FDI amendments in India

The Union cupboard Ministry crystal rectifier by the Prime Minister Narendra Modi gave its endorsement to varied amendments to the FDI Policy in an exceedingly Press note of last year. Foreign Direct Investment (FDI) could be a noteworthy driver of {monetary|of economic} development and a wellspring of non-debit finance for the monetary improvement of the state.
According to the press note that was discharged last December, the subsequent FDI amendments were created throughout the cupboard meeting:

Single complete Retail: Existing FDI approach on Single complete Retail commercialism (SBRT) permits forty ninth FDI beneath programmed course and FDI past forty ninth and up to 100 percent through Government authorization route. it's currently been determined to permit 100 percent FDI beneath automatic route for SBRT. it's been chosen to permit the one complete retail commerce unit to line off its steady sourcing of merchandise from India for worldwide tasks amid 1st five years, beginning one Gregorian calendar month of the year of the start of the first store against the obligatory sourcing requirement of half-hour of products from India.

Civil Aviation: per the present document, remote carriers ar allowable to place beneath Government approval route within the capital of Indian organizations operating planned and non-booked transportation management, up to forty ninth of their paid capital. In any case, this arrangement was directly not relevant to Air India, on these lines inferring that overseas craft couldn’t place resources into Air India. it's currently been determined to urge obviate this limitation and modify outside carriers to contribute up to forty ninth beneath endorsement course in Air India adhering to the conditions:

1) Foreign investment(s) in Air India, also as overseas Airline(s), won't surpass forty ninth in any means.

2) in depth possession and effective management of Air India shall still be unconditional within the Indian National.

3) Construction progress: it's been created clear that real-estate broking services don't add up to land business and, thus, qualified for 100 percent FDI beneath the automated route.

4) Power Exchanges: Existing policy accommodates forty ninth FDI beneath automatic route in Power Exchanges noncommissioned beneath the Central Electricity restrictive Commission (Power Market) laws, 2010. Conversely, FII/FPI investments were confined to the secondary market. it's currently been created clear to urge obviate this arrangement, on these lines allowing FIIs/FPIs to place resources into Power Exchanges through the first market too.

5) prescribed drugs: FDI policy on Pharmaceuticals division among alternative things imparts that which means of the medical equipment as fenced in within the FDI Policy would be vulnerable to alteration within the medication and Cosmetics Act. because the definition fenced in within the policy is thorough in itself, it's been chosen to discontinue the relation to the medication and Cosmetics Act from FDI arrangement. Further, it's to boot been determined to vary the which means of ‘medical apparatus’ as fenced in within the FDI Policy.

6) relating to audit firms: the present FDI policy doesn't have any arrangements in reference to detail of auditors which will be hand-picked by the Indian investee organizations obtaining overseas funds. it's been chosen to grant within the FDI policy that where the foreign capitalist wishes to work out a selected auditor/review firm having a world system for the Indian investee organization, at that time a review of such investee organizations got to be done as joint audit whereby one in all the inspectors ought not be a neighborhood of the same system.

The FDI Policy, because it remained once to those revisions, legalised FDI with no legislative approvals automatic route in units engaged with the business centre model of web business, and denied FDI in substances engaged with a stock-based model of web business. a poster centre model was characterised to mean the arrangement of associate degree data technology platform and alternative frameworks by the net business part, to encourage transactions among purchasers and vendors. A stock model nonetheless was characterised to mean a model during which the e-commerce business unit has management of products, and directly pitches to patrons on a B2C basis.

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India Interim Budget 2019

The Interim Budget, 2019, presented by the Union Finance Minister, Mr. Piyush Goyal, is a progressive budget for small taxpayers and real-estate sector. The proposals made in the interim budget would provide immediate relief to small taxpayers and incentivize the salaried taxpayers, who have continuously been hailed as the most honest taxpayer The incentives proposed for the taxpayers would be beneficial both for revenue and taxpayer.outgoes and the revenue would get the opportunity to reduce its administrative cost. Low-income groups and senior citizens generally have pension income, interest income and rental income. The budget has either extended the tax benefits or reduced the compliance burden in respect of all those incomes. When Government intends to keep the small taxpayers out of tax ambit, it saves enormous amount of interest that it eventually pays on the tax refunds as well as earns their goodwill.
Stating that India has enjoyed the best phase of macroeconomic stability and has been recognized as a bright spot in last 5 years, Union Minister Piyush Goyal assured that “we are poised to become a 5 trillion dollar economy in the next 5 years and we aspire to become a 10 trillion dollar economy in the next 8 years.”

Income and Taxation
Tax Rebate
In order to reduce the tax burden on taxpayers, it is proposed that individual taxpayers with taxable annual income up to INR 0.50 million will get a full tax rebate. The relief under Section 87A is proposed to be increased to INR 12,500, which shall be available to those resident individuals whose total income does not exceed INR 0.50 million during the Previous Year 2019-20.

Salary
The limit of standard deduction for the salaried taxpayer has been increased from existing INR 40,000 to INR 50,000. This benefit shall be available to salaried persons and pensioner. Interest on Deposits Threshold limit for deduction of tax from interest (other than interest from securities) paid or payable by a banking company or Co-operative bank or Post office is proposed to be increased from INR 10,000 to INR 40,000.

Withholding Tax
The threshold limit, for deduction of tax, under Sec 194-I from payment of rent is proposed to be increased from INR 1,80,000 to INR 2,40,000.

Income from House Property
A taxpayer can now claim that he has two self-occupied house properties. Consequently, deduction with respect to interest on borrowed capital can be claimed with respect to both the houses. However, the aggregate monetary limit for the deduction would remain same, i.e., INR 0.20 million.

Capital Gains
The Finance Bill, 2019 proposes to extend section 54 exemption for investment made, by way of purchase or construction, in two residential houses provided the amount of capital gains does not exceed INR 20 million. However, the assessee can exercise this option only once in a lifetime.

Deductions
Deduction under section 80-IBA is allowed in respect of profits and gains derived from the business of developing and building affordable housing projects subject to certain condition, inter-alia, the housing project should be approved on or before March 31, 2019. It is now proposed to extend the time limit for approval of the housing projects by one year, i.e., till March 31, 2020.

Commerce and Trade
Agriculture
Reiterating the commitment to double farmers’ income by 2022, the government announced the PM Kisaan Samman Nidhi Yojana for small and marginal farmers. Farmers having up to 2 hectares of lands will get INR 6,000 per year, in three installments, to be transferred directly to farmers' bank accounts. The first installment of INR 2,000 will be given to farmers soon. This farmer package will cost the government INR 750 billion and is expected to benefit 120 million farmers.

Unorganized sector
The government also announced a mega pension scheme for the unorganized sector. The scheme will be called PM Shramyogi Maan Dhan Yojana. The pension plan is worth INR 5 billion and is for those earning below INR 15,000. Beneficiaries will get an assured monthly pension of INR 3,000 after retirement. Workers will contribute INR 100 per month on joining. This scheme is expected to benefit 100 million workers. Meanwhile, the ESI cover limit has been increased to INR 21,000. The minimum pension was also increased to INR 1000.

Railways
• The Railways gets INR 645.80 billion in this Budget. The operating ratio is expected to be 98 percent.
• The capital support from the budget for railways is proposed at INR 645.87 billion in 2019-20 (BE).
• The railways’ overall capital expenditure programme is of INR 1586.58 billion.
• The people of North East have also received significant benefits of infrastructure development. Arunachal Pradesh came on the air map recently and Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time.
• The allocation for the North Eastern Areas is being proposed to be increased by 21 percent to INR 581.66 billion in 2019-20 over 2018-19. Digitization
• Stepping up the pedal on digitization, the government announced aplan to set up 0.1 million digital villages in the next five years.
• The government now aims for 1,00,000 digital villages in the nextfive years.
• The number of mobile manufacturing companies increased from 2to 268 in past five years, thereby generating more jobs in India.

Wages, salaries and pensions
• The New Pension Scheme (NPS) has been liberalised.
• Maximum ceiling of the bonus given to the labourers has been increased from INR 3500 to INR 7000 per month and the maximum ceiling of the pay has been increased from INR 10,000 to INR 21,000 per month.
• The ceiling of payment of gratuity has been enhanced from INR 1 million to INR 3 million.
• The Employee's State Insurance (ESI) cover limit has been increased to INR 21000 from INR 15000 per month. Micro Small and Medium Enterprises
• A scheme of sanctioning loans upto ‘INR 10 million in 59 minutes' has been launched. GST-registered MSME units will get 2 percent interest rebate on incremental loan of INR 10 million.
• 25 percent of sourcing for government projects will be now from the MSME sector, of which three percent will be from women entrepreneurs.
• MSMEs can now sell their products on the Government eMarketplace (GeM), a one-stop-shop to facilitate online procurement of common use goods.
• The government announced that businesses with less than INR 50 million annual turnover, comprising over 90% of GST payers, will be allowed to
return quarterly returns.

Education
A national programme on artificial intelligence has been envisaged by the government to harness the benefit from new age technologies in identified areas, which will be catalysed by the establishment of the National Centre of AI as a hub along with centres of excellence. Nine priority areas have been identified for the same. The Union Minister added that a national AI portal will be developed soon.

Other announcements
• A Welfare Development Board will be created for nomadic and semi-nomadic community. A Committee under NITI Aayog will be formed to identify these committees
• National artificial intelligence portal will be developed soon
• To promote “Make in India” campaign, the Finance Bill, 2019 rationalizes customs duty and procedures. The Custom Duty has been abolished on 36 Capital Goods.

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2019 Promises To Be The Year Of MSME Start-Ups?

Over the most recent two years, that spoke to difficulties looked by businesses subsequent to demonetization and prologue to GST, the year 2019 is probably going to be an favorable year for smaller scale, little and medium dimension ventures (MSME). While money crunch portrayed the year 2017, absence of access to credit, fall in the estimation of rupee and expanded consistence costs from changing over to the routine to GST added to the agonies of the little scale businesses.

This post investigations the ongoing plans for the MSME part and how these are probably going to help the development of new businesses in this field while likewise reinforcing the financial and market remaining of existing ventures.

The five sectors that can encourage micro, small and medium level enterprises.

Market analysts have seen that the best four operational and money related necessities of little part enterprises can be met by advancement in the field of :

• 1. Accessible and economical credit opportunities
• 2. Enhanced access to market
• 3. Technology up gradation
• 4. Ease of Doing Business

We will currently analyze legislative and managerial system went for requiring development in every one of these assigned parameters and how rising new businesses can harvest the upsides of the equivalent.

Accessible and Economical Credit Creation

The MUDRA Yojana that expects to make comprehensive enterprise targets loaning to the tune of 3 lac crores to the little ventures in the year 2018-19, where advances up to 10 lacs can be effectively gotten. The 2018 Budget additionally designated 200 crores to help little scale house ventures fabricating fragrances, basic oils and other related items. The administration has likewise set up instruments for a 59-minute advance entryway to empower simple access to credit for MSMEs. To additionally enable ventures to address operational issues, the administration has made a Trade Receivables e-Discounting System (TReDS) – that empowers business people to get to credit from banks, in light of their up and coming receivables, and consequently tackles the issue of money shortage in the working cycle.

Enhancing access to market

There is presently an order that orders that all open segment ventures should obligatorily buy 25 percent of their contributions from MSMEs. The administration is likewise going for upgrading Public Private Partnership in most area of open significance. The latest precedent is the unwinding offered to little private players in the zone of guard hardware fabricating, where based on a permit gotten by the Department of Industrial Policy and Promotion, gear and there extra parts thereof, can be made in India by little players.

Technology Up gradation

So as to improve the cost-adequacy and advance clean vitality use in assembling, the legislature repays venture costs towards these objectives for MSME division units and furthermore consumption caused for execution of clean innovation, readiness of review report and appropriations for authorizing items as indicated by national and worldwide benchmarks. Additionally, twenty mechanical centers will be shaped in the nation for conferring innovative preparing and lift advancement in MSMEs.

Ease of Doing Business

With the setting of NCLT and Special Commercial Courts, the way toward getting business contracts authorized has been made more straightforward. Mechanization in GST recording and e-way bill is probably going to lessen the time spent on compliance. Additionally, work law returns have been decreased to only one recording each year and under air contamination and water contamination laws, both have been converged as a solitary assent and the arrival will be acknowledged through self-accreditation.

In the 32nd Meeting of the GST Council finished up on January 10, 2019, it has additionally been prescribed to build the creation conspire limit to 1.5 crores, the enlistment exception for GST to 40 lacs and installment of GST exclusion limit to 20 lacs. The administration will likewise give an Accounting and Billing programming, free of expense to little citizens.

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Company formation in India

What is GST Audit?

The concept of audit by a Chartered Accountant in the area of Indirect Taxes was confined to State Value Added Tax and Central Sales Tax laws of certain States. In Central Excise and Service tax only in case of suspicion of undervaluation or excessive credit special audits were prescribed (not much used) which continue in GST. Therefore, Chartered Accountants engaged in rendering professional services in the areas of State taxes would be familiar with those provisions. The GST law has subsumed several Indirect Tax laws – among others, it subsumed Central Excise, Service Tax, Luxury Tax, Entertainment Tax, VAT/CST, Entry tax laws etc.;certain levies under the Customs laws have also been subsumed into the GST laws.
It would be relevant to note that the skill sets acquired in the understanding of the statutes that have been subsumed into the GST laws would help in better understanding of the GST laws since several provisions of the Central and State enactments have been replicated (fully or partially) in the GST laws – say, for instance, the provisions of Place of Supply of Services, Time of Supply of Services,Valuation of Supply Rules, etc. That being said,one needs to exercise caution in reading and understanding the subtle departures or changes in the statute in comparison with the erstwhile legislations, in which case,one has to enhance the understanding of the fully taken forward provisions. He also needs to unlearn the old laws and learn the GST laws afresh for a complete understanding of the taxing statute.

Types of GST Audit
There are 3 types of GST audits:
1. Audit to be conducted by a Chartered Accountant or a Cost Accountant: Every taxpayer with revenue exceeding the prescribed limit of INR 2 crore during a financial year shall get his accounts audited by a Chartered Accountant or a Cost Accountant. Such taxpayers whose audit is conducted by a Chartered or Cost Accountant shall submit: * An annual return by filling the form GSTR 9B along with the reconciliation statement by 31st December of the next financial year; * The audited copy of the annual accounts; * A reconciliation statement, reconciling the value of supplies declared in the return with the audited annual financial statement; and * Other particulars as prescribed.

2. Audit to be conducted by the tax authorities: As per Section 65 of the CGST / SGST Act, the Commissioner or any officer of CGST or SGST or UTGST authorized by him by a general or specific order, may conduct audit of any registered / enlisted individual. Intimation of the audit is provided to the taxpayer at least 15 days in advance in Form GST ADT-01 and the audit is to be completed within 3 months from the date of commencement of the audit. In rare cases, the GST Commissioner has the powers to extend the period by another 6 months, if required.

3. Special Audits: If at any stage of investigation or any other proceedings, tax authority is of the opinion that the value has not been correctly declared or credit availed is not within the normal limits, department may order special audit under the mandate of Section 66, by its nominated Chartered Accountant or Cost Accountant.

Obligations of the Auditee
Auditees shall have following obligations during the course of audit:
* The taxable person will be required to provide the necessary facility to verify the books of account / other documents as required.
* The auditee needs to furnish the required information and render assistance for timely completion of the audit.

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Transfer pricing in India

Introduction
Transfer Pricing (“TP”) regulations have been at the forefront of corporate headlines over the last few years due to the increasing number of controversies resulting out of tax structuring by multinational companies in India. What makes the topic both contentious and interesting is that regulators view the various techniques applied to inter-corporate transactions as purportedly planned with the intent of achieving benefits of comparable labor cost and tax advantage at the cost of a countries tax revenues.
Hence, there was a need to introduce a uniform and internationally accepted mechanism of determining reasonable, fair and equitable profits and tax in India in the case of such multinational enterprises.

Statutory rules and regulations
A separate code on transfer pricing under Sections 92 to 92F of the Indian Income TaxAct, 1961 (“the Act”) covers intra-group cross-border transactions and specified domestic transactions. Since the introduction of the code, transfer pricing has become the most important international tax issue affecting multinational enterprises operating in India. The regulations are broadly based on the Organisation for Economic Co-operation and Development (“OECD”) Guidelines and describe the various transfer pricing methods, impose extensive annual transfer pricing documentation requirements and containharsh penal provisions for noncompliance.

The Indian Transfer Pricing Code prescribes that income arising from international transactions or specified domestic transactions between associated enterprises should be computed having regard to the arm’s length price. It has been clarified that any allowance for an expenditure or interest or allocation of any cost or expense arising from an international transaction or specified domestic transaction also shall be determined having regard to the arm’s-length price. The Act defines the terms international transactions, specified domestic transactions, associated enterprises and arm’s length price.

Advance pricing agreement (APA)
An APA is an agreement between the taxpayer and tax authority determining the pricing of intercompany transactions for future years. In case of a roll-back, it would also include past years. The taxpayer and tax authority mutually agree on the transfer pricing methodology (TPM) to be applied for a certain period of time (generally five years) based on the fulfillment of certain terms and conditions. APA is an effective tool used in several countries with established transfer pricing regimes to avoid future disputes in a cooperative manner.

Documentation requirements
Taxpayers are required to maintain, on an annual basis, a set of extensive information and documents relating to international transactions undertaken with AEs or specified domestic transactions. Rule 10D of the Income Tax Rules, 1962 prescribes detailed information and documentation that has to be maintained by the taxpayer.

Further, it is mandatory for all taxpayers, without exception, to obtain an independent accountant’s report in respect of all international transactions between associated enterprises or specified domestic transactions. The report has to be furnished by the due date of the tax return filing (i.e. on or before 30 November) to avoid stringent penalties prescribed for noncompliance with the provisions of the transfer pricing code.

Transfer pricing disputes
While the initial years of transfer pricing regulations saw a slow rise of TP adjustments being proposed by the tax officers, soon the adjustment volumes increased considerably and reached an epic proportion of Rs. 70,000 crores by FY 2013. After a huge pushback from foreign investors, this number has come down but continues to generate a lot of heat for the taxpayers.

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Procedure for New company Registration in India

Company registration in India is not tough when you have the best consultants by your side. with our guided expertise and you will see that you do not need to worry about a thing. So, go ahead and set up Private Company in India without having to worry about a thing.

Persons desirous of forming a company must adhere to the step by step procedure as discussed below:-

1. Apply for Directors Identification Number and Digital Signatures.
2. Selection of type of the company.
3. Selection of name for the proposed company.
4. Drafting of Memorandum and Articles of Association.
5. Stamping, digitally signing and e-filing of various documents with the Registrar.
6. Payment of Fees.
7. Obtaining Certificate of Incorporation.
8. Preparation and filing of Prospectus/Statement in lieu of Prospectus and e-Form 19/20 (in case of public companies) for obtaining the certificate of commencement of business.
9. Obtaining Certificate of Commencement of business (in case of public limited companies).
10. Obtain Digital Signatures
11. Selection of the type of company
12. Selection of name Six names are requ1ired to be selected in order of preference after taking notes of numerous provisions, clarifications, circulars and rules made by the Ministry of Corporate Affairs, etc. In case key word is required, significance of each key word should be given in the e-Form 1A. a) Applying for ascertaining the availability of the selected name The promoters are required to make an application to the concerned Registrar of Companies to be submitted electronically to the Ministry of Corporate Affairs on the portal of MCA. An application shall be in e-Form INC-1 as per sec 4(4) read with Rule 9 of Companies (Incorporation) Rules, 2014, duly digitally signed by any one promoter or managing director or director or manager or secretary of the company along with the required fee for ascertaining whether the selected name is available for adoption by the promoters of the proposed company. MCA has prescribed certain rules for name availability so it is advisable to check guidelines for the same before applying for name. Refer Rule-8 of Companies (Incorporation) Rules, 2014./p> b) Approval of the name After receipt of completed application in e-Form INC-1, the Registrar shall intimate whether the proposed name is available for adoption or not. As per section 4(5), maximum time for which name will be available has been prescribed in the law itself under section 4(5). The name will be valid for a period of 60 Days from the date on which the application for Reservation was made.
    Note: The applicant cannot start business or enter into any agreement, contract, etc. in the name of the proposed company until and unless a certificate of registration is issued by the registrar of companies as per the provisions of the Companies Act, 2013 and the rules made there under.
13. Requirement for having DIN
14. Preparation of the Memorandum of Association (MOA) and Articles of Association (AOA)
15. Application for incorporation of a private company

Advantages of private limited company?

Introduction
Private Limited Company can be formed with a minimum of two members; this number can be extended up to two hundred members. A minimum of two directors is needed which can go up to fifteen. This form of business shares many similar traits with partnership firm. A total of two hundred shareholders is acceptable in a private limited company. A properly formulated registration procedure has been mentioned in companies Act. You may ask that why you should opt for Private Limited Company when there is LLP and One Person Company. There are some advantages of Private Limited Company below:

Advantages of Private Limited Company

1. Separate character: A private restricted organization is viewed as a different legitimate substance. It has its very own personality and particularly perceived as a different organization under the law. Additionally, the organization can possess property because of this component under its name. The organization can sue and furthermore it tends to be sued under its own name because of this exceptionally same component.

2. Steadiness because of Limited Liability: Private Limited Company has this element of constrained money related obligation of the considerable number of investors. The liabilities are restricted to their offers as it were. This component secures the individual resources and wage of investors now and again of any money related emergency looked by the organization. Additionally, it gives the organization more freedom of going for broke.

3. Long and congruity of Existence: Private Limited organizations are not influenced by the status of their own with regards to their reality. Demise or powerlessness to proceed if the proprietor does not upset the procedures of the organization.

4. Least necessity of investors and individuals: Only two individuals and two investors are required to fuse a private restricted organization. This gives numerous Entrepreneurs a chance to set up their own organization.

5. Simplicity of Raising Funds: Shareholders permitted are up to two hundred and another two hundred individuals are permitted, this numerous numbers and the notoriety of the private restricted organization makes it simpler to bring capital assets up in contrast with different types of organizations. Subsequently, we can state the extent of development is more prominent when a private constrained organization is fused. Taking obligations from banks and other money related endeavors are very simple as well.

6. Duty Advantages: They cover government obligation on assessable benefits and are exempted from higher individual pay impose rates.

7. Adaptable Relations: A man can go about as an investor, an executive and a representative in the meantime when the private restricted organization is mulled over. They are viewed as dependable as well.wner does not hinder the proceedings of the company.

8. Minimum requirement of shareholders and members: Only two members and two shareholders are required to incorporate a private limited company. This gives many Entrepreneurs an opportunity to set up their own company.

9. Ease of Raising Funds: Shareholders allowed are up to two hundred and another two hundred members are allowed, this many numbers and the reputation of the private limited company makes it easier to raise capital funds in comparison to other forms of companies. Therefore, we can say the scope of expansion is greater when a private limited company is incorporated. Taking debts from banks and other financial ventures are quite easy too.

10. Tax Advantages: They pay tax on taxable profits and are exempted from higher personal income tax rates.

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