STUDY TIPS FOR CA IPC INDIRECT TAX

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Indirect taxes

Indirect taxes play a pivotal role in the national economy as the central and state indirect taxes cumulatively contribute to more than 50% of the total tax revenue of the country. Being a major source of revenue, fiscal legislations lay a greater emphasis on levy of indirect taxes. Knowledge of indirect taxes is, therefore, very crucial and essential for a Chartered Accountant as one of his core function is to advise clients with regard to tax management and planning which necessarily entails a great degree of indirect taxes management.
Students are introduced to various significant indirect taxes at Intermediate (IPC) level in Part II: Indirect Taxes of Paper 4: Taxation. At this level, you are expected to develop an understanding of the basic concepts of the different types of indirect taxes and acquire the ability to analyse the significant provisions of service tax. Since the subject is totally new to you, you will have to first develop an understanding of the basic concepts of various indirect taxes. Furthermore, preparing this paper in a planned manner by drawing an effective Study Schedule is utmost essential.
The following procedure is recommended for the preparation of Part II: Indirect Taxes of Paper 4 Taxation (hereinafter referred to as “Part-II: Indirect Taxes”:
CA IPCC INDIRECT TAX STUDY TIPS MAY 15

Step – 1: Know your syllabus

(i) First and the foremost, you should go through the syllabus of the paper carefully. The objective of the syllabus is to develop an understanding of the basic concepts of the different types of indirect taxes and to acquire the ability to analyse the significant provisions of service tax.
The contents of the syllabus are:

1. Introduction to excise duty, customs duty, central sales tax and VAT – Constitutional aspects, Basic concepts relating to levy, taxable event and related provisions
2. Significant provisions of service tax
   • Constitutional Aspects
   • Basic Concepts and General Principles
   • Charge of service tax including negative list of services
   • Point of taxation of services
   • Exemptions and Abatements
   • Valuation of taxable service.

• Invoicing for taxable services
• Payment of service tax
• Registration
• Furnishing of returns
• CENVAT Credit [Rule 1 -9 of CENVAT Credit Rules, 2004]

(ii) There is no internal bifurcation of marks between various indirect taxes covered in the syllabus. Total 50 marks have been allocated to Part II: Indirect Taxes of Paper 4: Taxation. It is important to note that only general principles relating to State-Level VAT have been included in the syllabus. Students will not be examined with reference to any particular State VAT Law.

Step – 2: Get familiar with the knowledge inputs provided by the Board of Studies (BoS)

After going through the syllabus of the paper, the next step is to get familiar with the various publications/knowledge inputs provided by the Board of Studies with respect to Part II: Indirect Taxes. The following publications of the BoS need to be referred to while studying for this paper:-

• Study material is the basic knowledge material provided with an aim to build a strong conceptual base by explaining the complex tax laws in a lucid The Study Material is updated every year with the provisions of the relevant Finance Act and the relevant notifications and circulars.

Practice Manual contains a variety of questions and problems in each topic for the better understanding and application of the concepts explained in the Study Material. The Practice Manual is also updated regularly with the provisions of the relevant Finance Act and the relevant notifications and circulars.

• Supplementary Study Paper explains the amendments made by the annual Finance Act in Part-II: Indirect Taxes as well as the significant circulars and notifications issued by CBEC during last

It is especially relevant in case you have the earlier edition of the Study Material. However, even if you have the latest edition of the Study Material you are still advised to read the Supplementary Study Paper for a better understanding of the statutory amendments.

• The Chartered Accountant Student is the monthly Students’ Journal which contains regular academic updates on the
• Revision Test Paper helps the students to assess their preparation for the examination as also updates them with the latest statutory developments (which are applicable for the examination).

• Suggested Answers contain the questions set at the CA examination, as well as the suggested answers to such The answers are prepared with a view to assist the students in their education and generally represent the ideal manner in which questions should be answered. However, since they are prepared as per the provisions of law applicable for the respective examination, subsequent amendments made in the law should also be taken into consideration, while referring to the said answers.
• Mock Test Papers are prepared to help the students assess their preparation under examination The pattern of setting the questions in the Mock Test Paper is the same as that of the Intermediate (Integrated Professional Competence) Examination.

Step – 3: Find out about the applicability of the Finance Act relevant for your examination

The Finance Act of a particular year would be applicable for the May and November examination of the next year. For instance, the amendments made by the Finance (No.2) Act, 2014 would be applicable for May, 2015 and November, 2015 examinations.
You are expected to be updated with the notifications, circulars and other legislative amendments made upto 6 months prior to the examination. For May examination, such amendments made upto 31st October of the previous year would be relevant and for November examination, such amendments made upto 30th April of that year would be relevant.
The following table depicts the applicability of the Finance Acts and the Notifications/Circulars for the May and November, 2015 examination:-

May, 2015 Examination	Law as amended by the Finance (No.2) Act, 2014 and Notifications and circulars issued till 31.10.2014
November, 2015 Examination	Law as amended by the Finance (No.2) Act, 2014 and Notifications and circulars issued till 30.04.2015

Step – 4: Make a comprehensive study plan

Planning your studies will definitely help in preparation of any paper. Making a detailed study plan with appropriate time allocation for all the topics will facilitate in completing your studies (along with revision) in time. Your planning for Part-II: Indirect Taxes should be such that you go through the paper at least thrice before the examination.
Since in Part-II: Indirect Taxes, the examination paper has a mix of practical and theoretical questions, you should do written practice of good number of both theory and practical questions on each topic. Therefore, at the time of planning the study, you should factor in the time for written practice. Always remember that you will be able to reap the benefits of a study plan only if you stick to your daily targets. Following your daily schedule religiously will lead to completing your studies well in time.

You may study at least two hours a day so that you are able to complete first round of entire study and two rounds of revision well before the examination. Your first round of study should be completed well in advance that is at least 3 months before your exam. This is a broad based planning about how to study but you should also pay attention to specific time planning for each and every chapter in detail – when to start and by what time the chapter should be completed. Keep some extra time as assimilation of the chapters may take more time than expected or planned.
Your second round of study i.e., your first revision should be over before one month of your exam. You should revise the second time in the last month before exam so that you are in a position to remember all the concepts. These three rounds of study will help in boosting the confidence level for the subject and will make you mentally prepared to appear in the examination.

Step – 5: Start the study for Part-II: Indirect Taxes

1. Study from the relevant Study Material for your examination as the Study Material which would have been given to you at the time of registration for Intermediate (Integrated Professional Competence) Course may not be applicable for your For instance, you should study from Study Material – October, 2014 Edition which is relevant for May, 2015 and November, 2015 examinations.

Also, note that the Study Material relevant for May and November, 2015 examinations is updated with the amendments made by Finance (No.2) Act, 2014 and Notifications/circulars issued till 30.04.2014 as also the Budget Notifications. However, for May, 2015 examination, amendments made till 31.10.2014 will be relevant. In order to update the students with the amendments made between 01.05.2014 and 31.10.2014 as well, such amendments will be compiled and given in the RTP for May, 2015 examinations.
Similarly for November, 2015 examinations, amendments made till 30.04.2015 will be relevant and therefore, the amendments made between 01.05.2014 and 30.04.2015 will be compiled and given in the Revision Test Paper for the November, 2015 examinations.

2. You should go through each chapter meticulously to understand the concepts covered A word of advice – keep the Bare Acts and the Relevant Rules of the relevant statutes by your side when you read the Study Material. This way you will become conversant with the sections of the Bare Acts and the related Rules, and understand their implications properly.
3. Prepare short summaries of each chapter and try to include all the key points of the chapter in the said These summaries would be very useful for quick revision at the time of examination.
4. Work out practical problems from the corresponding chapter of Practice Manual after you complete the theory portion of a chapter from the Study

5. Even if you study from the latest Study Material you should go through the Supplementary Study Paper to update yourself with the amendments made by the Finance Act, 1994 and the Notifications/Circulars issued during the last one While in the Study Material the amendments are incorporated at the relevant places without any discussion on the old provisions or the reason of introducing the amendments, the same are dealt in detail in the Supplementary Study Paper. Therefore, in order to get a complete understanding of the amendments, you are advised to go through the Supplementary Study Paper.
6. Another thing to be kept in mind while studying for this paper is that indirect tax laws is amended very frequently by notifications and circulars (clarifying the position of law) issued from time to Therefore, you must pay due attention to the compilation of amendments given in the Revision Test Paper of your examination.
7. Every day when you start a new topic, you should first go through the concepts which you have read last day and then start learning new Remember, out of sight, out of mind.

Step – 6: Revision before examination and assessment of your preparation

As discussed earlier, you should complete two rounds of revision before your examination. You should go through the entire curriculum again during your first revision. This will facilitate the strengthening of concepts and will also lead to better retention of the various provisions. After you complete your first revision, you should go through the statutory updates given in the RTP relevant for your examination. For assessing your preparation status after first revision, you should attempt solving the questions given in Revision Test Papers (RTP) on your own and then compare your answers with the answers given there in.
The questions are an appropriate mix of amendments based questions, practical problems and theoretical questions. Needless to say, after identifying the mistakes made by you while solving the questions of the RTP, you should adjust your second revision plan appropriately to make time for strengthening those gray areas.
Your second round of revision should ideally start in the last month of the examination. After you finish the revision of the entire curriculum second time, you should once again check your preparation status with the help of Mock Test Paper of the Taxation. You should attempt the Mock Test Paper with sincerity as your performance in the Mock Test Paper will actually give you an insight of your preparation level.

Step – 7: The day before examination

On the day before examination, you should not go into much detail due to time constraints. Do not burn the midnight oil. Have adequate sleep. Just go through summary of each chapter and the treatment of significant issues.

Step – 8: Facing the examination

• Answer the questions with due emphasis on provisions of the law - Support your answers/conclusions with proper Answers should be based on relevant legal provisions rather than a mere common sense and/or guess work.
• Quote relevant section numbers – Quoting section numbers would definitely add value to your However, it is better not to quote than to misquote a section number.
• Give clear assumptions – Sometimes, there may be different point of view on procedural law based As a student, you should state your view/assumption clearly and proceed to answer the question on that basis.
• Answer in commensuration with the marks carried by the question - You should determine the length of your answer having regard to the marks allotted to the Do not have the misconception that lengthy answers fetch more marks.
• Do not use short forms – Use of short forms like CEO, AC, DC should be Write the full names of the statutes, like, ‘Service Tax Rules, 1994’ or ‘Finance Act, 1994’.
• First attempt the question which you know best – This will boost your confidence while attempting the remaining questions and create a positive impression of your level of knowledge on the
• Present your answers well - Underline important points and section references as and when you answer each Also, make sure that your handwriting is neat and legible. Answer all parts of a question one after the other. Do not answer different parts of the same question at different places.
• Follow instructions given on the cover page of answer paper – Pay heed to the instructions given on the cover page of the answer

To conclude

Last but not the least, remember that studies will not be an arduous task if they are approached with a positive attitude and pursued with interest. If you enjoy your study, your learning will be permanent and profound. A word of caution – do not try to mug up the provisions but understand the underlying concepts. Remember, strong conceptual clarity is the foundation for building a potent knowledge base.
Always bear in mind that your own resolution to succeed is more important than any other. Therefore, give your hundred percent and there will be no looking back.





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