Significance of Indirect Taxes-2

Significance of Indirect Taxes In Hydroelectric Construction Contracts

Significance of Indirect TaxesInHydroelectric Power Projects

IBS BUSINESS SCHOOL, GURGAONPresented by :- Anmol Jain (13BSP0110)

A PRESENTATION ON THE LEARNINGS DURING THE SUMMER INTERNSHIP PROGRAM (SIP)-2014 AND ITS REPORT (SIP WORK AND THE SUBMISSION OF THE PROJECT WORK REPORT IS DONE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF PGPM PROGRAM OF IBS GURGAON)

AGENDA FOR THE PRESENTATIONBRIEF ABOUT THE COMPANY AND SIPOBJECTIVES METHODOLOGY & LIMITATIONSDETAILED DESCRIPTION OF THE WORKDETAILS ABOUT THE SIP COMPANYMY SIP LEARNING EXPERIENCEIBS BUSINESS SCHOOL, GURGAONAGENDA FOR THE PRESENTATIONBRIEF ABOUT THE COMPANY AND SIPIBS BUSINESS SCHOOL, GURGAONI got an opportunity to work as an intern at the Hydro unit of Alstom India Limited.Alstom India LimitedPowerTransportRenewableCoal & OilNuclearGasHydroWindGeothermalBiomassSolarOceanMajor portion of shares held by promoters i.e. Alstom France & Central/State Government with Financial Institutions and Banks also have stake in the company.

The two Hydro Power Projects I worked upon are Chamera & Uri.Each project is formulated on the basis of three contracts.AGENDA FOR THE PRESENTATIONOBJECTIVES METHODOLOGY & LIMITATIONSIBS BUSINESS SCHOOL, GURGAONObjectivesPrimary: To study the significance of Indirect Taxes in the Hydroelectric Power Projects.Incidental: To analyze Alstom India Limited as a company in terms of its business activities, marketing strategies & financial results.MethodologyThorough study of the contracts.Meetings with the project manager, the head of taxation department & the tendering manager.Study of the annual reports of the company.Understanding the taxation with the help of books & internet.LimitationsAlstom's Hydro Power division is located in Vadodra, Gujarat with only fewer operations in Noida. Hence, access to information was limited.A period of 3 months was not sufficient to understand the business of Alstom India Limited as the scope of their business is vast.Because of long execution period of the contracts access to material like invoices, debit notes etc. was not easy.All the taxes mentioned in the study are vast in their own terms. Hence, only the portions relevant to the contracts were mentioned in the report.There was no exposure towards the rail transport business of Alstom.

AGENDA FOR THE PRESENTATIONDETAILED DESCRIPTION OF THE WORKIBS BUSINESS SCHOOL, GURGAONIt takes a lot of time to get a contract & the price quote is based on the laws prevailing 21 days prior to the bid.The tax rates have been changing year after year, due to which the contract price keeps on changing.CHANGE IN RELATION TO TAX

ALSTOM Communicate the change to the Client

Copy of a Notification of the change by the Law as a reference +Letter written and duly signed by the Taxation Head Client Agrees to PayClient Disagrees to Pay*(Not yet happened)

Alstom bears the burden of taxReduction in profits earned OrIncur a lossThe taxation department has to be vigilant about the changes in the taxes, in order to communicate the change and impact of that change on the contract price to the client.AGENDA FOR THE PRESENTATIONDETAILS ABOUT THE SIP COMPANYIBS BUSINESS SCHOOL, GURGAONStrong parental support gives Alstom an edge over its contemporaries.Revenue of the company is rising, however the Gross profit is declining. The reason being the rising COGS.Declining Dividend Payout shows that Alstom is retaining the earnings of the shareholders however, returns show that they are not able to use the money efficiently. Decline in market price per share shows that investors are more inclined towards Alstom rather than BHEL.

BHELALSTOMAGENDA FOR THE PRESENTATIONMY SIP LEARNING EXPERIENCEIBS BUSINESS SCHOOL, GURGAONThank You