PM hopeful about passage of GST bill this year

Prime Minister Narendra Modi has said he expects the long-pending GST bill to get the parliamentary nod this year while efforts to amend another contentious legislation on land acquisition are “over now”.

Modi also hit out at critics who accuse him of failing to pursue “big bang” measures to revamp the Indian economy, saying his government has undertaken maximum reforms since coming to power in May 2014.

He said that many of the changes he has put in place would have been regarded by previous administrations as difficult to implement, but now that he has done them, to his critics they no longer qualify as “big bang”.

“I have actually undertaken the maximum reforms,” Modi told The Wall Street Journal in an interview ahead of his visit to the US next month at the invitation of President Barack Obama.

Responding to a question on Goods and Services Tax (GST) bill, Modi said he expects the legislation to pass this year.

The GST bill, which has been approved by Lok Sabha, is pending in Rajya Sabha because of stiff resistance by Congress, the largest party in the House.

Government has been insisting that most of the parties, except Congress, are in favour of GST, which will bring about a uniform indirect taxation regime in the country.

He said the efforts to amend the land acquisition law at the federal level were “over now” and it is now up to individual states to pursue changes.

Modi said he would look to states to further liberalise the country’s rigid labour laws, the daily reported.

“Labour reform should not just mean in the interest of industry,” he said adding, “Labour reform should also be in the interest of the labourer.”

“When I came to the government, I used to sit down with all the experts and ask them to define for me what is the ‘big bang’ for them,” he said, adding

“Nobody could tell me.”

But at the same time he was quick to add that there was a need to do more.

“I have an enormous task ahead for myself,” Modi said in Hindi.

The Prime Minister said after coming to power his government had opened up more of the economy to foreign investment and made changes to curb corruption, fill gaps in rural infrastructure and make it easier to do business.

The Prime Minister also underscored the importance of public sector undertakings in the country.

“In any developing country in the world, both the public sector and the private sector have a very important role to play. You can’t suddenly get rid of the public sector, nor should you,” Modi said.

Source: PTI

How to Register Startup Business?

Startup India Initiative:

Startup India: The Prime Minister of India, Shri Narendra Modi had this year in his Independence Day speech announced the “Start-up India” initiative. This initiative aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive for growth of Start-ups. The objective is that India must become a nation of job creators instead of being a nation of job seekers. The Prime Minister of India will formally launch the initiative on January 16, 2016 from Vigyan Bhawan, New Delhi. The event will be attended by a vast number of young Indian entrepreneurs (over 2000) who have embarked on the journey of entrepreneurship through Start-ups. Following will explain you how to register startup Business? Continue reading “How to Register Startup Business?”

What is Panama Papers all about?

All About Panama Papers

1. WHAT ARE THE ‘PANAMA PAPERS’?
The ‘Panama Papers’ are a set of confidential documents leaked from one of the biggest law firms of Panama – ‘Mossack Fonseca’. The Panama Papers provide information about thousands of offshore entities, identities of their shareholders and directors. It listed various world leaders, public officials, billionaires, celebrities, sports stars and politicians.

2. HOW MUCH DATA HAS BEEN LEAKED AND BY WHOM?
a) The leaked data consists of 11.5 Million Documents in around 2,600 GB taken from the Mossack Fonseca’s internal database by one of its employees.

b) These documents were obtained by Sueddeutsche Zeitung, a daily newspaper headquartered in Munich, Germany. Sueddeutsche shared the Panama Papers with the Washington-based International Consortium of Investigative Journalists (ICIJ) and other news outlets, including the BBC, the Guardian and the Indian Express.

c) Sueddeutsche mentioned that an employee at the law firm had leaked the data, telling the newspaper that he had risked his life in doing so.

3. WHAT DOES THE PANAMA PAPERS REVEAL?
a) The Panama Papers contain information on 2.15 lakhs offshore entities connected to people from more than 200 countries.

b) The leaked data covers nearly 40 years period from 1977 through the end of 2015.

c) It reveals the database of individuals who have set-up offshore entities through the Panama law firm.

d) These individuals are either holding direct ownership or indirect ownership (beneficial ownership) in the offshore entities.

e) Some of the Indians have also floated offshore entities at a time when foreign exchanges laws of India did not allow them to do so.

4. WHAT IS THE AUTHENTICITY OF DOCUMENTS LEAKED?
Ramon Fonseca, one of the co-founder of the Mossack Fonseca, confirmed the authenticity of the papers being used in articles published by more than 100 news organizations around the world. He told to one of the Panama’s news channel that the documents are real and were obtained illegally through a hacking method.

5. WHO IS ‘MOSSACK FONSECA’ AND WHAT IS ITS ROLE IN THIS ENTIRE CONTROVERSY?
a) Mossack Fonseca & Co. is a law firm and corporate service provider based in Panama with more than 40 offices worldwide.

b) It specializes in commercial law, trust services, investor advisory and international structures.

c) It provides services like incorporating companies in offshore jurisdictions, wealth management, private banking, accounting services, etc.

d) This law firm is one of the seven firms that collectively represent more than half of the companies incorporated in Panama.

e) It also provides assistance in transferring funds, buying property, setting-up trusts or signing agreements with entities.

f) Mossack Fonseca plays a crucial role in incorporating entities in tax havens. It had incorporated 14,658 active companies in Panama till August, 2013 out of which 4,646 companies were incorporated without providing any information about their shareholders.

6. HOW ENTITIES INCORPORATED IN PANAMA PROVIDE SECRECY ABOUT THE BENEFICIAL OWNERS?
a) Panama offers the most favorable and most flexible company incorporation laws available in the world. Private Interest Foundations are also available, and are one of the most widely used estate planning structures in the world today.

b) Panama is the registered domicile for over 400,000 corporations & foundations, making it one of the most popular jurisdictions in the world to incorporate.

c) Panama does not impose any reporting requirements for non-resident Panamanian corporations.

d) Panama does not allow “piercing the corporate veil”.

e) Panamanian corporations share certificates can be issued in Nominative or Bearer form (anonymous form of ownership), with or without par value.

f) Panamanian Companies can have directors, officers and shareholders of any nationality and resident of any country.

g) The offshore entity in Panama need not appoint natural persons as directors or have individuals as shareholders.

h) Neither the directors nor the officers of Panamanian corporations need to be shareholders. Meetings of directors, officers, and shareholders may be held in any country and accounting books may be kept in any country.

i) It is not necessary for the interested parties to be present in Panama for the purpose of establishing a corporation. Corporations conducting business outside of Panama do not require a commercial license for offshore business activities.

j) Registered Panamanian Agents offers its own executives to serve as shareholders or directors. Sometimes an intermediary law firm or a bank acts as a director or a nominee shareholder. So the real beneficiary remains hidden.

k) The registered agent provides an official overseas address, a mail box, etc., none of which traces back the entity to the beneficial owner.

7. WHAT ARE THE KEY ADVANTAGES OF INCORPORATING A PANAMANIAN COMPANY?
a) The incorporation process is fast and can be achieved in 3 days.

b) The identity of the shareholders is not publicly available.

c) Nominee and bearer shares are allowed.

d) There are no currency restrictions although the US dollar is regularly used.

e) The transfer of shares can be done freely, which facilitates the transmission of assets in a confidential manner.

f) The shareholders, directors and officers can be of any nationality and residents of any country.

g) Meetings can be held in Panama or in any jurisdiction, subject to tax advice.
h) Accounts do not need to be held in Panama.

8. WHAT ARE PANAMA FOREIGN EXCHANGE RULES?
a) Panama’s circulating currency is the US Dollar, and Panama has no currency exchange controls or currency restrictions, so funds can flow in and out of the country freely.

b) Panama uses the U.S. dollar as its legal currency, instilling tremendous fiscal and monetary discipline while keeping inflation very low – under 2 percent for the last 40 years.

c) Panama has no restrictions on monetary remittances abroad, including dividends, interests, branch profits and royalties. No restrictions on funds flowing in or out of the country.

d) A dollar economy insulates Panama from global economic shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America.

9. HOW SECURE IS BANKING INFRASTRUCTURE OF PANAMA?
a) Panama is one of the most secure offshore financial center – where privacy and confidentiality is vigorously protected by constitutional law.

b) Panama offers the best bank secrecy and corporate book secrecy laws in the world.

c) Panama has no provision for “piercing the corporate veil”.

d) Revealing banking information to third parties is a crime, punishable by prison.

e) Panama has no mutual legal assistance treaties (MLAT’s) for sharing of banking information with any other nation and does not recognize court rulings from other countries.

f) Panama City is home to the second largest international banking center in the world next to Switzerland. Panama has the most modern and successful international banking center in Latin America, with more than 150 banks from 35 different countries.

g) Approximately 150 international banks are located in Panama. Total assets in Panamanian banks are over US$150 billion.

h) Some of the banks present in Panama’s banking center are: Citibank, HSBC, Dresdner Bank, Bank of Tokyo, Bank of Boston, Banco Nacional de Paris, International Commercial Bank of China, Societe Generale, Banque Sudameris, BBVA, Banco Uno, Banco General, PriBanco, Banco del Istmo, Global Bank, MultiCredit Bank, PanaBank, ABN Amro, Banco Aliado, Banco Continental, BancoLat, BIPAN, Lloyds TLB Bank, Bank of Nova Scotia BIPAN, Bank of Nova Scotia, and much more.

10. WHY AN OFFSHORE COMPANY IS INCORPORATED IN PANAMA OR OTHER TAX HAVENS?
a) Shell Companies are non-operational companies. These are legal entities having no independent operations, significant assets or employees.

b) It is not time consuming or expensive to establish anonymous shell corporation. Agents charge fees of $800 to $6,000 as upfront cost and an annual charge for formation of companies and other additional services.

Registration Process in GST

What is Registration Process in GST

All existing registered persons, whether with the Centre or State under any of the tax statues being subsumed in GST, would be allotted a GST registration number called Goods and Services Tax Identification Number (GSTIN) on voluntary basis. Dealers who are below the GST threshold will have option to remain in GST chain. Lets have a look at registration process in GST.

Registration of a business with the tax authorities implies obtaining a unique identification code from the concerned tax authorities so that all the operations of and data relating to the business can be agglomerated and correlated. In any tax system this is the most fundamental requirement for identification of the business for tax purposes or for having any compliance verification program. Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:

  • Legally recognized as supplier of goods or services.
  • Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.
  • Pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.

Basically following will be assumptions for registration in GST:

  • A Legal Person can not can collect GST and pass on GST without GSTIN.
  • A Person having the turnover below the specified threshold limit would not be required to obtain registration. Once the amount of turnover exceeds the specified threshold limit person would be required to obtain registration within 30 Days. However Person can go for voluntary registration.
  • There will be another relatively higher threshold of Gross Annual Turnover (to be calculated on all-India basis) to be called Compounding turnover up to which the registered person can opt to pay tax at a specified percentage of the turnover, without entering the credit chain. Such registered person will neither be allowed to collect tax from his customers nor claim any input tax credit. Compounding dealers shall remain under compounding scheme till their turnover crosses threshold or they opt for out of the scheme. Such dealers don‟t have to apply every year to remain under the compounding scheme. However, if the compounding dealer opts out of compounding in a financial year, for any reason, but eligible and wish to avail compounding in the next financial year, such dealer will have to apply afresh for compounding in the beginning of the financial year in which he wishes to claim compounding scheme.
  • Irrespective of turnover, if a taxable person carries out any inter-state supply and / or is liable to pay GST under reverse charge, he will be compulsorily required to take registration. Such person shall neither be eligible for exemption threshold nor for Compounding scheme.

What is GSTIN (Goods and Service Tax Identification Number)

Each taxpayer will be allotted a State wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). Structure will be as follows-

State Code

PAN Entity Code Blank Check Digit

1

2 3 4 5 6 7 8 9 10 11 12 13 14 15
  • 13th digit would be alpha-numeric (1-9 and then A-Z) and would be assigned depending on the number of registrations a legal entity (having the same PAN) has within one State.
  • 14th digit of GSTIN would be kept BLANK for future use.
Registration Process in GST
Registration Process in GST

New Registration in GST

New applicant can apply for registration:

(1) at the GST Common Portal directly

(2) at the GST Common Portal through the Facilitation Center (FC) Multiple applications can be filed at one go where a taxable person seeks registration in more than one State or for more than one business vertical located in a single / multiple State(s).

Following scanned documents are required to be filed along with the application for Registration –

Relevant Box No. in the Registration Form Document required to be uploaded Reason for requirement Relevant Box No. in the Registration Form Document required to be uploaded Reason for requirement Relevant Box No. in the Registration Form Document required to be uploaded Reason for requirement
Constitution of Business · Partnership Deed in case of Partnership Firm ; · Registration Certificate in case of other businesses like Society Trust etc. which are not captured in PAN. In case of Companies GSTN would strive for online verification of Company Identification Number (CIN) from MCA21.

Constitution of business / applicant as per PAN would be taken except for businesses such as Society

Partnership Deed would be required to be submitted in case of Partnership Firms.

Details of the Principal Place of business · In case of Own premises – any document in support of the ownership of the premises like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy

· In case of Rented or Leased premises – a copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy

· In case of premises obtained from others, other than by way of Lease or Rent – a copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy

· Customer ID or account ID of the owner of the property in the record of electricity providing company, wherever available should be sought for address verification.

This is required as an evidence to show possession of business premises. If the documentary evidence in Rent Agreement or Consent letter shows that the Lessor is different from that shown in the document produced in support of the ownership of the property, then the case must be flagged as a “Risk Case”, warranting a post registration visit for verification. GST Law Drafting Committee may add penalty provision for providing wrong lease details.
Details of Bank Account (s) Opening page of the Bank Passbook held in the name of the Proprietor / Business Concern – containing the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details This is required for all the bank accounts through which the taxpayer would be conducting business.
Details of Authorised Signatory For each Authorised Signatory:

· Letter of Authorisation or copy of Resolution of the Managing Committee or Board of Directors to that effect

This is required to verify whether the person signing as Authorised Signatory is duly empowered to do so.
Photograph

· Proprietary Concern – Proprietor

· Partnership Firm / LLP – Managing/ Authorized Partners (personal details of all partners is to be submitted but photos of only ten partners including that of Managing Partner is to be submitted)

· HUF – Karta

· Company – Managing Director or the Authorised Person

· Trust – Managing Trustee

· Association of Person or Body of Individual –Members of Managing Committee (personal details of all members is to be submitted but photos of only ten members including that of Chairman is to be submitted)

· Local Body – CEO or his equivalent

· Statutory Body – CEO or his equivalent

· Others – Person in Charge

Refer to CBEC Website for More

Contact us for Registration process in GST. Just Provide Basic KYC Documents we and seat back and relax we will do everything for you…

Significant Changes in TDS Rates in Budget 2016-17

Significant Changes in TDS Rates in Budget 2016-17

Under the scheme of deduction of tax at source as provided in the Act, every person responsible for payment of any specified sum to any person is required to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be made if the payments do not exceed prescribed threshold limit.

 

In order to rationalise the rates and base for TDS provisions, the existing threshold limit for deduction of tax at source and the rates of deduction of tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.

 

Table 3: Increase in threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act

 

 

Present Section Heads Existing Threshold Limit (Rs.) Proposed Threshod Limit (Rs.)
192A Payment of accumulated  balance due to an employee 30,000 50,000
194BB Winnings from Horse Race 5,000 10,000
194C Payments to Contractors Aggregate  annual limit of 75,000

Aggregate annual limit of 1,00,000

194LA Payment of Compensation on acquisition of certain Immovable Property 2,00,000 2,50,000
194D Insurance commission

 

20,000 15,000
194G Commission on sale of lottery tickets 1,000 15,000
194H Commission or brokerage 5,000 15,000

 

Table-4 : Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act:

 

Present Section Heads Existing Rate of TDS (%) Proposed Rate of TDS (%)
 

194DA

 

Payment in respect of Life Insurance Policy

 

2%

 

1%

 

194EE

 

Payments in respect of NSS Deposits

 

20%

 

10%

 

194D

 

Insurance commission

 

Rate in force (10%)

 

5%

 

194G

 

Commission on sale of lottery tickets

 

10%

 

5%

 

194H

 

Commission or brokerage

 

10%

 

5%

 

The following provisions which are not in operation are proposed to be omitted as detailed in Table 5.

 

Table 5: Certain non-operational provisions to be omitted

 

Present Section Heads Proposal
 

194K

 

Income in respect of Units

 

To be omitted w.e.f 01.06.2016

 

194L

 

Payment of Compensation on acquisition of Capital Asset

 

To be omitted w.e.f 01.06.2016

These amendments will take effect from 1st June, 2016.

[Clause 70 to 79]

 

 

Enabling of Filing of Form 15G/15H for rental payments

 

The provision of sub-section 194-I of the Act, inter alia, provides for tax deduction at source (TDS) for payments in the nature of rent beyond a threshold limit. The existing provisions provide threshold of Rs. 1,80,000 per financial year for deduction of tax under this section. In spite of providing higher threshold for deduction tax under this section, there may be cases where the tax payable on recipient’s total income, including rental payments , will be nil. The existing provisions of section 197A of the Income-tax Act, inter alia provide that tax shall not be deducted, if the recipient of certain payments on which tax is deductible furnishes to the payer a self- declaration in prescribed Form.No. 15G/15H declaring that the tax on his estimated total income of the relevant previous year would be nil. In order to reduce compliance burden in such cases, it is proposed to amend the provisions of section 197A for making the recipients of payments referred to in section 194-I also eligible for filing self-declaration in Form no 15G/15H for non-deduction of tax at source in accordance with the provisions of section 197A.

 

This amendment will take effect from 1st June, 2016.

[Clause 84]