FDI in India

FOREIGN DIRECT INVESTMENT (FDI): A key driver of India’s economic growth

FDI is an investment from a party in one country into the business/corporations of another country with the intention of having a “lasting interest”. Here the “lasting interest” is determined when the investing party acquires a share of at least 10% voting right in other organisation. Therefore, the element of control is the key differentiator between FDI & Foreign portfolio investment (FPI).

FDI in India is not just restricted to the movement of capital across borders but it also includes movement of other elements such as skills, technology, process, management

Since the liberalisation of the Indian economy in 1991, the climate of Investment has improved exponentially. This is more or else because of ease in FDI reforms across sectors.

To attract a huge chunk of investors from outside, Government of India (GOI) has made policy of FDI in India in such a way that it is more transparent & easy to understand for any investors.

There are two ways of FDI in India.

  • Automatic Route: Does not require any approval from GOI.
  • Government Route: Prior approval from GOI is mandatory.

For a mixed economy like that of India where we have both public and private sectors, it’s need of the hour that we should bring in as much FDI in India as possible since it will open new doors for the Indian economy and help in achieving the dream of becoming $5b economy by 2024.

FDI is the major driver for economic growth of India. Some of the factors which helps in attracting FDI in India are: Abundance of natural resource, market size, infrastructure, geographical location, government policies

Alternatively, FDI can be brownfield – wherein an organisation expands by way of cross-border mergers, acquisitions and joint ventures – by either leasing or purchasing existing facilities for its production. The clear advantage of brownfield investments is the savings in cost and time for starting up, as well as engaging in construction activities.

Read other blog: APPROVAL PROCESS FOR FDI IN INDIA

BENEFITS OF FDI IN INDIA

  • Employment and Economic Growth

Creation of jobs is the most obvious advantage of FDI in India. It is also one of the most important reasons why a nation, especially a developing one, looks to attract FDI. Increased FDI boosts the manufacturing as well as the services sector. This in turn creates jobs, and helps reduce unemployment among the educated youth – as well as skilled and unskilled labour – in the country.

  • Human Resource Development

This is one of the less obvious advantages of FDI. Hence, it is often understated. Human Capital refers to the knowledge and competence of the workforce. Skills gained and enhanced through training and experience boost the education and human capital quotient of the country. Once developed, human capital is mobile.

  • Development of Backward Areas

This is one of the most crucial benefits of FDI for a developing country. With the dawn of FDI in India, backward areas were transformed into industrial regions. This in turn provides a boost to the social economy of the area.

  • Technological development

Most updates technology, international operations practices are also brought in by bringing in FDI. Over time, the introduction of newer, enhanced technologies and processes results in their diffusion into the local economy, resulting in enhanced efficiency and effectiveness of the industry.

  • Increase in Exports

Since all the goods produced from FDI are not meant for domestic consumption rather many of these products are produced to be traded in global markets. The creation of 100% Export oriented Units (EOU) and Economic Zones have further assisted FDI investors in boosting their exports from other countries.

Read more: Top Reasons for Outsourcing Corporate Secretarial Services

  • Stable Exchange Rate

The constant flow of FDI into a country translates into a continuous flow of foreign exchange. RBI being central bank has certain responsibilities which it requires to fulfil; one of them is maintaining a substantial amount of foreign exchange reserves which acts as a buffer in case of any slump.

  • Stimulation of Economic Development

FDI is a source of external capital and higher revenues for a country. When factories are constructed, at least some local labour, materials and equipment are utilised. The people who are employed by such factories thus have more money to spend. This creates more jobs.
These factories will also create additional tax revenue for the Government that can be infused into creating and improving physical and financial infrastructure.

  • Improvement in Capital Flow

Capital inflow is beneficial for countries with limited domestic resources, as well as countries limited by opportunities to raise funds in global capital markets.

  • Competitive Market

FDI in India helps create a competitive environment by bringing in the foreign companies to setup here, break domestic monopolies. A healthy competitive environment pushes firms to continuously enhance their processes and product offerings, thereby fostering innovation. Consumers also gain access to a wider range of competitively priced products.  

Warehouse Registration

WAREHOUSE LICENSE & REGISTRATION

According to warehouse development & regulatory authority (WDRA) act, 2007 further amended in 2017, specifies the rule and regulations that are mandatory for anyone who is carrying on warehousing business in India or planning to issue Negotiable warehouse receipts (NWR) must apply for warehouse license beforehand. Online registration procedure to get warehouse license has been put in place since November 01, 2017 and now every warehouse registration applicant has to submit online.

PROCESS OF WAREHOUSE LICENSE & REGISTRATION

  1. Filling of application form for warehouse registration
  • In accordance with WDRA act, 2007, any person desirous of getting warehouse registration must fill in the application form in accordance with the rule & guidelines mentioned.
  • Application can be submitted for one or more warehouse(s) owned by an individual or having effective control over it.
  • Primarily an application can be submitted electronically or the method as specified by the authority.
  • An application can be treated as complete only when it fulfills the mentioned criteria.
  • Application submitted in the manner as specified in sub-rule (1) of WDRA act, 2007
  • Contains all the documents as specified under WDRA act, 2007
  • Accompanied with the fees as specified under WDRA act, 2007
  1. Prescribed fees for warehouse registration: As specified under third schedule of WDRA act, 2007; prescribed fees must be paid to the authority within the stipulated time to complete your Warehouse license process.
  2. Acknowledgment receipt of warehouse registration: After warehouse registration application form received by the WDRA authority, documents verified and checked; authority must send an acknowledgment to the applicant within three (3) working days of receipt of application.

DOCUMENTS IN SUPPORT OF WAREHOUSE REGISTRATION APPLICATION

  1. Photograph (Passport size) of Authorized Representative.
  2. Applicant’s identity proof according to the Warehouse Registration Rules, 2017.
  3. Address proof of Authorized Representative.
  4. Standard Operating Procedures (SOP).
  5. Documents supporting the net-worth of the applicant.
  6. Insurance policy copy.
  7. Data Sheet (in case of cold storage).
  8. Technical standards proof of the warehouse site.
  9. List of equipment for preservation of goods
  10. List of equipment for weighing goods at the warehouse.
  11. Fire Safety arrangements at the warehouse.
  12. Copy of the Records of registered property title deed in respect land (in case property is owned)
  13. Document to demonstrate effective control over the Warehouse
  • Lease or rent agreement.
  • Sub-lease agreement & lease deed indicating that sub leasing is permitted.
  • Revenue sharing agreement (if applicable)
  • NOC from Municipal Corporation (any local authority as applicable)
  • Allotment letter copy from State Government.

Top Chartered Accountants in India

Top Chartered Accountants in India

In today’s era, e-commerce is becoming very popular. We all are relying more on online service for purchasing of goods and services. Online Chartered Accountants services are also becoming popular as it is easy to access all services online rather than visiting CA’s office every time. Other benefits of Online CA services are:

  • Global reach as there are no geographical boundaries
  • Always opene. 24 hours a day, 7 days a week
  • The cost involved is less
  • Time and efforts involved are less
  • Ease of payment transactions
  • Paper wastage is less
  • Improved client services

Online CA services:

Now we can find all CA related services online like accountancy, auditing, taxation, etc. Chartered Accountants are providing following online CA services to their clients:

  • Accountancy or bookkeeping services: It includes writing up of accounts and preparation of financial statements.
  • Auditing services: It includes various audits like statutory audit under companies act 2013, tax audit under income tax act 1961, GST audit, internal audit, stock audit etc.
  • Taxation services: It includes preparing and filing of returns for tax purposes like Income tax returns, TDS returns and GST returns. It also includes representing the client before the tax authorities and rendering general advice on taxes to his clients.
  • Registration services: It includes company registration, GST registration, IEC registration, FSSAI registration, APEDA registration, ISO registration, MSME registration, etc.
  • Other Business related services: It includes other business-related services like company formation, company closure, company annual filing, LLP annual filing, business consultancy, financial advisory services, direct and indirect taxation advisory services, management consultancy services, foreign remittance compliance, etc.
Read other blog: Are you looking for a Chartered Accountant online in India?

Top Chartered Accountants in India:

Understanding and compliance of applicable tax laws can be very confusing and complicated for clients. There are various aspects related to bookkeeping, taxation, laws, and regulations, which can be difficult for the client to understand. That’s why it is very important to hire professionals for this work so that clients can focus on their main business activities rather than worrying about tax compliance.

Tax Consultants in India:

Tax Consultants ensures that clients comply with all tax obligations and receive all deductions for which he is eligible for. There are many small tax consultants in India but it is always better to prefer a Chartered Accountant as they have all the required knowledge and experience for compliance of applicable tax laws. Chartered accountants are professionals who use their knowledge and expertise in helping individuals or businesses for making compliance of applicable tax laws.

Also Read: How to register a company online in Delhi?

For the access of online CA services, we have to search for companies or CA firms providing online CA services. If you are searching for top chartered accountants in India, then you can visit CA on web website for online CA services. We are providing an online directory where you can find top chartered accountants in India or tax consultant in India as per your requirements and you can also search for top chartered accountants in India nearby your location for your convenience.

 

Income Tax Return filing

Confused about Income Tax Return filing? Find answers to all your questions

If you are earning taxable income, then you should contribute some amount by way of taxes for the benefit of Nation. It is the responsibility of all taxpayers to declare Income and deposit tax their on for the benefit of economic growth of the country. Many people are confused about the Income Tax Return filing process, income tax return form applicable for them and documents required for it.

To help you, we are providing answers to all your common questions regarding income tax return filing:

  • Who is required to file an income tax return?

Online income tax return filing is mandatory for Individuals having annual income exceeding Rs2, 50, 000. There is a relaxation in this income limit for senior citizens i.e. Rs.3, 00,000 for senior citizens (more than 60 years old, but less than 80 years old) and Rs.5, 00,000 for super-senior citizens (more than 80 years old).

  • What is the due date to file an income tax return form?

The due date for online income tax return filing not liable for a tax audit is July 31 of the assessment year. If you miss this deadline of ITR filing, and if you have a tax liability, then you have to file a belated return and pay your tax along with simple interest of 1 percent per month.

  • How to file an income tax return?

You can either file an income tax return form yourself by visiting the website of income tax department or take help of professionals through our online platform CAONWEB for filing and any queries relating ITR filing, income tax return form and, ITR due date.

  • What are the documents required to file an income tax return?

The documents required for ITR filing are PAN, Aadhar Card, Form 16 and 16A, Form 26AS, bank statements, interest statements, details of investments, insurance, and home loans. If you earn more than Rs.50 lakhs than you will also have to fill an additional column “AL” or assets and liabilities.

  • Which income tax return form to fill?

You have to select the applicable income tax return form for Online income tax return filing as per your income. Income Tax Department has provided seven forms ranging from ITR 1 to ITR 7 for ITR filing.

Read more:  New ITR filing date for A.Y 2019-20
  • Why you should file an income tax return even if your annual income is not taxable?

You should file an income tax return even if your annual income is not taxable as there are various benefits of ITR Filing like you can claim income tax refunds, apply for a loan, and carry forward capital losses.

  • Why there is tax due even after TDS was deducted?

There may be tax due even after TDS was deducted as your employer deducts TDS based on the tax slab you fall, which is based on your annual income. However, if you haven’t declared your investments or income from a previous employer, the calculations may go wrong. And, Banks also do not know your slab and they deduct TDS at 10%, which may lead to a tax due in your return if you belong to the 20% or 30% tax slab.

  • Is it mandatory to report all your bank accounts?

Yes, it is mandatory to report all your savings and current bank accounts other than dormant accounts while online income tax return filing.

  • How do I verify income tax return?

Online income tax return filing process is incomplete and ITR is invalid unless your ITR V is verified. For verification of ITR-V, you can electronically verify or mail the signed ITR V to the processing center in Bengaluru within 120 days of filing the return.

  • What happens if you do not file an income tax return?

If you do not file an income tax return, then you will be liable for interest, late filing fees and penalties levied under the Income Tax Act.

Related Blog: 7 Ways Salaried Individuals Can Save Tax

REVERSE CHARGE MECHANISM

REVERSE CHARGE MECHANISM (RCM)

GST being an indirect tax which is imposed on supply of goods & services is a comprehensive destination base tax. It is based on “One Nation One Tax” Approach which has subsumed almost every indirect taxes ate state/centre level.

Registration: A person who is required to pay tax under RCM has to mandatorily register under GST and the threshold limit of INR 40 lacs & INR 20 lacs is not applicable on this.

Read more blog: GST Department is getting stricter day by day!! Are you ready??

Input Tax Credit (ITC)?

  • When Goods purchased are for personal use: ITC cannot be claimed
  • When Goods purchased are for business use: ITC can be claimed
  • When Goods purchased are partly for personal & partly for business use: ITC can be claimed only on the portion used for supplies.
  • ITC not allowed for those supplies which are exempt from tax.

WHEN IS REVERSE CHARGE APPLICABLE?

According to section 3 of CGST act 2017, read in continuation with rule Rule46 of CGST rules, every invoice has to mention it on the top whether tax is in respect of supply on reverse charge.

: Maintenance of the accounts by a registered person.

: Reverse charge liability cannot be set off against the Input tax credit.

: Generally the supplier is liable to pay GST to the government almost in 90% of the cases, remaining 10% of the cases the liability is on the buyer to pay the GST. This creates a Reverse Charge where the liability shifts from supplier to the buyer. There are two (2) types of Reverse charge scenarios:

  • When an individual buys from an unregistered manufacturer.
  • When an individual buys from an e-commerce trader.
  • Supply of certain goods & services as specified by CBEC.

Time of supply?

It is the point at which the liability to pay GST arise. Factors relevant for time of supply depends on the person who is liable to pay tax. Therefore, the time of supply under reverse charge mechanism (RCM) is different from that of “forward charge”.

  1. Case of supply of goods

  • Date of receipt of goods; or
  • Date of debit as per bank account/Date of payment as per books of accounts (whichever is earlier); or
  • Date following the 30 days from date of issue of invoice. 
  1. Case of supply of services

  • Date of debit as per bank account/Date of payment as per books of accounts (whichever is earlier); or
  • Date following the 60 days from date of issue of invoice.

Read other blogs: 37th GST Council meeting: After restructuring Corporate tax structure now a big relief for GST Taxpayers

What is the concept of self-invoicing?

“Self-Invoicing” is a concept under Reverse charge mechanism (RCM) in which the onus of preparing the invoice lies with the receiver of goods or services falling under this category.

When you have purchased from an unregistered supplier then such transaction falls under reverse charge where the duty to pay tax lies with the receiver.

This is due to the fact that your supplier cannot issue GST invoice since his business is not registered. Hence, self-invoicing becomes necessary in this case.

 

What is FSSAI?

WHAT IS FSSAI?

FSSAI registration is based on the ONE NATION ONE FOOD LAW ideology which aims at providing globally benchmarked food standards and practices, ensuring consistency in enforcement of the rules and regulations so formed, and also manage food testing with standardized testing methods and products. FSSAI India has headquarters in New Delhi and 6 regional offices located in Delhi, Mumbai, Guwahati, Kolkata, Chennai, and Cochin.

As per Section 31(1) & 31(2) of Food Safety and Standards Act, 2006 every Food Business Operator in the country is required to be licensed/registered under the Food Safety and Standards Authority of India. FSSAI licensing, registration procedure and various other requirements are regulated by the Food Safety & Standards (Licensing and Registration of Food Business) Regulations, 2011.

GST Registration

An online portal has been created to ease out the process and make the procedure user friendly. Food Licensing and Registration System was been launched by Food Safety and Standards Authority of India to facilitate Food Business Operators (FBO) in India to apply for License/Registration Certificate and also be able to track their applications during the course of processing. FLRS is being used by 5 Regional offices and 2 Sub-Regional offices of FSSAI and several State Governments for processing and generation of licenses/registration certificates.

CATEGORIES OF FSSAI:

The process of application starts with identification of eligibility of your premise. Depending upon the installed capacity, turnover and location, your premise may be eligible for any of the following categories:

CENTRAL LICENSE:

  • Food Businesses with Annual Turnover more than 20 crores.
  • Operating business in two or more States.
  • Food business as listed in Schedule 1 of FSS (Licensing and Registration of Food Businesses) Regulations, 2011. 

STATE LICENSE:

  • Food Businesses with Annual Turnover between 12 lakh and 20 crore.
  • All grain, cereal and pulses milling units irrespective of turnover.

FSSAI BASIC REGISTRATION:

Meant for small manufacturers, restaurants and petty retailers dealing in food products which includes food sale done by the temporary stall holder.

Company Registration

FSSAI RENEWAL:

It depends on the application made by the food business operator the FSSAI License is granted for a period of one to five years as requested. The fee for registration also varies according to the number of years for which the license is applied. FSSAI renewal can be done thirty days prior to the expiry date of the license.

Related Blog – All you need to know about Company Registration as a startup

Q. What is the difference between FSSAI Registration & FSSAI License?

A. As we have discussed that according to the Food Safety and Standards Regulation, 2011, all food operator mandatorily require either FSSAI license or FSSAI Registration, if they are engaged in manufacture, distribution, selling, transportation, and storage of the food products. Whether one needs to go for FSSAI registration or license solely depends on the size and nature of the FBO.

Accounting & Auditing

Q. What are the consequences of not obtaining FSSAI?

A.  All the registered persons have to abide by the FSSAI rules and regulations. The Food Safety Officer has the authority to conduct the inspection of the facility provided by the food business operator and identify the level of compliance, if any. He marks the FBO based on the compliance level:

  1. Compliance (C)
  2. Non-compliance (NC)
  3. Partial Compliance (PC)
  4. Non-applicable/ not observed (NA)

In case the food safety officer issues an improvement notice to the FBO and they fail to comply with it, the officer may cancel their registration. The decision of the officer can be challenged through appealing in the Food Safety Appellate Tribunal/ High Court.

PAN Card number

Transactions in which it is mandatory to give your PAN Card number

There are various financial transactions in which attaching your PAN card details is mandatory. These exceptions are specified under Rule 114B of the Income tax rules, 1

962 which came into effect from 01, Nov, 1988.

There are 18 transaction which require your PAN Card details.

  1. Sale/purchase of Motor vehicle as specified under Motor vehicle act, 1988 requires PAN card number.
  2. Opening of Bank A/c with a banking company or a co-operative bank which are regulated by banking regulation act, 1949.
  3. Making an application to a banking company/financial institution/co-operative bank for the issuance of Credit or Debit card.
  4. Opening of Demat A/c under SEBI Act, 1992.
  5. Paying your bill at a hotel/restaurant (Cash payment more than INR 50,000)
  6. Payment in relation to traveling to any foreign country or currency exchange for the same. (Cash payment exceeding INR 50,000)
  7. Mutual fund payment for purchasing additional unit. (Amount exceeding INR 50,000)
  8. Payment to acquire bonds/debentures of a company. (Amount exceeding INR 50,000)
  9. Purchase of bonds issued by RBI. (Amount exceeding INR 50,000)
  10. Deposit with a banking company/co-operative bank/post office regulated by banking regulation act, 1949. (Cash deposit exceeding INR 50,000)
  11. Purchase of Demand deposit/Pay order/bankers cheque from a banking company/co-operative bank regulated by banking regulation act, 1949. (Amount exceeding INR 50,000)
  12. Time deposit with a banking company/co-operative bank/Post office/Nidhi company/NBFC. (Amount exceeding INR 50,000 or amount exceeding INR 5,00,000 during a financial year)
  13. Any pre-paid payment instrument as defined by RBI under Payment & settlements act, 2007.
  14. Premium of Life Insurance premium paid. (Amount exceeding INR 50,000 during a financial year)
  15. Sale/purchase of securities under Securities contracts act, 1956. (Amount exceeding INR 1,00,000)
  16. Sale/purchase shares of a company not listed on stock exchange. (Amount exceeding INR 1,00,000)
  17. Sale/purchase of any immovable property. (Amount exceeding INR 10 lakh)
  18. Sale/purchase by any person of goods/service of any nature except those mentioned from 1 to 17. (As notified by the central government).
YOUR PAN CARD MIGHT BECOME INOPERATIVE FROM 01, JANUARY, 2020

IMPORTANT POINTS TO REMEMBER

  • When a person involved in any of the above-mentioned transactions, is a MINOR & does not have any income chargeable to income tax, he/she should mention the PAN Card details of father/mother/guardian.
  • Anyone who does not have a PAN Card and enters into any of the above-mentioned transactions must fill Form No. 60 as per Rule 114B of Income-tax act, 1962.
  • Note PAN Card details in case of Tax deduction at source i.e. TDS or Tax collection at source i.e. TCS under section 139 [5b &5c] respectively.

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