The Hindu Business Line : ICWAI releases monograph on contemporary issues

THE Institute of Cost and Works Accountants of India (ICWAI) has come out with a series of guides on what have been billed as "important contemporary issues".

The monographs relate to the following: Arms length pricing, input tax credit, joint & by products, predatory pricing, R&D cost and anti-subsidy & anti-dumping in the context of WTO.

The initiative on cost issues in predatory pricing takes into consideration its relevance in the current competitive environment, the institute has pointed out, adding that charging of selling prices below predatory price standards (as a means of market consolidation) is looked upon with disfavour by governments. This is said to be relevant for India, where SMEs too are key players providing employment.

Transfer pricing, ICWAI has stated, has been traditionally defined as the price at which goods are transferred from one division/department of an enterprise to another division/department of the same enterprise. With the passage of time, transactions between related parties have come to occupy the centre stage on the issue of transfer pricing. The institute has noted that transfer pricing is also a predominant issue under I-T norms.

The present industrial scenario has undergone a paradigm shift, thanks to a multi product environment, the institute has mentioned in the context of its monograph on joint & by products costing.

Compounding the issue is the simultaneous production of more than one product from a common initial process. However, it is essential to make a fair and equitable allocation of cost to each product. This is imperative not only for stock valuation and income determination but also increasingly for assessment of excise duty, transfer pricing etc, it is felt.

As for WTO — anti-subsidy and anti-dumping measures, ICWAI has noted that discussions on these issues have accelerated after January 1, 2005. The institute has particularly cited the case of India's textile industry. The latter has been facing anti-dumping issues for a long time. Anti subsidisation too is a topical issue here, with the EU imposing countervailing duties on bed linen on exports from India in the first quarter of 2004, it is mentioned.

The main theme of the next ICWAI monograph, "Competency building under global competition under WTO scenario", dwells on key issues relating to accounting of R&D costs.

Lastly, ICWAI has mentioned that its monograph on input credits under indirect taxes relates to the distribution of service tax credit by input service distributor.

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