Centre may allow CAs to cater to non-financial services clients from GIFT IFSC

  • Admin
  • 06/11/2023

Centre may allow CAs to cater to non-financial services clients from GIFT IFSC

Source: The Hindubusinessline

The government may permit chartered accountants to offer their services to non-financial services clients from the International Financial Services Centre at GIFT City, Gujarat. This may attract Indian and global chartered accountancy firms to establish their presence at the financial services hub. IFSC’s existing ancillary framework allows accounting firms registered in IFSC to serve only IFSC and overseas entities involved in the financial services sector. The relaxation will create a fair competition with CA firms that operate from the mainland have no such limitations and can serve clients from various sectors.

Collaborations with Indian firms may enable foreign consulting firms to form partnerships with Indian CA firms at IFSC and delegate some of their accounting work to GIFT IFSC. Currently, only a few CA firms have registered at GIFT IFSC, mainly because most Indian CA firms do not have a significant number of overseas clients in the financial services sector. The units based in IFSC have to generate export income or foreign exchange to obtain registration and avail of tax benefits. “Global CA firms setting up offices at GIFT will be able to access Indian talent at a lower cost. Indian CA firms will be encouraged to set up at GIFT because of the tax benefits. These firms will now be able to serve diverse clients across sectors from pharma to automobiles to banking,” said a person with a global accountancy firm.

10-year tax holiday CA firms setting up shop or subsidiaries at GIFT IFSC will be able to enjoy a tax holiday for 10 years on the fee income earned. “There is a need for parity between the large global and domestic accounting firms. Currently, having a certain number of overseas clients from the financial services sector on the roaster is a major requirement for obtaining the ancillary services licence. Having broader permission that allows firms to serve non-financial sectors for overseas clients as well as those from the mainland (subject to tax implication), may provide a fair opportunity for setting up shop at GIFT IFSC,” said a chartered accountant who is a partner at a consulting firm.

The Big Four firms usually have a larger financial services client portfolio compared to local CA firms in India. Currently, it may not be feasible for large Indian firms serving, say, 200-300 non-FS clients and 10-15 FS clients to move to GIFT as the cost of administration and hiring employees at GIFT may outweigh any tax benefit, said experts. “A CA firm wanting to set up an office at GIFT will need to generate enough revenues to justify the cost of doing so,” said Ameet Patel, Partner, Manohar Chowdhry & Associates. “As it stands, the scope of work for Indian CA firms at GIFT is very limited as most do not serve overseas clients. Real estate is not cheap and CAs need to be able to afford the trip from Ahmedabad to Gandhinagar every day. It would take another 3-4 years for me to seriously consider setting up an office there.”

An email sent to the International Financial Services Centres Authority did not get a response. Over 3 lakh CA professionals in India are registered with the Institute of Chartered Accountants of India. About 200-300 Indian CA firms meaningfully serve overseas clients at present, according to industry estimates. The regulator had introduced the ancillary services framework in February 2021. This was for those providing legal, compliance, secretarial, auditing, accounting, bookkeeping, taxation and management consulting services.

Do You Need Help With Anything?

Receive updates, hot deals, new property, projects, sent straignt in your inbox every month

The information, details and specifications about the projects on this site are as provided by the developers and/or sellers to the best of our knowledge and it is advisable that the same be verified by the respective buyers & sellers. Kunvarji Realty Brokers is not a developer. Rates are indicative and subject to change without prior notice.
Okay, Got It