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NAGPUR: Indian chartered accountants (CAs), who have gone through the rigour of interpreting and implementing the Goods and Services Tax (GST), dubbed the most complicated tax law, are in great demand in the United Arab Emirates (UAE) and other Gulf countries these days. Their knowledge of Hindi has become an added advantage for Indian professionals, as many residents of the Gulf are comfortable with the language.
UAE will be introducing Value Added Tax (VAT) from January 1, 2018. This is similar to the GST, which came into force in India from July this year. After UAE, other Gulf countries will also be implementing the new tax. This has led to a demand for Indian experts to help businesses there understand the indirect tax system. In fact, Indian professionals find the tax in UAE much simpler than the Indian GST.
Chartered accountants from across the country, including Nagpur, are camping at UAE or making frequent trips there to help a host of clients understand the law. In Dubai alone, hundreds of Indian professionals have got assignments with demand for an equal number still there, said sources.
“This is the first time a major levy is being introduced in the Gulf, and businesses need in-depth training to understand the finer points. It will have an impact on the consumers too, as the VAT will be finally passed on,” said Pritam Mahure, a CA from Pune camping in Dubai these days.
The sectors where many of the CAs are being required include oil and gas, real estate and retail. Oil and gas is the mainstay industry of the Gulf. Since a host of other industries are related to this sector, VAT will have its applicability at every stage, said Mahure.
However, the VAT in UAE appears to be easier as compared to GST of India. There are no multiple schedules of rates. All taxable services or goods are charged at 5 per cent. There is a category of zero rate, besides exempt goods and services. Under zero rate category, the business need not pay tax but can claim input credit for the levy paid earlier. Schools are under zero rate, he said.
“Of course, there are some regular doubts. For example, retailers are asking whether VAT will be applicable to items offered free during promotions, like the buy-one get-one free offers,” said Mahure.
Varun Vijaywargi, of Nagpur’s M/s Vijaywargi-Khabiya and Saoji, chartered accountants, said he has often flown to UAE since August, and returned to Nagpur only last week. He said chartered accountants from India have been organizing training sessions and hand holding businesses to migrate to the VAT regime.
“The system in UAE is easier, especially due to the single rate. The returns have to be filed on quarterly basis, which acceptable to businesses. Under our GST, it began with monthly returns but was later relaxed to quarterly returns. The compliance mechanism of UAE is also effective. The firms with declared turnover above the threshold limit will have to pay a Rs 3 lakh fine if they have not registered for VAT,” he said.
Chartered accountant Jigar Doshi, a partner of SKP Business Consulting, said easy connectivity has led to several practitioners going down to the Gulf. Indians also have an advantage as many Gulf residents are comfortable with Hindi.
However, warning of some problems, Surandar Jesrani, partner and CEO of M/s Morison MJS Tax Consultancy, who has been in the Gulf since a decade, said challenges of the Gulf region are different, and so the advisers need to have a cautious approach.