Case Studies

• A client, who was operating a cab, approached us during our initial years of practice. He wanted our support while he was venturing into his own passenger transport business, after being rejected from being on-boarded as a driver by one of the top Passenger Transport Companies in Bangalore at that time. Without sufficient funds available at his disposal to establish a reasonable office and not more than 1 cab, one would find it challenging to back him in this process, especially in such industry having strong competitions already prevalent in the market. However, we always believed in assisting every person who approached us with a high level of vigour and commitment. And thus, we extended our committed services to him, in every small aspect for managing /growing his business.

• This client, who approached us with a single cab, has now grown leaps and bounds to handle 4,500 fleet of vehicles today with nearly 200 supervisors. He is now one of the highest tax payers for TDS in Bangalore and is recognized as a ‘Large Tax Payer’ under Service Tax / GST. He is serving several MNCs across all tech parks in Bangalore, undertaking pick up and drop services of their employees. The vehicles handled by him range from 4 seater cabs to 48 seater busses, based on the requirements of the MNCs.

• We began coordinating with the client on matters at the most operational level including automation of voucher generation and streamlined accounting processes. The entire process was developed for each driver, treating his PAN to be the unique identification factor for retrieval and collation of relevant payouts applicable to him. This process helped in –
  • 1. Maintaining documentation as vouchers issued to drivers for their services for the month
  • 2. Computing the amount payable to the drivers every month
  • 3. Capturing any deductions from the amount payable to the drivers
  • 4. Maintaining database of drivers and their monthly payouts;
  • 5. Ease of accounting in respect of such payments made to drivers and other relevant expenses / deductions;
  • 6. Establishing a one-to-one co-relation between the driver payments and expenses recognized in books to substantiate during audit;
  • 7. Retaining necessary audit trail and back up workings.
  This process is still used by various passenger transport entities even today, with necessary minor modifications.

• We have spent enormous time, not just taking care of their compliances but also developing relevant business models for their effective functioning. The Income Tax Act, 1961 was amended in October 2009 to introduce Section 194I(a) pertaining to TDS on renting of plant & machinery at 10%. This provision created a conflict between deduction of taxes under section 194C and 194I(a). The nature of transaction was always in the form of a contract, while the nomenclature “rent a cab” was more specifically used for service tax purposes, therefore, Section 194C was over riding the provisions of Section 194I(a). Having convinced the customers of the client thus, deduction of taxes at 10% was prevented, which would have otherwise caused excess working capital shortages and massive impact of cash flows. Recognizing this anomaly, the Government subsequent amended Section 194I(a) to bring it at par with the rates prescribed in Section 194C. Being a large tax payer, they were subjected to all audits / assessments including Income Tax Investigations, Service Tax audit, GST Audit. With our strong fundamental internal controls and procedures, the audit process was smooth and the client emerged out with a clean chit. The thought process of accommodating subsequent assessments / inquiries from Governmental Authorities at the time of implementation of internal controls, enabled effective compliances. The positions taken by the client under GST at the time of implementation was also seconded and agreed upon by the GST Authorities during their investigations.

• The fall in business activities during the COVID-19, particularly to this industry of rent a cab services was massive. With huge interest commitments and without any bookings, thanks to Work from Home, this industry underwent a crisis from March 2020. This period was all about breathing in the market and eventually – survival. The doctrine of “Survival of the fittest” was very strongly tested during this period. Amidst these financial hardships, our clients hoped for support from their stakeholders. We undertook the moral responsibility of providing all necessary support to the client. We took the lead by negotiating with banks for restructuring the loans. With our submissions, the banks recognized and considered the proposal of restructuring of the loans which substantially reduced the burden of cash flows to the client. We always focused on a synchronic approach between the managerial decisions and the operational implementations, enabling us to have complete control over the financial operations of the client. This helped in building the financial records and sustain the dry period caused by the COVID-19 pandemic with low revenues.
We scheduled meetings with the client at frequent intervals to keep their morals high and boost them with confidence to sustain during these testing times. Motivating the client to rely on the process and reminding him regularly that ‘Passage of Time will bring things back to Normal’ and instilled positive thoughts.?

We have, all along, moved on the path of ‘More for Less’ when it comes to rendition of services to our clients. We do wish to proudly state that we have growth with this client and our business relationship is still standing at 18 years (NOT OUT).