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ICWAI & Cost Accountants Oppose Dilution of Central Excise Act

New Delhi, July 07, 2009

Kunal Banerjee, the President of the Institute of Cost and Works Accountants of India (ICWAI) strongly opposes the dilution of Section 14A and Section 14AA of Central Excise Act. The audit under Section 14A relates to valuation of goods for the purpose of levy of excise duty. The audit under section 14AA relates to availing of Cenvat credit and utilization thereof. Such verification essentially centres on the analysis of the inputs in the form of materials and in relation to final output.

These assignments require expert knowledge and expertise relating to application of cost accounting principles and techniques. The Finance Bill has made an attempt to dilute the expertise of the profession of cost accountancy, which has been well defined by the Parliament in the Cost and Works Accountants Act.

It is important to keep in mind the recent happenings in the corporate world which called into question transparency and governance issues. Banerjee wonders whether the intention of the legislature of safeguarding transparency and accountanbility would be safeguarded by the proposed amendment.

If the intention of the legislature is to equate both the professions on equal footing, then it should be extended to all areas of tax laws and the cost accountants should immediately be recognised under the definition of "accountants" u/s 288 of the Income Tax Act. The Central Government should not be partisan to one profession to the exclusion of another when both are creation of the Law of the Land.