Services
S.K. & Associates specializes in finance, accounting, and taxation services, offering a comprehensive solution for all your needs. Whether it’s internal audits, accounting, trademark advice, GST services, income tax services, or audit and assurance services, we have you covered. Our primary objective is to earn and maintain customer trust, fostering long-term relationships through dedicated and high-quality service delivery.
The array of services we provide
Legal Entity Registration
Starting a business in India involves careful considerations. For those aiming to compete with industry leaders or expand, registering a company is crucial. The most common and authentic method is through Limited or Private Limited Company Registration, offering benefits like limited liability and a separate legal entity. Over 90% of registered companies in India opt for Private Limited status due to its popularity and the credibility it brings to the business.
Forms of Company Establishment in India:
1.Public Limited Company
2.Private Limited Company
3.One Person Company (OPC)
4.Section 8 Company
5.Nidhi Company
6.Producer Company
7.Microfinance Company
Foreign companies establishing a presence in India must adhere to local rules and regulations. Complying with the Companies Act, 2013, this involves understanding how foreign entities can initiate business operations in India.
In the context of the Companies (Registration Offices and Fees) Rules, 2014, any documentation required from foreign companies operating in India must be submitted to the Registrar of Companies, regardless of their business location in the country.
An Indian subsidiary of a foreign company is defined as a company where 50% or more of its equity shares are owned by a company incorporated in another foreign nation, referred to as the holding or parent company.
Limited Liability Partnership (LLP) is an advanced business structure combining the limited liability features of a Private Limited Company with the flexibility of a Partnership Firm. It is a preferred choice for entity incorporation due to its low maintenance costs and straightforward formation process. By incorporating an LLP, businesses can enjoy the benefits of both a limited company and a partnership firm.
Registered under the Limited Liability Partnership Act, 2008, an LLP allows partners to limit their liabilities to the extent of their contributions. This structure provides a significant advantage over traditional partnership firms as no partner is held liable for unauthorized actions of others. This feature protects individual partners from joint liability arising from the misconduct of their counterparts. LLPs are commonly favored by professionals, micro, and small businesses.
A non-governmental organization (NGO) is a non-profit entity formed by individuals for charitable and social purposes, aiming to promote various non-profit objectives such as education, welfare, environment protection, and more. NGOs seek to utilize all profits for the advancement of their specified objectives.
NGO registration involves three types, each governed by different laws:
- Section 8 Company Registration under the Companies Act, 2013
- Trust Registration under the Trust Act, 1882
- Society Registration under the Societies Registration Act, 1860
As of April 1, 2021, NGOs are required to file Form CSR-1 to register with the Central Government for CSR funding.
A partnership firm is a popular business entity where two or more individuals join forces to share profits and losses, collectively owning, managing, and controlling the business. Compared to other business forms, partnerships are relatively easy to establish, making them prevalent among small and medium-sized businesses in the unorganized sector. This structure requires a higher quantum of resources compared to a sole proprietorship due to the association of two or more individuals, allowing for increased contributions of effort, time, and capital.
While partnership registration is not mandatory, it is considered risky and is not recommended by experts and regulatory authorities. This type of business registration is particularly suitable for small and medium-sized businesses due to its ease and cost-effectiveness.
Types of partnership firms under the Indian Partnership Act include:
1.Unregistered partnership firm: Formed through a partnership agreement, it has legal recognition and can be registered at any time.
2.Registered partnership firm: Requires registration with the Registrar of Firm (ROF) in the jurisdiction of the firm’s location. A government fee, varying by state, is paid for registration.
A Sole Proprietorship firm is the most straightforward business entity in India, owned and managed by a single person. It is the easiest way to register and start a business, also known as sole trader or individual proprietorship. This business form is not governed by specific laws, making it the simplest in India. All decisions and management are solely in the hands of the owner, who bears unlimited liability for both profits and losses.
Unlike other business structures, sole proprietorships do not provide benefits such as separate legal entity, independent status, corporate existence, limited liability, free transferability, or perpetual existence. Registering as a sole proprietorship is suitable for small businesses with limited presence.
The Hindu Undivided Family (HUF) is a unique business form exclusive to India, offering tax-saving benefits through the creation of a family unit. HUF is distinct from its members for tax purposes and can be formed by Hindu families, as well as Buddhists, Jains, and Sikhs.
It’s important to note that HUF is limited to Hindus, Buddhists, Jains, and Sikhs. Other communities, such as Christians, Muslims, Parsis, and Jews, are not recognized under Indian law for HUF benefits.
The senior-most male member, known as the Karta, heads the HUF. With its own PAN, the HUF files tax returns independently of its members.
Taxation & Compliances
India’s tax structure comprises Direct and Indirect Taxes. Direct taxes, applying to individual and corporate incomes, require timely compliance to avoid penalties. Our services include income tax, advance tax, tax deducted at source, and wealth tax, aiding businesses in efficient tax structures.
For Corporate Tax, applicable to entity profits, we specialize in filing returns, tax planning, compliance, and legal opinions, serving as premier Income Tax advisors in Delhi.
In Personal Tax, covering taxes on individual income, our team manages computations, tax withholding, filings, and represents clients before revenue authorities, including non-resident services.
In Indirect Tax, we offer comprehensive support in GST registrations, returns, refunds, opinions, and compliance strategies, covering service tax, customs, VAT, luxury tax, excise duties. We cater to Corporate Houses, Firms, trusts, and individuals, providing effective tax management and compliance services.
An Income Tax Return (ITR) is a form where individuals, entities, or organizations report their income and tax liabilities to the Income Tax Department. This applies to various entities, including individuals, companies, trusts, and more. The government mandates the filing of ITRs for those earning a specified annual income, with deadlines set by the tax act. Even those earning less than the taxable amount can voluntarily submit their returns.
Many consider filing tax returns unnecessary, but it is a simple and beneficial process. It is a social and moral duty for citizens to file their returns annually. GTS LLP assists in accurately calculating income tax, offers consultancy to reduce tax liabilities, and ensures individuals benefit from available tax reliefs. Our expert team can assist in filing income tax returns across India, ensuring timely submissions.
The Income Tax Law offers special rebates for NGOs under sections 12A and 80G. NGOs with 12A registration enjoy income tax exemption. Additionally, organizations certified under section 80G allow donors to claim tax exemptions. The application for both 12A and 80G registrations can be submitted together or separately. However, obtaining 12A registration is mandatory before applying for 80G registration under the Income Tax Act, 1961.
The Indian Government has implemented significant tax reforms to enhance the ease of doing business, with a focus on e-assessments for income tax cases. These reforms aim to bring greater accountability and transparency to tax litigation. Despite positive efforts in tax compliance and digitization, litigation remains a complex and time-consuming issue for businesses in India. Our firm, a leading Tax Litigation Services provider, specializes in addressing various areas of tax disputes, including matters related to individuals, partnerships, charities, cross-border deals, transfer pricing, exemptions/deductions, corporate tax compliance, non-resident taxation, reassessments, black money, penalties, and dispute resolution. The multi-layered nature of litigation poses challenges, often leading to prolonged proceedings and delayed decisions at the Tribunal level.
Tax returns in India are subject to scrutiny assessment by the tax department if there’s a belief of incomplete or incorrect information. The Income Tax Act, 1961 governs this self-reporting tax system, outlining procedures for conflict resolution, penalties, prosecution, and various assessments:
1.Summary assessments (section 143(1), ITA)
2.Regular/Scrutiny assessments (section 143(3), ITA)
3.Best judgment assessments (section 144, ITA)
4.Re-assessment/Income escaping assessment (section 147, ITA)
5.Assessment under a search (section 153A and 153C, ITA)
Taxpayers receive notices to address discrepancies, and adherence to the tax department’s directions is crucial in this process.
GTS LLP offers meticulous certification and attestation services essential for diverse business needs in India. These certificates are crucial for compliance with laws, regulations, and financial arrangements. Our services cover various types of certificates, including:
- Support of accounts and annual financial statements
- Maintenance of statutory records under Companies Act, 2013
- Certification for statutory liabilities
- Valuation of shares for mergers, acquisitions, demergers, and buy-backs
- Certification for remittances abroad under Income Tax Act, 1961
- Net worth certificates for bank finances, guarantees, and embassy visa issuance
- Tax Residency Certificate (TRC) for relief under applicable DTAAs
- Arm’s length price certification under Income Tax Act, 1961
- Utilization certificates for grants by the Government of India to NGOs and charitable organizations
- Certificates for claiming deductions and exemptions under various rules
- Income-Tax law certificates for registrations, exemptions, and deductions
- Transfer Pricing-related certificates
- Certification for GST and other Indirect Tax Laws
- Certification under Exchange Control legislation for imports, remittances, ECB, DGFT, EOU, etc.
- Certification for claiming GST refunds
- Certification for MSMEs’ investment in plant and machinery.
Company & LLP Compliances
Under the Companies Act, 2013, compliance requirements for private limited companies are less stringent compared to public limited companies. S.K.& Associates offers valuable services to ensure timely fulfillment of all statutory obligations. Key mandatory compliances for private limited companies include:
- First Board Meeting
- Subsequent Board Meetings
- Directors’ Disclosure of Interest
- Appointment of First Auditor
- Annual General Meeting
- Filing Return of Deposits (Form DPT-3)
- Filing Financial Statements (Form AOC-4)
- Filing Annual Return (Form MGT-7)
- Statutory Audit of Accounts
- Directors’ DIN KYC Filing (Form DIR-3)
Meeting these requirements is crucial to avoid financial penalties and other non-fiscal consequences. GTS LLP can assist in ensuring successful adherence to all ROC legal and company annual compliances.
Limited Liability Partnerships (LLPs) must ensure regular filing to comply with legal requirements and avoid significant penalties. While LLPs have fewer annual compliances compared to private limited companies, the penalties for non-compliance are substantial, reaching up to 5 lakh INR.
As a separate legal entity, LLPs are obligated to maintain proper books of accounts and submit an annual return to the Ministry of Corporate Affairs (MCA). LLPs are exempt from audit requirements unless their annual turnover exceeds forty lakh or the contribution surpasses twenty-five lakh, simplifying the annual filing process.
Key mandatory compliances for LLPs include:
- Filing Statements of Accounts and Solvency (Form – 8)
- Filing Annual Return (Form – 11)
- Meeting audit requirements under the Income Tax Act
- Filing DIN KYC of Partners (Form DIR-3)
Directors play a crucial role as the guiding force behind a company’s operations. Changes in directorship, whether through appointments or resignations, aim to ensure an optimal mix of expertise for the company’s benefit.
The approval for director resignations lies with the Board of Directors, while appointments require shareholder consent. Regardless of the change type, intimation to the Ministry of Corporate Affairs is essential for the alteration to take effect.
While there are no specific qualifications, individuals seeking directorship must adhere to certain criteria:
Eligibility Criteria:
- Age Requirements
- Nationality Determination
- Director Identification Number (DIN) Mandatory
- Limit on Valid Directorship
Ineligibility Criteria:
- Unsound Mind or Bankruptcy
- Criminal Background
- Pending Overdue Returns
It’s important to note that, according to the law, only a specific natural person can serve as a director of any company.
Selecting an appropriate name is a crucial step in the incorporation process under the Companies Act, 2013 or Limited Liability Partnership Act, 2008.
The chosen name must be unique and compliant with the regulations. It should not resemble existing company names, LLPs, or trademarks in the same industry. For instance, if XYZInfotechPrivate Limited exists, names like XYZInfotechLLP or similar variations won’t be permitted. However, a name like XYZRealtors Private Limited, operating in a different industry, would be acceptable.
When selecting a name, it’s essential to ensure there are no existing registrations with the Ministry of Corporate Affairs (MCA) in the same industry. Additionally, the proposed name should include a clear and specific object that avoids vagueness. Names lacking an object or with vague objectives may not be approved.
As per the Companies Act, 2013, a “share” refers to a unit of capital in a company, inclusive of stock. A share is an indivisible ownership unit, establishing the ownership relationship between the company and the shareholder. The denominated value of a share is its face value, and the total face value of issued shares represents the company’s capital, which may differ from the market value.
Share transfer involves the process of moving existing shares, along with their associated rights and responsibilities, from one person to another. This transfer can only occur for existing shares and among existing shareholders. However, the transferee may or may not be an existing shareholder of the company
One way for a company to cease its existence is by striking off its name from the register of company names. This option is chosen by companies that are not operational and wish to erase their name from the registrar’s records.
During the process of getting removed from the register, the term used is “striking off,” while the completion of this process, resulting in the company’s elimination, is referred to as liquidation or dissolution. The company is considered liquidated when its name is successfully removed from the records.
The closure procedure for a Limited Liability Partnership (LLP) is akin to the company’s striking off process, requiring only a few essential documents. LLP closure can be achieved by filing LLP Form-24. Similar to companies, LLPs can be closed either suo moto by the Registrar of Companies (ROC) or by applying to the Registrar. The process through which the ROC autonomously removes the LLP’s name from the register mirrors that of companies.
When a business attracts Foreign Direct Investment (FDI) through capital infusion and allots shares to a foreign investor, it is required to report this transaction using the FC-GPR Form issued by the Reserve Bank of India (RBI). FC-GPR is utilized when an entity receives foreign investment and allocates shares to foreign investors. The entity must file details of such share allotment with the RBI within 30 days, adhering to the RBI compliances for FDI.
The Reserve Bank has recently introduced an online application called FIRMS (Foreign Investment Reporting and Management System) for reporting the FC-GPR form. FC-GPR, or Foreign Currency-Gross Provisional Return, covers the filing procedure, basic provisions, a checklist, and FAQs related to FC-GPR.
The term “entity” in this context includes:
A company as defined by section 1(4) of the Companies Act, 2013.
A Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008.
A startup meeting the conditions specified in Notification No. G.S.R 180(E) dated February 17, 2016, issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
Accounting & Auditing
Taxpayers are required to undergo a tax audit by an Independent Chartered Accountant if their business turnover or total receipts from any profession surpass the limits outlined in The Income Tax Act for a given previous year. The Tax Audit report, prepared according to Section 44AB of the Income Tax Act, 1961, must be submitted by September 30th of the Assessment Year.
The purpose of a tax audit is to validate the assessee’s books of accounts, ensuring compliance with the Income Tax Law.
Section 44AB of the Income Tax Act, 1961, mandates that individuals engaged in business or a profession must have their books of accounts audited by a practicing Chartered Accountant (CA).
For businesses, the tax audit limit was increased from Rs. 1 crore to Rs. 5 crore by the Finance Act 2020, and subsequently to Rs. 10 crore in 2021. Businesses falling under this threshold are not obligated to undergo an audit if cash receipts and payments remain below 5% of total receipts/payments.
In the case of professions, a tax audit is mandatory if gross receipts exceed Rs. 50 lakhs in any previous year.
Under specific circumstances, even if turnover is below the prescribed limits, books of accounts may need auditing by a practicing CA.
Entities subject to these regulations must have their books of accounts audited by a CA before the specified date and furnish the audit report.
Statutory audit is required to assess whether the company complies with the applicable laws, rules and regulations and standards and whether the financial statements reflect a true and fair view of the financial position of the company. It applies to all the companies registered in India under the erstwhile Companies Act, 1956 and Companies Act, 2013 and Limited Liability Partnerships (LLPs) having turnover exceeding Rs. 40 Lakhs or contribution Rs. 25 Lakhs.
Section 139(1) of the Companies Act,2013 read with Rule 3 of Companies (Audit & Auditors) Rules, 2014, mentions that every company shall appoint an individual/firm as an auditor.
Section 139(6) of the Act states that the first auditor of the company shall be appointed within 30 days of its date of registration.
Some important areas of consideration in a Statutory Audit
- Testing of Internal Controls
- Verifying Balance Sheet Items
- Verifying Profit & Loss Account Items
- Testing TDS related compliances
- Checking Provident Fund, ESIC, Gratuity, Bonus and Leave encashment payments with the applicable provisions of the respective acts.
- Checking whether the loan/advances of the company are permitted by the Companies Act, 2013 and Income Tax Act, 1961.
In general, a Stock audit means physical verification of the inventory/stock. It can involve the valuation of the stock as well, but it usually depends on the scope and terms of the term of the engagement letter of the assignment. When heading forward, it is very crucial to keep in consideration the sole purpose for which the audit is being conducted because the different audits may have a different approach which would ultimately depend on the ultimate objective of the organisation.
In other words, a stock audit is a statutory process that every company/business should get performed at least once in a particular financial year. As far as the stock audit procedure is concerned, the stock audit process in India involves physical counting of different inventories and presenting the premises and verifying the same with computed inventory maintained by the company. The reason and purpose behind executing this are to correct the discrepancies present in the book stock when compared to physical stock bypassing necessary adjustment entries.
Reasons to Perform Stock Audit:
- To update the opening stock details in Shopper.
- To identify the discrepancy between the book stocks, also called computed stock and physical stock.
- To update the actual physical stock as book stock.
- To ensure the adequate preservation and handling of stocks.
Secretarial Audit focuses on the non-financial aspects of a company, examining their impact on performance and ensuring compliance with applicable laws, regulations, and guidelines. This independent verification by a Company Secretary involves scrutinizing records, books, papers, and documents.
Key features of Secretarial Audit include:
- Identification of non-compliance events and support for corrective measures.
- Audit of the company’s adherence to good corporate practices.
- An independent process aimed at enhancing the company’s operations.
- Contribution to achieving company objectives through a systematic approach to assessing risk management, control, and governance processes.
- Provision of assurance to management, regulators, and stakeholders regarding statutory compliance, good governance, and the existence of proper systems and processes.
While the terms Bookkeeping and Accounting are often used interchangeably, they serve distinct functions. Bookkeeping is a subset of the accounting process, focusing on recording all financial transactions. It plays a crucial role in organizing financial records for management analysis, providing a reliable measure of business performance.
Bookkeeping represents the initial phase of the accounting process, involving the systematic categorization and recording of financial data. It serves as a record-keeping function that contributes to the overall accounting procedure. Bookkeeping is instrumental in generating financial statements at the end of each fiscal year.
Moreover, Bookkeeping aids in identifying monetary transactions and events, ensuring the maintenance of accurate financial accounts. This process encompasses the preparation of reference documents for various financial transactions and business activities.
Bookkeeping employs different methods, with Double-entry bookkeeping and single-entry bookkeeping being the most common ones. It entails the recording of day-to-day monetary transactions in a business.
Successful merger or acquisition transactions demand meticulous planning and execution. Prior to finalizing a deal, buyers conduct specific procedures to assess the agreement from commercial, financial, tax, and legal perspectives.
Due diligence is a critical inspection and risk assessment of an impending business transaction, essentially functioning as a background check to ensure that involved parties possess necessary information. It is vital for uncovering misrepresentation and fraudulent dealings in significant business transactions.
Due Diligence involves the exchange, review, and appraisal of confidential, legal, financial, and other material information by parties entering a business transaction. It refers to in-depth research conducted before signing an agreement or engaging in business, aiming to acquire and manage associated risks.
Goods & Service Tax
GST registration is mandatory for businesses with a turnover above ₹40 lakhs, as per GST rules. This process, known as GST registration, is essential to comply with Goods & Services Tax regulations. Failure to register is considered an offense, resulting in significant penalties.
Implemented nationwide on July 1, 2017, except in Jammu & Kashmir initially, GST unified the indirect tax system across the country. Applicable to traders, manufacturers, and service providers, GST consolidates various taxes into a single tax, excluding a few items like petroleum crude, diesel, petrol, aviation turbine fuel, and natural gas.
Registration under GST involves obtaining a GSTIN (Goods and Services Tax Identification Number), allowing businesses to collect tax on outward supplies and claim Input Tax Credit (ITC) for taxes on inward supplies. The registration process is primarily online, with physical verification initiated only in specific cases where Aadhaar authentication is not opted for or fails.
GST aims to streamline funds and compliance, fostering a business-friendly environment in India. A crucial aspect is establishing a hassle-free refund processing system to address the challenges of the existing tax structure, which often results in prolonged refund timelines.
With its efficient invoice-based tracking system, GST validates each transaction, offering relief to manufacturers and exporters, particularly those in 100% Export Oriented Units or Special Economic Zones. This helps in preventing the blocking of working capital due to time-consuming refund processes.
Services provided include assistance in filing refund applications, comprehensive documentation preparation, creation of declarations regarding tax incidence, necessary certifications by a Chartered Accountant, representation before government departments, proactive follow-ups for expedited refunds, and consultancy related to refunds. GTS LLP stands out as a reliable GST refund service provider in India.
Every GST-registered individual must regularly report sales, purchases, and associated tax details through online returns. It is mandatory to pay due taxes before filing the return to validate it.
The frequency of filing GST returns varies based on the type of registration and transactions. Regular taxpayers, foreign non-residents, input service distributors, tax deductors, and e-commerce operators must file monthly returns, while composition taxpayers do so quarterly.
Key components of a GST Return include:
- Outward Supplies
- Inward Supplies
- Output GST (on sales)
- Input Tax Credit (on purchases)
Whether your business needs tax registration help, return filing services or a custom-built GST compliance powerhouse that suits your company, Professional Services places the best expertise in your controls. Our team consists of GST domain experts, chartered accountants and lawyers who are dedicated to serving you in every sphere from tax analysis to specific projects and GST Compliance solutions in India. Collectively, our team is here to lead you through the tangle of GST arrangements and support you getting excellent results in framing any transaction.
The GST Council has laid down rules and regulations for regular compliances by a GST registered person. These generally cover the following areas for compliance needs:
- Maintaining Books of accounts and keeping of other relevant documents
- Issue of invoices
- Reporting of Sales and Purchases
- Payment of Tax Liability
- Filing of GST returns
Technically, adherence to rules and regulations in the above areas is what constitutes the compliance under GST. Being non-compliant, for a business can cost heavily. However, some entities are yet to adopt the right process to become GST compliant.
GST audit involves scrutinizing statements, records, returns, and related documents submitted by registered individuals. Its purpose is to verify the accuracy of sales, output tax payments, input tax refunds claimed, and Input Tax Credit (ITC) availed in the annual report. The audit serves as a reconciliation statement between audited financial statements and the furnished annual return, ensuring compliance with GST provisions.
According to Section 35(5) of the CGST Act, 2017, businesses with a turnover exceeding Rs. 2 crores in a financial year must undergo a GST audit conducted by a Chartered Accountant (CA) or Cost and Management Accountant (CMA). The audited financial statement, reconciliation statement (Form GSTR-9C), and other prescribed documents are required to be submitted with the GST Annual Return.
The term ‘turnover’ isn’t explicitly defined, but aggregate turnover includes the value of all outward supplies (taxable + exempt + exports + inter-state) by a person with the same PAN, excluding GST taxes. Inward supplies subject to Reverse Charge Mechanism (RCM) are not considered for calculating aggregate turnover.
Tax laws, including GST, are prone to uncertainties and various interpretations, leading to potential conflicts between taxpayers and tax authorities. The evolving nature of GST introduces complexities, and taxpayers may face issues such as show-cause notices, assessments, legal disputes, and litigations. Challenges like filing applications for “letter of undertaking (LUT)/Bond” for tax-free exports and resolving technical matters like refund claims may require professional guidance.
Dealing with GST discrepancies demands expertise and experience in handling authorities at different levels. GTS LLP, a reputable tax litigation firm and VAT consultant in India, offers a range of services, including preparing responses to notices, filing appeals, representing clients in GST litigation matters, handling disputed refund claims, addressing audit objections, GSTIN restoration, and managing litigation under the old indirect tax regime (VAT, CST, Central Excise, Service Tax, and Customs).
In the realm of GST, “assessment” refers to the determination of tax liability under the Act, encompassing self-assessment, re-assessment, provisional assessment, summary assessment, and best judgment assessment. Typically, entities with GST registration conduct self-assessment, filing returns and paying GST monthly based on their determined liability. However, the government retains the authority to re-assess or independently assess to identify any short payment of GST.
Various types of assessments under GST include:
- Self-assessment of taxes payable as per Section 59
- Provisional assessment as per Section 60
- Scrutiny of tax returns filed by registered taxable persons according to Section 61
- Assessment of registered taxable persons failing to file tax returns under Section 62
- Assessment of unregistered persons as per Section 63
- Summary assessment in specific cases under Section 64.
International Taxation
A Non-Resident Indian (NRI) is an individual who is an Indian citizen but resides in a foreign country. In India, tax liability is determined based on residential status rather than nationality or domicile. The taxation rules for NRIs under the Indian Income Tax Act, 1961 are applicable to those earning income outside their home country. These rules and the associated benefits differ significantly from those applicable to resident Indians.
The ongoing process of globalization has led to an increasing number of people relocating to different countries worldwide. The active growth of the Indian economy has attracted expatriates to India, contributing to a steady influx of individuals from various parts of the world.
“Transfer pricing” involves the pricing of transactions between related parties, such as a parent company and its subsidiary, under conditions that differ from those between independent enterprises. The transfer prices between related parties may not align with prices on transactions with unrelated parties.
For instance, if Company A purchases goods for Rs. 100/- and sells them to its associated Company B in another country for Rs. 200/-, which, in turn, sells them in the open market for Rs. 400/-, the transaction between A and B may be manipulated. By routing the goods through Company B, Company A limits its profit to Rs. 100/-, allowing Company B to appropriate the balance. This arrangement is not driven by market forces, and the profit of Rs. 200/- is shifted to the country of Company B. The transfer price, in this case, is arbitrary (Rs. 200/-) and not based on the market price (Rs. 400/-).
To safeguard revenue interests, the Income Tax Act, 1961, through its Chapter X, has specific provisions addressing transfer pricing. The fundamental principle established by these provisions is the consideration of an “arm’s length price” for international transactions. Almost every entity associated with an international entity encounters transfer pricing regulation in India. We assist these entities in determining the correct transfer pricing in India by providing transfer pricing reports for Indian companies within the specified legal framework and timeframe.
The Double Tax Avoidance Agreement (DTAA) is essentially a bilateral agreement between two countries aimed at promoting economic trade and investment by preventing double taxation.
Double taxation can have detrimental effects on trade, services, movement of capital, and individuals. Taxing the same income in multiple countries imposes a burdensome obligation on innocent taxpayers. While most countries’ domestic laws provide a unilateral remedy for double-taxed income, this is not always a satisfactory solution due to differences in rules for determining income sources.
Tax treaties seek to eliminate tax obstacles hindering the movement of trade, services, capital, and people between the involved countries. The necessity for a Double Tax Avoidance Agreement arises from variations in rules between two countries regarding the taxability of income, either on the receipt or accrual basis, or based on residential status.
The absence of a universally accepted definition for income and its taxability leads to scenarios where the same income, asset, or financial transaction may be subject to tax in two countries. Double taxation primarily occurs due to the overlap of tax laws and regulations in countries where an individual conducts business. There are three potential scenarios: the income is taxable in one country, exempt in both countries, or taxable in both countries with a credit for the tax paid in one country offsetting the tax payable in the other.
Business Licenses
The Import Export Code (IEC) is a unique ten-digit code assigned to individuals/companies, necessary for every import/export operation. The initial step in global business expansion involves importing and exporting products and services, benefiting both business individuals and the country. The government prioritizes trade facilitation to reduce transaction costs and time.
Various provisions of the Foreign Trade Policy, along with government measures towards trade facilitation, are consolidated to streamline import and export trade. Business growth is a key factor for success, and global expansion is often the first step. Annual Import Export Code Renewal is now mandatory for IEC license holders.
IEC is essential for:
- Customs clearance of consignments by importers.
- Exporting shipments through customs ports by exporters.
- Receiving inward remittances in foreign exchange directly into bank accounts.
- Availing benefits on imports and exports from Customs, foreign trade policies (FTP) regulated by DGFT, etc.
The Micro, Small and Medium Enterprises (MSME) sector has popped-up as a high-yielding, vibrant, productive and the most dynamic sector of the Indian economy. These enterprises play a crucial role in providing ample employment opportunities, helping in industrialization of rural & backward areas, reducing the regional imbalances and assuring that there is an equitable distribution of the national income and wealth. They are complementary to the large industries as an ancillary unit and they contribute an enormous amount to the socio-economic development of the Indian economy. Though at times, they do need assistance and aid from the Government’s side as they are not well-equipped with the technology and resources. Therefore, the Government divises schemes, incentives, plans and rebates to this sector of the economy.
Centre and the State government both are offerings various incentives and support packages to units who are registered with the MSME Act. Direct Taxes Law, Excise Law and Banking Laws, have incorporated the word “MSME” in their exemption notifications. Hence, the certificate of registration is issued by the MSME can be considered as a proof to avail the various benefits which are sanctioned for MSMEs. The registration is not yet made mandatory by the government but it is always beneficial to get your business registered under this Act. as it offers plenty of benefits in terms of setting up of business, credit facilities, taxation benefits, loans, etc. In Developing country like India, MSME industry helps in the economic growth of the country and considered as the backbone of the country.
FSSAI, which stands for the Food Safety Standards Authority of India, is an autonomous body established under the Ministry of Health & Family Welfare, Government of India. It regulates the food business in the country and operates under the Food Safety and Standards Act, 2006 (FSS Act).
For entrepreneurs involved in the food business, FSSAI Registration is mandatory. Every Food Business Operator (FBO) engaged in manufacturing, processing, storage, distribution, marketing, and sale of food products in India must obtain a 14-digit FSSAI registration or license number.
The registration or license number, which includes details about the assembling state and producer’s permit, must be printed on all food packages. There are three types of FSSAI registration based on the nature and size of the food business:
- FSSAI Basic Registration for FBOs with an annual turnover of up to Rs. 12 Lakhs.
- FSSAI State License for FBOs with an annual turnover between Rs. 12 Lakhs and Rs. 20 Crores.
- FSSAI Central License for FBOs with an annual turnover exceeding Rs. 20 Crores.
ISO, which stands for the International Organization for Standardization, is a non-governmental organization dedicated to promoting global standardization for specifications and requirements related to materials, products, procedures, formats, information, and quality management. With global recognition, ISO instills trust among customers, focusing primarily on the quality of products to ensure customer satisfaction. ISO sets standard values for specific objects, which companies are obligated to follow, providing a safeguard against violations.
Embark on your business journey with top-notch ISO certification in India. We offer all ISO certifications established by the ISO organization, including various types. Some of the most popular ISO certificates are:
Quality Management System (ISO 9001:2015)
Environmental Management System (ISO 14001:2015)
Occupational Health & Safety Management System (OHSAS 18001:2007)
Food Safety Management System (ISO 22000:2018)
A trademark, which can be a sign, logo, name, or mark, is utilized to distinguish the goods or services of one entity from others. Governed by the Trade Marks Act, 1999, trademarks play a crucial role in brand identification. Trademark registration is initially valid for 10 years, with the option to renew every 10 years thereafter upon payment of the renewal fee.
In today’s competitive market, trademarks are essential for a successful business. They serve as a distinctive feature for a brand that has worked hard to establish its name. Preserving this goodwill is crucial to prevent others from taking credit for your efforts.
Our assistance includes:
Preliminary searching for existing trademarks through trademark searches to avoid application rejection due to existing names.
Filing trademark registration applications to secure exclusive legal rights for the trademark owner.
Handling the examination of trademark applications by the Trade Mark Registry (TMR).
Filing responses to oppositions raised by the Trade Marks Office (TO) or other parties.
Publication of the mark in the Trademarks Journal and providing monitoring services for protection against infringement.
Managing trademark registration issues and suggesting corrections or amendments in the application.
Preparing renewal instruction letters for trademark renewal and submitting them to TMR for updating docket records.
NGO Darpan is an electronic platform managed by NITI Aayog, designed to facilitate collaboration between voluntary organizations (VOs) and non-governmental organizations (NGOs) with the government. The NITI Aayog NGO registration process has been made online to encourage more organizations to participate, providing a convenient application process.
VOs/NGOs nationwide register on this platform, creating a comprehensive information repository for the government. Upon successful registration, the system generates a unique ID, essential for applying for government grants and schemes. This ID is also required when registering under the Foreign Contribution Regulation Act.
Benefits of NGO Darpan registration:
- Access to various grants and schemes offered by ministries and government departments.
- Enhanced credibility and public image for the NGO/VO.
- No registration fee is charged by NITI Aayog.
- Online application for grants with easy tracking of application status.
- The government receives updated information about existing VOs and NGOs operating in India.
The Indian government initiated the “Startup India Initiative” to provide adequate resources and support for the growth of startups in the country. This program enables eligible companies to receive recognition as startups by DPIIT, offering benefits such as tax advantages, simplified compliance, fast-tracking of intellectual property rights (IPR), special incentives, and more.
Recently, the Indian Prime Minister announced the designation of January 16 as “National Start-up Day,” emphasizing the critical role of startups as the backbone of India’s economic growth in the upcoming years. He referred to the current decade as the “decade of India,” promising significant changes to strengthen innovation, entrepreneurship, and the startup ecosystem.
Highlighting the remarkable growth in the number of startups in India, from less than 500 to over 60,000 in the past five years, the Prime Minister emphasized their impact across nearly 55 industry sectors, stating that startups are “changing the rules of the game.” He expressed confidence that India’s startup ecosystem is entering a golden era, rapidly approaching the milestone of a century of unicorns, symbolizing a self-reliant and self-confident India.
Employees State Insurance (ESI)
The ESI Scheme is applicable to various establishments, including factories, road transport, hotels, restaurants, cinemas, newspapers, shops, and educational/medical institutions, where:
10 or more workers (20 or more in some states) are employed, and
The salary/wages drawn by the employees are up to Rs. 21,000 per month.
As of August 1, 2015, the ESI Corporation has extended the benefits of the ESI Scheme to workers deployed on construction sites in areas covered by the ESI Scheme.
Under the ESI Scheme:
Employers contribute 4.75% of the wages.
Employees contribute 1.75% of the wages.
Employees earning less than Rs. 137 per day as daily wages are exempted from paying their share of the contribution, while employers contribute their own share for these employees.
Employees Provident Fund (EPF)
The Provident Fund (PF) serves as a primary platform of savings for the working class in India. Establishments or businesses are mandatorily required to obtain an Establishment Identification Number (EIN) if the total employee strength is 20 or more. This total includes contractors or temporary employees like housekeeping staff, daily wage workers, security, or other temporary workers in the business. Even if a company has fewer than 20 employees, it can still apply for an EIN. The Provident Fund Registration certificate should be obtained within 30 days of reaching 20 employees.
Upon joining employment and receiving wages up to Rs. 15,000, an employee is required to become a member. In this context, wages imply and include Basic + Dearness Allowances, the cash value of food concessions, and retaining allowances, if any.
Other Corporate Services
XBRL is a language designed for the electronic communication of financial and business data, specifically for business reporting purposes. According to Rule 2 of the Companies (Filing of Documents and Forms in XBRL) Rules, 2018, XBRL is defined as a standardized language used for electronic communication to report, express, or file financial information by companies under the Act. This system is developed by XBRL International Inc. (XII).
Our team of experts can assist you in preparing financial statements or consolidated financial statements in XBRL format, along with providing supplementary services related to the preparation of independent audit reports and handling any litigations that may arise. We possess the necessary knowledge and experience to navigate the complexities of XBRL filings. Filing programs often impose various constraints on documentation related to XBRL for data quality and compliance with local protocols. Our experienced professionals can help define these rules and regulations and provide the necessary services to ensure seamless compliance.
All NGOs seeking CSR funds and the CSR implementing agencies are required to submit Form CSR-1. By completing this form, the social organization or agency can register with the Central government, becoming eligible to receive CSR funds.
Starting from April 1, 2021, the MCA has made this form available on its website and mandated its filing. The primary objective of the CSR-1 Form is to enable effective monitoring of CSR spending in the country.
The form needs to be digitally verified by a practicing professional such as a Chartered Accountant, Company Secretary, or Cost Accountant. Entities intending to undertake CSR projects must file this form on the MCA portal.
TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are fundamental concepts in taxation. TDS Return is a quarterly statement submitted by the deductor to the Income Tax Department, summarizing TDS entries collected and paid. The deduction occurs when money is credited to the payee’s account or at the time of payment, whichever is earlier.
Typically, the person receiving income is responsible for paying income tax. However, TDS ensures that tax is deducted in advance from payments made. The recipient receives the net amount, and the deducted TDS is adjusted against the final tax liability. The recipient claims credit for the amount already deducted and paid on their behalf.
TCS (Tax Collected at Source) is a method of collecting tax at the source of income by the Government. Under TCS provisions, sellers must collect an additional amount as tax at the time of sale and remit it to the Central Government. As per the Income Tax Act 1961, sellers must collect a specified percentage of tax when debiting the amount payable by the purchaser or at the time of receiving the amount, whichever is earlier.
Employee State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers, providing medical and disablement benefits. Administered by the Employees’ State Insurance Corporation (ESIC) under the Ministry of Labour and Employment, it operates according to the ESI Act, 1948.
ESI is applicable to establishments with 10 or more workers, benefiting employees earning Rs.15,000 or less per month. Employers contribute 3.25%, and employees contribute 0.75% towards ESI.
The Employees Provident Fund (EPF) is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and regulated by the Employees’ Provident Fund Organization (EPFO). PF registration is mandatory for establishments with 20 or more employees, and voluntary for those with fewer than 20 employees.
PF payments, due on the 15th of each month, require the employer to deposit 12% or 10% of the employee wages towards PF. The applicable PF rate is typically 12%.
Employee State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers, providing medical and disablement benefits. Administered by the Employees’ State Insurance Corporation (ESIC) under the Ministry of Labour and Employment, it operates according to the ESI Act, 1948.
ESI is applicable to establishments with 10 or more workers, benefiting employees earning Rs.15,000 or less per month. Employers contribute 3.25%, and employees contribute 0.75% towards ESI.
The Employees Provident Fund (EPF) is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and regulated by the Employees’ Provident Fund Organization (EPFO). PF registration is mandatory for establishments with 20 or more employees, and voluntary for those with fewer than 20 employees.
PF payments, due on the 15th of each month, require the employer to deposit 12% or 10% of the employee wages towards PF. The applicable PF rate is typically 12%.
A Digital Signature Certificate (DSC) is a secure digital key (USB e-Token) issued by certifying authorities to authenticate and verify the identity of the certificate holder. Using public-key encryption, it creates digital signatures and stores them in a digital format.
DSCs include details such as the user’s name, pin code, country, email address, date of issuance, and the certifying authority’s name. There are three types of Digital Signatures: Class I, Class II, and Class III Digital Signatures.
Legal drafting stands as a crucial tool for effective legal communication. The ability to draft well reflects one’s capacity to think and communicate effectively. Over years of dedicated practice and experience, legal professionals hone the skill of “legal drafting” to create documents such as petitions, plaints, and appeals that persuasively present their cases in court. This skill extends to the preparation of various written legal documents, including motions, letters, briefs, memos, and contracts.
In a broader sense, legal drafting encompasses the creation and preparation of legal instruments such as constitutions, statutes, regulations, ordinances, contracts, wills, conveyances, indentures, trusts, and leases. Essentially, legal drafting involves the act of preparing various legal documents like notices, contracts, and affidavits.