Executive Summary

This internship report emphasizes on the work experience that the researcher has gathered as
an intern in the Accounts & Finance Department of S.Y.Tantak & Assoicates from 6th
November 2022 till 15th January 2022. In this report, the researcher has mainly have
incorporated my experience at S.Y.Tantak & Assoicates especially in Accounts & Finance
department where they also have provided details about my 2 months’ work experience at
S.Y.Tantak & Assoicates. We completed the task given to us along with the data provided to
us. It providing services to following clients such as credit note and debit note.
It was a very good experience for the researcher to work during this tenure. The researcher
confidently say that my knowledge has improved in a very short time the researcher would
like to thank S.Y.Tantak & Assoicates for their constant support.
The internship report on implications of Goods and Service Tax (GST) on automobile
industry of India The objectives of the study was to find implications of Goods and Service
Tax (GST) on automobile industry of India, whether it will act as a boon or bane for industry.
The other sub- objectives are as follows:
To study how Auto loans will get impacted after GST implementation. How GST will affect
Indian Economy. Only secondary data was used to prepare this report. This report is divided
into few chapters such as introduction to banking sector,, introduction to tax and elaboration
of GST insights, impact of GST on automobile sector and Indian economy. The last chapter
is about conclusion and recommendations which are drawn from analysis of whole study. The
main findings of the study are as follows: Automobile industry is looking forward to
introduction of GST. However, there are quite a few concerns in GST model, which need to
be addressed Restrictions and conditions on eligibility to tax credits on assets used for
business is also a major area of concern, and the credit mechanism should be more liberal.
Overall, GST will be boon for automobile industry.
Some recommendation of the study are: Companies need to upgrade their enterprise resource
planning (ERP) a category of business management software so as to accommodate the
complexities of calculating GST ERP helps companies manage and monitor everything 2 in
the organization, including supply chain, finance and even human resource functions SAP
and Oracle are the big players in the Indian ERP space. Overall learning from internship
duration. It has been one of the most important learning curves of my life, working with
HDFC Bank, one of the leading banks in industry. I have gained insights regarding sales
pitch, building relationship with customers. I got to know about the real market and how to
make customers feel benefitted with their investments. This experience has helped me to
grow my personality and taught me about not only the position but also industry goals and
initiatives.

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CHAPTER:1
Introduction

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 A. Direct Tax
Introduction
Direct taxes are levied on individuals and companies by the country's supreme tax body.
Direct taxes are directly paid by those on whom it is imposed. For instance, taxpayers directly
pay income tax, property tax, tax on assets and gifts to the government.
What is Direct Taxes?
Direct taxes are imposed on the basis of individuals ability to pay principle, which says that
those individuals or entities having access to more resources and earning a higher income
need to pay higher taxes. The direct rules are framed such that taxes turn out to be a method
to redistribute money in the country.
Direct taxes are transferable to another person or organisation. The companies and
individuals on whom the direct taxes are applied are solely responsible for paying the taxes.
Failure to pay taxes on time may result in fines and imprisonments.
Direct tax system, based on the brackets system, may turn out to be discouraging as it
imposes higher taxes on those working hard to earn a higher income. Hence, people, with the
view of needing to pay higher taxes, may settle and cap their productivity to reduce their
outgo.
Indirect taxes are another form of taxes that are indirectly imposed on individuals when they
make transactions on goods and services. Indirect taxes are collected from retail and
wholesale dealers on a periodic basis.
The various types of direct tax that are imposed in India are mentioned below:
 Income Tax: Depending on an individual's age and earnings, income tax must be
paid. Various tax slabs are determined by the Government of India which determines
the amount of Income Tax that must be paid. The taxpayer must file Income Tax
Returns (ITR) on a yearly basis. Individuals may receive a refund or might have to
pay a tax depending on their ITR. Huge penalties are levied in case individuals do
not file ITR.
 Wealth Tax: The tax must be paid on a yearly basis and depends on the ownership of
properties and the market value of the property. In case an individual owns a property,
wealth tax must be paid and does not depend on whether the property generates an
income or not. Corporate taxpayers, Hindu Undivided Families (HUFs), and
individuals must pay wealth tax depending on their residential status. Payment of
wealth tax is exempt for assets like gold deposit bonds, stock holdings, house
property, commercial property that have been rented for more than 300 days, and if
the house property is owned for business and professional use.
 Estate Tax: It is also called as Inheritance Tax and is paid based on the value of the
estate or the money that an individual has left after his/her death.

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  Corporate Tax: Domestic companies, apart from shareholders, will have to pay
corporate tax. Foreign corporations who make an income in India will also have to
pay corporate tax. Income earned via selling assets, technical service fees, dividends,
royalties, or interest that is based in India are taxable. The below-mentioned taxes are
also included under Corporate Tax:
o Securities Transaction Tax (STT): The tax must be paid for any income that
is earned via security transactions that are taxable.
o Dividend Distribution Tax (DDT): In case any domestic companies declare,
distribute, or are paid any amounts as dividends by shareholders, DDT is
levied on them. However, DDT is not levied on foreign companies.
o Fringe Benefits Tax: Companies that provide fringe benefits for maids,
drivers, etc., Fringe Benefits Tax is levied on them.
o Minimum Alternate Tax (MAT): For zero tax companies that have accounts
prepared according to the Companies Act, MAT is levied on them.
 Capital Gains Tax: It is a form of direct tax that is paid due to the income that is
earned from the sale of assets or investments. Investments in farms, bonds, shares,
businesses, art, and home come under capital assets. Based on its holding period, tax
can be classified into long-term and short-term. Any assets, apart from securities, that
are sold within 36 months from the time they were acquired come under short-term
gains. Long-term assets are levied if any income is generated from the sale of
properties that have been held for a duration of more than 36 months.

Who is eligible to pay?

 Income tax can be filed by filling applicable forms. Salaried individuals earning less
than Rs 50 lakh a year through income from salary, residential property, other
sources, and agriculture, should file their taxes by filing ITR-1 form.
 Individuals and HUfs with no income from gains and profits of profession
and business must file their taxes by filing ITR-2 form.
 Individuals and HUFs with income from gains and profits of profession and business
should file their taxes by filing ITR-3 form.
 Individuals, HUFs, firms (excluding LLP) having an overall income of less than Rs
50 lakh with income from profession and business computed as per Sections 44AD,
44ADA, and 44AE, should file their taxes by filing ITR-4.
 For entities and persons other than companies, individuals, and HUFs should file their
taxes by filing ITR-5.
 Those companies that are not claiming exemptions under Section 11 should file their
taxes by filing ITR-6.
 For individuals including firms needed to furnish their return under Section 139(4A)
or 139(4B) or 139(4D) should file their taxes by filing ITR-7

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  For persons including companies required to furnish return under sections 139(4A) or
139(4B) or 139(4C) or 139(4D) only
A detailed breakdown of the procedure for filing the tax
In India, possessing PAN card and Aadhaar card is mandatory to file income taxes. PAN
(permanent account number) card is issued by the Income Tax Department while Aadhaar
card is issued by the Unique Identification Authority of India (UIDAI).
Income tax can be filed by individuals when the window is open. If they fail to file within the
deadline, they may file their taxes along with the penalty. Not filing income taxes may result
in imprisonment and penalties. Corporate taxes are paid by companies and property taxes are
paid by the property owners.

B. Indirect Tax
Introduction
Indirect tax is defined as the tax imposed by the government on a taxpayer for goods and
services rendered. Unlike direct taxes, indirect tax is not levied on the income, revenue or
profit of the taxpayer and can be passed on from one individual to another.
Who is eligible to pay?
Custom Duty is to be paid by an importer or exporter for the goods imported or exported out
of India.
Excise Duty is levied on goods which are manufactured in India. Till 30 June 2017, most of
the goods came under its net. Later, GST was introduced which subsumed Excise duty. But
there are some goods that still fall under the excise laws such as tobacco products, aviation
turbine fuel, natural gas, high-speed diesel and petroleum crude.
Goods and Services Tax (GST) refers to the tax on supply of goods or services that must be
paid by individuals or businesses who have a turnover more than the prescribed limit.
A detailed breakdown of the procedure for filing the tax
GST is imposed at every point of supply. Also, State GST and Central GST are applicable
when intra-state sales take place. However, in the case of inter-state sales, an Integrated GST
is applicable.
Since its implementation, GST has been able to remove the ‘cascading effect or the 'tax on
tax' dilemma in the country. With the elimination of the tax on tax quandary,
the markets have witnessed a considerable drop in prices.
Also, with GST being more of a technology-driven process, the need for a physical interface
has been brought down considerably. An online GST portal which allows registration, GST
return filing, application for refund ensure a smooth and transparent GST filing process.
Here are some of the advantages of GST:
1. Lower cost of compliance

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 2. Simplified online process for GST
3. Removal of the cascading effect of tax (tax on tax effect)
4. Improves efficiency in logistics
5. Regulation of the unorganised sector
6. Composition scheme for small businesses
7. Allows a higher number for registration

2.Overview of TDS

Tax deducted at source (TDS) is a tax that is deducted from income that a company in India
pays to a recipient or supplier if the income amount exceeds a specific statutory limit in a
financial year. The types of income that are subject to TDS Include:

 Salary
 Interest and dividends.
 Winnings from the lottery.
 Insurance commission.
 Rent.
 Fees from professional and technical services.
 Payments to contractors and subcontractors.

The withholding amounts for TDS can be deducted from an invoice submitted by a supplier
or from the payment that is issued to the recipient or supplier. Examples of recipients and
suppliers include contractors, providers of professional services, employees, and real estate
landlords. Companies submit a TDS certificate to each supplier on a monthly or yearly basis.
The certificate includes the payments, as well as information about the company and supplier.
Companies must also submit an annual return to the government for each recipient or supplier
for the financial year. TDS certificate can be either Form 16 (R75110A) or Form 26Q-P2P-
IND (R751122EQ). Form 16 is the TDS certificate which an individual submits and Form
26Q is the TDS certificate which a company submits to the tax authorities.

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TDS must also be deducted from payments issued to third parties by both corporate and no
corporate entities. The entity must deposit the amount owed for withholding at any of the
designated branches of banks that are authorized to collect taxes on behalf of the government
of India. The entity must also submit the TDS returns, which contain details about the
payments and the challan for the tax deposited to the Income Tax Department

3.TDS RETURNS:-

TDS is a system whereby the income tax is deducted at the time of making some payments
like rent, interest, commission etc. The person making such specified payments is responsible
for deducting the TDS and paying the balance amount to the person entitled to receive such
payment. The TDS amount deducted must be deposited to the government within the due
dates specified by the person deducting TDS. While it is commonly assumed that the TDS is
applicable only on salary income, but it is also applicable in many other cases such as:
Income from interest on securities and debentures.
 Income from interest other than those on securities. Income from dividends.
 Income from withdrawal of EPF (Before expiry of a certain period
 or if amount withdrawn is beyond the limit specified) Payment to
contractors/subcontractors/freelancers.
 Winnings from horse races, lottery, crossword puzzles or any game related wins.
 Income from rendering technical or professional services.
 Income from royalty, etc.
All income is taxable only at the end of the financial year, hence the government has
instituted the concept of TDS, in order to ensure:

a) Prevention of tax evasion:

This mechanism ensures that the government collects a portion of the income itself, chances
of hiding income or tax defaults are minimized significantly. Timely collection of tax.
b) Ease in filing tax returns:
As the tax is automatically collected and deposited with the concerned authorities by the
deductor, it becomes easier for individuals to file their returns. If there are no other sources of
income for a person, once TDS has been appropriately deducted, they need not pay any
additional tax during return filing.

4.PROCESS FLOW OF TDS:-

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This process flow shows the steps to charge and remit TDS: -
i. Create vouchers for suppliers with pay status % and applicable tax type
ii. Calculate TDS on vouchers
iii. Issue payments to suppliers with TDS
iv. amounts deducted
v. Submit monthly payment for TDS to
vi. tax authority
vii. Update Challan
viii. Generate monthly statements and submit quarterly and annual returns

5.Overview of VOUCHING

Vouching is a technical term which refers to the inspection of documentary evidence

supporting and substantiating a transaction, by an auditor.
It is the practice followed in an audit, with the objective of establishing the authenticity of the
transactions recorded in the primary books of account.
It essentially consists of verifying a transaction recorded in the books of account with the
relevant documentary and the authority on the basis of which the entry has been made; also
confirming that the authority on the basis of which the entry has been made; also confirming
that the amount mentioned in the voucher has been posted to an appropriate account which
would disclose the nature of the transaction on its inclusion in the final statements in account.
Vouching do not include valuation.
Vouching can be described as the essence or backbone of auditing.

6.Preparation in the books of Tally

Following are the books that were made in tally:

 YOUCHER ENTRY
Tally provides flexibility to use predefined voucher types, comprisingof accounting and
inventory voucher types to record various business transactions. It also allows you to use
Keyboard Shortcut Keys as well as mouse operations during voucher entry.
To create a new Voucher Type,

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Go to Gateway of Tally > Accounts Info. > Voucher Type > Create
1) Enter the Voucher name
2) Specify the Type of voucher
3) Specify the Method of numbering
4) Activate or deactivate the other functions as required.

7.Book and registers

Tally provides you capability to generate various books and registers for any specific period
viz., month, date, and year and as on date. In Tally, once voucher entry is made, the
transactions are automatically & immediately in the Day Book and other Books of Accounts
without any additional effort. Tally allows you to maintain and generate all primary books of
accounts and registers like:

a. Cash Book
b. Bank Book
c. Purchase Register
d. Sales Register Journal Register
e. Debit Note Register
f. Credit Note Register
g. General Ledger
h. Journal Register

8.Preparation of partnership deed

In this, we prepare the partnership deed of different persons, in which different rules and
regulations we mentioned according to the law. A partnership deed also known as partnership
agreement, is a document that outlines in detail the rights and responsibilities of all parties to
a business operation. It has the force of law and is designed to guide the partners in the
conduct of the business. It is helpful in preventing disputes and disagreements over the role of
each partner in the business and the benefits which are due to them. The partnership deed
normally carries the name of the business, the address of its principal place of business and a
short summary of the business the partners intend to operate.

Q. How to prepare a partnership deed in India?

When registering a partnership firm in India for startups, there are some basics that need to be
covered. Partnership and proprietorship are the two most popular forms of business
organisations in India. The reason why these two forms of organisations are so popular is
because they are relatively easy to set-up and the number of statutory compliance
requirements needing to be followed by these forms of organisations is relatively less than the

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statutory compliance requirements applicable to LLP's and companies. As such, this article
focuses on the registration process for the partnership firm.

Choose a partnership name: -

The partners are free to choose any name as they desire for their partnership firm subject to
the following rules:

1. The names must not be too identical or similar to the name of another existing firm
doing similar business, so as to avoid confusion. The reason for this rule being that
the reputation or goodwill of a firm may be injured, if a new firm could adopt an
allied name.
2. 2. The name must not contain words like Crown, Emperor, Empress, Empire or words
expressing or implying the sanction, approval or patronage of the Government, except
when the State Government signifies its consent (in writing) to the use of such words
as part of the firm name.

Create a Partnership Deed:

The document in which the respective rights and obligations of the members of a partnership
is written is called the Partnership Deed. A partnership deed agreement may be written or
oral. However, practically an oral agreement does not have any value for tax purposes and
therefore the partnership agreement should be written. The following are the essential
characteristics of a partnership deed:
 Name and address of the firm as well as all the partners.
 Nature of business to be carried on Date of commencement of business.
 Duration of partnership (whether for a fixed period/project). Capital contribution
by each partner.
 Profit sharing ratio among the partners.
 The above are the minimum essentials which are required in all partnership deeds.

Consider whether additional clauses are needed:

The partners may also mention any additional clauses. Some of the examples of
additional clauses which may be mentioned in the partnership deed are mentioned below:

 Interest on the partner's capital, partners' loan, and interest, if any, to be charged on
drawings.
 Salaries, commissions etc., if any, payable to partners.
 Method of preparing accounts and arrangement for audit.
 Division of task and responsibility, namely, the duties, powers and obligations of all
the partners.

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  The rules to be followed in case of retirement, death and admission of a partner

Do the partnership deed in the appropriate form:

The deed so created by the partners should be on a stamp paper in accordance with the Indian
Stamp Act. Each partner should have a copy of the partnership deed. A Copy of the
Partnership Deed should also be filed with the Registrar of Firms in case the firm is being
registered.
Decide whether or not to register the partnership firm:
Partnerships in India are governed by the Indian Partnership Act, 1932.As per the Partnership
Act, registration of partnership firms is optional and is entirely at the discretion of the
partners. The Partners may or may not register their Partnership Agreement. However, in the
case where the partnership deed is not registered, the partners may not be able to enjoy the
benefits which a registered partnership firm enjoys.
 Registration of a partnership firm may be done before starting the business or anytime
during the continuance of partnership. However, where the firm intends to file a case
in the court to enforce rights arising from the contract, the registration should be done
before filing the case.

Register:
The procedure for registration of a partnership firm in India is fairly simple/An application
and the prescribed fees are required to be submitted to the Registrar of Firms of the State in
which the firm is situated. The following documents are also required to be submitted along
with the application:
1. Application for Registration of Partnership in Form No. 1.
2. Duly filled specimen of Affidavit.
3. Certified True Copy of the Partnership Deed.
4. Ownership proof of the principal place of business or rental/lease agreement thereof.
Sign the application:
The application or statement must be signed by all the partners, or by their agents especially
authorised in this behalf.
Expect the registration process to proceed formally:
When the registrar is satisfied with the points stated in the partnership deed, he or she shall
record an entry of the statement in a register called the Register of Firms and issue a
Certificate of Registration. The Register of Firms maintained at the office of the Registrar
contains complete and up-to-date information about each registered firm.
 This Register of Firms is open to inspection by any person on payment of the
prescribed fees; any person interested in viewing the details of any firm can request

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 the Registrar of Firms for the same and on payment of the prescribed fees, a copy of
all details of the firm registered with the Registrar will be given to the applicant.

9.Be registered for tax: It should be noted that registration with the Registrar of Firms is
different from registration with the Income Taxation Department. It is mandatory for all firms
to apply for registration with the Income Tax Department and have a PAN Card. After
obtaining a PAN Card, the partnership firm is required to open a Current Account in the
name of the partnership firm and to operate all its operations through this bank account.

10.Overview of VAT:

1.Preparation of VAT returns

At the end of the month or each quarter, you file a VAT return with the tax office, and remit
the VAT due.
2.Prerequisites
You have carried out the activities described in closing for VAT.
3.Process
1. You prepare a copy of the sales ledger and the purchase ledger. The ledgers show the
invoices that have been paid and on which VAT is thus due. The ledgers are for your own
reference in the event of a check-up by the tax office.
2. You prepare the VAT return. This consists of two steps.
a. You calculate the total amounts of VAT for each tax code.
b. You print the VAT return. The system fills out the fields in
c. the VAT return using the totals that you calculated in the first step.
d. A 1. You prepare a copy of the sales ledger and the purchase ledger. The ledgers show
the invoices that have been paid and on which VAT is thus due. The ledgers are for
your own reference in the event of a check-up by the tax office.
e. For information about preparing VAT returns for VAT withheld from vendors.
f. You file the VAT return with the tax office and remit the taxes.

11.Computer online software

Tax Solution for professionals is to provide end to end management of every stage of the tax
life cycle from provision to estimates and extensions, returns, audit, amendment and
planning.
A Solution For-
a. Income Tax Return
b. TDS return
c. Service tax return

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d. A Standard letter to clients
e. Balance sheet & audit report
f. VAT returns
g. Checking of assessment orders ROC form and filling
h. CMA
i. AIR return
j. Document Management
k. Challan
l. All other required forms
m. Standard formats of departmental letters
n. Office assistance works & mechanism.
o. Various types of reporting.
Features
a) Single switch board for all software.
b) Common client information for all software.
c) Searching of records by Code No., Name PAN, etc.
d) Online auto-update of software.
e) Defining user rights with grouping facility.
f) Password protection for individual clients.
g) Activation/De-activation of individual party from particular/all software.
h) Single window/screen to input, edit, view and print.
i) Front-view buttons for easy understanding.
j) User friendly similar layout of all software.
k) LAN compatible.
l) Various data input validation checks to eliminate errors.
m) Easy auto backup of your precious data.
n) Option to access from anywhere in the world.

Q. What is VAT?

Every commodity passes through different stages of production and distribution

before finally reaching the consumer. Some value is added at each stage of the
production and distribution chain: for instance, a forged metal tool is more valuable
than metal, which was itself more valuable than the ore that was originally mined.
Value Added Tax (VAT) is a tax on this value addition at each stage.

Under a VAT system, a dealer collects tax on his sales, retains the tax paid on his
purchase and pays the balance to the government. It is a consumption tax, because it
is borne ultimately by the final consumer.

The tax paid by the dealer is passed on to the buyer. It is not a charge on the dealer.
VAT is instead a multipoint tax system with provision for collection of tax paid on
purchases at each point of sale.

Q.What is Output Tax?

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Output tax is VAT charged to the customer by a dealer making taxable sales. A dealer
is an individual, partnership, or business that is registered under VAT. Any person or
business making sales above the prescribed limit are required to register. When a
dealer is registered, VAT becomes chargeable on all taxable sales made by that
dealer.

Q. What is Input Tax?

The tax a dealer pays for purchases is input tax. Many purchases will carry a VAT
charge, but when a dealer is registered under VAT, they can normally claim a credit
for VAT charges on most business purchases. Input tax includes not only the VAT on
your purchases of raw materials or on goods purchased for resale but also VAT on
capital goods, such as machinery or equipment.

12.YAT Computation
A dealer pays VAT by deducting the tax paid on purchases (input tax) from his tax
collected on sales (output tax). In other words,

VAT Output Tax - Input Tax.

For example: A dealer pays Rs.10.00 @ 10% on his purchase price of goods valued
Rs.100.00. He sells the goods at Rs.150.00 and collects tax amounting to Rs.15.00
(@101). He will pay Rs.5.00 (Rs.15.00- Rs.10.00) as he has already paid Rs.10.00 to
his seller while purchasing those goods.

Q.How is VAT different from Sale Tax?

VAT has fewer rates, as opposed to the high number of rates for Sales Tax, and
allows offsets of tax on inputs against those on outputs. VAT also does away with the
tax on tax.

Q. Who will be covered by VAT?

All business transactions involving the sales of goods/commodities carried on within

a state by individuals, partnerships, or companies will be covered by VAT.

VAT will not cover small businesses with sales below a certain limit. In Maharashtra,
the limit is 10 lakhs or below.

Q. What are the tax rates under VAT?

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Since every state has its own VAT legislation, VAT rates, taxable base and list of
taxable goods, VAT rates will differ from state to state. As an example, here are
Maharashtra's tax rates as of June 2016:

Schedule 'A' - Essential Commodities (Tax-free) - Nil

Schedule 'B' - Gold, Silver, Precious Stones, Pearls etc. - 1%
Schedule 'C' - Declared Goods and other specified goods - 5%(Rates for items other
than declared goods changed to 5.5%)
Schedule 'D' - Foreign Liquor, Country Liquor, Motor Spirits, etc.-20% and above
Schedule 'E' - All other goods (not covered by A to D) - 12.5% starting April 1, 2016.

Q. How does VAT help trade, consumers, and government?

Trade-
Uniform rates of VAT will boost trade; 100% self-assessment will
reduce the need for taxpayers to visit a tax department officer.

Customers-
Removing tax on tax reduces prices of goods that the end consumer pays.

Government-
Since dealers will conduct self-assessment, the resources required for this process will
be fewer, and the revenue department can focus more on collection than
administrative processes.

13.Overview of Tally ERP 9

Journal Entry Journal Vouchers are used to adjust the debit and credit amounts
without involving the cash or bank accounts. Hence, they are referred to as adjustment
entries.

Creating a Journal Entry-

Journal entries are usually used for finalization of accounts. To pass a Journal
Voucher,

Go to Gateway of Tally> Accounting Vouchers Click on F7: Journal on the Button

Bar or press F7.
For example, there may be entries made for interest accrued or
interest due. If you have to receive Interest from a party, the same can be entered
using Journal Voucher.
1. Debit the Party
2. Credit the Interest Receivable Account the Journal entry is displayed as shown:

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14.SPECIAL KEYS FOR VOUCHER NARRATION FIELD:

 ALT+R: Recalls the Last narration saved for the first ledger in the voucher,
irrespective of the voucher type.
 CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of
the ledger.

Allowing Cash Accounts in Journals:

Journals are adjustment entries, which do not involve Cash account and Bank account.
However, in exceptional cases where the user would like to account Journal entries involving
Cash/Bank Account, Tally. ERP 9 has the flexibility of passing such entries by enabling the
option under F12 configuration.

To enable Cash Accounts in Journal voucher, Set Allow Cash Accounts in Journals to Yes in
F12: Configure (Voucher Entry Configuration).

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To pass a Journal voucher with Cash/Bank Ledger,
1. Go to Gateway of Tally > Accounting Vouchers > Select F7:Journal
2. Press the spacebar at the Debit or Credit field. The Journal Voucher Screen with
Cash/Bank Ledger selection will appear as shown:

Debit Note Entry

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Debit Note is a document issued to a party stating that you are debiting their Account in your
Books of Accounts for the stated reason or vice versa. It is commonly used in case of
Purchase Returns, Escalation/De- escalation in price, any other expenses incurred by you on
behalf of the party etc.
Debit Note can be entered in voucher or Invoice mode. You need to enable the feature in F11:
Accounting or Inventory features.
 To use it in Voucher mode you need to enable the feature in F11:
Accounting Features Use Debit/Credit Notes.
 To make the entry in Invoice mode enable the option F11: Accounting Features - Use
invoice mode for Debit Notes. To go to Debit Note Entry Screen, Go to Gateway of
Tally> Accounting Vouchers.
 Click on Ctrl+F9: Debit Note on the Button Bar or press Ctrl+F9. You can toggle
between voucher and Invoice mode by clicking Ctrl+V. Pass an entry for the goods
purchased returned to Supplier A:

15. Special keys for voucher narration field :

1. ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of
the voucher type.
2. CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the
ledger.

Credit Note Entry

Credit Note is a document issued to a party stating that you are crediting their Account in
your Books of Accounts for the stated reason or vice versa. It is commonly used in case of
Sales Returns.

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A Credit Note can be entered in voucher or Invoice mode.
You need to enable the feature in F11: Accounting or Inventory features.
 To use it in Voucher mode you need to enable the feature in F11: Accounting
Features - Use Debit/Credit Notes.
 To make the entry in Invoice mode enable the option F11: Accounting Features - Use
invoice mode for Debit Notes.
To go to Credit Note Entry Screen: Go to Gateway of Tally> Accounting Vouchers
1. Click on Ctrl+F8: Credit Note on the Button Bar or press Ctrl+F8. You can toggle
between voucher and Invoice mode by clicking Ctrl+V. Pass an entry for goods sold
returned from Customer A:

16.Special keys for voucher narration field:

1. ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of
the voucher type.
2.CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the
ledger.

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17.AS-26 Intangible assets:

Intangible asset is a non-physical non-monetary asset which is held for use in the production
or supply of goods and services, or for rental for others, etc.
As 26 should be applied by all enterprises in accounting of intangible assets, except:

 Intangible assets that are within the scope of another standard financial asset.
 Rights and expenditure on the exploration for or development of minerals, oil natural
gas and similar non-generative resources.
 Intangible assets arising in insurance enterprise from contracts with policyholders.

Recognition and Initial Measurement of an Intangible Assets -

It applies when an item meets the criteria of an Intangible asset and it is probable that the
future economic benefits will flow to the enterprise and the cost of the asset can be measured
reliably. These recognition criteria are applicable to cost of acquiring and generating an
intangible asset internally.
Note: If an intangible asset is acquired separately, that should be measured initially at cost,
which includes purchase price that includes import duty, non-refundable purchase taxes, after
deducting trade discount and related direct cost.
If an asset is acquired in a business combination, the cost of that asset should be its fair value
at the acquisition date which depends on market expectations. When the asset is acquired free
of charge or for a normal consideration, by way of government grant, then it is recognized at
a nominal value or at the acquisition cost.

18.Overview on auditing

An auditor is someone who prepares and examines financial records. They ensure that
financial records are accurate and that taxes are paid properly and on time. They assess
financial operations and work to help ensure that an organization runs efficiently.
In this area, we were done different type of work such as matches the balances of transactions
from software information with our tally voucher entries information. We check different
financial records of companies any analyze that and identify the mistakes then give some
suggestions to them.
An audit is a systematic and independent examination of books, accounts, statutory records,
documents and vouchers of an organization to ascertain how far the financial statements as
well as non-financial disclosures present a true and fair view of the concern. It also attempts
to ensure that the books of accounts are properly maintained by the concern as required by

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law. Auditing has become such a ubiquitous phenomenon in the corporate and the public
sector that academics started identifying an Audit Society. The auditor perceives and
recognizes the prepositions before them for examination, obtains evidence, evaluates the
same and formulates an opinion on the basis of his judgement which is communicated
through their audit report.
Any subject matter may be audited. Auditing is a safeguard measure since ancient times.
Audits provide third party assurance to various stakeholders that the subject matter is free
from material that the subject matter is free from material misstatement. The term is most
frequently applied to a legal person. Other areas which are commonly audited include:
secretarial and compliance audit, internal controls, quality management, project management.
water management and energy conversion.

Auditing Standards -
The Public Company Accounting Oversight Board (PCAOB) maintains external auditing
standards for public companies (issuers) registered with the Securities and Exchange
Commission (SEC).
As of 2012, PCAOB has 15 permanent standards approved by the SEC and a number of
interim standards that reflect generally accepted auditing standards, as described in standards
issued by the Auditing Standards Board (ASB), which is part of the American Institute of
CPAs (AICPA).
The ASB also issues Statements on Auditing Standards (SASS) that apply to preparing and
releasing audit reports for non-issuers (companies not required to register with the SEC).
AICPA members who audit a non-issuer are required by the AICPA Code of Professional
Conduct to comply with these standards. As of 2012, there are more than 60 active standards.
For internal auditing, the Institute of Internal Auditors provides a conceptual framework
called the International Professional Practices Framework (IPPF) that provides guidance for
internal audits. Some of the guidance is mandatory, while others are considered strongly
recommended, but not required by law.
There are four main steps in the auditing process. The first one is to define the auditor's role
and the terms of engagement which is usually in the form of a letter which is duly signed by
the client.
The second step is to plan the audit which would include details of deadlines and the
departments the auditor would cover.
The next important step is compiling the information from the audit. When an auditor audits
the accounts or inspects key financial statements of a company, the findings are usually put
out in a report or compiled in a systematic manner.
The last and most important element of an audit is reporting the result. The results are
documented in the auditor's report.

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Audit Planning -

Audit planning includes deciding on the overall audit strategy and developing an audit plan.
Auditing Standard No. 9 from the PCAOB describes an external auditor's responsibility and
the requirements for planning an audit. According to standard No. 9, an audit plan is expected
to describe the planned nature, extent, and timing of the procedures for risk assessment and
the tests to be done on the controls and substantive procedures, along with a description of
other audit procedures planned to ensure the audit meets PCAOB standards.
For internal auditing, the Institute of Internal Auditors provides guidance for audit planning.
Planning starts with determining the scope and objectives of the audit.
Internal auditors need to understand the business, operations, and unique characteristics of the
department/unit being audited and to develop an audit plan that defines the procedures
needed to do an efficient and effective audit.

19.Overviews on GST

What is GST?
GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and
Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect
on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage,
destination- -based tax that is levied on every value addition. In simple words, Goods and
Service Tax (GST) is an indirect tax levied on the supply of goods and services.
This law has replaced many indirect tax laws that previously existed in India.
GST is one indirect tax for the entire country.
So, before Goods and Service Tax, the pattern of tax levy was as follows:

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Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales,
Central GST and State GST are charged. Inter- state sales are chargeable to Integrated GST.
Now let us try to understand the definition of Goods and Service Tax- "GST is a
comprehensive, multi-stage, destination-based tax that is levied on every value addition.
Multi-stage -
There are multiple change-of-hands an item goes through along its supply chain: from
manufacture to final sale to the consumer.
Let us consider the following case:
a) Purchase of raw materials
b) Production or manufacture
c) Warehousing of finished goods
d) Sale to wholesaler
e) Sale of the product to the retailer S
f) ale to the end consumer

Value Addition -

The manufacturer who makes biscuits buys flour, sugar and other material. The value of the
inputs increases when the sugar and flour are mixed and baked into biscuits.
The manufacturer then sells the biscuits to the warehousing agent who packs large quantities
of biscuits and labels it. That is another addition of value after which the warehouse sells it to
the retailer.

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The retailer packages the biscuits in smaller quantities and invests in the marketing of the
biscuits thus increasing its value.
GST is levied on these value additions i.e. the monetary value added at each stage to achieve
the final sale to the end customer.

Destination Based-
Consider goods manufactured in Maharashtra and are sold to the final consumer in
Karnataka. Since Goods & Service Tax is levied at the point of consumption. So, the entire
tax revenue will go to Karnataka and not Maharashtra.

Advantages of GST-
GST has mainly removed the Cascading effect on the sale of goods and services. Removal of
cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on
tax, the cost of goods decreases. GST is also mainly technologically driven. All activities like
registration, return filing, application for refund and response to notice needs to be done
online on the GST Portal; this accelerates the processes.
a) Removing cascading tax effect
b) Higher threshold for registration
c) Composition scheme for small businesses
d) Online simpler procedure under GST
e) Lesser compliances
f) Defined treatment for e-commerce
g) Increased efficiency in logistics
h) Regulating the unorganized sector

Components of GST -
There are 3 taxes applicable under this system: CGST SGST & IGST
CGST: Collected by the Central Government on an intra-state sale (Eg: transaction
happening within Maharashtra)
SGST: Collected by the State Government on an intra-state sale (Eg: transaction happening
within Maharashtra)
IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil
Nadu)

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20.Overview on Taxation:

A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by
a governmental organizational in order to fund various public expenditures. A failure to pay,
along with evasion of or resistance to taxation, is punishable by law.
In this we learned about the Direct & Indirect taxes. We filled most of the income tax returns
of different clients.
In this we learned about different heads of income, calculation of taxes & different deduction
with sections. As well in Indirect taxes we file returns of GST in which different forms are
involved for Regular scheme & Composition scheme. For regular scheme we filled GSTR-1
& GSTR-3B (online) and for composition scheme we filled GSTR-4 (offline)

Purposes & Effects -

The levying of taxes aims to raise revenue to fund governing and to alter prices in order to
affect demand. States and their functional equivalents throughout history have used money
provided by taxation to carry out many functions. Some of these include expenditures on
economic infrastructure, military, scientific research, culture and the arts, public works,
distribution, data collection and dissemination, public insurance, and the operation of
government itself. A government's ability to raise taxes is called its fiscal capacity.

Types of Taxes -
Taxes are of two distinct types, Direct and Indirect taxes. The difference comes in the way
these taxes are implemented. Some are paid directly by you, such as the dreaded income tax,
wealth tax, corporate tax etc. while others are indirect taxes, such as GST.

25 | P a g e
 CHAPTER:2

Organisation profile

26 | P a g e
1.Introduction of the Organization’s Business Sector

Organization is working as a Chartered Accountants firm under the rules and regulations and
code of ethics designed for CA firms by ICAI (The Institute of Chartered Accountants of
India).

The Institute of Chartered Accountants of India (ICAI or the Institute) was established as
statutory body on July 1, 1961 under Chartered Accountants Ordinance, 1961 to regulate the
profession of accountancy in the country.

ICAI is governed by the Council which consists of nineteen members. Fifteen members are
elected from amongst the members for a period of four years. The remaining four of the
Council members are nominated by the Government of India.

Vision of the ICAI is:

The profession of Chartered Accountants in India should be the benchmark of professional

excellence upholding the principles of integrity, transparency and accountability.

2.Mission of ICAI:

Is to achieve excellence in professional competence, add value to businesses and economy,

safeguard public interest; ensure ethical practices and good corporate governance while
recognizing the needs of globalization.

These kinds of firms provide different kinds of professional services like audit, taxation and
management consultancy to its clients.

The Chartered Accountancy course is conducted by the Institute of Chartered

Accountants of India, which has its headquarters in New Delhi, 5 regional offices

27 | P a g e
 (Calcutta, Kanpur, Chennai, Mumbai and New Delhi) and 81 branches under these
regional centres.

3. Organizational Structure

A hierarchy is an arrangement of items (objects, names, values, categories, etc.) in which

the items are represented as being "above," "below," or "at the same level as" one another
and with only one "neighbour" above and below each level. These classifications are made
with regard to rank, importance, seniority, power status, or authority. A hierarchy of power
is called a power structure.

 Partners
 Directors
 Senior Managers
 Managers
 Supervisors
 Senior Trainee Students
 Junior Trainees

Partners are often the founders of the firms. Most of the firms’ names are associated with
the names of partners. They are basically the main parties who issue and sign any report
(specifically audit report) on behalf of the firm. Partners mostly communicate with the
Senior Managers. In other words, the progress of any report and any inquiry is made from
the Senior Managers and hierarchal structure is strictly followed to avoid any disruption.

Managers are inquired of by Senior Managers and mostly manager manage audit field
works etc and after field work managers with cooperation of senior managers makes and
finalize any audit report to be issued. Senior Manager is a qualified Chartered accountant
having more than 10 year working experience.

Field work and information collection and implementation of policies by adopting changes
in rules & regulations is the main responsibility of supervisors and trainees. They use
different kind of techniques for error and fraud detection.

28 | P a g e
 S.Y.Tantak & Assoicates Is having its head office in Hadpser. Almost all the controls and
regulations are dealt at head office in Hadpser. All the offices constitute different number of
departments who basically handle their respective functions. The major departments
include

 Audit and Assurance Department:

Firm provides audit and assurance services to wide range of clients which include
performing audits of financial statements of limited companies, NGOs and partnerships.
Firm also performs special assignments which include management audits, internal audits
and investigations. Audit focuses on business issues and the matters that can impact on the
financial statements, whilst also retaining the basic audit procedures that test the
information contained in the financial statements. Services are aimed to comply with the
legal requirements as defined under the various laws and regulations in Pakistan. In doing
so firm not only identify the non-compliances but also assists clients in its rectification,
designing remedial measures and provides guidance to adhere with the laws and
regulations. Firm always endeavour to meet reporting deadlines as set out by the laws and
regulations or as mutually agreed with clients, without compromising the professional, legal
and ethical requirements.

Firm emphasis on delivering high quality services to clients, adding value to their business
through identification of existing and potential control risks and suggesting best possible
measures in the given circumstances. Firm always place priority in deploying audit teams to
clients who are well equipped with the specific industry knowledge, experience and are
professionally sound.

 Tax & Corporate Department: Firm delivers taxation services to clients and assists them
in obtaining optimal tax benefits available under the laws. Firm also assist clients to comply
with the tax rules and regulations and always keep them updated with the latest
developments and amendments. Tax personnel are qualified professionals, experienced and
knowledgeable. We maintain a comprehensive tax library which always provides ready

29 | P a g e
 references and timely solution in complex situations. Firm provides a comprehensive range
of tax services which includes;

 Preparation and submission of annual tax returns

 Compliance services
 Tax advisory services
 Representation and litigation with tax authorities
 Personal income tax services

In S.YTantak & Assoicates. same staff is handling with tax matters as well as corporate
sector. While in corporate firm provides different kinds of services relating to corporate
sector from incorporation to winding up of a Company.

 Computer Department: Department handles the computer related matters and assists
other departments in working properly and efficiently. Department deals with online filing
of returns of income for tax department and finalize audit reports in proper format in a
presentable manner. It deals with networking of computers in office and all other problems
which may be faced by computer users time to time.
 Correspondence Department: It handles with all the correspondence of the firm by
sending the solicited and unsolicited information from time to time. Effectively and
efficiently manage the day-to-day operations of the Correspondence. Interact with clients to
resolve policy and customer issues. Identify trends and remove obstacles in Statement
production and delivery by properly maintaining record of all communication for future
reference.
 HR Department: This department is mainly concerned with the recruitment, hiring/firing
of the firm and this department presents the timely reports on effective utilization of the
resources by the firm. A purpose of the human resource is to keep the trained employees
and recruit new energetic staff to work. Another purpose of this department is to provide a
good working environment for staff and try to make by facilitating them and arranging
some recreational activities for them. HR knows the real worth of its employees so cares for
them and motivate them to work more efficiently and diligently.
The hierarchy adopted by S.Y.Tantak & Associates. is in accordance with the legal
structure a CA firm shall have. Although the ICAI rules permit of not having the

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supervisors and does not make it mandatory having senior manager and manager, yet this
goes as additional benefit for the firm of having such an extensive hierarchy.

Chapter 2:

Literature Survey

31 | P a g e
1. Introduction

Working Capital Management WCM is considered an important topic for CFOs and other
executives. A large part of the current research on the topic has been done through different
annual surveys (e.g. REL 1000) conducted by practitioner outlets. However, the area of
WCM has received considerably less attention within recent academic research. (Kieschnick,
Laplante & Moussawi, 2013) The recent research has focused on the profitability
implications that WCM has on companies. Aravindan & Ramanathan (2013) identified a
trade-off between liquidity and profitability. Their research thus aims to create a model for
estimating the optimal levels of working capital from a liquidity and profitability perspective.
Further, Kieschnick et al. (2013) have studied the relation between WCM and creation of
shareholder wealth. Their findings indicate that the working capital components need to be
studied individually, in order to determine their effect and their impact on shareholder value.
However, Kieschnick et al. (2013) further state that the components also need to be
considered jointly because of their interconnected nature. Moreover, Kieschnick et al. (2013)
conclude that the existing research on WCM is thin and needs to receive more attention,
especially in the relation to value-creation (such as revenue growth).

While the above-mentioned researchers conclude that the area of WCM needs further
research, there is some criticism against WCM and the ability to address effective levels as
well as the struggle to measure it efficiently (Brealey et al., 2013). Many have tried to work
out a pure model but the issue remains disputed. For example, there are those who argue that
WCM is solely a way of managing short-term investments and financing. However,
opponents argue that in order to fully understand the topic, there are more aspects that have to

32 | P a g e
be taken into consideration (Banham, 2013) Moreover, the WCM-critics argue that it is an
expensive form of management and that focusing on other management issues, such as just-
in-time, is more efficient and will provide a similar outcome (Brealey et al., 2013). History
has also shown that companies rarely apply strong focus on WCM in times of good economic
climate, as they are eager to invest in projects of expansion and thus rather put efforts
towards this than towards WCM. (Banham, 2013)

2.WORKING CAPITAL AND WCM

Working capital refers to the capital that a company needs in order to run its operations, i.e.
the short-term financing of the company. Because of this, the properties of working capital
are such that it does not earn interest (e.g. capital tied up in Inventory). Therefore, it is
important that companies manage the working capital levels well in order to ensure that it
provides the company sufficient amounts of profit (to counter the cost of capital). Working
capital is made up of the net sum of current assets minus current liabilities and is often
referred to as the net working capital (NWC). (Penman, 2013)

WCM is referring to any actions aimed at managing companies’ working capital levels and
thus does not refer to any specific managing-model or framework. In contrast to long-term
financial decisions, WCM deals with the issues of short-term financing. For example,
deciding the level of credit a company gives their clients as well as how much credit they
should demand from their suppliers. These types of short-term financing decisions are
important for the sustainability of companies, as it affects liquidity and profitability.
(Aravindan & Ramanathan, 2013)

Figure 1: Working capital management flow

The net balance between current assets and current liabilities is important as the current assets
are expected to turn into cash within one year, while current liabilities are commitments that
are due to mature within one year. NWC is thereby a measurement of short-term financial
stability as it indicates if the company will be able to live up to its short-term commitments.
From this nature, working capital is of high interest from a short-term financing perspective

33 | P a g e
and liquidity analysis. However, working capital is also important for companies’ long-term
financing because the indication of short-term survival strength and financial-health through
short-term liquidity will impact the companies’ ability to attain attractive long-term
financing. A company with poor financial health is likely to have a higher cost of capital than
a company with better finances, because of the higher credit risk. (Penman, 2013)

According to Aravindan and Ramanathan (2013), WCM deals with decisions regarding the
trade-off between liquidity and profitability. In short, Aravindan and Ramanathan (2013)
mean that WCM is the managing and planning of liquidity and profitability. A company with
poor WCM may run the risk of locking-up surplus amounts of capital (e.g. excess
inventories) and on the other hand a shortage of working capital can damage the flow of
operations. (Aravindan & Ramanathan, 2013) For the financial manager, WCM will put
focus on three main current assets: inventories, accounts receivable (AR) and cash (and cash
equivalents), while the main current liability is accounts payable (AP). Managing current
assets is of importance for many companies as it often accounts for the major part of the
company’s total assets. (Brealey et al., 2013; Kieschnick et al., 2013) However, the details of
how these assets should be handled to achieve optimal levels of working capital is dependent
on a number of factors such as the nature of business as well as seasonal variations that might
affect product demand. (Aravindan & Ramanathan, 2013) Additionally, the cost of capital in
terms of the opportunity cost needs to be considered when referring to optimal levels of
working capital. (Brealey et al., 2013) One of the leading institutes on working capital
research, REL (a Hackett Group company), tracks the development of working capital
through an annual survey. The results of the 2013 report indicates that, as an effect of an
increased focus on working capital due to the previous recession, the management is
becoming increasingly more efficient. (REL, 2013).

While there is room for improvement in the area of WCM there are suggestions that the
current trend is not sustainable. History has previously shown that attention tends to shift
towards other issues as the economic climate improves (REL, 2013).

However, the need to manage working capital is, and will be, of importance for most
companies as it is connected to survival and sustainable growth. The importance of WCM is
argued to increases as the difficulty and cost to ensure short-term capital raises. Thus, the
argument that the need might be higher for smaller companies, as they are likely to face
greater difficulty to ensure external capital. (Padachi, 2006) Furthermore, it follows that the

34 | P a g e
importance increases with the interest rates. When interest rates are low, the cost of excess
capital being tied up is lower. (REL, 2013)

As there are several factors that contribute to the total working capital, it is also important to
address the issue of capital allocation among the different categories. It is suggested that the
result of keeping high inventories will have a different effect than keeping large amounts of
cash, both on the financial health of the company as well as on what action is needed from
management. Furthermore, it is important to understand the impacts of different WCM
decisions both from the individual perspective as well as in a larger context. (Padachi, 2006;
Kieschnick et al., 2013) As no component of the working capital is isolated from the other,
decisions and actions regarding one component need to be coordinated with the other parts
that make up the total working capital. (REL, 2013)

3.1 INVENTORY, AR & AP

Inventories could be made out of both raw materials, work in process as well as finished
goods, depending on the nature of business as well as the business strategy. Regardless of
how inventory is kept, the need arises from the risk of unexpected increases in demand as
well as the increased cost of smaller production runs (economies of scale). By having
inventory, companies can thus reduce the risk of not being able to deliver goods at a set time
as well as cutting costs by allowing larger production runs. (Brealey et al., 2013) On the other
hand there’s also a cost of keeping to much inventory as capital is tied up in assets that does
not earn interest. The inventory could also need insurance as well as storage space, both
adding costs for the company. Managing inventory levels thus means handling the trade-off
between the abovementioned costs. (Brealey et al., 2013) One method to use is the just-in-
time principle, which helps companies calculate the right level of inventory in order to
answer to the demand so that as little capital as possible is inactive (Hutchins, 1999).

As goods are being delivered to customers there is a need of handling invoices in order to
ensure payment. AR is made out by trade credit (for B2B) and consumer credit (for B2C),
which are created due to time differences in sales and payment. AR will therefore be
dependent on the terms of sale and credit policy that the company applies to their customers.
Factors that might impact credit management are for example the credit rating of the
customer as well as the importance of a specific customer. (Brealey et al., 2013) By keeping
track of the level of AR, a company can measure the efficiency by which it turns sales into
cash. If a company’s AR is increasing faster than their sales are growing it indicates that the

35 | P a g e
company is selling their products without actually getting paid for them. It also means that
more excess capital is being tied up, at the price of the opportunity cost. (REL, 2013).

It has been argued that it is common that companies disregard from the AR side of WCM,
because the “ball is in the payees’ court” (Johnson, 2013). According to Johnson (2013) this
is a misperception: "It's not the client paying you, it's you initiating the collection". There are
several ways to ensure that the customer pays on time. For example, one important aspect is
to ensure efficient handling of invoicing. (Johnson, 2013)

While inventory and AR are current assets, AP is a current liability and a common form of
short-term financing. By delaying payments, companies’ can use the money for a longer
period of time thus, lowering the need for other financing. AP is a tradecredit and thus an
effect of the credit-terms companies agree upon with their suppliers. (Cuñat, 2007)
Furthermore, it is a significant source of financing for investments in AR and inventory and
thus efficient managing is crucial for the shortterm financing of companies. (Smith, 2013)

There is a close connection between the components of working capital and the cash
conversion cycle (CCC) since the cycle measures the amount of days it takes to receive
payment from investments in resources. The CCC can thus be used as a tool to measure the
net changes in levels of inventory, AP and AR in order to keep desirable levels. (Shin &
Soenen, 1998; Nobanee, 2009) The CCC model is not connected to investments in general,
but directly to a company’s refining process of supplies. (Gill et al., 2010)

The traditional view of the CCC is that by following the model it is possible to increase a
company’s profitability, since the working capital is being handled in a more effective way
(Nobanee, 2009). However, there are also direct downsides to using the CCC. If the cycle is
driven too tight, there is a trade-off as it could create problems for some departments in the
company, such as sales and customer relations. It may not be possible to deliver the same
customer satisfaction when placing a higher focus on reducing the CCC. (Shin & Soenen,
1998) Thus, connecting a shorter CCC to higher profitability is not as simple as it might seem
and conclusions should not be made too quickly (Grosse-Ruyken, Wagner & Jönke, 2011).

The CCC calculates the amount of days it takes to receive payments from investments. It can
further be broken down into three individual components, which make up the cycle (See
Figure 2). These are: days inventory outstanding (DIO), days sales outstanding (DSO) and
days payable outstanding (DPO). By analyzing the cycle, companies can identify
inefficiencies in the use of capital and thus take appropriate action. (Nobanee et al., 2011)

36 | P a g e
Days Inventory Outstanding (DIO) = Inventory / (Cost of Goods Sold/365)

Days Sales Outstanding (DSO) = Receivables / (Sales/365)

Days Payable Outstanding (DPO) = Payables / (Cost of Goods Sold/365)

FIGURE 2: CCC CALCULATION (GROSSE-RUYKEN ET AL., 2011)

In a study by Shin & Soenen (1998) the authors analyzed the two American giants Kmart and
Wal-Mart and looked into the companies’ financials to understand their capital structures.
What they found was that the two companies had almost the same structure concerning sales,
assets, equity and debt. However, the difference in profitability was clear. It turned out that
the CCC for the two companies differed by 34 % (61 days for Kmart and 40 for Wal-Mart).
The difference made Wal-Mart more profitable than Kmart, by 198.3 million dollar per year
(Shin & Soenen, 1998; Nobanee et al., 2011). The difference was mainly due to higher costs,
related to a larger amount of capital being tied up in Kmart’s operations.

Farris II & Hutchinson (2015) bring up the importance of benchmarking and measuring the
ability of generating cash against companies within the same industry. Managers can
compare data and by that develop strategies fit for their own operations by observing
competitors. Liquidity is linked to company value and by a shorter CCC it is possible to drive
it up since less capital is being tied up in working capital (Farris II & Hutchinson, 2015).

4. CASH FLOW

The terminology of cash flow has for a long time been used to attract investors to projects
and operations in need of capital (Fight, 2018). The fact that a project is estimated to generate
cash is one of our time’s most efficient arguments for possible investments (Hofmann, 2018).
The cash flow is directly affected by changes in the inventory, AR and AP and thus
influenced by WCM decisions (Kaplan & Zingales, 1997). The net cash flow is the
summarized incomes from operating, financing and investing activities (See Figure 3).
Operating activities are the daily actions that are supposed to generate the most income to a
company while income from finance and investments could be seen as the use of spare
capital. However, the use of finance and investment activities can also be seen as strategic
actions in order to drive development. (Gilchrist & Himmelberg, 1995)

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 FIGURE 3: NET CASH FLOW (GILCHRIST & HIMMELBERG, 1995)

Gilchrist and Himmelberg (1995) argue that cash flow is an important factor for companies
both on a macro- and microeconomic level. When the environment is unfavorable for
companies, like during e.g. financial crises and recessions, it is extra important to manage
cash with precaution. By handling cash properly and following a strict diet when it comes to
spending cash, companies have a better chance of survival. (Gilchrist & Himmelberg, 1995).

5. REVENUE GROWTH

Revenue is the gross income generated by a company’s operations and can thus be used as an
indicator if a company is expanding, stagnating or even decreasing in volume. As mentioned
earlier, it has been popular over the years to compare working capital with profitability.
However, as revenue is not influenced by accounting decisions to the same extent as profits
are, which for various reasons could be window dressed, it could be argued that revenue is
more suitable as a proxy for measuring company growth and expansion. (Keiningham, Cooil,
Andreassen & Aksoy, 2007; Nooteboom & Thurik, 1985).

FIGURE 4: REVENUE CALCULATION (TALLURI & VAN RYZIN, 2018)

In order to grow a company, its management needs to decide on taking on new projects and
investments. Most investments will in addition to the project or initial investment also require
investments in working capital (Brealey et al., 2013). The different financing options for new
investment will depend on capital structure policies, that is, how much equity versus debt the
company should hold. Decisions regarding the financing are likely to impact the WCM as the
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cash balance will be affected i.e. the company can decide to use cash to invest in a long-term
asset. Theory thereby suggest that poor WCM would cripple companies’ ability to grow as it
puts restrictions on capital by increasing the total capital requirements to run the company.
(Brealey et al., 2013) By streamlining the working capital and reducing the excess capital tied
up, companies could instead use the capital to fund new growth projects. (Gundavelli, 2006).

6. WORKING CAPITAL AND CORPORATE PERFORMANCE

Baños-Caballero, Garcia-Teruel and Martinez-Solano (2013) argue that large capital

allocation to the components of working capital will constrain companies’ capability of
investing for long-term financial growth. This is due to the fact that short-term assets and
liabilities receive more focus. Hence, there is a trade-off between capital allocations to
working capital and focusing on other value-creating investments. (Baños-Caballero et al.,
2013) There is also a general acceptance that working capital affects firm value. However,
opinions vary in which direction. By raising levels of working capital e.g. by agreeing to
longer credit terms, companies are able to increase sales and direct more attention towards
satisfying customers. However, as the level of working capital increases, so does the credit
risk. Furthermore, the marginal benefit will decrease because of the cost of capital. The
balancing of these types of benefits and costs is dependent on the specific situation of each
company. It is managers’ assignment to continuously follow up operations in order to follow
the optimal level of investments in working capital. (Baños-Caballero et al., 2013)

7. MANAGEMENT ATTENTION

As mentioned previously, there has been a shift in management attention from working
capital towards growing revenues (Banham, 2013). Ocasio (2011) suggests that management
attention is limiting and selective. This means that different areas of interest that receive
attention from management are limited and will vary continuously. Furthermore, Ocasio
(2011) suggests that direction of management attention will shape the organization in many
ways, such as overall corporate strategy and subsequently what decisions are made and what
organizational goals that are pursued. Management attention and organizational decision-
making is highly connected since it is the top management that decides how to run a company
and what goals that should be pursued. According to Ocasio (2011) top management tend to
look forward. This means that after a recession, development and growth is likely to be back
on the agenda. Moreover, the agenda of decision-makers are also connected to type of
industry and the company’s culture and social structure. (Ocasio, 2011) Hence, management

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attention is crucial to company development and according to Ocasio (2011) the single most
important factor when it comes to organizational improvement.

8. WCM AND REVENUE GROWTH UNITED

In regards of working capital and revenue growth, the nature of current assets and current
liabilities are such that they are likely to increase as the revenues grow. As sales grow,
increases of inventory, AR and AP are likely to, in effect, grow as well. (e.g. Baños-
Caballero et al., 2013; Brealey et al., 2013; Cuñat, 2007; REL, 2013) The WCM task is
therefore to ensure that every increase in working capital results in the optimal output. As for
growing revenue, this means that efficient WCM will strive to ensure that every increase in
working capital can be motivated by the generated revenue increase. (Douglas, 2012).

As stated by Ocasio (2011) management attention is limiting. Thus, in order to sustainably

address both the working capital issues as well as the revenue growth issues, goals that create
alignment and coherency need to be set up. One way of creating coherency among growth
and working capital goals is by putting attention to goals that ensure both sides are being
cared for. (Douglas, 2012) E.g. by connecting rewards for sales people to the actual payment
of goods or services, attention is paid both to the growth as well as to minimizing the APs.
Furthermore, working capital is closely connected to many aspects of the daily operations.
This stresses the importance of a holistic, cross-functional approach that aligns all the
different aspects and creates incentives to coordinate actions between the different
departments, necessary for successful WCM (e.g. by coordinating actions between
production and sales, the risk of building up too much inventory will decrease) (Gundavelli,
2006). History has shown that by focusing on goals that lack alignment between revenue
growth and working capital the result is a loss of attention over time. By incorporating the
WCM goals with the revenue growth strategy this loss of attention is less likely to occur as
they are, in effect, automatically connected to the growth goals. (Douglas, 2012)
Furthermore, theory suggests that the components of working capital are interdependent and
thus need to be considered in relation to one another (Kieschnick, et al., 2013).

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 CHAPTER 3:
Industry & Company Profile

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1.COMPANY PROFILE
 
 S.Y. Tantak & Associates was established in the year 5 Dec.1998 Saturday. It is a leading
chartered Accountancy firm rendering comprehensive professional services which include
audit, management consultancy, tax consultancy, accounting services, manpower
management, secretarial services etc.
 
S.Y. Tantak & Associates is a professionally managed firm. The team consists of
distinguished chartered accountants, corporate financial advisors and tax consultants. The
firm represents a combination of specialized skills, which are geared to offers sound financial
advice and personalized proactive services. Those associated with the firm have regular
interaction with industry and other professionals which enables the firm to keep pace with
contemporary developments and to meet the needs of its clients. 
Firm Detail:
Firm Name: -S.Y Tantak & Associates
Founder Name :Mr.Sachin Tantak
Firm Founded: 5 Dec.1998 Saturday
Firm Sector: -  Community & Government » Public administration
Bank Address: Mantri Market, Hadapsar Gaon, Hadapsar, Pune, Maharashtra
Phone: 098222 24014
Firm Legal Status: General public administration activities
State: - Maharashtra.
City: - pune
Pin: - 411028
Website Link: http://www.sytantak.com/

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Company Email: S.Y Tantak & [email protected]
Firm Phone: 98222 24014
Company Guide Name: - Mr.Suhas Tantak Sir
Company Guide Designation: - H.R. Manager
Department: - H.R.Department
Email: - [email protected]
Location: - pune
Mobile No: - 9422733882 / 93254 04014

2.Mission

 Client Orientation
Our approach to business is client-centric and issues-based. We work with each client to
co-develop solutions that deliver real value—the value they need and the value their
stakeholders expect.

 People Focus
We are committed to a people first culture. This culture gives priority to personal career
growth and satisfaction. We believe that we can best create value and confidence for our
clients—through outstanding solutions and services—by creating value and confidence
for our people.

 Trusted Advisor
Integrity and professional competence are the cornerstones of our firm. We work hard to
earn and maintain our clients’ trust and confidence. To ensure that we provide quality
professional services in an independent, objective, and ethical manner we continue to
implement professional development initiatives and quality and compliance safeguards—
including state-of-the-art methodology, quality control policies, supporting tools and
technology and training.

 Industry Expertise
In-depth industry knowledge is key to bringing our clients the best advice. That’s why we
have teams of industry specialists and specialised services dedicated to serving different
industry

3.Vission

Our mission is always to strive to be front-runners in our profession and be a one

stop value additive service. Guiding our actions, these values each of which are
closely interconnected, reflect what we shall be known for in our industry.

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 The dedication & sincerity of its partners and staff give it an edge over other
Chartered Accountants firms.

Traditional CA Practices were mainly focused around the regulatory requirements

of audit and tax. The profession and its practice have gradually evolved from being
mere regulatory compliance support to playing an active role in clients' businesses
through broad-ranging support and advisory functions.

Our practice focus is management support services that are geared towards growing
and strengthening our client's business, where we work in tandem with the owners
& management.

We are a group of trusted professionals working ethically acting on a broad range of

Audit, Tax and statutory requirements with our clients.

Our vision is to offer comprehensive business and tax related services and assist
enterprises to tackle complex situations in the fast changing scenarios of business
with the power of rightful decision making.

We seek to build strong and lasting relationships with our clients by providing them
quality services which are personalized, reliable and value driven...Commitment to
provide:

 Quality, cost-effective service

 Continuous accessibility
 Sound business advice
 High ethical and professional standards

4.Why contact S.Y. Tantak & Associates ?

MBA is a master’s degree in Business administration, where as a work of a CA is related you

Auditing, Financial Reporting, Regulatory Compliances etc.

The former deal with operational and functional aspect of the business and management,
whereas the latter is concerned Law, Accounts & Audit related areas of an entity.

Being an MBA student working in as CA firm will benefit you to an extent, in gaining core
knowledge about Auditing, Taxation, Accounts related aspects, which is equally important
for an entity.

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So you will have both the ability and knowledge of managing and controlling a business as
well as the practical knowledge of Regulatory aspect in adherence to which a entity is bound
to perform.

Thus, it will contribute greatly to your skill development as an business administrator.

So working in CA FIRM being an MBA STUDENT, will ultimately benefit you, but need to
maintain a tight time schedule as CA firms work for long hours even for more then 12 hours
during year ends or when some significant financial event occurs like introduction of new tax
regime etc.

So decide wisely so that it won’t affect your studies.

5.S.Y. Tantak & Associates services include:

A C.A firm provides various services to their client depending upon the need of their client.

A sample of services are-

1. Statutory Audit
2. tax Audit
3. Direct tax compliance
4. indirect tax compliance
5. managerial services
6. Actuarial services
7. Business consultancy services
8. Book- keeping
9. internal audit
10. and many more.

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 CHAPTER4:
OBJECTIVES OF STUDY

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I choose to work with S.Y.Tantak & Assoicates . During this internship I have learnt
many new skills. Before internship I have only theoretical knowledge about work in
organization but now I have practical some practical experience of working in
organization. Now I have knowledge about the organization's working environment and
how organizations work and achieve their goals and objectives.

This internship has to gives me the understanding of business and also about the
elements of strategic thinking, planning and implementation, and how these things are
applied in a real world organization environment. Following are the objectives that I
have in my mind before working as an internee.

To improve communication skills. To analyze the business situation.

To establish high standard in professionalism.

To learn more than the theoretical knowledge.

To learn book keeping practices of different companies.

To apply the theoretical knowledge in actual organization. To compare practical aspects

with theoretical aspects.

To make quick decision in real situations.

To learn how to promote and to conduct research in business areas.

To enhance my personal knowledge and professional preparation

for future. To properly integrate my theoretical knowledge and practical work.

To plan for the future of oneself and learn how to adjust in an

organization.

To know how to present your recommendations in front of your boss. To get knowledge
of opportunities and threats while entering into an organization.

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To get exposure to do a work in an organization and also known about organizational
behaviour, ethical rules and regulations. Assist the student development of employer-
valued skills such as

teamwork, strong communication and attention in details.

 Expose student to the environment & expectations of performance on part of
accountants in professional accounting practices.

> Enhance & expand the student's knowledge of particular areas of accounting.

> Expose the students to professional role models or mentors who will provide the
student with support in the early stages of the internship & provide an example of
behaviour expected in the internship workplace.

> Expand networks of professionals' relationship & contacts.

> Develop a solid work ethic & professional demeanour as well as

commitment to ethical conduct & social responsibility.

>Develop time management skills and the ability to be responsible for more than one
project at a time.

> Develop organizational skills to complete the project in a timely manner.

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 CHAPTER 5:

Task Carried Out

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1. Job Description

I have tried my best to enhance my abilities and apply the knowledge that I gained during the
studies. On my first day at firm, company secretary Miss. Nensi Goyal gave me training
session about TDS returns and computerised accounting in tally software. Mr. Rahul Goyal
(assistant) also shared his practical experience with me and gave me some techniques of this
process. He also guided me that how to prepare VAT return and creating data in income tax
return preparation software.

Different task that I performed during my internship:

1. Maintenance of accounts/ book keeping.

2. TDS return preparation.
3. VAT returns preparation.

Software used during internship:

1. MS office
2. Tally software

2.Overview of TDS

Tax deducted at source (TDS) is a tax that is deducted from income that a company in India
pays to a recipient or supplier if the income amount exceeds a specific statutory limit in a
financial year. The types of income that are subject to TDS Include:

 Salary
 Interest and dividends.
 Winnings from the lottery.
 Insurance commission.
 Rent.
 Fees from professional and technical services.
 Payments to contractors and subcontractors.

The withholding amounts for TDS can be deducted from an invoice submitted by a supplier
or from the payment that is issued to the recipient or supplier. Examples of recipients and
suppliers include contractors, providers of professional services, employees, and real estate

50 | P a g e
landlords. Companies submit a TDS certificate to each supplier on a monthly or yearly basis.
The certificate includes the payments, as well as information about the company and supplier.
Companies must also submit an annual return to the government for each recipient or supplier
for the financial year. TDS certificate can be either Form 16 (R75110A) or Form 26Q-P2P-
IND (R751122EQ). Form 16 is the TDS certificate which an individual submits and Form
26Q is the TDS certificate which a company submits to the tax authorities.

TDS must also be deducted from payments issued to third parties by both corporate and no
corporate entities. The entity must deposit the amount owed for withholding at any of the
designated branches of banks that are authorized to collect taxes on behalf of the government
of India. The entity must also submit the TDS returns, which contain details about the
payments and the challan for the tax deposited to the Income Tax Department

3.TDS RETURNS:-

TDS is a system whereby the income tax is deducted at the time of making some payments
like rent, interest, commission etc. The person making such specified payments is responsible
for deducting the TDS and paying the balance amount to the person entitled to receive such
payment. The TDS amount deducted must be deposited to the government within the due
dates specified by the person deducting TDS. While it is commonly assumed that the TDS is
applicable only on salary income, but it is also applicable in many other cases such as:
Income from interest on securities and debentures.
 Income from interest other than those on securities. Income from dividends.
 Income from withdrawal of EPF (Before expiry of a certain period
 or if amount withdrawn is beyond the limit specified) Payment to
contractors/subcontractors/freelancers.
 Winnings from horse races, lottery, crossword puzzles or any game related wins.
 Income from rendering technical or professional services.
 Income from royalty, etc.
All income is taxable only at the end of the financial year, hence the government has
instituted the concept of TDS, in order to ensure:

c) Prevention of tax evasion:

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 This mechanism ensures that the government collects a portion of the income itself, chances
of hiding income or tax defaults are minimized significantly. Timely collection of tax.
d) Ease in filing tax returns:
As the tax is automatically collected and deposited with the concerned authorities by the
deductor, it becomes easier for individuals to file their returns. If there are no other sources of
income for a person, once TDS has been appropriately deducted, they need not pay any
additional tax during return filing.

4.PROCESS FLOW OF TDS:-

This process flow shows the steps to charge and remit TDS: -
ix. Create vouchers for suppliers with pay status % and applicable tax type
x. Calculate TDS on vouchers
xi. Issue payments to suppliers with TDS
xii. amounts deducted
xiii. Submit monthly payment for TDS to
xiv. tax authority
xv. Update Challan
xvi. Generate monthly statements and submit quarterly and annual returns

5.Overview of VOUCHING

Vouching is a technical term which refers to the inspection of documentary evidence

supporting and substantiating a transaction, by an auditor.
It is the practice followed in an audit, with the objective of establishing the authenticity of the
transactions recorded in the primary books of account.
It essentially consists of verifying a transaction recorded in the books of account with the
relevant documentary and the authority on the basis of which the entry has been made; also
confirming that the authority on the basis of which the entry has been made; also confirming
that the amount mentioned in the voucher has been posted to an appropriate account which
would disclose the nature of the transaction on its inclusion in the final statements in account.
Vouching do not include valuation.
Vouching can be described as the essence or backbone of auditing.

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6.Preparation in the books of Tally

Following are the books that were made in tally:

 YOUCHER ENTRY
Tally provides flexibility to use predefined voucher types, comprisingof accounting and
inventory voucher types to record various business transactions. It also allows you to use
Keyboard Shortcut Keys as well as mouse operations during voucher entry.
To create a new Voucher Type,
Go to Gateway of Tally > Accounts Info. > Voucher Type > Create
5) Enter the Voucher name
6) Specify the Type of voucher
7) Specify the Method of numbering
8) Activate or deactivate the other functions as required.

7.Book and registers

Tally provides you capability to generate various books and registers for any specific period
viz., month, date, and year and as on date. In Tally, once voucher entry is made, the
transactions are automatically & immediately in the Day Book and other Books of Accounts
without any additional effort. Tally allows you to maintain and generate all primary books of
accounts and registers like:

i. Cash Book
j. Bank Book
k. Purchase Register
l. Sales Register Journal Register
m. Debit Note Register
n. Credit Note Register
o. General Ledger
p. Journal Register

8.Preparation of partnership deed

In this, we prepare the partnership deed of different persons, in which different rules and
regulations we mentioned according to the law. A partnership deed also known as partnership
agreement, is a document that outlines in detail the rights and responsibilities of all parties to
a business operation. It has the force of law and is designed to guide the partners in the
conduct of the business. It is helpful in preventing disputes and disagreements over the role of

53 | P a g e
each partner in the business and the benefits which are due to them. The partnership deed
normally carries the name of the business, the address of its principal place of business and a
short summary of the business the partners intend to operate.

Q. How to prepare a partnership deed in India?

When registering a partnership firm in India for startups, there are some basics that need to be
covered. Partnership and proprietorship are the two most popular forms of business
organisations in India. The reason why these two forms of organisations are so popular is
because they are relatively easy to set-up and the number of statutory compliance
requirements needing to be followed by these forms of organisations is relatively less than the
statutory compliance requirements applicable to LLP's and companies. As such, this article
focuses on the registration process for the partnership firm.

Choose a partnership name: -

The partners are free to choose any name as they desire for their partnership firm subject to
the following rules:

3. The names must not be too identical or similar to the name of another existing firm
doing similar business, so as to avoid confusion. The reason for this rule being that
the reputation or goodwill of a firm may be injured, if a new firm could adopt an
allied name.
4. 2. The name must not contain words like Crown, Emperor, Empress, Empire or words
expressing or implying the sanction, approval or patronage of the Government, except
when the State Government signifies its consent (in writing) to the use of such words
as part of the firm name.

Create a Partnership Deed:

The document in which the respective rights and obligations of the members of a partnership
is written is called the Partnership Deed. A partnership deed agreement may be written or
oral. However, practically an oral agreement does not have any value for tax purposes and
therefore the partnership agreement should be written. The following are the essential
characteristics of a partnership deed:
 Name and address of the firm as well as all the partners.
 Nature of business to be carried on Date of commencement of business.
 Duration of partnership (whether for a fixed period/project). Capital contribution
by each partner.
 Profit sharing ratio among the partners.
 The above are the minimum essentials which are required in all partnership deeds.

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 Consider whether additional clauses are needed:
The partners may also mention any additional clauses. Some of the examples of
additional clauses which may be mentioned in the partnership deed are mentioned below:

 Interest on the partner's capital, partners' loan, and interest, if any, to be charged on
drawings.
 Salaries, commissions etc., if any, payable to partners.
 Method of preparing accounts and arrangement for audit.
 Division of task and responsibility, namely, the duties, powers and obligations of all
the partners.
 The rules to be followed in case of retirement, death and admission of a partner

Do the partnership deed in the appropriate form:

The deed so created by the partners should be on a stamp paper in accordance with the Indian
Stamp Act. Each partner should have a copy of the partnership deed. A Copy of the
Partnership Deed should also be filed with the Registrar of Firms in case the firm is being
registered.
Decide whether or not to register the partnership firm:
Partnerships in India are governed by the Indian Partnership Act, 1932.As per the Partnership
Act, registration of partnership firms is optional and is entirely at the discretion of the
partners. The Partners may or may not register their Partnership Agreement. However, in the
case where the partnership deed is not registered, the partners may not be able to enjoy the
benefits which a registered partnership firm enjoys.
 Registration of a partnership firm may be done before starting the business or anytime
during the continuance of partnership. However, where the firm intends to file a case
in the court to enforce rights arising from the contract, the registration should be done
before filing the case.

Register:
The procedure for registration of a partnership firm in India is fairly simple/An application
and the prescribed fees are required to be submitted to the Registrar of Firms of the State in
which the firm is situated. The following documents are also required to be submitted along
with the application:
1. Application for Registration of Partnership in Form No. 1.
2. Duly filled specimen of Affidavit.
3. Certified True Copy of the Partnership Deed.
4. Ownership proof of the principal place of business or rental/lease agreement thereof.

55 | P a g e
Sign the application:
The application or statement must be signed by all the partners, or by their agents especially
authorised in this behalf.
Expect the registration process to proceed formally:
When the registrar is satisfied with the points stated in the partnership deed, he or she shall
record an entry of the statement in a register called the Register of Firms and issue a
Certificate of Registration. The Register of Firms maintained at the office of the Registrar
contains complete and up-to-date information about each registered firm.
 This Register of Firms is open to inspection by any person on payment of the
prescribed fees; any person interested in viewing the details of any firm can request
the Registrar of Firms for the same and on payment of the prescribed fees, a copy of
all details of the firm registered with the Registrar will be given to the applicant.

9.Be registered for tax: It should be noted that registration with the Registrar of Firms is
different from registration with the Income Taxation Department. It is mandatory for all firms
to apply for registration with the Income Tax Department and have a PAN Card. After
obtaining a PAN Card, the partnership firm is required to open a Current Account in the
name of the partnership firm and to operate all its operations through this bank account.

10.Overview of VAT:

1.Preparation of VAT returns

At the end of the month or each quarter, you file a VAT return with the tax office, and remit
the VAT due.
2.Prerequisites
You have carried out the activities described in closing for VAT.
3.Process
1. You prepare a copy of the sales ledger and the purchase ledger. The ledgers show the
invoices that have been paid and on which VAT is thus due. The ledgers are for your own
reference in the event of a check-up by the tax office.
2. You prepare the VAT return. This consists of two steps.
g. You calculate the total amounts of VAT for each tax code.
h. You print the VAT return. The system fills out the fields in
i. the VAT return using the totals that you calculated in the first step.
j. A 1. You prepare a copy of the sales ledger and the purchase ledger. The ledgers show
the invoices that have been paid and on which VAT is thus due. The ledgers are for
your own reference in the event of a check-up by the tax office.

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 k. For information about preparing VAT returns for VAT withheld from vendors.
l. You file the VAT return with the tax office and remit the taxes.

11.Computer online software

Tax Solution for professionals is to provide end to end management of every stage of the tax
life cycle from provision to estimates and extensions, returns, audit, amendment and
planning.
A Solution For-
p. Income Tax Return
q. TDS return
r. Service tax return
s. A Standard letter to clients
t. Balance sheet & audit report
u. VAT returns
v. Checking of assessment orders ROC form and filling
w. CMA
x. AIR return
y. Document Management
z. Challan
aa. All other required forms
bb. Standard formats of departmental letters
cc. Office assistance works & mechanism.
dd. Various types of reporting.
Features
o) Single switch board for all software.
p) Common client information for all software.
q) Searching of records by Code No., Name PAN, etc.
r) Online auto-update of software.
s) Defining user rights with grouping facility.
t) Password protection for individual clients.
u) Activation/De-activation of individual party from particular/all software.
v) Single window/screen to input, edit, view and print.
w) Front-view buttons for easy understanding.
x) User friendly similar layout of all software.
y) LAN compatible.
z) Various data input validation checks to eliminate errors.
aa) Easy auto backup of your precious data.
bb) Option to access from anywhere in the world.

Q. What is VAT?

Every commodity passes through different stages of production and distribution

before finally reaching the consumer. Some value is added at each stage of the
production and distribution chain: for instance, a forged metal tool is more valuable

57 | P a g e
than metal, which was itself more valuable than the ore that was originally mined.
Value Added Tax (VAT) is a tax on this value addition at each stage.

Under a VAT system, a dealer collects tax on his sales, retains the tax paid on his
purchase and pays the balance to the government. It is a consumption tax, because it
is borne ultimately by the final consumer.

The tax paid by the dealer is passed on to the buyer. It is not a charge on the dealer.
VAT is instead a multipoint tax system with provision for collection of tax paid on
purchases at each point of sale.

Q.What is Output Tax?

Output tax is VAT charged to the customer by a dealer making taxable sales. A dealer
is an individual, partnership, or business that is registered under VAT. Any person or
business making sales above the prescribed limit are required to register. When a
dealer is registered, VAT becomes chargeable on all taxable sales made by that
dealer.

Q. What is Input Tax?

The tax a dealer pays for purchases is input tax. Many purchases will carry a VAT
charge, but when a dealer is registered under VAT, they can normally claim a credit
for VAT charges on most business purchases. Input tax includes not only the VAT on
your purchases of raw materials or on goods purchased for resale but also VAT on
capital goods, such as machinery or equipment.

12.YAT Computation
A dealer pays VAT by deducting the tax paid on purchases (input tax) from his tax
collected on sales (output tax). In other words,

VAT Output Tax - Input Tax.

For example: A dealer pays Rs.10.00 @ 10% on his purchase price of goods valued
Rs.100.00. He sells the goods at Rs.150.00 and collects tax amounting to Rs.15.00
(@101). He will pay Rs.5.00 (Rs.15.00- Rs.10.00) as he has already paid Rs.10.00 to
his seller while purchasing those goods.

Q.How is VAT different from Sale Tax?

VAT has fewer rates, as opposed to the high number of rates for Sales Tax, and
allows offsets of tax on inputs against those on outputs. VAT also does away with the
tax on tax.

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Q. Who will be covered by VAT?

All business transactions involving the sales of goods/commodities carried on within

a state by individuals, partnerships, or companies will be covered by VAT.

VAT will not cover small businesses with sales below a certain limit. In Maharashtra,
the limit is 10 lakhs or below.

Q. What are the tax rates under VAT?

Since every state has its own VAT legislation, VAT rates, taxable base and list of
taxable goods, VAT rates will differ from state to state. As an example, here are
Maharashtra's tax rates as of June 2016:

Schedule 'A' - Essential Commodities (Tax-free) - Nil

Schedule 'B' - Gold, Silver, Precious Stones, Pearls etc. - 1%
Schedule 'C' - Declared Goods and other specified goods - 5%(Rates for items other
than declared goods changed to 5.5%)
Schedule 'D' - Foreign Liquor, Country Liquor, Motor Spirits, etc.-20% and above
Schedule 'E' - All other goods (not covered by A to D) - 12.5% starting April 1, 2016.

Q. How does VAT help trade, consumers, and government?

Trade-
Uniform rates of VAT will boost trade; 100% self-assessment will
reduce the need for taxpayers to visit a tax department officer.

Customers-
Removing tax on tax reduces prices of goods that the end consumer pays.

Government-
Since dealers will conduct self-assessment, the resources required for this process will
be fewer, and the revenue department can focus more on collection than
administrative processes.

13.Overview of Tally ERP 9

Journal Entry Journal Vouchers are used to adjust the debit and credit amounts
without involving the cash or bank accounts. Hence, they are referred to as adjustment
entries.

Creating a Journal Entry-

Journal entries are usually used for finalization of accounts. To pass a Journal
Voucher,

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 Go to Gateway of Tally> Accounting Vouchers Click on F7: Journal on the Button
Bar or press F7.
For example, there may be entries made for interest accrued or
interest due. If you have to receive Interest from a party, the same can be entered
using Journal Voucher.
1. Debit the Party
2. Credit the Interest Receivable Account the Journal entry is displayed as shown:

14.SPECIAL KEYS FOR VOUCHER NARRATION FIELD:

 ALT+R: Recalls the Last narration saved for the first ledger in the voucher,
irrespective of the voucher type.
 CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of
the ledger.

Allowing Cash Accounts in Journals:

Journals are adjustment entries, which do not involve Cash account and Bank account.
However, in exceptional cases where the user would like to account Journal entries involving
Cash/Bank Account, Tally. ERP 9 has the flexibility of passing such entries by enabling the
option under F12 configuration.

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To enable Cash Accounts in Journal voucher, Set Allow Cash Accounts in Journals to Yes in
F12: Configure (Voucher Entry Configuration).

To pass a Journal voucher with Cash/Bank Ledger,

1. Go to Gateway of Tally > Accounting Vouchers > Select F7:Journal
2. Press the spacebar at the Debit or Credit field. The Journal Voucher Screen with
Cash/Bank Ledger selection will appear as shown:

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Debit Note Entry
Debit Note is a document issued to a party stating that you are debiting their Account in your
Books of Accounts for the stated reason or vice versa. It is commonly used in case of
Purchase Returns, Escalation/De- escalation in price, any other expenses incurred by you on
behalf of the party etc.
Debit Note can be entered in voucher or Invoice mode. You need to enable the feature in F11:
Accounting or Inventory features.
 To use it in Voucher mode you need to enable the feature in F11:
Accounting Features Use Debit/Credit Notes.
 To make the entry in Invoice mode enable the option F11: Accounting Features - Use
invoice mode for Debit Notes. To go to Debit Note Entry Screen, Go to Gateway of
Tally> Accounting Vouchers.
 Click on Ctrl+F9: Debit Note on the Button Bar or press Ctrl+F9. You can toggle
between voucher and Invoice mode by clicking Ctrl+V. Pass an entry for the goods
purchased returned to Supplier A:

15. Special keys for voucher narration field :

1. ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of
the voucher type.
2. CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the
ledger.

Credit Note Entry

Credit Note is a document issued to a party stating that you are crediting their Account in
your Books of Accounts for the stated reason or vice versa. It is commonly used in case of
Sales Returns.

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A Credit Note can be entered in voucher or Invoice mode.
You need to enable the feature in F11: Accounting or Inventory features.
 To use it in Voucher mode you need to enable the feature in F11: Accounting
Features - Use Debit/Credit Notes.
 To make the entry in Invoice mode enable the option F11: Accounting Features - Use
invoice mode for Debit Notes.
To go to Credit Note Entry Screen: Go to Gateway of Tally> Accounting Vouchers
2. Click on Ctrl+F8: Credit Note on the Button Bar or press Ctrl+F8. You can toggle
between voucher and Invoice mode by clicking Ctrl+V. Pass an entry for goods sold
returned from Customer A:

16.Special keys for voucher narration field:

1. ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of
the voucher type.
2.CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the
ledger.

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17.AS-26 Intangible assets:

Intangible asset is a non-physical non-monetary asset which is held for use in the production
or supply of goods and services, or for rental for others, etc.
As 26 should be applied by all enterprises in accounting of intangible assets, except:

 Intangible assets that are within the scope of another standard financial asset.
 Rights and expenditure on the exploration for or development of minerals, oil natural
gas and similar non-generative resources.
 Intangible assets arising in insurance enterprise from contracts with policyholders.

Recognition and Initial Measurement of an Intangible Assets -

It applies when an item meets the criteria of an Intangible asset and it is probable that the
future economic benefits will flow to the enterprise and the cost of the asset can be measured
reliably. These recognition criteria are applicable to cost of acquiring and generating an
intangible asset internally.
Note: If an intangible asset is acquired separately, that should be measured initially at cost,
which includes purchase price that includes import duty, non-refundable purchase taxes, after
deducting trade discount and related direct cost.
If an asset is acquired in a business combination, the cost of that asset should be its fair value
at the acquisition date which depends on market expectations. When the asset is acquired free
of charge or for a normal consideration, by way of government grant, then it is recognized at
a nominal value or at the acquisition cost.

18.Overview on auditing

An auditor is someone who prepares and examines financial records. They ensure that
financial records are accurate and that taxes are paid properly and on time. They assess
financial operations and work to help ensure that an organization runs efficiently.
In this area, we were done different type of work such as matches the balances of transactions
from software information with our tally voucher entries information. We check different
financial records of companies any analyze that and identify the mistakes then give some
suggestions to them.
An audit is a systematic and independent examination of books, accounts, statutory records,
documents and vouchers of an organization to ascertain how far the financial statements as
well as non-financial disclosures present a true and fair view of the concern. It also attempts
to ensure that the books of accounts are properly maintained by the concern as required by

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law. Auditing has become such a ubiquitous phenomenon in the corporate and the public
sector that academics started identifying an Audit Society. The auditor perceives and
recognizes the prepositions before them for examination, obtains evidence, evaluates the
same and formulates an opinion on the basis of his judgement which is communicated
through their audit report.
Any subject matter may be audited. Auditing is a safeguard measure since ancient times.
Audits provide third party assurance to various stakeholders that the subject matter is free
from material that the subject matter is free from material misstatement. The term is most
frequently applied to a legal person. Other areas which are commonly audited include:
secretarial and compliance audit, internal controls, quality management, project management.
water management and energy conversion.

Auditing Standards -
The Public Company Accounting Oversight Board (PCAOB) maintains external auditing
standards for public companies (issuers) registered with the Securities and Exchange
Commission (SEC).
As of 2012, PCAOB has 15 permanent standards approved by the SEC and a number of
interim standards that reflect generally accepted auditing standards, as described in standards
issued by the Auditing Standards Board (ASB), which is part of the American Institute of
CPAs (AICPA).
The ASB also issues Statements on Auditing Standards (SASS) that apply to preparing and
releasing audit reports for non-issuers (companies not required to register with the SEC).
AICPA members who audit a non-issuer are required by the AICPA Code of Professional
Conduct to comply with these standards. As of 2012, there are more than 60 active standards.
For internal auditing, the Institute of Internal Auditors provides a conceptual framework
called the International Professional Practices Framework (IPPF) that provides guidance for
internal audits. Some of the guidance is mandatory, while others are considered strongly
recommended, but not required by law.
There are four main steps in the auditing process. The first one is to define the auditor's role
and the terms of engagement which is usually in the form of a letter which is duly signed by
the client.
The second step is to plan the audit which would include details of deadlines and the
departments the auditor would cover.
The next important step is compiling the information from the audit. When an auditor audits
the accounts or inspects key financial statements of a company, the findings are usually put
out in a report or compiled in a systematic manner.
The last and most important element of an audit is reporting the result. The results are
documented in the auditor's report.

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Audit Planning -

Audit planning includes deciding on the overall audit strategy and developing an audit plan.
Auditing Standard No. 9 from the PCAOB describes an external auditor's responsibility and
the requirements for planning an audit. According to standard No. 9, an audit plan is expected
to describe the planned nature, extent, and timing of the procedures for risk assessment and
the tests to be done on the controls and substantive procedures, along with a description of
other audit procedures planned to ensure the audit meets PCAOB standards.
For internal auditing, the Institute of Internal Auditors provides guidance for audit planning.
Planning starts with determining the scope and objectives of the audit.
Internal auditors need to understand the business, operations, and unique characteristics of the
department/unit being audited and to develop an audit plan that defines the procedures
needed to do an efficient and effective audit.

19.Overviews on GST

What is GST?
GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and
Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect
on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage,
destination- -based tax that is levied on every value addition. In simple words, Goods and
Service Tax (GST) is an indirect tax levied on the supply of goods and services.
This law has replaced many indirect tax laws that previously existed in India.
GST is one indirect tax for the entire country.
So, before Goods and Service Tax, the pattern of tax levy was as follows:

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Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales,
Central GST and State GST are charged. Inter- state sales are chargeable to Integrated GST.
Now let us try to understand the definition of Goods and Service Tax- "GST is a
comprehensive, multi-stage, destination-based tax that is levied on every value addition.
Multi-stage -
There are multiple change-of-hands an item goes through along its supply chain: from
manufacture to final sale to the consumer.
Let us consider the following case:
g) Purchase of raw materials
h) Production or manufacture
i) Warehousing of finished goods
j) Sale to wholesaler
k) Sale of the product to the retailer S
l) ale to the end consumer

Value Addition -

The manufacturer who makes biscuits buys flour, sugar and other material. The value of the
inputs increases when the sugar and flour are mixed and baked into biscuits.
The manufacturer then sells the biscuits to the warehousing agent who packs large quantities
of biscuits and labels it. That is another addition of value after which the warehouse sells it to
the retailer.

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The retailer packages the biscuits in smaller quantities and invests in the marketing of the
biscuits thus increasing its value.
GST is levied on these value additions i.e. the monetary value added at each stage to achieve
the final sale to the end customer.

Destination Based-
Consider goods manufactured in Maharashtra and are sold to the final consumer in
Karnataka. Since Goods & Service Tax is levied at the point of consumption. So, the entire
tax revenue will go to Karnataka and not Maharashtra.

Advantages of GST-
GST has mainly removed the Cascading effect on the sale of goods and services. Removal of
cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on
tax, the cost of goods decreases. GST is also mainly technologically driven. All activities like
registration, return filing, application for refund and response to notice needs to be done
online on the GST Portal; this accelerates the processes.
i) Removing cascading tax effect
j) Higher threshold for registration
k) Composition scheme for small businesses
l) Online simpler procedure under GST
m) Lesser compliances
n) Defined treatment for e-commerce
o) Increased efficiency in logistics
p) Regulating the unorganized sector

Components of GST -
There are 3 taxes applicable under this system: CGST SGST & IGST
CGST: Collected by the Central Government on an intra-state sale (Eg: transaction
happening within Maharashtra)
SGST: Collected by the State Government on an intra-state sale (Eg: transaction happening
within Maharashtra)
IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil
Nadu)

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20.Overview on Taxation:

A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by
a governmental organizational in order to fund various public expenditures. A failure to pay,
along with evasion of or resistance to taxation, is punishable by law.
In this we learned about the Direct & Indirect taxes. We filled most of the income tax returns
of different clients.
In this we learned about different heads of income, calculation of taxes & different deduction
with sections. As well in Indirect taxes we file returns of GST in which different forms are
involved for Regular scheme & Composition scheme. For regular scheme we filled GSTR-1
& GSTR-3B (online) and for composition scheme we filled GSTR-4 (offline)

Purposes & Effects -

The levying of taxes aims to raise revenue to fund governing and to alter prices in order to
affect demand. States and their functional equivalents throughout history have used money
provided by taxation to carry out many functions. Some of these include expenditures on
economic infrastructure, military, scientific research, culture and the arts, public works,
distribution, data collection and dissemination, public insurance, and the operation of
government itself. A government's ability to raise taxes is called its fiscal capacity.

Types of Taxes -
Taxes are of two distinct types, Direct and Indirect taxes. The difference comes in the way
these taxes are implemented. Some are paid directly by you, such as the dreaded income tax,
wealth tax, corporate tax etc. while others are indirect taxes, such as GST.

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CHAPTER:6
Data Analysis

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CHAPTER 7:
Observation

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1. There is no racism on the basis of any caste, creed, colour and gender. Everyone is
treated same thus making it easy to co-ordinate with each other and to share views
and ideas with each other. The mentors as well as the colleagues are always ready to
sort out any problem that the interns could not resolve on their own.

2. Everyone is disciplined and dedicated towards their job, thus provides motivation to
do our jobs perfectly and to learn and grab as much as we can. The perfect
competitive environment always motivates us to excel in our job responsibility and to
perform better than we are performing

3. The working environment is lenient in the organization. Neither the employees are
overburdened by the work given. Neither they nor the proprietor force them to work
for extra time. All the work/targets are completed by the employees in the provided
time frame.

4. The employees are always energetic and ready to do work; they don't waste their
time. They always strive for excellence with effectiveness and efficiency in their
work. Even if the proprietor is not at the office they don't skin work hours.

5. The proprietor is really good at customer handling, he is always too humble towards
the clients even though if the clients are in bad mood or tempered, he never loses his
temper and handles them greet fully, he never abuses his employees even if they make
silly mistakes, and corrects their mistakes by smiling and sarcastically commenting on
it so the employees don't feel down and eventually improve themselves.

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CHAPTER 8:
Key Learnings

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I learned through my training program, that how I can

 Improve communication skills.

 Analysised the business situation.
 Establish high standard in professionalism.
 Learn more than the theoretical knowledge.
 Learn book keeping practices of different companies.
 Apply the theoretical knowledge in actual organisation.
 Compare practical aspects with theoretical aspects.
 Make quick decision in real situation.
 Learn how promote and conduct research in business area.
 Promote my personal knowledge and professional preparation for future.
 To properly integrate my theoretical knowledge and practical work.
 Plan for the future of oneself and learn how to adjust in an organisation.
 Know how to presenty our recommendations in front of your boss.
 Get knowledge of opportunities and threats while entering into an organisation.
 Get exposure to do a work in an organisation and also known about organisational
behaviour, ethical rules and regulations.

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CHAPTER 9:
Conclusion

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 S. Y. Tantak & Associates is overall one of the profit making and reputed firm of
Hadapsar. The organization since its very first day is devoted to providing quality
services. The detailed and through review of work and clients’ trust shows the
perfection with which it is working.

 The firm has earned a distinction of being placed in the category 'A' in the list of
panel of auditors maintained by State Bank of India. More over only these “A”
category firms can audit of listed companies.

 The Institute of Chartered Accountants of India has also carried out the Quality
Control Review and has issued satisfactory QCR report stating that the firm has
conducted the audits of the clients in accordance with International Standards on
Auditing.

 In a nutshell, this internship has been an excellent and rewarding experience. I can
conclude that there have been a lot I’ve learnt from my work at S. Y. Tantak &
Associates.

 Needless to say, the technical aspects of the work I’ve done are not flawless and
could be improved provided enough time.

 As someone with no prior experience with Node.js whatsoever I believe my time

spent in research and discovering it was well worth it and contributed to finding an
acceptable solution to build a fully functional web service.

 Two main things that I’ve learned the importance of are time-management skills
and self-motivation.

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 CHAPTER 10:
Recommendation & Suggestions

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 They have good opportunity to introduce the ISO standards training program which
no other firm is giving to customer.
 Try to adopt new technologies that their competitors are not using.
 Make a network that allows its customers to negotiate with them easily.
 In comparison of S.Y. Tantak & Associates. With its competitors has an edge to
make an accurate and error free report.
 The local economy continues to be strong and we believe our typical clients will
continue to flourish.
 The company has mostly professional educated human resources, which are the
biggest threat for their competitors.
 S.Y. Tantak & Associates has the facility to give coverage even the small retailers
for income estimation who want to take loan from bank.
 S.Y. Tantak & Associates strongly needs to improve its network firms so as to be
counted among one of the extensively know firms in UP. The partner needs to make
the best use of their goodwill to bring more clientage and reputation to firm. They
need to offer the audit services at most economical cost with the assured quality
services to retain and expand clients.
 The infrastructure and working condition reviews can improve the working
efficiency of the trainees. Audit and Assurance is the tough job. Some motivational
meetings and mentoring exercises would bring good feel among employees for their
work. Time to time financial bonuses or performance incentives will energize the
staff.
firm
 The trainees are not offered extra financial or any other incentive for the extra work
or over time. This causes some sort of mental stings which immediately needs to be
overcome by the management. The firm, to be more competitive in days to come,
still has room for improvement in Information Technology. As firm don’t have any
of its website to attract customer and their timely feedback as most of the good
firms have their own web and well organized.

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 Firm also lacks in marketing perspective as it does not any marketer to market
and introduce their business, firm is getting business only on personal relations
of the partners and other firm personnel. So if firm thinks to improve its business
volume it needs a professional marketer as many other big firms adopted and have
complete marketing department.

CHAPTERS 11:
Limitation of the study

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Even though the report finished on time, it does not mean that I did not face any problem in
doing this research. Every student may have different report since we work in different
places. The most difficult problem that I found during doing this research was difficult to get
information from managers while doing questionnaire. It may because the employee there is
really busy with customer on the calls and other activities such as controlling their
subordinates or junior.

Most of them would not have any will if I ask them during the working hours. There are just
a few managers who want to fill the questionnaire during lunch time, break time, even when
the working hours passed they're hard to reach. It's also hard to get deep information from
them; I need to promise to not leak the important information to anyone. That is why cannot
put the real data number on the graph or chart. Because that was my company privacy like
basic price, number of stocks per month, or how much the operation cost.

In addition, since the problem that I talk is private problem which protected by the company,
so I cannot get too much information from public information as internet or company
websites. So, I really have to do so much effort to get as much as information from managers.
However, with my intensity, I can finish the entire project with satisfy. All of the problem
can solved even though have to do extra effort to solve it.

Some of the limitations of our project are: -

 They have a small staff with shallow skills base in many areas.

 Less number of staff members.

 Developments in technology change this market beyond S.Y. Tantak & Associates.
Ability to adopt.

 Change in government policies and procedures may act as threat for company.

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  A small change in focus of large competitor might wipe out any market position S.Y.
Tantak & Associates achieved

 S.Y. Tantak & Associates has many competitors. Under certain circumstances these
competitors may act as a major threat for the organisation.

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 Tally System

 CIMS

 MPRM Reports

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