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February 15, 2021February 15, 2021

Yearly compliance checklist for Startups In India

Do you intend to set up a startup but worried about several laws to follow? In case your answer is yes then we can help you with all the compliances regarding start up.

With regard to start up, money is precious and it won’t be a good idea to waste some currencies as penalties towards non-compliance. So, follow rules and regulations to bypass hurdles.

The various laws you must follow:

Goods and Services Act (GST)
Companies Act
Labor and mercantile laws
Income Tax Act

After getting your startup registered as an Indian company, it is essential to follow the provisions specified in the Companies Act, 2013.

List of major things one should not miss with regard to startup:

Accounts filing with ROC (Form AOC-04)
Board meetings
Statutory Audit
Annual General Meeting (AGM)
Annual Returns with ROC (Form MGT-07)

These happen to be some chief Startup compliances that individuals must follow but apart from these there are some more forms that differ. To give an example, if you have taken a bank loan, you must file the CHG-01 form with ROC to get your charge registered. There exists a penalty for the late filing of the statutory forms.

It is essential for every company to get the turnover audited by a certified CA every year. Even if there had been no transaction in a year.

Filing income tax is a must

In case the startup is formed as a limited liability partnership or a proprietor company, it is mandatory to file the income tax. If the taxable income happens to exceed the exemption limit, you must file within a certain time limit. A fee is levied for filing income tax late.

Startup Checklist to follow with GST

The ideal thing about GST is that you are no longer required to pay indirect taxes. Goods and Service tax is an easy and convenient tax regime. You should register under GST in case of a turnover of over Rs 20 Lakhs annually. If you happen to hail from any special states, you must get registered if the turnover exceeds Rs 10 Lakhs annually. In case you happen to be an online seller, GST compliance is mandatory.

In short, you must follow below-mentioned Startup compliances for GST:

Annual GST in case the annual turnover goes beyond Rs 2 Crores.

Registration if you go beyond exempted turnover of Rs. 20/10 lakhs

Monthly returns in case the turnover exceeds Rs 1.5 Crores or else quarterly returns

Annual returns

EWAY bill for transportation if the value of invoice crosses Rs 50 thousand for transportations of the goods.

Startup checklist to follow with labor laws

There are three chief laws applicable to a company on the basis of the number of employees working under you:

Provident fund

Provident fund applies to you if there are over 20 people working under you. You have to register under PF and file the returns. Each month, a part of employees’ salaries must be cut and paid to the government together with the share of the employer. Then, a return must be filed. Do not ignore PF as it is a critical law to be followed.

ESI

Employees’ State Insurance happens to be a health insurance and social security scheme meant for the workers in India. This fund is handled by the State Insurance Corporation for employees as per the ESI ACT 1948. The ESI law functions akin to the PF law.

Profession Tax

For certain states, it is essential to file the profession tax. For example, in states like Karnataka, in case you pay over Rs 15,000 salary then it is a must to subtract Rs 200 each month and pay the same to the government.

It is a must to follow these laws so that your company does not face any legal hurdles going forward. Hence, ignore this at your peril.

Who we are?

We are one of the leading business management consultants in India providing several services such as Proprietorship Firm Registration and Start up Compliance Package and Company Compliance Package. We also offer a host of services in tax administration and procedure expansion to efficiently manage GST compliance Process. You may contact biatconsultant.com now

December 18, 2020December 18, 2020

An overview on Company Fresh Start Scheme 2020

On 30^th March 2020, The Ministry of Corporate Affairs issued a circular pertaining to Companies Fresh Start Scheme 2020. This happens to be another window for all defaulting companies to file every belated document as newly began documents devoid of any extra fees. Under the scheme, the companies get the breather to file their outstanding documents such as annual returns and financial statements sans paying any extra fee for the delay.

The Intent:

Giving exemption from extra fees: It happens to be a single-time prospect to assist stakeholders in filing their due compliances such as Annual Return and Financial statement and several other statements, documents and returns to be filed with the Ministry of Corporate Affairs (MCA),minus the additional fee due to the hold up.

Getting Immunity: To get protection from prosecution or proceeding or being made to pay a penalty due to the delay regarding filing of belated documents (and not any other consequential proceeding).

Opportunity to dormant companies: To grant an option to dormant companies to get their entities labelled as inactive company as per section 455 of the Companies Act, by filing a normal application at regular fees, which would assist these inactive companies to be on the register of the Companies with very few compliance obligations.

Period: The Companies Fresh Start Scheme would be active on the 1^st of April 2020 till the 30^th of September 2020.

NON-APPLICABILITY: The Fresh Start Scheme will not be applicable in these cases:

For entities against which action for last notice for deleting the name as per 248 of the Act has already been launched by the concerned authority.

In cases where any application has already been filed by the Companies for deleting the name of the Company from the registrar of Companies.

To Companies that have merged as per a scheme of arrangement or compromise under the Act.

In cases where applications have already been filed for keeping inactive status under section 455 of the Act prior to the scheme.

To varnishing Companies.

In cases where any spike in authorized capital (Form SH-7) and charge related documents (Form CH-1. CH-4, CH-8, CH-9) are in the fray.

The immunity will not be there with regard to any appeal pending before the court of law and if a management dispute arises regarding the Company and the same is pending before any court of law or tribunal.

The immunity is not applicable if any court has convicted in any matter or an order levying any penalty has been issued by an adjudicating authority under the Act.

Method:

The defaulting company can file their pending documents/returns/other statements and standard Annual Filing documents in relevant specified e-Forms by giving the regular statutory filing fee (minus any extra fee) within the immunity period.

The defaulting Companies has to file the Form CFSB-2020 after ending all defaults and every filings are put on record or authorized by the Designated authority accordingly. This form can even be filed post the end of the Scheme but not after six months have expired from the date of closure of the Scheme. There are no filing fees of Form CFSB-2020.

The Form CFSB-2020 is a form totally based on self-declaration. Post submitting Form CFSB-2020 and as per self-declaration made by the Director, the ROC will provide Immunity Certificate.

PLAN FOR INACTIVE COMPANIES: The defaulting welsh companies while filing the outstanding documents as per CFSS 2020, can side by side either:

Apply to get themselves certified as inactive Company under section 455 of the Companies Act 2013 by filing e-form MSC-1 at regular fee on said form or;

Apply for getting the name of the company deleted by filing e-form STK-2

The Companies Fresh Start Scheme is to boost the special measures under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 with regard to the COVID-19 outbreak, to give respite to the obedient Companies and Limited Liability Partnerships.

December 3, 2020December 3, 2020

Method of GST registration via MCA portal

Of late, A fresh feature has come into being with which the person can easily go for Goods and Services Tax (GST) registration while looking to incorporate the company through the MCA portal. The applicant wanting to acquire GST registration via MCA portal should apply in e-form AGILE (INC-35). This write up strives to provide clarity regarding GST registration application via MCA portal.

Rudimentary facilities pertaining to applying in e-form AGILE-

The expansion of AGILE comes to Application for Goods and Services Tax Identification Number (GSTIN), employee state Insurance corporation registration (ESIC) plus employee provident fund organization (EPFO). Hence, the applicant can get registration under three categories i.e., GSTIN, ESIC and EPFO by providing a sole e-form AGILE via MCA portal.

The person seeking to incorporate the entity by filing an application in e-form SPICe+ and possessing a registered office address has the right to apply to acquire GST registration by filing e-form AGILE via MCA portal.

It is to be noted that every company incorporated by filing e-form SPICe+ has to essentially file e-form AGILE. But, getting registration under GST, ESI or EPF is very much an option for people.

Type of taxpayer suitable for GST registration through e-form AGILE-

Taxpayer wanting to get GST registration in any of these category can apply through e-form AGILE-

Regular taxable person; or Composition scheme taxable person

Significantly, the taxpayer wishing to get registration in the following category should not apply for GST registration through e-form AGILE-

Input service distributor; or

Special Economic Zone developer/ unit; or

Irregular taxable person or

Tax deductor liable to reduce tax under section 51 of the Central Goods and Services Tax Act, 2017; or

Non-resident taxable person or

Tax collector responsible to collect tax under section 52 of the Central Goods and Services Tax Act, 2017; or

Non-resident online service provider; or

Unique Identification number

With regard to registration in any of the above categories, the applicant should apply via GST portal and not through MCA portal.

Method for getting GST registration via the filing of e-form AGILE-

The applicant wanting to get GST registration via MCA portal should follow afore-mentioned steps-

STEP 1 – The applicant must file a company incorporating application in form SPICe+.

STEP 2 – After filing the afore-mentioned application with an available link, e-form AGILE will be provided.

STEP 3 – In order to get GST registration, the applicant must give the following particulars-

State – Specify the state for which GST registration needs to be acquired.
District.
State and Centre jurisdiction.
Purpose of getting registration.
Particulars regarding the premises.
Alternative for composition scheme.
Kind of the business task performed at the afore-mentioned premises.
Particulars of goods supplied by the business (i.e., mention HSN code).
Particulars of services provided by the business (i.e., mention SAC code).
Particulars of directors.

STEP 4 – Attach the needed documents.

STEP 5 – Submit the e-form AGILE with the digital signature. It is to be kept in mind that the form has to be digitally signed only by the authorized signatory who happens to be a citizen and an Indian resident with PAN.

STEP 6 – The information so given will be dispatched to the GST network. Here, the information will be processed for GST application.

STEP 7 – GST network will verify the data. After successful validation, TRN (Temporary Reference Number) and ARN (Application Reference Number) is produced and showcased on the MCA portal.

Some critical points-

Particulars of proposed directors in form AGILE hinge on the class/ category or subcategory provided in SPICe+ form. The details given in form AGILE should be the same as the ones submitted in SPICe+. Number of directors shall be as under-

Number of directors	Type of company incorporated
One	One-person Company
Two	Private Company
Three	Public Limited Company
Five	Producer Company

• The director signing the form AGILE will straight away become the major authorized signatory for GST registration.

The registered office given in form AGILE will directly be the Principal Place of Business for the sake of GST registration.

The applicant acquiring GST registration by filing form AGILE can get registration of just that State where the registered office of the company is located. Preferably, the applicant wishing to get registration in various states must acquire GST registration only via the GST portal.

The applicant who wants to get GST registration by filing AGILE can update information like extra place of business; designated representative; bank account particulars etc. by modifying the GST application with GST portal.

Summary

It is a known fact that prior to starting the business, the company has to be incorporated/ registered under several laws. Basic purpose of E-form AGILE is to simplify the company incorporation method. Despite certain hiccups, with e-form AGILE, the company can get registration under three laws namely GST, ESI and EPF. However, it is a must to meet the these conditions for getting GST registration through e-form AGILE-

The company has to be incorporated by filing e-form SPICe+.

The company must have a registered office address.

The company should acquire GST registration as a regular taxable person or composition scheme dealer.

November 24, 2020November 24, 2020

5 indications that you immediately need a Virtual CFO

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Your company is on an upward trajectory and you are getting busier day by day. But the cash in your hand is not in sync with the success of yours, so what would you do? on top of this you are loosening your purse strings too much and on things that are hardly helping you company to grow. Like accounting, for example. We have dealt with several entrepreneurs. They happen to be salespeople and inventors but not accountants. They realize the significance of cash and have created businesses with an intention to generate cash. At a particular point, however, a business evolves beyond intuition. It requires financial processes and systems in order to flourish. Here are 5 signs indicating that your business might have touched that point.

Tough to get data you require

Majority of startups utilize QuickBooks. It’s an ideal weapon for the companies which have just begun their journey. It’s normally established by a tax accountant to aid him or her prepare tax returns without any issues. The problem happens to be getting good data into QuickBooks to take out meaningful data from it. In the beginning getting the data to operate your business won’t be tough. However, as you evolve you’ll get more transactions and complexity will increase in your accounting. How do you find what is significant for you and what isn’t?

Not having adequate cash

This happens to be the major cause of concern with our new clients.They have a good feel for the growth and sink of their cash balances however, they can’t track cash on a regular basis. They want more predictability and firmness with regard to their cash flow so they can take confident calls. They also require access to capital – so as to absorb the ups and downs.

Adhering to a financial plan is a must

It is common knowledge that the business that indulge in planning performs well. You realize the potential of making a financial plan, but, you have to find time for the same as well. Once it is accomplished, you need to track and gauge performance against it.

You need a financial “sounding board”

It is a good thing to have someone to speak about your business. It could be friends, advisors or mentors who can help you out with valuable inputs. However, at times you have to get into the details about critical things: how much do I pay someone? What should be the price of a new product? What all risks can drastically affect my business? It would be better to have help at hand for all these things.

Want more time to work on your business

Several business owners consume a lot of time working in their business, particularly on their books. You want things in a particular way, but the bookkeeper is unable to get the books where they ought to be. Hence, the owner does not have any options, but to spend good time getting things in order instead of focussing on building the business.

Lastly

If the above-mentioned points ring true to your business, then the time is ripe for hiring a Virtual CFO. He is someone who can aid you with his financial and accounting expertise, knowledge and systems. This is an economical manner to get more time to focus on growth of your business.

August 17, 2020August 17, 2020

RBI guidelines on NBFC take over

What is NBFC?

A Non Banking Financial Company (NBFC) happens to be a company that is registered under the aegis of Companies Act, 2013 of India. It is involved in the trading of loans and advances, shares acquisition, stock, bonds, hire-purchase insurance business or chit-fund business.

Takeover of NBFC

Takeover of NBFC normally happens via the documents pertaining to the target firm. If Acquirer gets sanction to the takeover of the concerned NBFC, an MOU will be signed along with a token sum. Then Know Your Customer (KYC) Documents, Business Plan & Projection for 3 years have to be made with regard to incoming directors, as per the suggestion of the acquirer. Through this article, we intend to throw light on RBI regulation pertaining to the acquisition of NBFC.

Basic formalities

Relevant documents has to be submitted to the RBI by the acquirer. The acquirer has to reply to all RBI queries related to the takeover. After getting the approval letter from the RBI, the acquirer is required to issue a public notice in the 2 newspapers for 30 days in accordance with the RBI guidelines. This is done to invite any objection, if any, from the general public or any interested parties with regard to the change in management. The inking of Share Purchase Agreement & giving of change of management, payment of remaining considerations etc. has to happen on the 31st day of newspaper notice or as concurred by all the parties concerned.

The need of RBI Approval beforehand

Prior written consent of the RBI is needed for:

Any alteration in control of an NBFC, which might not lead to change of management;

Any change in the nature of shareholding, which would result in acquisition/ transfer of shareholding of 26 percent or more of the paid-up equity capital of NBFC. However, prior consent would not be mandatory if the nature of shareholding does not exceed 26 percent which is as a result of buy back of shares/ decrease of share capital and it has approval of the competent court. In such cases, the RBI has to be informed within 1 month from its occurrence.

Any change in the composition of the NBFC which would lead to an alteration in over 30 % of the directors, not including independent directors.

Beforehand approval is also not needed for those directors who are selected again post retirement on a rotational basis.

NBFCs will continue to concerning any alteration in their directors/ management as Financial Companies Acceptance of Public Deposits (Reserve inform the Reserve Bank required in Non-Banking Bank) Directions, 1998,

Non-Systemically Significant Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 & Systemically Important Non-Banking Financial (Non-Deposit Accepting Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015.

Application for advance Approval

Applications pertaining to this can be submitted to the Regional Office of the Department of Non-Banking Supervision under whose authority the Registered Office of the NBFC is located.

The need of advance Public Notice regarding alteration in Control/Management

It is necessary to give public notice of at least 30 days in advance prior to conducting the sale of, or change of the ownership via selling shares, or alteration in control, either with or without the sale of shares. This type of public notice will have to be provided by the NBFCs & also by the other party or jointly by the relevant parties, post getting the advanced permission of the RBI.

The public notice should clarify the reason to sell or transfer ownership/ control, the details regarding transferee & the motive behind such sale or transfer of ownership/ control. The notice has to appear in at least one prominent national & in one popular local (covering the place of registered office) vernacular newspaper.

The guidelines mentioned above are applicable instantly i.e., the same will be valid for any takeover or acquisition of control, any diversion in the shareholding or any change in the management happening post the date of this circular.

Other laws apply as well

These guidelines will be including, & not in suppression of the essence of any other laws, rules, regulations or directions, till the time it is active.

Repeal & Saving

Non Banking Financial Company, (Approval of Acquisition or Transfer of Control) Directions 2014 dated May 26, 2014, will remain cancelled. Despite this, any thing done, purported to have been done or unleashed within the directions hereby nullified shall continue to be guided by the clauses of the stated directions.

Annex

Particulars about the suggested promoters/ directors/ shareholders of the Company

Sr. No.	Particulars Required	Response
1.	Name
2.	Designation	Chairman/ Managing Director/ Director/ Chief Executive Officer
3.	Nationality
4.	Age (has be backed with the date of birth)
5.	Business Address
6.	Residential Address
7.	E-mail address/ Telephone number
8.	PAN Number under Income Tax Act
9.	Director Identification Number (DIN)
10.	Social security number/Passport No.*
11.	Educational/professional qualifications
12.	Professional milestone related to the task
13.	The area of business or vocation
14.	Any other information relevant to the Company
15.	Name/s of other companies in which the person has held the post of Chairman/ Managing Director/ Director/ Chief Executive Officer
16.	Name/s of the regulators (RBI, SEBI, IRDA, PFRDA, NHB or any other foreign regulator) of the entities mentioned in which the persons hold directorships
17.	Names of the NBFC, in case, the individual is related as Promoter, MD or Director comprising a Residuary NBFC, which has not been allowed to accept deposits/ prosecuted by the RBI?
18.	Details of the tribunal, if any, pending or commenced or resultant in a conviction in the past in contradiction of the person or against any of the entities he is associated with for violation of economic laws & regulations
19.	Cases, if any, involving the person or relatives of the person or the entities in which the person is associated with, are in default or have been in evasion in the last five years in related of credit services acquired from any entity or bank
20.	In case the person happens to a member of a professional association/ body, particulars of the disciplinary action, if any, pending or commenced or leading to conviction in the past against him/ her or whether he/ she has been barred entry of any professional occupation at any time
21.	Whether the person is eligible for disqualification provided under Section 164 of the Companies Act, 2013
22.	Has the individual or any of the companies, he/ she belongs to, been under any kind of probe at the instance of the Government Department or Agency
23.	Has the person been found violating rules/ regulations/ legislative requirements by Customs/ Excise/ Income Tax// Foreign Exchange/ Other Revenue Authorities, if so, give particulars
24.	Involvement in the business of NBFC (number of years)
25.	Equity shareholding in the company No. of sharesFace valuePercentage of total paid up equity share capital of the company
26.	Name/s of the companies, firms & proprietary concerns in which the person holds substantial interest
27.	Names of the principal bankers to the concerns at 26 above
28.	Names of the overseas bankers *
29.	Whether the number of directorships held by the person goes beyond the limits permitted under Section 165 of the Companies Act, 2013
* For foreign promoters/ directors/ shareholders Note: Different form should be given with regard to each of the proposed promoters/ directors/ shareholders

Information about Corporate Promoter

Sr. No.	Particulars Required	Response
1.	Name
2.	Business Address
3.	E-mail address/ Telephone number
4.	PAN Number under Income Tax Act
5.	Name & contact details of compliance officer
6.	Line of business
7.	The details of their major shareholders (more than 10%) & line of activity, if corporates
8.	Names of the principal bankers/ overseas bankers *
9.	Name/s of the regulators (RBI, SEBI, IRDA, PFRDA, NHB or any other foreign regulator)
10.	Names of Firms in the Group as defined in the Prudential Norms Directions
11.	Names of the firms in the Group that are NBFCs
12.	Specify the names of companies in the group which have been prohibited from accepting deposits/ prosecuted by RBI?
13.	Particulars of trial, if any, pending or started or led to a conviction in the past in contradiction of the corporation for violation of economic laws & regulations
14.	Cases, if any, wherein the corporate, has defaulted or have been in default in the last 5 years with regard to credit facilities sought from any entity or bank
15.	Whether the business has been under any kind of probe by the Government Department or Agency
16.	Has the Corporate been found guilty of violating rules/ regulations/ legislative requirements by Customs/ Excise/ Income Tax// Foreign Exchange/ Other Revenue Authorities, if so, give particulars
17.	Is the promoter corporate/ majority shareholder of the promoter business, if a business, ever applied to RBI for CoR which has been rejected

August 13, 2020August 13, 2020

What is the exemption limit of agricultural income?

What do you mean by agricultural income?

Agricultural income constitutes the money or revenues earned from areas such as farming/Agriculture land, building on/associated with agricultural land, and the commercial gains made out of horticultural land.

According to the Section 2 (1A) of the Income Tax Act of 1961, agricultural income is:

Any income or money made out of any piece of land in India meant for agriculture

Additionally, any revenue derived out of such land through agricultural works like refining agricultural products so as to make it commercially viable in the market

Any income collected through saplings or seedlings reared in a nursery

Moreover, any revenue linked to a farmhouse lest it is in line with provision prescribed in Section 2 (1A)

Section under which agriculture income is exempted

As specified under Section 10 (1) of the Income Tax Act of 1961, agricultural income is set aside from taxation. But, it is included for computation of the total tax liability provided the guidelines given beneath are followed in totality:

Total agricultural income does not go beyond Rs. 5,000/- for the last financial year.

Net income, on top of the gross agricultural income, breaches the general exemption ceiling (It is to be noted – The primary limit of agricultural revenue kept out of tax net is 2,50,000 for person less than 60 years of age and Rs. 3,00,000 for those higher than 60 years of age)

For people who meet the afore-mentioned criteria, the taxable agricultural income will be calculated by following these methods-

Method 1: Inclusion of the agricultural income to the cumulative income

Method 2: By including income exempted under Section 10 in the agricultural income

Method 3: Moreover, deducting the amount acquired from Step 2 from that of Step 1 to arrive at the final tax liability.

Pay your taxes to rid yourself of anxiety

Benefit u/s 54 B

The person who pays tax (individual or HUF) can gain under this section, provided he sells his agricultural land to purchase another. But there is a catch as he has to meet certain conditions to claim the benefit.

Some fine Examples Of Agricultural Income

These happen to be:

Revenue derived through selling replanted trees

Additionally, the rental accrued from a piece of agricultural land

Revenue obtained through selling of seeds

Money earned via nurturing creepers/ flowers

Further, profits accrued through a partner belonging to a firm or a company indulging in agricultural production or activities

So, interest received by a partner from a firm or company via ploughing in capital in agricultural endeavors

Commonly Asked Questions

1. What is the ceiling for agricultural income tax exemption?

The primary limit to exempt agricultural income from tax is –

-Rs. 2, 50, 000 for people falling below the age bracket of 60

Rs. 3, 00, 000 for people above the age bracket of 60

2. Why is agricultural revenue kept away from the tax net?

Since from the beginning itself, agriculture happened to be a major source of income generation for a large number of the population in India. Also, the whole country still relies a lot on crop production to get its food on the table. This also happens to be a primary sector, pushing the economic wheels of the country. Hence, it is imperative that the Government comes up with schemes, strategies, and policies that ensure the constant evolution of the agriculture sector. So, in one such scheme, agricultural revenue is kept away from the purview of income tax.

3. How do we portray agriculture revenue in income tax?

In case your gross agricultural revenue happens to be less than Rs 5000 during a financial year, it can be projected in your income tax return ITR-1. However, in the event of your income going beyond Rs 5000, Form ITR -2 becomes applicable.

3. What is agricultural income and how is it treated for tax purposes?

Under Section 2 (1A) of the Income Tax Act of 1961 agricultural income is defined as –

A rent or income sourced from any piece of land in India meant for agriculture

Also, any money generated from such land through agricultural activities like processing of agricultural products to make it commercially viable

Additionally, any income made from saplings or seedlings nurtured in a nursery

Any income pertaining to a farmhouse if it follows guidelines prescribed under Section 2 (1A)

Income included for the sake of tax

As described in Section 10 (1) of the Income Tax Act of 1961, agricultural income is set aside from taxation.

But, agricultural income is used for the net tax liability calculations if the conditions described underneath are met totally-

Gross agricultural income going above Rs. 5,000/- in the last financial year

Net income, along with the gross agricultural income, breaks the basic exemption ceiling

August 2, 2020August 2, 2020

GST Penalties and Appeals

The GST Law has defined its offenses and penalties that are levied in each scenario. This is an important topic for every business owner, CA, CS as any mistake can cause severe consequences.

Overview

GST law prevents many tax evasion and corruption over tax as it contains strict provisions for offenders regarding penalties, prosecution and arrest. The introduction of GST Law Government of India ensures to prevent tax evasion and corruption and also introduces stricter liabilities for the non-payment of the same.

Offences and Penalties

Offenses

There are 21 offences which are being introduced under GST law. Some of the offences which has been introduced by the introduction of GST law are as follows-

When the company/organization or an individual has not enrolled themselves under GST Law, even when it is required by law.
Supply of any goods/ services without any invoice or issuing a false invoice.
The issue of invoices by a taxable person using the GSTIN of another bonafide taxpayer.
Submission of false information without getting registered under GST Laws.
Submission of fake financial records/ documents or files,or fake returns to evade tax.
Obtaining refunds by fraud.
Deliberate suppression of sale to evade tax.
Opting for a composition scheme even though a taxpayer is ineligible.

Penalty

If any of the offense is committed by a taxpayer, then he is liable for the penalty which he has to pay under GST. the principals on which these penalties are based are mentioned by law.

For Late Filing

If returns of GST are filed late i.e. after the last date of filing, then it would involve a penalty of Rs. 100 per day as per the Act. So it is 100 under cgst and 100 under sgst so, total late fee would be levied of Rs. 200/- per day along with the interest of 18% per annum. The time period will be from the next day of filing of the date of payment.

For not filing

If you are not filing your GST return, then it will have a cascading effect as you will not be able to file your subsequent returns and therefore it involves heavy penalty and fines.

For the 21 offenses with no intention of fraud or tax evasion

If the offender is not paying the tax or making short payments must pay a penalty of 10% of the tax amount due subject to a minimum of Rs. 10,000/-.

For the 21 offense for the intention of fraud or tax evasion

In this case the offender has to pay 100% penalty for tax evasion subject to a minimum of Rs, 10,000/-. The tax evader could be imprisoned for a term of 1 year for tax amount 100-200 lakhs, upto 3 years for 200-500 lakhs and upto 5 years for the tax amount of 500 lakhs and above.

Inspection under GST

The Joint commissioner of CGST and SGST may have reasons to believe hat in order to evade tax, a person has suppressed any transaction or claimed excess input tax credit etc. then the joint commissioner can authorize any other officer of CGST/SGST in writing to insect places of business of the suspected evader.

Search and Seizure under GST

The joint commissioner can order for search and seizure if he finds any person liable for tax evasion on the basis of the inspection.

Goods in Transit

If a person in charge is carrying goods exceeding 50,000/- is required to carry the following documents-

Invoice or bill or delivery challan
Copy of e-way bill

Compounding of offences under GST

Compounding offenses is a shortcut method to avoid litigation. In case of prosecution each time of hearing in criminal proceedings a person has to appear before a magistrate along with his advocate which is little time consuming process.

In compounding offence, the accused is not required to appear personally and can be discharged on payment of compounding fee which cannot be more than the maximum fine as applicable under GST.

Prosecution under GST

If someone has committed crime under GST law deliberately, then he is subject to criminal prosecution under the law. A few example of these offenses are follows-

Issue of an invoice without supplying any goods and services
Obtaining refund of any CGST/SGST by fraud
Submitting fake financial records/ documents or files and fake returns to evade tax.
Helping another person to commit fraud under GST.

Arrest under GST Law

Any person accused of committing a cognizable offense is entitled to get arrested within 24 hours of the offense. Then he is to be produced before the Magistrate within 24 hours of the arrest.

Appeal

Any person aggrieved by the decision of tribunal or court may appeal in the appellate court. If the person is aggrieved by the decision of fit appellate authority then he could appeal in the National Appellate Tribunal and then to the High court and Supreme court thereafter.

May 12, 2020May 12, 2020

Know your legal right/ Divorce in India

Between any couple divorce appears to be the most traumatic occurrences of their lives. However, it can be a costly affair in India if divorce is contested by any of the parties. Even couples who agree for mutual divorce have to show to court that they have been separated a year before the filing of the divorce petition. In India dovorce is considered to be a personal matter as rules of divorce are connected with one’s religion like Hindus, Buddhists, Sikh, and Jains is governed by Hindu Marriage Act, 1955. Muslims by dissolution of muslim marriages act, 1939, Parsis by the Parsi marriage and Divorce Act, 1936, and Christians by Indian Divorce Act, 1956.

The spouse can initiate to send legal notice before ending their relationship.

There are different grounds on which divorce is granted, here our expert legal team helps you understand different topes of Divorce petitions and help in understanding the divorce process in India.

Types of Divorce Petitions

Divorce with Mutual Consent

When both spouses agree to a divorce, then it is considered a Mutual Divorce. However, as per the Act, a couple should at least be separated for over a year and the same is to be proved before the Hon’ble Court. Ofte, even when either of the spouses is reluctant to the mutual divorce, agrees to a mutual divorce because it is relatively inexpensive, time saving and not as traumatic as a contested divorce. Matters such as child’s custody, maintenance and property rights could be agreed mutually through an Agreement.

There are three aspects regarding which a husband and wife have to reach a consensus.

First is Maintenance decided by a wife. For this no law has stated the minimum or maximum limit of support. It could be any figure or no figure.

Second is of Custody of a child, it takes maximum time in court to decide the custody of a child. It takes much longer when it is without mutual consent. Child custody in a mutual consent could be shared, joint or excessive depending upon the understanding of the spouses.

Third one is the Property, the spouses must decide who will get which part or how much of the property. Thus includes both movable and immovable property. Even bank accounts could also be shared amongst the two. It is not necessary for it to be fair, so long as it is agreed to by both parties.

Once the first motion of the Divorce is filed, before filing of the second motion of divorce, there is a timing minimum of 6 months. However, waiver application could be moved before the Hon’ble court and its total courts jurisdiction on its allowance. As per section 13B of Hindu Marriage Act, 1955 and section 28 of special marriage act, 1954, the couple should be living separately for at least one year before divorce proceedings can begin. Living separately does not mean that they are living in different locations, it’s just mean that couple have to prove that there is no relationship between two as husband and wife i.e. having no physical relationship etc.

Divorce without Mutual Consent

In case of a contested Divrce following could be the grounds on which Petition can be filed-

Cruelty

Cruelty could be physical or mental cruelty. If any of the spouses has an apprehension or a reason to believe that he/she has been a victim to cruelty then it would be a sufficient ground to file for Divorce.

Adultery

If the husband has maintained illegal or consesunal intercource with a third woman, the wife is free to file for Divorce. However, it is no longer considered as a crime after the Supreme Court Recent judgement.

Desertion

If one spouse is deserting the other spouse without a reasonable cause (cruelty for eg) then there is a reason for Divorce. There should be a proper reason to prove that. As per the act, dissertation should have lasted for at least two consecutive years.

Conversion

If any spouse converts his/her religion then divorce could be filed.

Mental disorder/unsoundness of mind

If any spouse becomes of unsound mind then divorce can be granted by either of the spouses.

Renunciation of the world

If any spouse has renounced the world then spse can take divorce.

BIAT Legal LLP over the years has become expert in handling Family and Matrimonial Litigations.

March 12, 2020March 12, 2020

TRADE LICENSE

When any organization, an individual firm is planning to start its business operations at small or large scale it needs a license to carry on the business activities and that license is termed as Trade License.

It is mandatory for the organization , firm or business entities to have a license for commencement of any type of business .A company or business enterprise should obtain the license within 15 days from the commencement of the business or 03 months prior starting the business.

The state government together with the municipal corporation of the area regulates the licensing process. There are different mechanisms of charging the application fees and some pay annually while others make it as per the annual turnover.

Therefore an applicant shall be at least 18 years of age , should have a clean and right image in the society and free from any type of criminal activities or no case of criminal activities under his name.

CATEGORIES OF TRADE LICENSE –

A] CATOGORY 1 –

This category includes mostly business of consumable items and eating places

B] CATOGORY 2 –

These categories include licenses to those businesses which are mainly engaged in industries , workshops , flour mills etc.

C] CATEGORY 3 –

For business related to firewood , charcoal etc. the above category is being provided

DOCUMENTATION REQUIRED FOR TRADE LICENSE –

There are various documentation being required in order to get the license of the trade license which are being highlighted below –

1] The bills of the place where business or operation will be carried

2] Agreement of the rent or lease

3] Receipt of municipal taxes

4] Certificate of the registration of shop as per the act

5] Applicant Id proofs

6] Copy of blueprint of the premises or workplace

7] Pan card details of the applicant

8] If the business is managed by some other person irrespective of the owner therefore provide ID proof , photo , Address detail of the manager

9] Non objection certificate from the fire department

MINIMUM REQUIREMENTS FOR OBTAINING TRADE LICENSE –

A] AGE CONDITION –

It is mandatory for an individual or applicant applying for the license to be 18 years of age.

B] LEGALITY –

The company or applicant applying for the license should have business activities legal and valid in the eyes of law.

C] CRIMINAL CASE –

The applicant should have no criminal background and carry on a clean image in society.

TRADE LICENSE RENEWAL –

A trade license is not a one time license only and shall be renewed on time to time basis.

In some states and cities , it is compulsory to pay a certain amount of annual fees in order to renew the trade license.

The renewal is done between 1st January to 31st march of every year.The renewal application should be made at least 30 days before from the expiry time so that it shall be done in time.

In case of delay , there is a late fees fine of 50 % of the total trade license fees incurred.There are certain documents to be submitted with the application for trade license renewal :

1] Copy of the original license

2] Tax payment receipt

3] previous year challans of fees being paid

DENIAL OF THE TRADE LICENSE APPLICATION –

Sometimes the application applied by the applicant for trade license purpose gets rejected , under such circumstances one can make appeal in the to the standard committee or file a petition to them with the relevant documents together with the copy of letter of denial so that the matter can again be considered for approval of trade license

June 2, 2019June 2, 2019

Companies 2nd Amendment Rules 2019 for Appointment and Qualification of Directors

INC 22A is an active form introduced by MCA as compliance back in January of this year. Under this compliance, every company which is formed or which is registered on or before 31st December, 2017 has to file the e-form active INC-22A. It tags the companies that are active and currently doing business. At the same time MCA takes their eyes on the working of the companies. Cobimining with this rules for Director Qualification and appointment, MCA has released a new notification for companies 2nd amendment of 2019, it states as follows-

“Where a company governed by Rule 25A of Companies (Incorporation) Rules, 2014, fails to file the e-form ACTIVE within the period specified therein, the Director Identification Number (DIN) allotted to its existing Directors, shall be marked a Director of ACTIVE Non-compliant company.

Let’s talk about Director Disqualification

As per Rules of Companies Act, under certain circumstances, a director of a company can be disqualified by the MCA. when that happens, the Director’s DIN is removed from the registry. As a result, the Director can no longer be associated with the company. Where you can definitely remove the Director disqualification by filing a Petition o the Court, what if the Director of a company is appointed to again goes non-complaint because of Non- filing of INC-22A.

ACTIVE e-form INC 22A

MCA introduced this form back in january. Important and mandatory for companies that were registered before 31st December, 2017, this form’s main reason was to tag companies that are active (Currently doing business), through active tagging and verification it tries to locate shell companies. If the companies does not file INC 22A within the extended period of due date, it is marked in the MCA registry as “ACTIVE non compliant. It means that the company is active but has not filed the ACTIVE e-form.

Director of Non-compliant company

Before the mentioned notification, it was only the company that was marked as non- compliant. However, with the announcement of companies act, 2nd amendment notification, the meaning is this,

“ If the company is marked as Non- compliant in the mCA registry because INC 22a was not filed the DIN of the Director of that company is marked as “ Director of ACTIVE Non- compliant company”.

The notification further states that when the Director’s DIN is marked as Director of ACTIVE Non- compliant company, then they have to take all the necessary steps to file the complaint and to remove this mark. In this case the step would be to file INC 22A.

Further the notification states that once the Director files the Compliance INC-22A their DIN will be marked as Director of ACTIVE Non- compliant company.