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How GST Impact Various Indian Businesses Sectors?

Goods & Services Tax (GST) was presented in the Indian Constitution through the 101st…

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Goods & Services Tax (GST) was presented in the Indian Constitution through the 101st Constitutional Amendment Act, 2016. Numerous sectors received some negative as well as positive effects with the introduction of GST.

Super 20 Training Institute offers best online GST course in India that can help individuals and organizations in understanding and implementing GST.

Impact of GST on Different Sectors of The Economy

Retailers, Distributor, and Manufacturing Sector

GST has boosted performance and competitiveness in the retailers, distributors, and manufacturing sectors as it has replaced various Indirect Taxes, and the troubles of the older indirect tax system have vanished. The remaining worries of the sector are declining exports and high expenses.

Agricultural Sector

The agricultural sector covers around 16% of the Indian Gross Domestic Product and is a significant sector to the overall Indian Gross Domestic Product. The introduction of the Goods & Services Tax has affected the transportation of agricultural items across states all over India. GST may help India in forming its first National Market for agricultural items.

Textile Sector

GST has a positive effect on readymade and textile pieces of garments The advantages which GST gave to the textile sector are the Input Tax Credit framework, Input Tax Credit on capital goods and the cost of transportation is currently lower in contrast with the past tax system.

IT Sector

Factors like the accessibility of Input Tax Credit or ITC will reduce the operating expenses and expand the Information Technology sector’s general productivity. The advantages of the GST on the IT sector are simpler tax rate administration, removal of cascading effect of taxes, and increase in revenue from the creation of software for GST.

Banking Sector

The banking sector has turned out to be more costly. Major challenges in the implementation of GST in the banking sector are stated below:

  • Separate registration based on location for the banks
  • Identification of place of supply
  • Increase in cost for the transactions between banks

Hotel and Tourism

The rate of GST varies for the inns as a result of the tariffs. Goods & Services Tax rates for hotels are dependent on room tariff with impact from 1st October 2019. GST brought a single tax rate compared to the multiple taxes under the previous system which has made it easier for the industry and provides clarity to the customers as well.

Entertainment Industry

The entertainment industry has benefited from the introduction of the GST benefit. Before GST, the sector had many taxes. They included the state tax, central tax, and tax by the local authorities. With GST, they moved into just one tax.

Automobile Sector

A wide range of taxes like Excise Duties, VAT, Sales Tax, and Road Tax were levied on this sector. GST has brought an increase in automobile deals as it replaced several other taxes. Automobile brands experienced record growth in the year 2018 and 2019.

Export-Import Sector

Import and Export were administered by the Customs Duty, Excise Duty, Value Added Tax, and Service Tax. All these taxes have been replaced by GST. IGST includes the taxes which were administering the imports of goods and services before the GST.

Education Sector

Education of people has a significant part in the strength of a nation and therefore the government has tried to keep education institutions excluded from the duties or taxes, in the new Goods & Services Tax system. These include the services given by any educational association to its staff, faculty, and students.

Real Estate

This sector has seen good growth in recent years and GST on real estate has brought more productive activities, and numerous new brands have come up which has helped the economy of the nation enormously.

Energy Sector

The energy sector is excluded from the scope of GST which will affect the economy.

Iron and Steel

Central Sales Tax, Value Added Tax, Excise Duty were levied in this sector and an aggregate of 19.5% net duty was forced upon iron & steel in the older system. Under GST most of the items manufactured fall in the 12% and 18% categories, while a few items fall under the 28% category.

Service Sector

Many service sectors had a lot of changes as they adjusted to the presentation of this new tax system. The positive GST impacts on the service sector are:

  • No double taxation
  • Easier taxation for repairs and maintenance
  • Access to inputs held in stock
  • Reduction in costs to service providers
  • Equality amongst all states
  • Decrease on the cost of inputs

Conclusion

GST is a milestone in India’s Indirect Tax system that addresses multiple issues together. It is a destination-based tax charged at the point of consumption. Its introduction may have benefited some sectors but in the long term, it will benefit all the sectors.

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Knowledge Series For Commerce Students: Know Your Home Loan

Home Loans cater to your needs or possibly a renovation, construction, or additional repairs…

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Home Loans cater to your needs or possibly a renovation, construction, or additional repairs to your humble abode. It is affiliated with a plethora of facets that the borrower needs to take into consideration before he/she can finally attempt to avail of such a loan.

How Much Of A Loan Amount Are You Eligible To Avail?
The predominant requirement is the eligibility of the borrower in the repayment of the loan that would determine the tenure, interest rates, and down payments attached to the loan amount. Your surplus income will drive the lender to figure out the actual amount of loan that you are eligible for.

So, your total assets, total liabilities, and the apparent stability of income play a pivotal role in gaining the lender’s trust. At the end of the day, a bank needs to ensure that your financial stability will not pose any problem for them in the repayment of the loan amount.

Additional Charges And Figures That You Need To Be Aware Of
Statistically, the bank assumes that as much as 50% of your income would suffice for your loan repayment, furthermore, the desired tenure, as well as pegged interest rate, will also impact the decision of assessing the amount of loan.

The majority of lenders expect around 10 to 20 per cent of the amount of home’s purchase in the form of a down payment on your part, and the remaining portion of the loan is eventually financed by the lender.

Now, this aggregate amount of loan encompasses certain charges, for instance, registration, transfer, stamp duty etc. You may be eligible for a larger amount but it does not necessarily mean that you have to get that much amount financed, even a significantly smaller amount can also be availed which directly relies on your requirement.

It is advisable, however, that keeping the ratio of down payment relatively higher than the ratio of loan amount so that the ultimate cost of interest payable can be mitigated and be kept at the desired level.

The Necessity Of A Co-Applicant
Additionally, having a co-applicant is an indispensable requirement to fulfil, so if you are the only owner of the property under scrutiny, then, in this case, an immediate sibling or any other family member can be anointed as a co-applicant.

What Specific Documents You Will Require For The Loan?
The documentation process is another integral and intrinsic phase where a checklist of specified documents is handed out by the bank which is to be filled accurately to steer clear of future ramifications.

Your unique identity proof, proof of residence, form 16/Income tax returns and recent salary slips which has to be decidedly authenticated by your employer and has to be self-attested.

But generally, in most cases, collateral security is also warranted such as insurance policies, units of mutual funds or any other significant investment. In most cases, the designated property is purposefully mortgaged in favour of the lender in the form of security until the loan has been repaid in its entirety.

Should You Secure Your Home Loan With An Insurance Policy?
It is vehemently advisable to secure insurance in favour of the home loan so that the liability does not fall on anyone else, but you alone will be secured enough to repay it. Now there are two prominent plans which are prevalent in today’s scenario, i.e. pure term insurance and the other one is a Mortgage insurance plan.

Now the loan amount should be equivalent to the insurance amount. As far as the premium is concerned, then a single premium, as well as regular premiums, will be the coveted choice. However, it is not mandatory to avail of insurance cover but a sense of self-assurance is generated by availing of such service.

Disbursement Of Loan
The documentation process is the precursor of the disbursement of the loan. The magnitude of the loan amount is solely scrutinised based on the documentary proof and that entails the procurement of a sanction letter from the bank which explicitly states the final amount of loan, duration, and applicable interest rate etc.

So in a nutshell, when the loan has finally been confirmed from the bank, it is commonly referred to as disbursement of the loan after getting through entire technical and legal or valuation activities and handover the cheque or demand draft in favour of seller after successful execution of sale deed and mortgage deed of the house.

Types Of Interest Rates
Rates of home loan can be distinct in the form of fixed or flexible. Calculation of EMI varies as per the various financial institutions/banks from where your loan has been sanctioned. Underlying additional charges also apply in tandem with the payment of the EMI such as processing fee which is generally about 0.5 to 1% of the loan amount. Now, repayment in the form of EMI begins right after the month when the loan has been disbursed.

Repayment Through ECS
Electronic Clearing System (ECS) is one of the avenues through which the repayment of the loan can be done, which involves direct payment of the loan amount from your salary account on a specific date of the repayment.

If you are eligible to pay higher EMI, then it will certainly benefit you since it acts as a long-term advance. Clearing the obligated amount faster will alleviate and relieve your mental stress easily.

Pre-Closure
The borrower always has this option at his disposal to pre-close his/her loan way ahead of the specified duration. However if the interest on your loan is of floating nature, then you will not be bound to pay additional charges, whereas if it is of a fixed nature, then certain charges may be applicable.

Every financer or lender should explicitly state in their statement the total interest as well as the principal amount payable at the very beginning of the financial year. This will eventually serve as a propellent factor to the department of accounts regarding your proof of investment for necessary tax deductions.

This phenomenon will serve you to reap tax benefits at the end of the year. It is prudent to pick the lender that renders the lowest EMIs option which can mean that you are paying a significantly lesser amount of money in the form of repayments as compared to other applicants from any other financial institution.

How Your Grievances Can Be Addressed
There may be incidences that a borrower may not be satisfied with the services rendered by the bank or some other pertaining relevant problem might occur.

So in that case, you can mention your grievance specifically in writing delineating the factors that displeased you, which needs to be addressed at the concerned branch and if however, the bank does not resolve or overlooks your concern then you have the option at your disposal to lodge your complaint with the ombudsman.

Income Tax Benefit of Housing Loan
Interest payment for housing loan is deductible under the head income from house property. The maximum limit is Rs. 2 Lacs p.a. u/s. 24(b). Moreover, we can also get benefit u/s. 80C of income tax for the principal repayment of housing loan with maximum limit of Rs. 1.50 Lacs. The stamp duty and registration charges paid at the time of registration of sale deed is also deductible u/s 80C of Income Tax Act, 1961.

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Fixed Asset Accounting

Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a…

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Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a given year. The annals are further used for analysis by the stakeholders, agencies, and tax collection bodies making accountants a crucial wedge in the company’s innards.

Of the concepts an accountant should be well-versed with, the ones of assets and liabilities are the most basal yet indispensable. Here we introduce you to the fundamentals of fixed assets and their accounting.

What Are Fixed Assets?

Fixed assets are the non-liquid physical possessions an organization holds to generate income over the long haul. They are also referred to as capital assets or property, plant, and equipment (PP&Es). 

Fixed assets are not to be done away with in the same accounting year. The list comprehensively includes land, vehicles, office spaces, computers and software licensing, buildings, etc.

The principal criterion for anything to identify as a fixed asset is that it should be held by the company for more than one accounting year. Also, they are tangible and intangible. Long-term bonds and securities don’t make it to the list.

An esoteric aspect of fixed assets is that their book values usually exceed the capitalization limit as set by the organization. However, a company must be careful while setting a cap limit. A too higher or lower value can have far-reaching impacts on its balance sheet.

How? That requires us to delve deeper into the topic. Here is a verified Accounting Certificate Course in Ahmedabad you can take.

Initial Asset Inclusion

It is done at the time of purchase of an asset. 

Now, before adding to its capital stock, a corporation makes the requisite assessments. It compares the total cost incurred on the asset with the gross amount of cash flow it leads to. If the deal seems profitable, it is sealed. 

The initial recordation incorporates the cost of the assets, their transportation and installation amount, testing and preparation fees, taxes, and other such expenditures. Meanwhile, administrative charges, general overhead costs, and expenses not directly enhancing its utility are not recorded here.

When an asset is purchased at its market value, we note its fair value. On the other hand, the interest amount has to be mentioned while documenting for an asset bought on credit. 

The case of an asset being exchanged for another one calls for recording the fair value of the new body. While if it is not possible to assess its cost, the price of the one given up is considered.

Depreciation of Assets

Assets start losing their productivity or we say, they get used up with time. We need to make allowances for this downturn. In accounting, depreciation is apportioning the cost of an asset over its useful life.

Of all the techniques to account for the depreciation of assets, the written down value method is extensively used. As it shows the fair value of the asset at every end of the year. In this method, depreciation is more in the initial year compares to subsequent years. Another method of depreciation is the straight-line method. Here, the accountants are required to subtract the salvage value of the asset from its cost. The resulting difference is then divided by the number of years the company intends to hold the asset for. The figure they arrive at is the yearly monthly depreciation of the asset. In this method, the Depreciation of asset is uniform during the life of the asset.

Companies can choose their modus operandi. However, as per the caveats of the IAS (International Accounting Standards), they are allowed to change it only once. To know more about the IAS and their impact in the field, you can go for this Accounting Course in Ahmedabad as recommended by our experts.

Disposal Of Assets

After a certain point, when assets cease to be profitable, they are to be exscinded. It is usually done when their useful lives come to an end. Sometimes, an unforeseen circumstance (for instance, unexpected obsolescence) forces the company to discard an asset. 

It is however not necessary to throw a valuable possession away when it can be liquidated. The company can exchange the asset for newer ones. Also, they may sell it off. A price higher than the then book value of the asset marks a profit and a lower one points towards a loss.

Whatever the case may be, the loss of a company’s asset shows on its balance sheet. Fresh investments need to be undertaken.

Asset Impairment

Impairment of an asset is where its current carrying value exceeds the gross profits it is estimated to bring in. It is usually the result of unexpected predicaments. 

In simpler words, asset impairment has to do with the chance that fixed capital may not be as economically viable as it is computed to be. Impairment leads to a radical slump in a business’ profits. Asset impairment on the balance sheet is associated with a corresponding loss in the income statement. 

Intangible holdings such as copyrights and trademarks stand higher chances to get impaired. However, under circumstances like unexpected obsolescence, natural calamities, adverse market fluctuations, judgment failures or may be due to some unaccountable reason, fixed assets may undergo the same fate. 

Accountants are supposed to be on the lookout for such incidents. They must warn the stakeholders and the decision-makers of the company’s state of affairs.

Disclosure Of Assets

A corporation does not want every confidential detail to be presented on its annual financial statements. However, certain norms formulated by the national and international bodies need to be followed. An organization has to make the following disclosures about its fixed assets.

  • The carrying value of the assets at the beginning and the end of each accounting year
  • The useful life of the assets
  • Rate of depreciation and the method used to calculate it
  • The effects of acquisitions, disposals, and net foreign exchange on the value of the assets
  • Impacts of revaluation 

To learn about other disclosures, go to the link for this certified Accounting Training in Ahmedabad and stake in your growing accounting expertise.

The Strict Don’ts

While accounting for fixed assets, you need to eliminate the three commonly made mistakes. 

  • Not considering expense costs transportation charges, taxes, and installation amount while recording the purchase of a new asset
  • Disregarding the alteration in the assets’ use while maintaining them
  • Ignoring record-keeping demands relating to insurance

 

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All About Assessment Proceedings

Every democratic country has three wings – the legislators, the administrators, and the judiciary.…

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Assessment Proceedings

Every democratic country has three wings – the legislators, the administrators, and the judiciary. As has always been the case with any law, once it is enacted by the law-makers / legislators, it is expected that the public at large must abide by it. In order to ensure that the law is being followed, there are administrators, and in case of disagreement between the two, there is judiciary to resolve these issues.

Background

In the context of income tax as well, the law (Income Tax Act, 1961) has prescribed a set of rules and compliances. It is expected of people to honestly follow the same. At the same time, an administrative body – the Income Tax Department – has been set up in order to ensure correct implementation of the law. 

Once a tax return is filed by a taxpayer, it is picked up for processing. It may be accepted as it is. On the other hand, should the department feel the need, it can make some inquiries from the taxpayer regarding various incomes declared / not declared by him. These inquiries are conducted as part of assessment proceedings. The law provides for various kinds of assessment proceedings, the manner in which they must be conducted, and the time frame within which they must be initiated and completed. A good knowledge on the subject can be gathered from commerce course at Super 20 Training Institute. Nevertheless, an overview is provided below.

Types

The main type of assessment proceeding is Scrutiny assessment. Some key aspects are:

  • Requisite notice must be issued in order to initiate the same
  • Such notice can be issued within 6 months from the end of the financial year in which return is filed
  • The time frame to complete this assessment is 21/ 18/ 12 months from the end of the assessment year (depending upon which year’s assessment it is) 

Scrutiny assessment is clubbed with other provisions of the Income Tax Act in certain situations, such as:

  • Best judgment assessment: when the taxpayer doesn’t cooperate / submit information, the tax officer can make an assessment on the basis of information available with him
  • Section 148 assessment: when the income considered to have escaped assessment exceeds specified limits and the afore-said time period of 6 months to issue notice has expired
  • Block assessment: when search / survey has been conducted, and assessment proceedings of multiple years are to be pursued on the basis of evidence collected during such search / survey.

How is scrutiny assessment conducted?

Once a notice is received, it is usually accompanied by a questionnaire seeking information as the tax officer may deem fit. The assessee must prepare a response and appear before the tax officer with all explanations. In case there is no questionnaire, the tax officer may ask for information during the course of discussion. The assessee can always seek some time which he thinks he will require to collate the details. If the tax officer considers the request reasonable, he would allow the assessee to come back with answers at a later date. Such back and forth may continue until all queries are responded to and tax officer has no further questions. 

More recently, the department has been moving towards e-proceedings, which implies that all responses to the inquiries raised can be responded over email, and do not require the assessee to be present in person. This has turned out to be a sincere blessing for all taxpayers, since it saves significant effort, time and paper, and even rules out any chances of harassment of any kind.

What happens after?

It is not necessary that the tax officer may agree with all the explanations furnished by the assessee. In case he is not satisfied, he may make suitable adjustments to the taxable income of the assessee for that year and raise demand for any shortfall in taxes paid, basis such revised income computed by him. 

If the taxpayer does not agree with such assessment, he can approach the higher authorities to appeal against the assessment so completed and the matter can be argued by both parties (taxpayer and tax officer) for adjudication. 

You can learn more about assessment proceedings as part of taxation training given by Super 20 Training Institute in its Advanced Executive of Commerce course.

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The Accounting Skills You Need To Succeed

Every second person is now aspiring to be an accountant due to the unending…

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accounting skills you need to succeed

Every second person is now aspiring to be an accountant due to the unending demands for the same. But they can be categorized between mediocre, good and excellent. This transition will pave your way towards your goal to excel at accounting. This transition is utmost mandatory to grade up your job position or to attract more clients. If you are still wondering what skills you can work upon to get there, don’t worry. 

We shall discuss in this article the accounting skills which you must polish:

  • Knowledge

An accountant should possess thorough knowledge of how a particular transaction should be dealt with. If the company that he deals in wants to issue a Initial Public Offer and be listed with the National or Bombay Stock Exchange, the accountant should have in depth knowledge of how to proceed with that, what documents, bank requirements, the capital/sales requirements, etc. How is it going to affect the Balance sheet, Profit and loss and cash flows of the company? 

An accountant should be aware of the Indian Accounting Principles and Standards set by the Accounting Standard Boards and should also be able to apply them in the practical situation.

  • Analyze

An accountant should possess great analytical skills. He should be able to calculate the position of the company by having a glance at its Balance sheet, Cash flows and Profit and loss statements. This power of analyzing the opposite party can help the company to take their decision whether or not to deal with them. Like if their Debt to Equity ratio is more than 1, it implies the company has taken more debts than its capacity and hence riskier to work with it.

  • Audit

Brief knowledge on audit can save the company from complications later. A visionary accountant should foresee any difficulties approaching from the perspective of an auditor so that minimum issues are raised by the auditors after the balance sheet is finalized. Any extra ordinary case shall be looked into deeply as the auditor will not spare that. And its treatment should be convincing enough for the auditor.

  • Working on dead lines

Accountants should be able to work on deadlines as most of the work is associated with time lines. 

  • Vision

An accountant should be able to think strategically about a particular transaction and its affects if treated one way or the other in the long term. It most often affects the profitability of the company.

  • Adaptability

A lot of companies have gone global and multi-national. With that, accounting and taxation laws of the other countries are also taken into consideration. An accountant who is easily able to adapt to international laws and its treatment in India can go far in their career. Also, the local clients throw challenge with various fields they work in. Like Textiles, Pharmacy, Food, Construction, Jewelry, etc. The accountant should not be afraid but open to accepting challenges to work in different fields.

  • Good communication

Without good communication, one can literally land nowhere. Accountants should acquire the skill of being able to communicate verbally and non-verbally to attract, convince, interact with their clients or bosses. No one can work in isolation. Therefore, with great set of communication skills one can co-ordinate and be more organized in their field.

  • Organized

Since the accountant has lots to do and within set time limits, he will mess things up if his mind is not organized. He should be well aware of the dates and deadlines and should be able to prioritize work according to its urgency. 

  • Honesty and Integrity

An accountant is looked up to for his integrity. Even the Government hires accountants for special reports in case of fraud because they trust the accountants as their profession expects them to be honest and transparent.

  • Convincing power 

At times, deciding on how to treat a transaction may inflict a conflict within the organization or between two parties. An accountant possessing knowledge but no convincing power will be of a waste. Developing this skill will be an icing on the cake.

  • Accounting software

Along with Tally, a lot of new accounting software are launched for business automation and to reduce the clerical work of an accountant. Any small or large enterprise works on one or other accounting software like Zoho Books, Quickbooks, SAP, Saral, MProfit, etc. So, at least basic knowledge of the most used accounting software in the market should be gained to have an upper hand at any interview.

Your love for accountancy will enhance as and when you develop the above skills and for your career. Keep upgrading your knowledge as the past glory will just keep you where you are. You can join accounting coaching classes in Ahmedabad and attain the heights in the accounting profession.

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Future of B.Com Student

Hey, all of the B.COM students out there here is a glimpse of knowledge…

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Hey, all of the B.COM students out there here is a glimpse of knowledge and opportunities on the basis of your stream. As B.Com. students, students have a working knowledge of accounts. Right?

But you know there are some cool buddies who were busy enjoying their college life instead of attending the boring college lectures, but that`s ok. Those free birds also may have a very bright future.

Super 20 the best accounting training institute welcomes all of you to catch your successful flight. You can enroll yourself to book your ticket on that flight. But for that, you must know what services would be provided in that amazing flight.

So here you go, our Super 20 team will provide you knowledge of accounts from `TOE TO HAIR`. B.com student can land their future in a very good company or our team will help to improve your skills so that you can get a prestigious job.

A B.com student always has so many doors to enter. A student can go for accounting, taxation, corporate sectors etc. but what you need all is sharp skills and effective communication. Super20 gives the shape to your personality along with our super training and courses so that you can go for any door with the most effective entry. We all are like not BOOK WORM and even we don’t like to learn things with books, we get bored of books, so our institute gives you practical knowledge on several real cases without any book. Oh, this sounds so amazing yeah, it must be fun and how we can learn things with real cases and that’s also without any BIG FAT BOOKS.

You know what, I have seen that CA is always in trend but that trend not for all of us right? But you guys have ever wondered that if you cannot go for that trend but at least you can do accounting. Right? So what Super 20 does? Super 20 enables you to learn professional accounting. S20 trains a student in a very well manner. The process starts from the very basics. So B.com student is always suitable for the required job. You guys must go for this option because Super 20 after training gives 100% placement opportunity with very well reputed companies.

As I am saying again and again that a B.com student has very bright future ahead and they can be eligible or suitable for any field because this is the reality, a B.com student can never be unemployed until unless he or she willing to do work.  We would just like to say that don’t waste your time students, do something, get experience, get a failure, get success. But do something, never stop learning. Analyse yourself; find out what you are good at. There are so many opportunities waiting for you, come out of your comfort zone and go grab your opportunities.

See friends, there are lots of fields to choose from but choosing the right path is difficult. So choose that field through which you can get something. That can add something new to your personality. Accounting, taxation is something which is very interesting to learn and important too, this can be added as your technical skill in your CV. To learn something under the experts is really amazing and worthy, it really gives you the extra perks to your knowledge and our personality.

So guys what I am saying go for the internship which can be good for you and that would be the best way to know your interest and then easily you can take your successful flight and land it at your best destination.

ALL THE VERY BEST !