Chartered Accountants for manufacturing businesses, taxation and financial management

In a factory, a tax or accounting problem seldom starts in the return itself. It starts in the stock register or a job-work challan, in a transfer between two units, or in an invoice raised on a group company. Our work therefore begins with those records.

Typical work for manufacturers and groups:

• Job work. Tracking inputs and capital goods sent to job workers, the time limits for their return, ITC-04 reporting, and the GST effect when material is not returned in time.
• Multi-unit and multi-state GST. Separate registrations, stock transfers between units valued correctly, credit kept where it belongs, and e-way bills that agree with the books.
• Product costing. Reconciling standard cost with actual cost, item by item, where consumption per unit has moved away from the bill of materials and the margins no longer reconcile.
• Inventory and working capital. Valuation of raw material, WIP and finished goods; slow and obsolete stock; stock statements to the bank that match the books; payments to MSME suppliers within the legal time limits.
• Group companies. Pricing of transactions between related entities, transfer pricing documentation where it applies, consolidated reporting, and structures that still make sense when the next generation joins.

Each of these matters has a cost in money. Input tax credit may be blocked, or reversed with interest. A deduction is lost when a supplier was paid late, and sales to a sister company can lead to a transfer pricing adjustment. Working capital may sit in stock that has never been counted against the books. Our review is carried out on the records before a return is filed or a stock statement is sent, so that the department or the bank is not the first to find a difference. The manufacturing page sets out the issues for each sector: auto components, engineering, pharmaceuticals, food processing, electrical and electronics, and chemicals.

Section 144 of the Companies Act, 2013 applies where we are a company's statutory auditor. Under it, we may not keep the company's books, run its internal audit or provide management services to it, or to its holding or subsidiary company. Other work for that company, such as tax, GST and transfer pricing, requires the approval of its board or audit committee.

• Manufacturing groups with two or more entities, often a manufacturing company, a trading or job-work unit and a firm or LLP that holds property. Auto components, engineering, electrical and electronics, pharmaceuticals, plastics and food processing.
• Owner-managed manufacturers with one or two units, an in-house accountant and a bank that asks for stock statements, projections and CMA data.
• Groups with a foreign link: exporters with an overseas subsidiary, and Indian companies with a foreign parent, where transfer pricing and withholding tax apply.
• Traders, distributors and agri-processors dealing with multi-state GST, e-way bills, inventory and seasonal cash flow.
• Promoters and professionals: the owners of these businesses, doctors and senior employees, for income tax, capital gains and notices. Groups owned by one family face their own questions, set out under family businesses.

Most of our work lies within a short drive of the office in Nashik. Satpur and Ambad hold the older engineering and electrical units, together with many of the vendors that supply the large plants. Sinnar has auto components, engineering and process industries, in its MIDC estate at Malegaon and the co-operative estate at Musalgaon. Gonde and the Igatpuri belt are on the road to Mumbai. The food, grape and wine businesses are concentrated in Dindori, Niphad and Vinchur, while Nashik Road is the district's rail and trading point.

Businesses in these areas meet much the same difficulties. A job-work chain may pass through two or three units, and many firms hold more than one GST registration. Cash credit limits are set against the monthly stock statement. Large customers pay late, while the small suppliers of the same business must be paid within 45 days, and a late payment of that kind can cost the buyer its deduction. We visit the factory, read the stock records on site and work through them with the accounts team. The Nashik page describes the areas and the issues in more detail.

Nashik is our primary base. From the Nashik office we work with businesses across Nashik district and with clients elsewhere in Maharashtra; we also work with clients in Indore and other places from our Nashik office. Groups further afield, in India and abroad, are served remotely or through planned visits where the work allows. The firm has no offices outside Nashik. Where those clients are, and how the work runs, is described on the Maharashtra page.