Reverse charge Mechanism under GST

Under normal routine of work, the GST is collected from the receiver and paid by the supplier to the Government on the goods and services he supplies. Under Reverse Charge Mechanism (RCM) as part of GST, the buyer or the receiver of the goods and services pays the supplier the price of the product/service minus the GST. This tax is then paid to the Government, direct by the receiver.

It is important to note that the tax paid under reverse charge mechanism is eligible for input tax credit which means that the taxpayer who has paid the reverse tax can avail input tax credit pertaining to condition that the goods or the services will be used or is being used for his business.

Which are the scenarios were RCM is applicable?

A.    The Reverse charge mechanism, as per the Sec 9(4) of CGST Act applies in a scenario where the supplier is not part of GST registration in India which means that the supplier is not a registered GST supplier but the buyer has done his GST registration online. Hence, the buyer or the receiver does not pay the supplier instead he pays it direct to the Government. Since the buyer or the registered receiver of the goods and services is paying under reverse charge mechanism, he has to prepare a self-invoice against the purchase. The receiver is liable to pay both the Central GST (CGST) and State GST (SGST) in case of intra-state trade and Integrated GST (IGST) in case of Inter-state trade.  The important point to note here is that the taxpayer who is required to pay tax under RCM has to register compulsorily with GST following all the prescribed GST registration procedure. RCM will apply in either of the following cases mentioned below:-

·         Supply of either a good or a service is being done

·         Supply should be with respect to taxable goods and services

·         The supply has to be done by an unregistered supplier (URD).

·         It is compulsory for the receiver of the goods and services to have done his GST registration online

·         The supply needs to be intra-state supply

B.    It is applicable for all e-commerce operators who supply services. In such case the e-commerce platform needs to collect the tax from its customers rather than the service providers and deposit it with the Government.

C.   The Central Board of Excise and Customs has listed about 10 items in which case the receiver needs to pay GST under RCM. The goods include unpeeled cashew nuts, bidi wrapper leaves, tobacco leaves, silk yarn, raw cotton, lottery supply, used vehicles as well as confiscated goods, waste, scrap and Priority Sector Lending certificate.

GST Act exempts payment of tax under RCM for purchases of Rs. 5000/- or less per day from unregistered suppliers. Hence only for expenses above Rs. 5000/- on a daily basis will the registered receiver need to pay tax under reverse mechanism. The registered tax payer needs to keep a check on his daily expenses and P/L accounts to not fail paying tax under RCM.

RCM does not apply for items like salary and wages; electricity; interest; car fuel and government fees. It applies for items like – audit fees, rent, commission payments, office maintenance, gift expenses, repairs and maintenance, office and vehicle maintenance, legal fees, consultancy fees etc.

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An Overview of Producer Company Registration in India

Under the Companies act, a concept of Producer Company was introduced. Now in this article, we will discuss about the Producer Company and its registration procedure. Producer Company Registration is done with the ministry of corporate affairs under the company’s act of 2013.

Let’s have an overview of a producer company

The producer company is basically defined as “Any person that engages in any activity that is connected with any relatable produce or a primary produce. A produce could be anything that’s been produced. Like the things that are grown, like in farming for example. And so, a producer company is a legal body that is incorporated for having one or all of the following objects:-

·         The production of any goods and then harvesting its growth, and then obtainment and grading the fresh produce. After that pooling and handling of the goods produced and finally selling is done.

·         The producer company is supposed to be dealing with the produce of the company’s active members primarily. Allowing them to be able to carry out any activities by themselves or via other such entities that will be done on behalf of the members of the producer company.

·         The processing of the product includes the preservation and drying of the goods. Sometimes distilling, brewing and venting of liquid product. At times canning and then packaging of the produce, that’s been produced by the company members.

·         It can provide you with the education on assistance principals that will be mutual among the company’s members and others.

·         The producer company renders technical services along with the services of the consultancy and training research and development. Along with other activities for the promotion of the respective interests of their company’s members.

·         The primary produce should be relatable to the activities in the producer company. It could be the generation of power, its transmission and distribution among regions for its use. It could also involve revitalization of the said resources like land and water, then their use and water conservation also through the communication.

·         There should also be the welfare measures taken to facilitate the benefits that can be given to the producer company's members. This will usually be decided by the board.

·         The producer company will have to finance the procurement and then process and involvement in the marketing or any other activities which will include an extension of the credit facilities or any other services involving finances to the producer company’s members.

How to Apply for Producer Company Registration?

For the producer company registration in India, following combination is necessary:

The individuals should be in two or more in number as members and all should be producers. It could also be two or more institutions of production or a combination of ten or more individuals and production institutions.

Source url - http://swaritadvisers.doodlekit.com/blog/entry/4590215/an-overview-of-producer-company-registration-in-india

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What exactly is LLP, its advantages & disadvantages and process of registration?

Limited Liability Partnership is a form of legal entity in which all the partners or some partners have a set of limited liabilities and their responsibilities in the business are limited.

Key Points to Remember:

It is generally run by the partnership and cooperation between the partners for which they need to be very reliable and thus it involves a lot of trust risk.

      Each partner will have their own responsibility and liability and no other partner shall be responsible for the other partner’s liability or mistakes.

      Unlike traditional partnerships where all the partners have equal and unlimited liabilities here everyone has their own limited liability.

      All the partners are the stakeholders; however, they are given direct access to control and monitor the business directly which is not given to stakeholders in the corporation.

      That is why the board of Directors is needed for a corporate company and for Limited Liability Partnership there are no such requirements.

      The taxation policy for an LLP is different from companies and is much simpler and small in comparison to them.

In many countries like India in case of a Limited partnership, there exist at least one partner who has the unlimited liabilities and the other partners may be allowed to the limited liability investor and in return, their role will be passive. Thus in such countries, it’s better to choose an LLP as a form of business in comparison to a limited partnership so that all the partners enjoy an active role in the business. All the LLPs in India are registered under the Limited Liability Partnership Act, 2008.

Benefits of a Limited Liability Partnership:

v  The internal structure of an LLP is less complex and easy to organize in comparison to a company.

v  You can have any number of partners and there is no legal maximum number of partners required for an LLP however, obviously the minimum required number is 2.

v  The fundraising and utilization is completely dependent on the partner’s will and say. However they have to follow the rules of Companies Act 2013.

v  You can save your amount of Dividend Distribution Tax, as you do not have to pay it for LLP while in case of the company it’s compulsory.

v  It’s very useful for professional like the Doctors, Advocates, Chartered Accountant and Engineers to register themselves as LLP.

v  There is no such minimum amount of capital that is required to start an LLP, unlike a company which requires certain fixed minimum funds to be invested.

v  There are no compulsory audits required, unlike companies where regular audits are mandatory.

Disadvantages of a Limited Liability Partnership

v  The LLP cannot raise money or funds from the public.

v  The act of one partner without the consent of another partner may bind the LLP.

How to Register for an LLP?

v  The First step is to get the digital signatures of all the partners.

v  All the partners need to apply for DIN i.e. Director Identification Number which is mandatory to become a partner.

v  Apply for the approval of the name of the LLP.

v  Get the Certificate of Incorporation from Indian Registrar of Companies as it is a proof of registration.

v  Then apply for the PAN (Permanent Account Number) of LLP.

v  File all the related documents of the LLP and also apply for the current bank account which is a mandate.

Source url https://swaritadvisorsindia.wordpress.com/2018/09/19/what-exactly-is-llp-its-advantages-disadvantages-and-process-of-registration/

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How copyright registration is beneficial to us?

Copyright is the lawful right of a man which is applied to his creation such as musical, literary, artistic work, dramatic, cinematography, and much more. Copyright is a heap of rights which incorporate the privilege of re-generation, screening, and correspondence out in the public, adjustment, interpretation or any other use in any other type of the work. Copyright can be considered as a process to safeguard the creativity of the individuals. The presence of this privilege signifies the importance given to the individual, in the public society and in the eyes of law as well, where the hard work, original thinking, and idea of creativity is considered as the major contribution for our progress in each and every field. This privilege gives an umbrella security to the sharing of one individual's imagination with others so everybody can commonly profit themselves and at the same time encourages the soul of advancement. The provisions identified with the Copyright are represented in India by the Copyright Act, 1957 which has been amended six times to include the changing elements of the general public.

For Registering a Copyright in India, the candidate needs to accompany the following steps:-

An application for the copyright registration must be submitted to the Copyright Office headed by the Registrar of Copyrights either face to face or through the post. An Application can also be made through the e-filing, it simply requires the documents as per the category of the work for which you are claiming copyright i.e. artistic work, literary, music, sound, recording or cinematograph work, software, etc. You may find the checklist for above mentioned work at the website of the Copyright Office, Government of India. In order to simplify the process, the online e-filing process has been started from 14^th Feb2014.

·         An Application according to the form 4 of the First Schedule of the Copyright Rules, 2013 incorporates the Expression of particulars and Statement of Further Particulars alongside an oath i.e. affidavit ensuring the responsibility for the ownership of the work.

·         The Application must be accompanied with the fees as endorsed in the Second Schedule.

·         The Application should be documented either by the candidate or the Advocate who has been given the Power of Attorney to this regard and his acknowledgment to the same must be thus enclosed in the form as well.

After the successful filing of the application, you must be provided with a Dairy number which will be mandatory for about 30 day period for call for objections. In case if the objections are raised then at that point a notice is issued to both the parties to give a chance of being heard by the Registrar who will resolve the issue. Once the issue is sorted there will be a scrutiny by the examiner. If he finds any issues then the Registrar will again hear the issue. And when everything gets sorted then the Copyright registration is approved by the Deputy Registrar and Extracts from the Register are sent to the applicant.

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What is the need of rental agreement? And how to use it?

A lot of you want to either make use of some property or just generate an earning from your owned property. The best thing to do is to give your property on rent. But before you decide to do that, make sure you enter a residential rental agreement with your tenant, this will provide the parties, you and your tenant with an agreement on understanding that is authenticated with the signatures of both the parties on the document. This will prevent any unnecessary disputes between the tenant and the owner and legally will be able to follow the agreed terms and conditions together.

So, a rental agreement is basically a legal document that abides by the law. The parties can use the rental agreement as evidence in the court of law in the case, there is any disagreement or ill behaviour that wasn’t agreed within the residential rental agreement terms and conditions.

When can you use a rental agreement?

Here is a Residential rental agreement format that you can use in the situations that are as follows:-

1)     In case, you want to let out or give your house or an apartment on rent or a commercial place for business.

2)     You may use the format to have an agreement written with your landlord or your tenant.

3)     You may use the rental agreement to register something with your local authorities.

What Must a Regular Rental Agreement Cover?

1)     A regular residential Rental Agreement must cover the amount of rent as well as the submitted deposit.

2)     It must have terms regarding the electricity, water and other utility maintenance.

3)     The terms must cover any damages, any repairs or possible alterations.

4)     What responsibility the tenant will take.

5)     What responsibility the landlord will take.

6)     Termination of the lease should be mentioned in the residential rental agreement.

7)     Any possible extension of the same lease should also be mentioned in the rental agreement.

8)     And other miscellaneous clauses that you might want to include apart from the above mentioned.

Now we will see how we can make this written document legal and enforceable

Once you are done with the write up of your agreed rental agreement, just check everything up through the checklist below:-

1)     The document must be printed on a stamp paper of the legally recommended value.

2)     Do ensure that both the involved parties’i.e. the tenant and the landlord have signed the right bottom of the legal document on a stamp paper.

3)     There must also be a witness to this residential rental agreement document, who also shall sign the document along with his own residential address.

4)     To the rental agreement, attach any fixtures or schedules of the respective property.

What could happen in case you rent out a property without any rental agreement?

A rental agreement is a legal validation of your understanding with the opposite party involved. Not having a residential rental agreement will lead to possible insufficiencies legally in case of any dispute arise?

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Protect Your Uniqueness with Trademark - Get All Info You Want For It

What do you understand by Trademark?

A Trademark is generally a recognizable design, signature or a statement of expression which helps us to identify a particular product or services associated with it. This helps us to differentiate one brand of product from the other. Thus in the common language, the trademark is also known as the brand or logo of the organization that manufactures that product.

The trademarks are the most important aspect of a business and they are amongst the most valuable assets of the business. The trademark needs to be registered in an official manner and the entire procedure needs to be followed. The Trademark Registration can be done by an individual, an organization or any other legal entities. They are often used as a symbol to remind us of the entity that they are associated to. Also, all the trademarks have to be registered under the Trademarks Act.

Go Through the Advantages of Trademark Registration

v  They give the owner the exclusive rights to the use of the mark, subjected to the goods or services for which they have been registered under the Trademarks Acts. Anyone else using it can be severely penalized at legal grounds by the proprietor of the trademark.

v  It is a way of providing your work a security to not be used or imitated.

v  It is the most valued asset of the business as it is their sole legal intangible property.

v  Trademark Registrations helps the other business of same trade not to use your trademark or similar or identical to yours to give you and assure you the uniqueness of your trademark

v  A registered trade can be transferred from one person to the other irrespective of the business transfer.

Have a Look at the Procedural Steps for Trademark Registration

The Trademark Registration procedure in India is generally a five-step procedure which includes the following steps:

v  Filing: The first and the primary step is to file the application for the registration, which can be filed in a different class, the single class or multi-class.

v  Examination: The second step is to examine the application filed. This is done in the time period of 3 months to 1 year from the date of Registry of Application depending on the backlog of application. The application is examined by the Registrar in accordance with the terms and laws under the Trademarks Act. The application may be accepted or refused as per the Act which can be done on Absolute Grounds or on Relative Grounds as per the provisions of the Act.

v  Advertisement: After the stage of Examination and on approval of Registrar for the same, the application is now made published in the journal which has all the trademark-related information and is called in general the Trademark Journal. This is done in order to inform the public that if they have any opposition for the trademark they can file an opposition in order to stop the application for the Trademark.

v  Opposition: In this, the person who is having an objection can file a legal objection for the concerned trademark and if the opposition holds good the application for registration is refused.

v  Registration: If the application does not receive any opposition then it is assumed to be in favour of the applicant and the concerned application is registered and the trademark is now accepted to be a registered one and a certificate of Registration is sent for the same.

v  Renewal: All the registered trademarks are to be renewed over a period of 10 years from the date of Application of Registration and Certificate of Registration.

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Importance and Process Of NBFC Registration In India

In this article, we are going to discuss the online process of an NBFC or the non-banking financial company and the process of the NBFC Registration. Let us start with what it is first.

WHAT IS A NON-BANKING FINANCIAL COMPANY (NBFC)?

Non-banking financial company or as its short abbreviation is NBFC is a kind of registered company that gets registered under the company’s act. These NBFCs get engaged in businesses like lending loans and other advances. It also gets involved with the acquisitions of banking like activities such as shares, stocks, debentures, bonds and securities. All of which are issued by the government or the local authorities.

The principal business of receiving deposits is followed by a non-banking financial company under a scheme or a certain arrangement in a one lump sum amount or in instalments by the way of contributing or perhaps in another certain manner. This also falls under the non-banking financial company activity (a residuary non-banking financial company).

WHAT IS THE DIFFERENCE BETWEEN BANKS & NBFCS?

Non-banking financial companies lend money and make certain investments and this is why their activities are recognized to be similar to that of a bank’s activities. However, there are still some differences that are put below in points:-

• NBFC cannot accept demand deposits,
• Unlike in the case of banks, Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.
• NBFCs doesn’t form a part of the payment and settlement system and cannot issue cheques drawn on itself,

WHAT ARE THE REQUIREMENTS FOR REGISTRATION WITH RBI?

Non-banking financial company that has been incorporated under the company’s act of and wishes to commence a business of the non-banking financial company as a financial institution then they must get NBFC Registration.

The NBFC Registration has to be done under section 45 I (a) of the reserve bank of India act of 1934 and it must comply with the following: –

• A company must get registered under Companies Act, 2013.
• And it should have a minimum net owned fund of Rs 200 lakhs.

WHAT IS THE PROCEDURE FOR APPLICATION TO THE RESERVE BANK OF INDIA FOR NBFC REGISTRATION?

• The company that is applying for NBFC Registration is required to apply file for an application online and then submit a physical copy of that application (print out) to the regional office of the reserve bank of India. The filing for the NBFC Registration application has to be done through the official website of RBI, which is cosmos.rbi.org.in
• At this stage, there won’t be any need for logging in to the cosmos application and this is why there will be no requirement for user id. Your company can simply click on the company registration on the main log-in page and you will be redirected to a window that will show an excel application form that is available for being downloaded. The company may download this form and fill in the information requested.
• The company should put in the correct name of the respective regional office in the field C 8 of the Annex i.e. identification of particulars into the online excel NBFC Registration application form.
• Now after following through the above steps, the applicant company shall then receive a reference number for the COR application that’s been filled online. After which the applicant can submit the copy of this online form (this time indicating the online Company application reference number. This along with the requested list of required documents) has to be then submitted to the regional office too.
• Now the company can further easily check for their NBFC Registration application status by filling in the given acknowledgement number until they finally receive their NBFC Registration certificate.

For more details, you may anytime contact Swarit Advisors as we are 247 hr available to serve our customers in any online legal processes of registrations.

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