started getting back seat. The experts were getting attracted to the value
addition activities and business-oriented opportunities. Slowly the role of experts started shifting from a
watchdog to a milking cow.
However, so long as the laws are being enforced and the government is being followed by the authorities the
experts will be in demand. Moreover, they will have specialized services to render. The experts will be engaged
for the critical and more technical issues than routine execution. The overall need of the qualified experts will
be lesser day by day hence they will have to look for other opportunities. They will have to be more
contributory to the industry. It is a good sign of change that the experts will have more opportunities to apply
their high-level knowledge, experience, analytical skills for making great value addition to the industry and
eventually to the economy of the country.
As I said earlier the compliance practice was getting more and more stressful day by day. The amendments,
notifications, circulars and whatnot have made the life of experts miserable. Continuously updating the
technology, modification in the version of forms, schema suddenly without any intimation put unnecessary
pressure on the experts during due dates. Heavy interest, penalty, late fees for missing due dates have lost the
mental peace of the experts and clients also. The experts started looking for alternative practice areas or even
to shut down as a last resort.
An increase in the threshold limits of turnover for a tax audit, GST audit, exemption of certain compliance to certain
entities has also made the experts realign their practice areas. The reduced volume of compliance practice
at the same time increase in responsibility of the experts while signing the reports, documents in compliance
function compelled the experts to relook at the practice and take an appropriate decision or step for the future.
In a nutshell, we can say the compliance practice has carrot and stick both it is the skill of an expert how to take
a carrot out of it and eliminate the possibility of the stick.