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Compliance of Form 61A of Income Tax Act – Statement of Specified Financial Transactions ( SFT )

October 7, 2022
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Form 61A of Income Tax Act – Statement of Specified Financial Transactions ( SFT ) Section 285BA of the IT Act requires…

October 7, 2022
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PF Withdrawal Amendments Due to Corona Virus Pandemic As we all know the whole world is going through with the Pandemic…

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Incorporation of Foreign Subsidiary in India Foreign Subsidiary Company: Foreign Subsidiary company is a company owned and controlled by another company and…

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Following Compliance need to be done by company during the financial year in respect of income tax Act, GST Act and TDS …

Form 61A of Income Tax Act – Statement of Specified Financial Transactions ( SFT )

Section 285BA of the IT Act requires specified reporting persons to furnish statement of monetary transaction. Rule 114E of the IT Rules, 1962 provides that the statement of financial transaction needs to be furnished under sub-section (1) of section 285BA of Act shall be furnished in the prescribed Form No. 61A. Financial Budget 2019 widens the scope of Statement of Financial Transactions (SFT). So therefore from this Financial Year 2019-20, compliance will be more difficult.

Contents of the Article:-

Which are the Specified Financial Transactions?
Due Date to File Form 61A and Consequences in case of default.
List of Transactions along with respective reporting person who needs to furnish Form 61A.
Different parts of Form 61A.
How to furnish the Statement of Financial Transaction Form 61A electronically?

Which are the Specified Financial Transactions?

Below referred transactions are covered under Specified Financial Transactions:

Sale, purchase or exchange of products, right, property, or interest in any property.
Works contract.
Delivering services.
Any investment or expenditure.
Accepting any deposit or taking any loan.

It is important to notice that CBDT can recommend different values with reference to different transactions for various persons by considering the character of the transactions. The aggregated value of transactions in that particular financial year should exceed Rs. 50,000.

Due Date to File Form 61A and Consequences in case of default:-

This statement for the previous FY (financial year) must be furnished within May 31st of the following Financial Year. In case an assessee fails to do so, the income tax department will issue a notice to such an assessee, demanding the assessee to submit the same within 30 days from the issuance of such notice. In case such assessee continues to be the assessee in default by not answering to such notice, a penalty would be levied on the assessee that amounts to INR 500/day of such default. This penalty would be calculated from the expiry of the grace period as stipulated in such notice.

List of Transactions alongwith respective reporting person who needs to furnish Form 61A:-

Sr. No.	Assessee responsible for furnishing Form 61A	Type of Transaction	Limit
1)	Banking Companies and Co-operative Banks	Cash payment for purchase of POs (Purchase orders) / DDs (Demand drafts).	Aggregating to INR 10 lakh or more in a FY.
2)	Banking Companies and Co-operative Banks	Cash payment for purchasing any prepaid RBI instruments like RBI bonds, etc.	Aggregating to INR 10 lakh or more in a FY.
3)	Banking Companies and Co-operative Banks	Cash Deposits or withdrawals from a current account of an account holder.	Aggregating to INR 50 lakh or more in a FY.
4)	Banking Companies, Co-operative Banks and Post Offices	Cash Deposit in one or more accounts of an account holder other than a current account.	Aggregating to INR 10 lakh or more in a FY.
5)	Banking Company, Co-operative Bank, Post Master General of Post office, Nidhi or NBFCs	One or more time deposits (other than renewed time deposit of another time deposit) of a person.	Aggregating to INR 10 lakh or more in a FY.
6)	Banking Company, Co-operative Bank, any other company or institution issuing credit card	Cash payment against any credit card bill which is issued to a customer in a year.	Aggregating to: INR 1 lakh or more in cash or INR 10 lakh or more by any other mode in a FY.
7)	A company or an institution issuing debentures or bonds	Receipt from any person for acquiring such debentures/bonds.	Aggregating to INR 10 lakh or more in a FY.
8)	A company issuing shares	Receipt from any person for acquiring such shares. This includes share application money received.	Aggregating to INR 10 lakh or more in a FY.
9)	Listed companies	Share buy-back from a person.	Aggregating to INR 10 lakh or more in a FY.
10)	Manager/Trustee of a Mutual Fund	Receipt from any person acquiring the units of Mutual Fund.	Aggregating to INR 10 lakh or more in a FY.
11)	A Dealer of Foreign Exchange	Receipt from any person for sale of a foreign currency or expenses incurred in such foreign currency via a debit/credit card or via issue of draft or traveller’s cheque or any other financial instrument.	Aggregating to INR 10 lakh or more in a FY.
12)	Inspector-General/Sub-Registrar appointed under the Registration Act, 1908	Sale/ Purchase by a person of an immovable property.	For the amount of INR 30 lakhs or more or which is valued by stamp valuation authority at INR 30 lakhs or more.
13)	Persons liable for audit u/s 44AB of the Income Tax Act	Cash receipt for sale of goods or rendering of services (other the ones specified above).	Exceeding INR 2 lakhs by a person.

Different parts of Form 61A:-

Form 61A has two parts:

Part A: It contains the statement level information which is common to all transaction types.

The second part is report level information which has to be reported in any one of the following parts (depending of the nature of the transaction):

Part B (Person Based Reporting), or

Part C (Account Based Reporting), or

Part D (Immovable Property Transaction Reporting).

How to furnish the Statement of Financial Transaction Form 61A electronically?

The process of furnishing of Statement of Financial Transaction in Form 61A is divided in two major steps:

Generation of Secured Statement Package through the java based Generic submission Utility available on reporting portal with the help of Digital Signature of the authorized signatory.
Uploading of the Secured Statement Package generated.

Statements generated by reporting entities using report generation and validation utilities at first step can be uploaded on the reporting portal directly or through submission utility.

Uploading of the Secured Statement Package (through Reporting Portal):-

Register yourself on Reporting portal under My Account menu.
Please note that all statements uploaded to the Reporting Portal should be in the XML format consistent with the prescribed schema published by the Income-tax Department.
Once XML is generated, sign and encrypt the XML using the Submission utility and prepare package to be uploaded.
On successful generation of submission package, login to the reporting portal and click on Statements on the top toolbar.
Click the File Statement button on the left sidebar.
On the Upload Statement page, fill out all the fields and select the relevant options from dropdown lists.
Against the Statement (.zip) field, click Browse and locate the secured XML statement package prepared from submission utility to upload.
Click Upload.
If manifest validation error appears, correct the relevant errors either on the screen or in Part A of the statement.

Upon successful upload, the following dialog box appears:-

Form 61A has been uploaded successfully. An email has been sent to your registered email id along with generated transaction No. “XXXXX.” Kindly login after 24 hours to check the status of uploaded report.

Uploading of the Secured Statement Package (through Generic Submission Utility):-

The Statement Upload section of the submission utility allows Reporting Entity to upload secured statement package (Digitally Signed Statement) generated through secure XML section.

Click the Statement tab. This opens the Statement Upload section by default.
Fill the login credentials and other relevant fields/ select the relevant options from dropdown lists.
Click Browse and attach the secured XML statement package prepared from the Secure XML section to upload.
Click Validate to display validation errors.
If manifest validation error appears, correct these errors either in upload form or in Part A of statement through report generation utility.
If no manifest error is displayed, the Upload button will appear.

Click the Upload button. Upon successful upload, Acknowledgement message will be displayed.

Note: Please ensure that the digital signature of the authorized signatory used for the generation of Secured Statement Package should be registered at the reporting portal.

PF Withdrawal Amendments Due to Corona Virus Pandemic

As we all know the whole world is going through with the Pandemic and its spreading drastically in the world. If we talk about country like India so only one thing came in mind i.e. liquidity because our economy is cash based economy and the people of India needs to have more cash with them self and for ensuring that our finance minister has announced the relief package for the country & amendments in withdrawal of PF is one of them.

It’s crystal clear that due to long lockdown people has started facing issues in terms of money and some of them are becoming Jobless. In this crucial time people don’t have money to survive so here came the relief package from the GOVT. for salaried employees over the PF withdrawal on 24th of March.

Sowe will tell you how much you can withdraw money from PF fund. First of all, let’s understand amendments for PF withdrawal rules.

Amendments announce due to Corona Virus Pandemic for withdraw of PF Rules

The finance minister said in her announcement that the employee can withdraw up to 75% from the balance of his EPF account as an advance (But this amount should not be more than 3 months basic Salary plus DA amount of the employee)

Understand with diagram and example to give you more clarity.


	75% of Outstanding Balance in EPF Account
PF Withdrawal Rule	75% of Outstanding Balance in EPF Account
		OR	Whichever is Lower
		OR	Whichever is Lower
	(Basic+DA) of 3 Months
	(Basic+DA) of 3 Months

For Example:

If you have PF account balance is 2 lakh and your per Month Salary plus DA is 30,000 then PF advance will be calculated as follows:

75% of 2 Lakhi.e. equal to Rs. 1,50,000/-

3 Months Salary (Rs. 30,000 per Month for 3 Months i.e. equal to Rs. 90,000/-(In this two conditions you can withdraw lower amount i.e. Rs. 90,000/-)

There are some benefits of withdrawing PF money in this Pandemic that a PF account holder can availed. Here are some Benefits given below:

1. Non-Repayable -If you withdraw the PF amount due to corona virus pandemic there is no need to repay the PF amount in future.

2. Not Mandatory to submit Proof – In the normal case of PF Withdrawal. A PF account holder need to submit some proof but if you want to withdraw your fund due to Corona virus Pandemic there is no need to submit proof.

3. No Tax Liability – In the Normal case If someone want to withdraw the PF before 5 years there are some tax that needs to pay by the account holder but in this case PF holder will not be required to pay tax on it.

Here are several points that are needed to be taken care off before raising request for PF claim.

1. Updated KYC– In your PF Account Your KYC detail should be updated (i.e.:-Your Name, PAN, Aadhar, Photo, Sign, Bank Detail Etc.) if your KYC is not updated then your claim request will not be processed.

2. Bank Account number– Check your bank account detail it should be Active and if you want to change the details then one should do it before raising the claim for PF.

3. Mobile number linked with Aadhar– This is very important that your mobile no must be linked with Aadhar because when you request PF claim online then for verification purpose the OTP will come on your Register Mobile number which will be registered with your Aadhar. If your mobile number is not linked with Aadhar then you won’t be able to claim your PF.

However, Yes, you now also have the option to withdraw from your EPF corpus. However, since the money you contributed to your EPF account is some kind of forced savings, withdrawing your EPF corpus should be your last resort. So consider and exhaust all other options before withdrawing from your EPF account. This is also because interest on EPF contributions is currently exempt from tax up to certain limits and financial planners therefore consider it one of the better options for debt investment.

In general, this package provides relief to eligible employees regarding their retirement benefits

Incorporation of Foreign Subsidiary in India

Foreign Subsidiary Company:

Foreign Subsidiary company is a company owned and controlled by another company and located in a country other than the parent company or holding company. The owning company is called a parent company or Holding company of the subsidiary company.

Benefits of the Foreign Subsidiary Company

The composition of a subsidiary in a foreign country may have many benefits such as opening access to new markets and using efficient production methods to control costs, expanding brand recognition. Move into a new location can increase profit and business expansion that would not be possible in the home country.

The stepwise process to incorporate a foreign subsidiary in India

1. Application for Name approval (Part-A)

First, it needs to decide the name of the proposed subsidiary company, it can be similar to foreign entity name by using the word “India” in its name, and this will help to take the Benefit of Its goodwill in foreign County.

After checking the name availability, the Incorporation Part A name approval application needs to submit with the Ministry of Corporate Affairs (MCA) department to take approval for the name of the foreign Subsidiary. The name availability check facility is available at the MCA website.

2. Documents need to be prepared for the Incorporation of foreign Subsidiary companies.

After getting the name approval letter from the Ministry of Corporate affairs following documents need to be prepared for company formation.

1. The physical copy of the MOA (Memorandum of Association of Company) shall be prepared.

2. The physical copy of the AOA (Article of Association of Company) shall be prepared.

3. Form DIR-2 declarations from the first Directors of the proposed company.

4. Declaration from the foreign directors and INC-9 Declaration from the foreign subscribers not having PAN or DIN (Director Identification Number).

5. NOC from the owner of the premises of the registered address.

Note: All the documents related to the foreign entity, foreign-based authorized person, and foreign director shall be duly Apostille / notarized in the country of origin.

3. The following documents and information should be required to incorporate a foreign subsidiary.

1. Copy of duly notarized and apostilled Certificate of Incorporation (COI), MOA and AOA (By-Laws) of the Foreign Entity.

2. Copy of duly notarized and apostilled board resolution to open a subsidiary company in India and to authorize someone to subscribe to the MOA (Memorandum of Association and AOA (Article of Association) of the proposed company on behalf of the foreign company.

3. Copy of ID and address proof of authorized person with passport size Photograph. (Passport, driving license and latest Electricity Bill or Mobile Bill or Latest bank statement)

4. ID and Address proof of proposed directors and Shareholders with passport size Photographs. One Indian Director shall be mandatory to incorporate a Subsidiary company in India)

5. Email ID & mobile number and education qualification of proposed director/shareholders and Authorized person

6. Latest utility bill as registered address proof of the proposed company and Rent agreement or lease deed if the property is on rent.

7. Details of Authorized capital and paid-up capital of the company.

4. Application for Company Incorporation (Part-B Incorporation of Company)

After getting the name approval letter from the Ministry of Corporate affairs and preparing all the above-required documents for company formation the applicant needs to log in the MCA website account and need to fill all the required Information in web-based Spice+ Part B form related to the formation of the foreign subsidiary company like Capital structure of the proposed company, registered address details, details of shareholder and directors of the company, PAN and TAN details of the proposed company and practicing professional details, etc. and also need to attach Following documents in Spice + Part B form.

(i) Copy of board resolution for Authorization, COI, and By-laws of the foreign entity.

(ii) MOA and AOA of the proposed company,

(iii) Latest Utility bill as a registered address proof

(iv) NOC from the owner of the premises

(v) ID and Address proof of the Subscribers, Directors and Authorized person.

(vi) INC-9 declaration if a person does not have PAN or DIN

(vii) Form DIR-2 (Declaration form the first directors of the company.

5. To Fill the details in AGILE PRO form:

After submission of Spice+ Part B form, one another AGILE PRO Web-based form needs to fill. In AGILE PRO form information related to GST, EPFO, ESIC, and BANK Account of the proposed company need to fill related to the proposed company and also need to attach following attachment in AGILE PRO Form:

(i) Utility bill as registered address proof of the proposed company

(ii) ID and Address proof of Authorized Person.

(iii) Specimen signature of the Authorized Person.

The Ministry of Corporate Affairs gives an option to apply for GST in AGILE PRO form, if the applicant wants to take GST then he/she can apply for GST but if do not want to take GST, in that case, he/she can select the option “No” but it’s mandatory to apply for ESIC and EPFO for every person but the company does not require to file a return of ESIC and EPFO till the date applicability of provisions of same on such company.

6. INC-9 Declaration

If the directors/ subscriber having PAN or DIN, in that case, INC-9 declaration shall be generated web-based and do not need to prepare separately, only need to affixation of DSC of Directors/ subscribers on the same. But in case directors/subscribers do not have PAN or DIN, It shall not be generated web-based, and the applicant needs to prepare it separately.

7. Download PDF of all the web-based forms

The applicant needs to download all the web-based forms in PDF file from the link given at the MCA dashboard after complete the filing of all information in a web-based form. After downloading the all web-based form PDF, applicants need to affix the DSC of Authorized person and subscriber in the same.

8. Submission of forms with the MCA

Whenever all forms ready with the applicant, upload all three documents as the linked form on the MCA website and make the payment of the same.

Web-based form i.e.

Spice+

Agile Pro

INC-9

9. Certificate of Incorporation

Once all the forms submitted with the MCA department the Registrar will issue a certificate of incorporation only after checking the forms and satisfying himself about the compliance with relevant provisions of the Companies Act to register the Company.

Some mandatory post incorporation compliances for foreign subsidiary:-

Report to the RBI in form FCGPR:

A report in Form FCGPR (Foreign Currency – General Purchase Register) need to submit with the RBI: This form needs to be filed within 30 days from the date of allotment of shares to foreign entity.

Further, the shares must be allotted within 60 days from the date of receipt of funds or within 60 days from the date of the Incorporation of the company. (Whichever is earlier), so it’s mandatory for newly incorporated company that funds should be received within 60 days from the date of incorporation.

Payment of Stamp Duty:

The Company must be an issue the Share Certificate within 60 days from the allotment of shares or from the date of Incorporation.

Payment of Stamp Duty: The Company will have to pay the stamp duty on the shares allotted as per the State in which the Company is registered. The rate of stamp duties is varied state to state.

Commencement of business form INC-20A:

The applicant needs to submit the Commencement of business form INC-20A to MCA within 180 days from the Incorporation date of the company.

Over a few years, there have been significant changes to certify PPE when used by Healthcare Professionals. We have noticed that most of the manufacturers of medical devices and PPE kits are confused in the standards. In the time of urgency and when a different type of certification is being asked for on short notice, the client is not able to understand exactly which standard is most relevant for his activity. Earlier SITRA’s (ISO 16603) norms were followed. But as demand is raised the market has been flooded with low-quality material. It becomes mandatory to follow the standard for the manufacturer. There is another certification from DRDE and if fabrics are certified with SITRA certification need not to have DRDE. But nowadays as many manufacturers and purchasing authorities are new to this field are not able to distinguish between both certification and insist their supplier/manufacturers take both certifications.

Standardization assures that the personal protective equipment is designed under the guidelines and to safeguard wearers against all known possible hazards.
If you are a new manufacturer of PPE Kits/Mask/Gloves/Medical Devices you might look for any of these following certifications.
ISO 13485
ISO 16603
Sitra Certification
DRDE Certification
CE Marking

ISO 13485 – ISO 13485 is standard for Medical Devices Industry. This assures production quality & regulatory compliance. This international standard involves the process to monitor the quality management on one or more stages of the life cycle of the medical device. The standard provides the guidelines to Medical Device Industry to achieve effective quality management. In these times when the market is flooded with much medical device business, A company certified with 13485:2016 is always preferred by vendors of this industry. Standard ISO 13485 ensures medical devices in different places signify the same quality and credibility.

ISO 16603 – This standard is concerned about protection for clothing against contact with blood and body fluids. This is the test certification addresses performance of materials used in protective clothing. The primary purpose of this standard is to clarify the test method.

SITRA – The Union Ministry of Textile has mandated SITRA (South Indian Textile Research Association) Registration for the production of personal protective equipment (PPE). Manufacturer of PPE Kits needs to pass a laboratory test as set out by South Indian Textile Research Association.

DRDE Certification – This is a Laboratory test for Personal Protective Equipment (PPE) Body Coverall submitted by Indian Manufacturers. The test covers the guidelines of Ministry of Textile and issues for implementing the quality control mechanism. The sample for Test is submitted to the Institute of Nuclear Medicine & Allied Sciences.

CE Marking – This is applied to get recognition in the European Economic Area. This ensures that the product is safer and visually more appealing. IEU making Conformitè Europëenne (CE) a worldwide mark. The employers of healthcare professional must ensure that they tested the quality of PPE kit and weaknesses of the protection systems.
The CE mark has become mandatory for all PPE placed in Market after 2004. Any manufacturer of PPE kits of any medical device is obligated to ensure that its product and its documentation meet all mandatory provisions under the directive of CE marking.
To take the registration of ISO please click here https://www.mycorporation.in/india/iso-certification-consultant-standard-9001-2008

Every LLP registered with MCA should follow the specific compliance and practical approach related to it. Each LLP needs to follow the minimum required compliance to keep away from being defaulter and to avoid future penalties or unfriendly results.

The mandatory compliance for compliance of any LLP is given below:

1. Form-11 with MCA

2. Form-8 with MCA

3. Filing of Income Tax Return

4. Tax/Statutory Audit

4. DIR-3 KYC Filing

LLP Annual Return Filing: (Form-11)

The LLP’s annual return filing is to be documented with MCA in the recommended group for Form-11. The expressed structure gives data regarding the partner of the LLP. Form-11 provides a summary to MCA about LLP partners and furnish the information to ROC such as total number of Partners, contributions received by each partner and any change or amendment has taken place in the management of the partner or LLP at the time of the announcement should be incorporated into the framework stated earlier so that the Ministry should have the latest data about the partner / designated partner of the concerned LLP. The form is filed on the MCA portal within 60 days from the end of the financial year ending 31 March. The due date for filing after the end of the financial year is 30^th May.

Statement of Account & Insolvency: (Form-8)

Form-8 is filed to disclose Statement of Account & Insolvency of the LLP. Every company or LLP require maintaining the books of accounts and financial statements to smooth the process of filing returns. The records required to be outfitted before the Ministry each year in the form-8 along with the mandatory details and information asked in the prescribed format. Form-8 should be filed with MCA on or before 30^th October of every year. The form-8 is signed by two designated partners and has to be certified by CA/CS. The form is divided into two parts.

Statement of Solvency

Statement of Accounts, Income and Expenditure Statement.

Income Tax Return:

Every LLP needs to file Income Tax Return annually. This is to furnish the information about financials of LLP, What was the earning of LLP, Taxes has to be paid and Tax liabilities and the rebates received from Govt. The turnover of LLP is more than 40 Lakh or the contribution is more than Rs. 25 lakh in any financial year, statutory audit becomes mandatory to file.

Note:
1- If the turnover is less than 40 lakh ITR has to be filed on or before 31^st July and if turnover is more than 40 lakh the date of filing usually extended till 31st October.
2- The tax rate is applicable in accordance with the turnover of LLP
If turnover is less the 250 cr. The tax rate is 25% and cess 4%
And if turnover is more then 250 cr. The tax rate is 30% and cess 4%

Tax Audit:

In case of LLPs, if the annual turnover is more than Rs. 1 cr. Tax Audit is mandatory to file. The accounts of LLP has to be audited by a practising chartered accountant. The due date to file the return as tax audit is 30^th September.

DIR-3 KYC:

DIR-3 KYC is new added compliance introduced by ROC. Every DIN holder whether he/she is holding directorship/partnership or not need to file dir-ekyc every year, The forms contains details about the partners of LLP

(DIR ekyc) for the first time filing – e-form DIR-3 KYC has to be filed

(DIR ekyc) For subsequent admissions – DIR- 3KYC WEB form has to be filed.

FSSAI is a contraction for Food Safety and Security Authority of India. It is an organization which is controlled by the Indian Government and the Ministry of Health and Family Affairs. FSSAI is perceived under sanitation and security Act, 2006. It is an organization which is made for protecting the health of the public. All the individuals or organization who are associated with the food business whether, as Manufacturer, dealers, food business administrators (FBOs) has mandatory to obtain 14-digit FSSAI number which is printed on the package of food so, that Buyer can purchase it as per standard of FSSAI and safe for consumption. Get overall details about food license India.
On the off chance that you are wanting to begin a food business, you should have a food permit which is given by FSSAI authority. No one can commence its food business without license otherwise penal provision shall apply as per the said act.
The Food Authority has taken a step to protect foods for the food-related businesses, which is tested in various parameters to guarantee the nature of the food and make it safe for human use and as a result case of food shortage and fainting Helps reduce quality which is insufficient Thus, it is mandatory to obtain food license or registration it depends upon the location and a yearly turnover of the food business operator.

Kinds of FSSAI Food Licenses in India
FSSAI issues three unique kinds of food licenses in India:
Basic FSSAI Registration
Small-sized food business operators like transporters, stockpiling units, distributer, advertisers, retailers, manufacturers and which is issued by the State Government for a minimum period of one year and a maximum of 5 years. It is for the most part for the units having a yearly turnover of less than 12 lakh. The rest depends on aptitude; FBO can thus fall under either state FSSAI license or basic registration.
State FSSAI License
The authority has guided the food business operators annual turnover of more than 12 lakh, like small to medium-sized manufacturers, stockpiling units, transporters, advertisers, retailers, distributors, etc to obtain the State FSSAI License. It is issued by the respective State Government having a minimum validity of one year and a maximum of 5 years.
Central FSSAI License
Applicable for obtaining central food license issued by the central government to food manufacturers who have a turnover of more than 20 crores such as large manufacturers, units with 100% fare arrangement, traders, central government offices, airports, ports, etc. Is directed to obtain a central license for the head office of those who are FBOs and if they work in more than one state. This license is one year and the most extreme is 5 years.

Who needs to apply for FSSAI
It includes any food business operator like:
• Hotels
• Restaurants
• Food Chains
• Packaged Food Manufacturers
• Food Sellers and Resellers
• Canteens in Corporate Companies
• Schools
• Colleges
• Hospitals
• Government Institutions
• Food Importers and Exporters
• Raw Material Suppliers

There are 3 different kinds of FSSAI registration, the normal time for FSSAI license registration varies.
1. The basic FSSAI license will be given in 7 working days.
2. State license and Central license will be allowed in 30 days.
Please Note Food license can be renewed

Documents necessary For Central License
?   Copy of Aadhaar Card/Voter personality card of Owner/Accomplices/Executive
?   Electricity/Water charge (Business Spot)
?   List of Chiefs with full location and contact
?   Proof of ownership of premises
?   Partnership Deed/Affirmation of Ownership/MOA&AOA
?   NOC and Duplicate of Permit from the producer (compulsory for re-labellers and re-packers as it were)
?   Declaration Structure
?   Authority letter
?   Food Security The executive’s Framework plan or endorsement
?   IEC Code (For shipper/Exporter)

Documents necessary For Traders To Get FSSAI Central License
?   Photo ID gave by Government authority
?   Passport size Photograph
?   Address confirmation gave by Government authority
?   List of Executives with full location and contact
?   Copy of Lease understanding (If the property on Lease)
?   Partnership Deed/Testimony of Ownership/MOA&AOA
?   NOC and Duplicate of Permit from the maker (obligatory for re-labellers and re-packers as it were)
?   Declaration Structure
?   List of food items
?   Authority letter
?   Food Wellbeing The executive’s Framework plan or authentication
?   BluePrint of Handling Unit and Gear/Hardware
?   Production unit photo
?   For Transporters: Evidence for Turnover or self-statement of number of vehicles
?   List of Gear and Apparatus
?   Pesticide buildups report of water
?   IEC Code (For shipper/Exporter)

To know more about the food license please click here https://www.mycorporation.in/india/apply-food-license-fssai-food-safety-and-standards-authority-of-india-registration-consultant

Conversion of OPC to Private Limited

What is the Conversion of One Person Company?

Company conversion means the conversion of the company from one type to another type of company. A one Person Company (OPC) can be converted into a normal Private Limited or Public Limited company by way of voluntarily conversion or mandatorily conversion.

Conversion of a One Person Company (OPC) into a Private Limited Company

The conversion of an OPC- One Person Company into Private Limited Company is possible and need to follow the provisions of Companies (Incorporation) Rules of 2014, in particular the Rule 7(4) of the Companies (Incorporation) Rules, 2014 and Section 18 of the Companies Act, 2013. We can convert OPC to Private Limited voluntarily as well as mandatorily (as required by the department). In both the conversion process it’s mandatorily required to alter the MOA and AOA of the OPC (As per the guideline of section 18 of the Companies Act, 2013, along with section 122 of the Companies Act 2013.

Following documents should be required for conversion of One Person Company (OPC) into Private Limited Company:

• ID and Address proof of Directors;

• MOA and AOA of the company;

• COI of the company;

• Audited Financials of the Company;

• NOC from the Creditors and Members of the company;

Basic conditions to convert OPC into Private Limited (Voluntary)

Voluntary conversion of One Person Company into a private or public limited company should be possible, only if a period of two years of its incorporation of the OPC (two years counted from the date of incorporation of the OPC) has been passed. The process and Provision of voluntary conversion of an OPC into a private limited company are as under:

• The existing OPC which we want to convert must have the total paid-up capital less than or equal to the INR-50 Lacs; and during the past three immediately preceding years and consecutive financial years its average annual turnover, should be less than or equal to the INR-2 Crores, at the time of conversion of One Person Company to Private Limited Company.

• The OPC shall require to obtain “No Objection” in written form, from its members and creditors of the company.

• To convert OPC to private limited it must have two directors and two members.

• The Company also needs to pass a special resolution in the general meeting in support of its conversion. The copy of such resolution shall need to submit with the concerned ROC within Thirty Days by way of filing Form MGT-14, after getting approval of form MGT-14, application in Form INC-6 is also need to submit with the following attachments:

I. A solemn declaration of the director of OPC

II. List of members and list of creditors if any.

III. A copy of No Objection letter from creditors

IV. The latest audited balance sheet on the profit and loss account

Compulsory conversion of OPC to Private Limited

As per the Rule 6 of the Companies (Incorporation) Rule, 2014 & and conversion of One Person Company to Private Limited Company is mandatorily required under the Companies Act, 2013 if:

I. OPC has paid-up share capital that exceeds Rs. 50 lakhs and

II. The yearly turnover of immediately previous three consecutive financial years is more than 2 Crores rupees,

Then it is mandatory for Such company has to compulsorily convert into a private or public limited company within 6 months from the date when the paid-up share capital exceeded 50 lakhs rupees or the last date of the related period in which the average annual turnover of immediately previous three consecutive financial years exceeds the limit of INR 2 Crore.

For Compulsory conversion its require to pass a special resolution in the general meeting of the company, to take NOC in written from the creditors of the company, and the other members before the resolution are passed and also need to submit form MGT-14 with the concerned ROC.

Form INC-5 also needs to submit with the department within sixty days of exceeding threshold limits and after getting the approval of form MGT-14 and form INC-5, its shall also be required to submit form INC-6 with required attachments with the department within six months of mandatory conversion to convert OPC into Private Limited.

Note: Once all the forms submitted with the MCA department the Registrar will issue a new certificate of incorporation only after checking the forms and satisfying himself about the compliance with relevant provisions of the Companies Act 2013 and other applicable provisions and laws.

Countervailing Duty – A Boon for Indian Producers

Index:

What is Custom Duty?
Types of Custom Duties
Countervailing Duty (Additional Duty)
- What it is?
- Why it is levied?
How it benefits the Economy?
Conclusion

What is Custom Duty?

Customs duty is a type of indirect tax levied on all goods imported into the country, as well as some goods exported out of the country. The duty levied on the first is called an import duty, while the second is called an export duty.

The duty levied depends on the value of the goods, its dimensions and weight, along with many other criteria. Although value-based rights are called valorem rights, quantity-based rights are called specific rights. On the other hand, rights to values ??plus other factors are called compound rights.

Custom Duty in India falls under the Customs Act. As per this act, the government levies duties on both import and export of goods along with their procedures. Matters pertaining to this duty fall under the CBIC (Central Board of Indirect Taxes and Customs), a division of the Department of Revenue of the Ministry of Finance.

The CBIC helps in formulating policies w.r.t. the collection and imposition of custom duties. It oversees the tax administration of inland and foreign travel.

Types of Custom Duties

Customs duties generally levied on goods imported into the country. While export duties are levied on goods as specified in the list in the law, no import duties are levied on certain items such as fertilizers, food grains, life-saving medicines, etc. The customs duty can be classified into the following types: Compensatory obligation to compensate for export subsidies: First, there is the countervailing obligation to take countervailing measures against export subsidies granted to their exporters by foreign governments.

Basic Customs Duty: This obligation is fixed based on the price of the item and therefore imposes the value of the item at the specified rate. However, the government has the right to exempt certain goods from this tax.

Countervailing Duty: CVD or additional customs duties are levied on imported goods.

Anti-Dumping Duty:This duty is based on the dumping margin, which is the difference between the export price and the normal price. It is imposed only if the imported goods are lower than the fair market price.

Education Cess: Education cess used to be levied at 2% of the aggregate of customs duties.

Protective Duty: This right was created to protect domestic industry from imports at rates recommended by the Tariff Commissioner.

Safeguard Duty: This right has been created to protect domestic industry from imports at rates recommended by the Tariff Commissioner.

Countervailing Duty (Additional Duty)

What it is?

The countervailing duty is an import duty imposed on imported goods because it neutralizes some of the benefits of the imported goods (from the exporter’s governments).

Why it is levied?

Compensatory obligation to offset export subsidies: First, there is the countervailing obligation to take countervailing measures against export subsidies granted to their exporters by foreign governments.For example, the export subsidies provided by the Chinese government make Chinese products cheap on the Indian market. This is a drawback for the competing Indian products. To overcome this situation, the Indian government can impose a countervailing duty on Chinese imports.

Countervailing duties to neutralize the exemption from excise duty: Secondly, there are the countervailing duties imposed on the imported product to neutralize the exemption from excise duty enjoyed by the imported product. In this case, most imported products in the producing countries are exempt from excise duty (tax on production). This exemption is granted by the governments there to offer exporters a low price (since tax is exempt). On the other hand, their competitors in India as local producers have to pay excise duty in India. In order to balance this situation, the Indian government may impose an additional customs duty (or countervailing duty) on imports.

How it benefits the economy?

Except in all cases, except in the rarest cases, the tariffs are harmful to the country that imposes them, as their costs outweigh their benefits. The tariffs are a boon to domestic producers who are now facing less competition in their home market. Prices are rising due to less competition. Sales from domestic producers should also increase, everything else would be equal. Increased production and prices are causing domestic producers to employ more workers, increasing consumer spending. The rates also increase government revenues that can be used for the benefit of the economy.

However, there are costs associated with the rates. Now that the price of the good has risen with the tariff, consumers are forced to buy less of this good or less of another good. The price increase can be seen as a decrease in consumer income. Because consumers buy less, domestic producers in other industries sell less, which causes the economy to decline.

Overall, the benefit brought about by the increased domestic production in the tariff-protected industry plus the higher government revenues does not offset the losses caused by higher prices for consumers. We haven’t even thought about the possibility that other countries would levy tariffs on our goods in retaliation, which we know would cost us dearly. Even if they don’t, the rate is still expensive for the economy.

Let’s understand with an example, which will simplify understanding:

If country “X” applies rates to products from country “Y”, consumers from country “X” would pay more for products from country “Y”. As a result, goods from country “a” are made more attractive to consumers from country “X”. This increased demand for domestic products is helping industry to expand, create jobs, etc.

However, there are always negative side effects. Businesses in country “X” have declined over time as there is less competition from countries abroad whose products are more expensive for domestic consumers. Less competition means less innovation, higher prices and lower quality goods. When rates are increased, these companies can sometimes lag behind international competitors – after all, they must be protected from international competition. More competition results in more efficiency, more innovation, lower prices and better quality goods. Companies gratefully fight each other to protect their market share. Less competition means the other.

As I said, consumers from the country pay “X” more for products, thanks to the import tax (tariffs). While they will protect domestic industry and jobs to a certain degree and for a short time, they do affect consumers – especially the poorest consumers who pay a greater share of their income for everyday necessities.

Domestic companies may also find that you pay more. For example, Coca-Cola pay more for aluminium thanks to the ten rate that is levied on imports of aluminium. These costs are always passed on to the buyer.

There are better ways to protect domestic industry, such as easing labour laws, cutting taxes, investing in education, removing the burden of health insurance for workers through a universal health care system, etc. In countries like the UK, companies have no an equivalent burden to provide health care to his or her employees. But this is often another debate for a special day.

Conclusion

As every human body has a defence mechanism to protect the internal intact organs from the foreign particles, the same type of mechanism exists in every country to ensure the protection, sustainability and development of the inland industries.

• While making regulations and rules on trade policy, Govt. should allow a perfect competition in between domestic as well as international competitors. To fulfil the need of the consumers, not every domestic and international organization has the ability to gain the sense of faith and reliance of the consumers. Perfect competitions among organization eventually introduce the better final goods at competitive price.

• The durability, performance, and product support are some of the key aspects on which every producers and organizations have to think twice before launching the goods in market. Sometimes global organizations have the plus point on these aspects as compare to the domestic industries. This is because the global organizations focus on easy access and well interlinked planned at every step during the finalization of the goods. Government should provide a bird’s eye view of these aspects to the domestic suppliers which enable them to compete with the better strength of reliance of their consumers.

• It’s a good step to introduce the extra duties levied on imported goods, it will boon the progress, production and performance of the domestic goods. But we need to keep one think before the introduction of the same, there is the presence of varied type of consumers who expect better experience in return of worthy money. It will better to introduce after the transparency at each step of the production.

ESIC Registration, Applicability and Benefits

Index:

What is ESIC?
Applicability of ESIC
Required Documents for ESIC Registration
ESIC Contribution rates and Deposit rule
ESIC Registration Benefits

What is ESIC?

ESIC Stands for Employee State Insurance (ESI), Basically ESI managed by govt. of India and its all administrative activities covered under Employee Insurance Act 1948 .This is a social security scheme where employee has so many benefits related to medical and cash such as Sickness, Maternity, Disability, Death at the time of employment, Unemployment Etc. It provides protection from health related calamities for more than 2 crore employees and their families. In addition to this, there are more than 150 Hospitals and 15000 dispensaries are working across the country.

Applicability of ESIC

Now the question is which establishment is needed to be registered under ESIC scheme for the proper fulfillment of all adviseriese this Act will applicable to all factories and other establishment which cover under this Act.

Now we understand what the ESIC applicability criteria are.

If total number of employee more than 10 is working in an establishment than ESIC registration is applicable for the establishment. However In case of Maharashtra and Punjab require minimum to 20 employees for coverage for this Act.

Minimum monthly wages of an employee must be less than Rs. 21000.

On 1st January 2017 the amount of Rs. 21000/- is amended earlier the limit was Rs. 15000/-

If the establishment cover once in this act will always be covered in this act, even if the number of employee goes below than the required limit i.e. 10 or 20 as required.

If the employee wages of Rs. 21,000 is increased due to any reason, then employee continues to be covered under the scheme.

Person who are not covered under this scheme

Proprietor or Partner
Contractor
Person engaged on a contractual basis (i.e.- Tax Consultants, Legal Consultants)
Apprentice covered under Apprentice Act, 1961

Required Documents for ESIC Registration

Registration Certificate issued under shops and Establishment or Factory act.
Partnership deed for Partnership Firm/Memorandum and Article of Association in case of company/Trust deed for trust.
GST Certificate (if available).
List of Partners/Directors.
PAN of the Establishment.
Address proof of the Establishment.
Bank statement/ Cancelled cheque of the Establishment.

ESIC Contribution (Employee and Employer)

Total deduction made by employee and employer is 4% and Employer deducts the amount on behalf of employee. Where the contribution of employee is 0.75 % and employer contribution is 3.25 % of the gross salary.

Deposit Rule

The Contribution should be deposited to the Govt. to 15 day of every month, For Example: If ESI Contribution is due for the month of March, then it should be deposited in 15 Day of Next Month (i.e. 15 April)

If the establishments fail to deposit the contribution within the due date or non deposit of contribution is a punishable offense and it’ll attract an interest of 12% per annum.

ESIC registration Benefits

There are several benefits available given below:

Medical Benefits: ESIC Provides to employee medical benefit starting from date of employment and also cover medical benefits to his family.
Sickness Benefit: if the employee in a medical leaves then 70% of average daily wage will be provided in cash for 91 days in two consecutive benefit periods.
Maternity Benefit: Under this benefit is provided 100% average daily wage for mother up to 26 weeks, for 6 weeks in case of miscarriage, 12 weeks for a commissioning mother/adopting mother.
Disability Benefit: ESIC grants monthly payment in case of temporary disablement till injury lasts and lifelong in case of permanent disablement.
Dependants’ benefit: In case of death due to employment injury, the monthly payment is granted to dependants. Also, the funeral expenses are born by the ESIC
Unemployment Allowance: if the case is of involuntary loss of employment, ESIC provides for monthly cash allowance for duration of 24 months (maximum).

Conclusion

ESIC provide heath security to employees and their dependent families. The scheme provides to the employees medical and cash benefits with the very low amount.

Following Compliance need to be done by company during the financial year in respect of income tax Act, GST Act and TDS

Income tax Act and GST:-

a) Regarding Advance Taxes :

Every company is required pay advance taxes if tax liability is more than 10,000 in financial year.

1^st Instalment: 15% advance tax liability by 15^th June

2^nd Instalment: 45% advance tax liability by 15^th Sep

3^rd Instalment: 75% advance tax liability by 15^th Dec

4^th Instalment= 100% advance tax liability by 15^th Mar

b) Regarding Income tax return and Tax audit:

Every company will have to file ITR on 30^th September and if turnover crosses the threshold limit that is Rs. 1 CR then tax audit becomes applicable and it is performed by a practicing chartered accountant and due date for the audit is 30^th September for next financial year.

c) Regarding TDS Compliance:-

A company requires to deduct TDS specified payments as per the income tax act. This amount should be deposited with the government on or before 7^th of the succeeding month in which tax was deducted except for the March month that is 30^th April

TDS Return Due Date for the FY 2019-20:-

Quarter Period		Last Date of Filing
1st Quarter (April-June)		31st July
2nd Quarter (July-Sep)		31st Oct 2019
3rd Quarter (Oct-Dec)		31st Jan 2020
4th Quarter (Jan-March)		30th May 2020 (Now its 30^th June 2020 for the FY 19-20 Q4)

Compliance under Goods & Service tax Act (GST)

As of now there are only two returns depends upon cases i.e. GSTR-3B is compulsory for the tax payment of taxpayer and for other depends on their registration type & and for regular tax payer its GSTR-1

I) GSTR 3B:

GSTR-3B is summary return it consist the details of total taxable supplies, Tax amount, ITC (Input Tax Credit) and Cash Payment if any.

ii) GSTR 1:

GSTR-1 is showing outward supplies for the month or quarter depends upon the person who file it whether they are liable for the monthly filing or quarterly filing.

iii) GST Annual return:

GST Annual return is basically a reconciliation statement which is prepare by registered person themselves and if there is any changes required then taxpayer reconcile the same on its own.

iv) GST Audit:

GST Audit is required by those companies, whose annual turnover has crossed threshold limit that is Rs. 2 crores. And its required to file annually .The due date to file GST audit report for FY is 30^th September of subsequent financial year and it is amended time to time by the Government.

Due Dates are as follows:-

Returns Type	Due Dates
GSTR-1(Return of Outward Supplies if turnover is less than 1.5 Cr then –Quarterly Return Filing)	31^stof subsequent month after ending Quarter
GSTR-1(Return of Outward Supplies if turnover is More than 1.5 Cr then –Monthly Return Filing)	11^th of Subsequent month
GSTR-3B	20^th of Subsequent month
GSTR-9/9C (Annual Return & GST Audit)	30^th September of Next financial year

All the above due dates and turnover limits are as per the standard rules, but it’s possible in any circumstance government changes these rules for any time period so it’s very important to updated on daily basis because due to COVID-19 government changes many due dates and rules so all the above matter is just for basic idea about compliance and their due dates.

Author: – CMA Praveen Kumar Tiwari

Website:- https://www.mycorporation.in/

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