Steps for starting a business in India

Steps for starting a business in India?

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The first step before starting a business in India is to choose the right business structure. A right business structure is one which compliments the business of the entrepreneur. The available business structures in India are as follows:

  • Sole Proprietorship
  • Partnership Registration
  • Company Registration
  • Limited Liability Partnership

Being the most important step one needs to consult a professional to choose the right business structure. A Private Limited Company is the best and highly recommended business structure to start a business in India. Here are the benefits of Company Registration:

  • Provides limited liability to its shareholders
  • The directors may be different form the shareholders i.e. owners
  • Tax benefits
  • Ease of getting bank loans
  • Legal Recognition
  • Perpetual succession
  • Preferred by investors

Once the business structure is decided the next step is to get the same registered. Company incorporation being the popular form of business one can refer the following Company registration process:

  1. UNIQUE NAME: Name registration/ approval is required to find a unique name for the proposed Company. For which a thorough check of MCA database and trademark in the related class needs to be done before applying the name with the Ministry of Corporate Affairs.
  2. DIGITAL SIGNATURE CERTIFICATE: Application for digital signatures need to be filed with the government authorised agencies which are verified by the Controller of Certification Agencies. DSC’s are password protected token used in the Company registration process.
  3. Next is to prepare the related documents and forms for which one can take assistance from professionals or hire them for such Ca services. The incorporation forms are linked forms which contain the following:
  • FORM NO. INC-32 (Simplified Proforma for Incorporating Company Electronically): As the name specifies it’s an integrated form which shall enable the applicant to file the following:
  • Name of the Company
  • Director Identification Number
  • Incorporation Certificate
  • PAN
  • TAN

FORM NO. INC-33 (e-Memorandum of Association): This form contains the main business activity of the Company along with the details of the subscribers to the memorandum i.e. the shareholders of the Company and the amount of authorised capital.

FORM NO. INC-34 (e-Articles of Association): All the rules and regulations along with the procedures for holding meetings, transfer of shares, voting rights etc. are listed in the articles of the Company. It contains the rules required to run the Company as required by the Companies Act, 2013.

FORM NO. INC-35 (Application for Goods and services tax Identification number, employee’s state Insurance corporation registration plus Employees Provident fund organisation registration): One can apply for GSTIN / EPFO / ESIC through the same form.

Once the forms are filed the company registration process is completed.

After business registration one needs to obtain the PAN i.e. Permanent Account Number and TAN i.e. Tax Account number. Both can be applied through NSDL website by filling form 49A and 49B respectively.

All businesses where the turnover exceeds 20 Lakh need to take GST registration. It is compulsory for E-commerce businesses as well.

The registration process takes around 7-12 working days. Business registration is not an easy task it requires professional interface at every step.

Brand registration is required for the logo and the brand name. For which trademark registration can be applied. Once the application is filed the words TM can be used with the logo and after approval R mark is used.

Frequently Asked Questions:

What are the important steps to start business in India?

Related Blog : ALL ABOUT COMPANY REGISTRATION IN INDIA

What are the documents required for Company Registration?


DOCUMENTS REQUIRED:

  • PAN Card of the promoters
  • Passport size photograph of both the promoters
  • Aadhaar Card/ voter id of the promoters
  • Bank Statement/Utility bill of both the promoters
  • Rent agreement, if the registered place of business is a rented accomodation
  • Electricity bill/ Water bill (registered place of business)

How do I start a small business at home in India? At the initial stage one can start operations at home by obtaining a udyog adhaar registration or GST registration.

Related Blog: What entities are eligible for MSME Registration & Document for MSME?

Related Blog: WHAT IS THE GST REGISTRATION PROCEDURE

GST Registration

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MSME Registration

What entities are eligible for MSME Registration & Document for MSME?

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The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector in the Indian economy and is the backbone of the country. Obtaining the MSME registration certificate is not mandatory and is at the sole discretion of the enterprises. Eligibility for MSME registration for enterprises depending upon their scale of business which are defined as per their classification. Therefore MSME’s are classified into two categories:

Manufacturing Enterprises and Service Enterprises.

  1. Manufacturing sector represents enterprises engaged in manufacturing and production of products i.e. goods.

The eligibility criteria as defined by the MSMED Act for obtaining MSME Registration Certificate is as per investment in plant and machinery used in manufacturing the product:

  • Micro Enterprises: Investment on plant and machinery or equipment does not exceed INR 25 Lakh
  • Small Enterprises:  Investment on plant and machinery or equipment is less than INR 5 Crore, but more than 25 Lakh rupees. Micro Enterprises: Investment on plant and machinery or equipment does not exceed INR 25 Lakh
  • Medium Enterprises: Investment on plant and machinery or equipment is less than INR 10 Crore but more than INR 5 Crore.

Read Other Blog: WHAT IS MSME REGISTRATION FEES & PROCESS?

2. Services: The service sector represents enterprises engaged in providing services.

The eligibility criteria as defined by the MSMED Act for obtaining MSME registration certificate is as per investment in equipment used in providing services:

  • Micro Enterprises: Investment on equipment is less than INR 10 Lakh
  • Small Enterprises:  Investment on equipment is less than INR 2 Crore but more than INR 10 Lakh.
  • Medium Enterprises:  Investment on equipment is less than 5 Crore, but more than 2 Crore.

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3. Who can apply for MSME Registration Online?

  • Sole Proprietorship: It’s the simplest form of business where the owner and the business are considered as the same. The registration available for sole proprietorships are GST registration and MSME registration online. No separate tax return is required to be filed for sole proprietorships as no separate PAN card is required for the proprietorship’s.
  • Partnership:  Partnership’s require two or more people who agree to enter into a lawful business which they start together by registering the partnership deed wherein the roles, duties, liabilities, procedures, profit and loss ratio are predefined.
  • Company: Company Incorporation is the most popular form of business structure. Minimum two individuals are required to form a company both can be director and shareholder. Company registration is done with the Ministry of corporate affairs. It enjoys the status of a separate legal entity providing limited liability to its shareholders and is the most recommended business structure.
  • Limited Liability Partnership: We can say it’s a combination of benefits derived from partnership and company form of business. Unlike partnership registration LLP registration is mandatory. It’s a newer concept wherein all the partners have limited liability.

4. Documents required for the MSME Registration Online are as follows:

  • PAN Card of Proprietor/ Partnership/ Company/ LLP
  • Aadhar Card of Proprietor/ Partner/Director/ designated partner
  • Office Address Proof i.e. Electricity Bill/ Telephone Bill
  • Business Name and Object
  • Investment (In Lakhs)
  • No. of Employees
  • Bank Details (Account no., IFSC)
  • Email id and Mobile No.
  • Registration Document (if applicable) i.e. GST certificate/ Partnership Deed/ 10) Company Incorporation Certificate/ LLP deed
Import export code

WHAT IS AN IMPORT EXPORT CODE (IEC)?

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One needs to adhere to various rules, regulations and other technicalities that international trade has, to make one’s business global. One of the mandatory requirement is Import export code.

What is Import export code?

Import Export Code (IEC) or Import Export License is a Ten digit alphanumeric code allotted which is same as your PAN No. (Exp. XXXXX0000X) and is issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce, Government of India. No person or entity is allowed to export or import any article/ goods/ services etc. without having an Import Export Code (IEC) Number.

The validity of the Import Export Code is for lifetime and it is valid for all the branches or factories of the importer/exporter. IEC is a PAN based registration, therefore IEC code online would be issued against a single PAN number. In case there are more than one IECs allotted to any entity the same may be surrendered to the Regional Office for cancellation.

How do I register for Import Export Code (IEC)?

An application shall be filed online in the specified form along with the documents required to the Regional Authority of the Directorate General of Foreign Trade (DGFT) in the region where the office of the company is registered.

The person applying for IEC Code online shall get himself registered in one of the many form of business, for instance:

  • Proprietorship Firm Registration
  • Company Registration
  • Partnership Firm Registration
  • Cooperative Society Registration, etc.

In simple language, there should be a legally registered entity depending upon the requirement of the applicant who is getting the registration.

However there are some exempted categories of Import and exports, who are not required to take an Import Export License (IEC No.) For exp:

  • Ministries/Departments of the Central or State Government;
  • Persons importing or exporting goods for personal use;
  • Persons importing/exporting goods from/to Nepal or Myanmar exceeding certain limit;
  • Some Charitable Institutes; etc.

Read More Blogs: Essentials to Get FSSAI License in India for Restaurant

When is Import Export Code (IEC) Required?

  • When an importer/exporter has to clear his shipments/ send his shipments from the customs
  • When an importer/ exporter sends/receives money from abroad through banks in foreign currency.

What are the documents required for IEC code?

Documents required for Import Export Code or Import Export License are as follows:

  • Digital Photograph (3x3cms) of the Signatory Applicant
  • Self-Attested Copy of PAN card
  • Self-Attested Copy of Passport
  • A list of partners/directors along with address and phone number
  • MoA/AoA or partnership deed
  • Bankers Certificate or cancelled bearing the applicant entities name, Current Bank Account details;

There are various other documents required depending upon the form of your business, it is always advised to take assistance of an expert.

Read more blogs: Top Reasons for Outsourcing Corporate Secretarial Services

Benefits of IEC Registration–

  • Export related incentives

     For promoting Export government is providing several benefits on their exports from the DGFT, Export Promotion Council, Customs, etc.

  • IEC Code Online

     DGFT has introduced IEC code online system of filing application along with some simple documents which made the process faster and easier.

  • Pan based Registration

     The Code is based on the Permanent Account Number of the business organisation. Therefore, one PAN one IEC. 

  • Lifetime validity

     Import Export license is a permanent code which is valid for life time till the business is in existence or till the registration is not revoked or surrendered.

  • No Return Filling

There are no prescribed returns in case of IEC, hence no return filing requirement with DGFT.

  • No renewal of Code

Import Export code does not require renewal, once it is obtained it can be used by an entity for all export and import transactions.

Choose Your City For Import Export Code

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INTERNAL AUDIT

Why is Internal Audit Important for Your Company in India?

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INTERNAL AUDIT

Internal audit process is executed in every company irrespective of its size and under which segment it is operating. Internal audit process helps in keeping an internal checks & balances on the company policies & management including corporate governance and accounting processes associated. Internal audit process also ensures that the company is complying with the rules & regulations, laws, financial reporting standards etc.

Various benefits of implementing Internal Audit in your company

  • Operational efficiency: without keeping checks and balances on the operational process of the company one would not be able to figure out the extra time and cost which will bring in the efficiency in the company’s functioning. By following Internal Audit Process one could ensure that no such unnecessary cost which is creating a burden on the company.
  • Effective production: Cutting on the extra cost which is sometimes included during the production process is a wise decision. This will bring in economies of scale in the production process and will also help in attaining the break-even point very easily. Internal audit will help in identifying the glitch in the production process and minimise the same in future processes.
  • Confident stakeholders: Report of internal audit boosts the confidence of all the stakeholders. A stakeholder is confident when the internal audit assures that all the risks are being evaluated and appropriate measures are being taken. This clearly demonstrates that the executive management & the board of directors are managing the organisation effectively on behalf of the stakeholders.
  • Quality check: Auditing & assurance service also ensures that a quality check is done before the final product is displayed. Internal audit ensures that the product is as per the standards specified by the company. Quality standards of the product must be met so as to ensure customer satisfaction which will ultimately lead to strong goodwill of the company.
  • Reliable corporate governance: Internal audits evaluate a company’s internal controls, including its corporate governance and accounting processes. Internal audit helps in identifying the problem at the very primary stage at the company level because if any fault is found at the external audit then it might create some serious issues for the company. Therefore it is advisable to conduct a balanced internal audit process primarily involves identify the problems and take corrective steps for the same.

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  • Risk evaluation: Management must identify the stages which are associated with the risk and how will they impact their company at large. Internal audit must be able to anticipate future concerns which will affect the company and its production and provide assurance & advice.
  • Ensures the compliance of laws: There are various laws which every company has to comply with. If you are running a company then you must comply with the company act, 2013, if you are a manufacturing house then you must comply with the factory act regulations. This is ensured by conducting an internal audit being done by a company’s auditor.

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Know all about Digital Signature Certificate

Know all about Digital Signature Certificate

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What is Digital signature certificate (DSC)?

Digital signature certificate (DSC) provisions are regulated under Information & technology act, 2000. This is the most authentic and secures way of uploading a document electronically.

Digital signature certificate (DSC) is a way of signing a document electronically. In the era of internet where everything is present online, it is need of the hour to make these transactions fully authentic and Digital signature certificate (DSC) is the right choice for that.

Digital signature certificate (DSC) authenticates the identity of the sender or signer of the document and the sender cannot easily disclaim it later on.

Digital signature certificate (DSC) includes following information about the user:

  • User Name
  • Pin code
  • Country
  • E-mail address
  • Date of issuance certificate
  • Name of certifying authority

Read other Blogs: How to Register a Trademark & What Cannot Be Trademarked In India?

How Digital signature certificate (DSC) is useful?

  • Reduce cost & time: One can digitally sign the documents and send them much more quickly as compared to physically signing and delivering the documents to the concerned person. The Digital Signature certificate (DSC) does not demand the physically presence of Signature holder to conduct or authorize a business.
  • Integration of data: Once signed, it’s difficult to edit or change the document content which makes it safe & secure. Many times when there is any investigation going on and you are required to present the proof, then digitally signed documents acts as a full proof.
  • Documents authenticity: Digital signature certificate (DSC) minimises the chances of a document being forged. Hence the authenticity of a document is restored in case of any discrepancy. An original signature holder is the rightful person to authenticate the documents.
  • Statutory compliance: There are certain circumstances where it is compulsory to have a Digital signature certificate (DSC). For instance those entities that are required to get their accounts audited or income tax return by a certified professional have to compulsorily do it using a digital signature certificate (DSC). Furthermore certain departments has made it compulsory to use electronic signature such as, Ministry of Corporate Affairs (MCA) has made it mandatory for companies to file annual reports, applications and forms using a electronic signature and under GST registration a company can get registered only by verifying the GST application through an electronic signature.

Read more: Nidhi Company in India – It’s Features, Advantages & Disadvantages

FEATURES OF DIGITAL SIGNATURE CERTIFICATE

  • Legal Limitation: One can use only the valid electronic signature issued to him/her by the authorities. Using someone else’s electronic signature is illegal and is considered as a civil offence. This legal bar is not only on those who have their electronic signature with the authorities but all those who don’t have any digital signature.
  • Certification agencies: Under the provisions of Information technology act, 2000 controller of certification agencies (CCA) is the rightful authority to authorise the certification agencies for issuing digital signature certificate (DSC). Accordingly section 4 of IT Act, 2000 has specified nine agencies that are authorised to issue DSC.
    • National informatics centre (NIC)
    • IDRBT
    • Verasys
    • Capricorn
    • NSDL
    • C-DAC
    • E-MUDHRA
    • (n) Code solutions CA
    • Safecrypt CA, Sify communication ltd.
  • Categories of Digital Signature Certificate (DSC): There are three (3) categories of DSC which is issued by the certifying authorities above:
  • Class I – Issued to business personnel or private individuals. This authorises that the information mentioned by the subscriber does not conflict with that already mentioned in consumer database. Data compromise risk is not significant.
  • Class II – Issued to business personnel or private individuals. Relevant where the risk of fraudulent activity or data compromise if moderate in nature.
  • Class III – Issued to Individuals as well as organisations. Relevant where the data security is of utmost priority and failure of security services in high.
  • Cost/Price of DSC: It includes the cost of medium, the cost of issuance of DSC and the renewal cost after the period of validity. Company representatives and professionals are free to procure DSC from any Certification Agencies as per the MCA portal. The issuance cost varies from agency to agency and are primarily derived from market forces.

Also Read This: FOOD SAFETY AND STANDARDS AUTHORITY OF INDIA

HOW TO APPLY FOR DIGITAL SIGNATURE CERTIFICATE (DSC) & DOCUMENTS REQUIRED?

  1. Approach anyone of the above mentioned certifying authorities.
  2. Carry original documents & self-attested copies of the same.
  3. Using Aadhar card E-KYC based authentication (no supporting documents required in this case)
  4. Letter/certificate as certified by the bank managers containing the DSC applicant information as retained in banks database.
Trademark registration

How to Register a Trademark & What Cannot Be Trademarked In India?

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Trademark registration is regulated under the rules and regulation specified Trademarks act, 1999. Trademark registration gives an individual advantage over its competitors in the market. It also gives your product a legal representation, uniqueness from competitors, helps in creating a brand value. This unique identification is given in the form of certain word, logo, symbol, character, numerals or a combination of these.

WHAT IS TRADEMARK?

Trademark could be a symbol, word, numerals, colour combination, label or a mix of all, which is used by business to differentiate its products from that of its competitors in the market.

WHO AUTHORISES TRADEMARK

In India, a trademark is authorised by controller general of patents designs & trademarks under ministry of commerce & industry, Government of India. Trademark gives its owner the right to sue for loss of infringement, misuse of its patented trademark.

If your trademark is similar to existing registered trademarks or it is offensive in nature or unreliable then it could not be registered.

WHO CAN APPLY FOR TRADEMARK REGISTRATION

An application for trademark registration can be applied by:

  • Individuals
  • Private companies
  • Limited liability companies
  • Public limited companies
  • NGO

ADVANTAGES OF TRADEMARK REGISTRATION

There are various advantages which are related with trademark registration, some of them are discussed below:

  • Brand Protection: Creating & managing brand of your business is necessity but providing it due protection is something one should also focus at while creating a brand. This can be provided by registering it with Intellectual Property Rights Registrar .
  • Goodwill: It is something which requires continuous hard work, a sense of trustworthiness with a brand, a reputation which a particular brand possesses in the market. This is a quantifiable asset which can be redeemed while it is being sold.
  • Product Differentiation: To differentiate your product from the competitors in the market, it’s required that you must differentiate it from the competitors. This can be done easily by Trademark registration.
  • Recognition to product/service: Trademark registration of product provides it due recognition amongst the category; product is falling under.
  • Quality Assurance: While developing the product/service one must give priority for its quality and this can be done if the product has a due certificate for it.
  • Prevent unfair trade practices: once you have registered under trademark registration act, no other company/competitor can use your logo, symbol which you have registered under your name.
  • Legal proceedings: If any person tries to use the trademark of product without the permission of the registered owner, then legal proceedings can be started in the court of law against the individual doing so.
  • Edge over competitors in market: Getting your product/service registered under trademark registration act, will certainly give you an edge over your competitors in the market
  • Additional brand presence in the market
  • Less volatility in business
  • Easy market penetration
  • Competent brand value

TRADEMARK REGISTRATION PROCESS

  1. Prepare a list of prospective name that would represent your brand.
  2. Supporting documents to be submitted with the trademark application form.
  3. Filing an application for trademark registration. There are two ways for making an application-
  4. Offline mode: you will have to personally move an application to the registrar office of trademarks in major cities such as New Delhi, Kolkata, Mumbai, Chennai etc. It will take around 15-20 days for you to receive the acknowledgment receipt.
  5. Online mode: Here in E-registration mode, you will receive the acknowledgment receipt instantly. Once you have received the receipt you can use the “TM” symbol beside your brand name.
  6. An application for trademark registration shall be made in Form TM-A and shall be signed either by the applicant or his agent.
  7. Examination of trademark registration application: Once you have applied and you have sent the application to the registrar, now he will examine whether you have followed certain conditions that you needs to comply with or not.
  8. Application for any miscellaneous function in respect of a trademark registration must be in format of Form TM-M.
  9. In the case of an application for trademark registration in respect of a large variety of goods or services, the Registrar may refuse to accept the application unless he is satisfied that the specification is justified by the use of the trademark which the applicant has made.
  10. Trademark registration certificate: If there is no opposition from anyone within the stipulated time period of 90 days, then registrar will accept your application and subsequently your trademark certificate will be issued.

To know more read: What is Trademark Registration Procedure In India?

DOCUMENTS REQUIRED FOR TRADEMARK REGISTRATION

While applying for trademark registration, following documents must be taken care of before making an application:

  • Proof of Applicant: The trademark owner or the person who is approved by the trademark owner requires presenting their identity proof. It can be your Aadhar Card, Driving License, Passport, Ration card or Voter’s ID.
  • Brand Name & Logo: Must contain name of the brand for which you are applying trademark registration.
  • Affidavit: One should submit the affidavit; it will give the authorisation for use of personal data.
  • MSME / Start-up Recognition: To get a substantial rebate on government fee a partnership firm/body corporate can submit a certificate of registration under MSME or Startup India.
  • Signed Form TM – 48: Form for authorisation of an agent.
  • PAN Card and Address Proof of Applicant

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WHAT CANNOT BE TRADEMARKED IN INDIA

Section (9) of the trademarks act, 1999 deals with the grounds on which trademark registration can be refused. Certain categories which can be devoid from trademark registration are:

  • Lost the distinctive identity of the product and cannot be able to distinguish it from other goods or service.
  • If it is of such nature that it deceive the public at large.
  • If it hurts the religious sentiments of any class or any senior citizen of India.
  • If it contains any obscene matter.
  • If its use is prohibited under emblems & name act, 1950.
Advance Tax

What is Advance Tax and Due Dates for Advance Tax Payment

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What is Advance Tax?

Section (208) of the Income tax act, 1961 defines “Advance Tax” which means any tax that is paid before the end of the financial year. An assessee earning an income of more than Rs. 10,000 and above in a financial year is liable to pay advance income tax. Rather than receiving all the direct tax revenue at the end of the year, advance tax payment helps the government to meet its obligation on time.

DUE DATES FOR ADVANCE TAX PAYMENT

F.Y. 2019-20 for both Individual/corporate taxpayers

For the taxpayers earning income from any source (Salary, rent, business profession, capital gain etc.)

DUE DATE PERCENTAGE OF ADVANCE TAX
On or before 15th  June 15%
On or before 15th September 45%
On or before 15th December 75%
On or before 15th March 100%

For the taxpayers filing ITR under presumptive scheme (U/S 44AD or 44ADA)

DUE DATE PERCENTAGE OF ADVANCE TAX
On or before 15th March 100%

APPLICABILITY OF ADVANCE TAX

Advance tax is applicable on all tax payers whether you are a salaried professional or a freelancer or businessman.

Exception:

  • If your employer had already deducted TDS from your salary then you don’t have to worry for advance tax payment.
  • However, if such assessee has any other source of income viz. capital gains, house property & interest on investment, then he/she has to fulfil the advance tax liability condition.

FREQUENTLY ASKED QUESTIONS (FAQ’s)

What if advance tax paid is more or less than actual tax obligation?

  • If the advance tax paid is more than actual obligation then the excess amount will be refunded to your registered bank within the stipulated time by the Income tax department.
  • If the advance tax paid is less than the actual tax obligation then then assessee have to pay the remaining amount and the penal interest @1% per month may also apply on the outstanding amount.

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What if I miss the deadline of advance tax payment?

  • If you fail to pay your advance tax or the amount you pay is less than the mandated 30% of the total liability by the first deadline (September 25), you will be liable to pay interest on the amount, viz. 1% simple interest per month on the outstanding amount for three months.
  • The same would apply if you fail to pay the amount by the second deadline (December 15). Failing to pay the third and last instalment (March 25) would attract a penalty of 1% simple interest on the defaulted amount for every month until the tax is fully paid.

Read other blogs: TAX AUDIT LIMIT FOR BUSINESS/PROFESSION IN INDIA

How should I file advance tax for the current financial year?

  • Advance tax is paid just like any other tax payment by filing challan 280. Please follow the following steps to know more how the advance tax is filed:
    1. Login to NSDL –  click on “services”
    2. Then go to “e-payment”
    3. Select the relevant challan [In case of Advance tax select Challan 280]
    4. Enter other mandatory details such as PAN/TAN, address of the taxpayer and the bank through which the payment is to be made etc.
    5. On confirmation of the information so entered, you will be directed to the payments page.
    6. On successful payment a challan, a box will be displayed containing CIN, payment details and bank name through which online payment was made.

How to deposit advance tax with the government?

Advance Tax is to be deposited with the Government of India by using the challan prescribed in this behalf. The Challan can be downloaded from www.incometaxindia.gov.in & Tax can be paid in the designated banks by either of 2 modes viz. physical mode (cash/cheque) or online mode by using debit card or net banking. ​​In case anyone is not able to download challan even after the payment, then challan details will be updated in their form 26AS after a few days.

FSSAI License in India

Essentials to Get FSSAI License in India for Restaurant

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India is projected to have the largest food & beverages industry by 2020. So this is the responsibility of a central food authority i.e. FSSAI to lay down certain standards & rules which will help in regulating the food industry. Most Indians eat out once or twice in a month, they eat out on occasions in office and family. Due to the hectic routine of people, it is a way to be around with family or friends- to go out and eat in a restaurant. Therefore the market opportunity is increasing tremendously.

Getting a FSSAI License in India is necessary for all those business ventures planning to enter into the food/restaurant industry. FSSAI is a central institution responsible for laying down safety & security standards for articles of food and to regulate their manufacture, storage, distribution, and sale/import to ensure that quality products should reach the ultimate consumers.

Some essentials to get your FSSAI license are:

  • Food Licensing in India: One needs to have FSSAI License in India – There are three categories of the same and it depends on the nature of your business and turnover. Our experts at Caonweb are there to help you in the process of getting FSSAI License.
  • Shop & Establishment Act: A restaurant has to be registered under this act as is applicable in the concerned state. This act safeguards employee rights and working conditions.
  • Weights & Measures Department:  Approval for the weighing and measuring of instruments you use in the restaurant must be in line with the Weights & Measures Department.
  • Trade registration: For any kind of business you are doing. The local authority needs to be informed. There are formalities such as filling up application provided by them and getting their okay to start the business.
  • License for eating out: In the restaurant, it may not be closed door. If you will be providing eating out facility then you need to have a separate license for that as well. City or state police provides this facility. In mostly all cities this procedure can be done online.
  • Fire Security Certificate: All restaurants need to be secure against fire hence they need a NOC from the fire department of the city.
  • Lift Clearance: Restaurants in multi-story building premises need to ensure that the lift operations comply with safety norms. For this, an electrical inspector from the labour commission must give his approval certificate for the same.
  • Clearance for playing music/video:  This license is obtained from Phonographic Performance Limited or Indian Performing Right Society.
  • Environmental Clearance: An NOC from the Pollution Board of the city/state is required to ensure the restaurants activities do not violate pollution norms.
  • Business Insurance: Insurance for burglary, loss or damage due to fire, damage to property riot, strike and for various other factors.
  • Signage clearance: Obtaining the permission from the local civic bodies like Municipal Committee or City Corporation for putting a sign board of the restaurant is essential.

Read other blog: YOUR PAN CARD MIGHT BECOME INOPERATIVE FROM 01, JANUARY, 2020

FREQUENTLY ASKED QUESTIONS (FAQ’s)

Is FSSAI License in India mandatory for restaurant?

  • There are some FSSAI standard regarding hygiene & safety under which the food is prepared in the restaurant. Some related directly to the product while some relates to the premises of the restaurant.
  • Yes, it is mandatory for every restaurant to have FSSAI License in India either from the central authority or the respective state authority.

Get  Import Export Code Online on lowest cost.

What is the procedure to apply for FSSAI License in India?

  • Login with your user credential and select apply for license/Registration from the Tab License/registration and proceed. Follow the following steps
    • Select the state in which your restaurant is situated.
    • If your restaurant is located in more than one state, click “yes” or else “No”.
    • Proceed for next step.
    • Nature of business you are in.
    • Turnover & the installed capacity must be entered correctly.
    • Registered office address, business premise area, person in-charge of operation, person complying with condition of license and products details etc.
    • Upload the supporting documents (if required).
    • Payment of fees.
    • After signing the acknowledgment, upload the same on portal.

Who needs to register to get FSSAI License?

  • If you are a manufacturer or involved in repackaging of the product then select the product from the kind of businesses mentioned below:
    • Dairy manufacturing units (Incl. chilling unit).
    • Vegetable oil processing units (Incl. refined oil, edible oil or any fat producing product).
    • Meat processing unit/slaughtering unit.
    • All food units involved in relabeling/repacking of the product.

How much does it cost to register with FSSAI & how to pay its fees?

  • Central license: Payment via debit card/credit card/net banking
  • State license: Depends from state to state [Offline mode- challan/DD/Cash]
  • Approximate fees: INR 7,500+GST+Transaction or debit card charges if applicable.

How to check the application status of FSSAI License in India?

FDI in India

APPROVAL PROCESS FOR FDI IN INDIA

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The proposals for FDI in India are processed according to the standard operating procedure (SOP) devised by the Department for the promotion of Industry and internal trade (DPIIT).

Following are the stages which are there in FDI approval process:

  • APPLICATION SUBMISSION: Preliminary stage to initiate a process of FDI in India is to submit the application in the prescribed format, which requires prior approval from several ministries via single window i.e. Foreign Investment Facilitation Portal (FIFP) working under the ambit of Department for promotion of industry and internal trade (DPIIT).
  • UPLOADING DOCUMENTS: There are certain other documents which need to be attested with the application form for FDI approval on the FIFP portal. These documents will help in verifying the application of the applicant.
  • ASSIGNING OF CASES: Within 2 working days, DPIIT will assign the cases.
    • In the case where the documents are digitally signed by the applicant, then physical submission of the same is not required.
    • In the case where the documents are not digitally signed, then the physical copy of the proposal is to be submitted to the Competent Authority within 5 days of such intimation.
  • CIRCULATION OF PROPOSAL TO VARIOUS DEPARTMENT: Since FDI in India is regulated under FEMA regulations, therefore, it is necessary to circulate a copy of the same to RBI to consider it in that perspective. Some additional departments such as External Affairs, revenue, and finance are also equally important, so the proposal must be shared with these departments as well.
  • SCRUTNIZAITON: Proposals are scrutinized within a week time and additional information must be served to department if required.
  • FINAL APPROVAL/REJECTION: On getting all required information, the Competent Authority is required to give out its decision in next two weeks. Approval/rejection letters are sent online to the applicant, consulted Ministries/Departments and DIPP.
    {Note: Where total foreign equity inflow is more than INR 5000 crore, then it is required to place the same in front of Cabinet Committee on Economic Affairs (CCEA).

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HOW WILL CAONWEB WILL HELP YOU?

When it is about managing funds which is brought in by the way of FDI then CAONWEB is the right choice you can opt for. Since bringing in funds by the mode of FDI in India is the most challenging part which every business planning to expand at an international level goes through. This is when CAONWEB comes into play. We at CAONWEB have the most experienced Chartered accountants & Company secretary who will look into all your FDI related queries.

Our FDI consulting services are immensely beneficial for setting up business in any sector which falls under the ambit of FDI. Broad category of FDI services we offer:

  1. Advisory for business expansion.
  2. Consultancy on FDI compliance.
  3. All round support for the type of venture one is planning to establish. For example: Joint venture, partnership company, private company
TAX AUDIT LIMIT FOR BUSINESS/PROFESSION IN INDIA

TAX AUDIT LIMIT FOR BUSINESS/PROFESSION IN INDIA

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According to Section 44AB, Income tax act 1961 (As amended by finance act, 2017) accounts of persons carrying business/profession need to be audited.

Every person carrying on: –

Business Total sales/Turnover/Gross receipts exceeds INR 1 Crore in any previous year.
Profession Gross receipts exceeds INR 50 lacs in any previous year.
Business (Section 44AE  Section 44BB  Section 44BBB) Profits & gains from business are deemed to be the profits & gains of such person under the specified sections, and the person has claimed his income to be lower than profits of the business in any previous year.
Profession (Section 44ADA) Profits & gains from profession are deemed to be the profits & gains of such person under the specified sections, and the person has claimed his income to be lower than profits from the profession and his income exceeds the maximum amount not chargeable to income tax in any previous year.  
Business (Section 44AD-4) Provision of the section 44AD (4) Income tax act 1961, are applicable in his case and his income exceeds the maximum amount not chargeable to income tax in any previous year.

These previous year accounts must be audited by the accountant before the specified date and furnish the report duly signed & verified by such accountant including such particulars as may be prescribed.

Read other blog: STATUTORY AUDIT OF FINANCIAL STATEMENTS OF COMPANY

Who will not be covered under this section?

  • Person who declares his profits & gains in previous year as per section 44AD (1) of Income tax act 1961, and his total sales/turnover/gross receipts does not exceeds INR 2 Crore in any previous year.
  • Person whose income is in the nature specified under section 44AB/44BBA of Income tax act 1961.
  • Person who is required to get his accounts audited under any other law, then it shall be sufficient with provisions of this sections that person get accounts of such business/profession audited under such law before the specified date and further report by an accountant in the form prescribed under this section.

IMPORTANT SECTIONS RELATED WITH SECTION 44AB, INCOME TAX ACT

Section 44AE: Provision for computing profits/gains of business from plying, hiring or leasing goods carriages

Section 44BB: Provision for computing profits/gains in connection with business of exploration of mineral oils

Section 44BBB: Provision for computing profits/gains of foreign companies engaged in business of civil construction & various turnkey projects.

Section 44ADA: Provision for computing profits/gains of profession on Presumptive basis

Section 44AD (4): Provision for computing profits/gains of business on Presumptive basis

Section 44AD (1): A sum equal to 8% of total turnover/gross receipts of assesse in previous year OR a sum higher than aforesaid sum claimed to have been earned by assesse, shall deemed to be the profits/gains chargeable to tax under the head “Profit & gains from business/profession”

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FREQUENTLY ASKED QUESTIONS (FAQ’s)

Q. What is auditing?

A. Auditing is a process which comes into place once the whole process is completed. It creates checks & balance, review & inspection on the whole process. There are various types of audits for example: Cost audit, tax audit, company audit covered under cost accounting law, income tax law, and company law respectively.

Chartered Accountant conducting the Tax audit is required to furnish the report in the format (Form 3CA/3CB & 3CD) as prescribed in income tax law.

Q. What are the due dates of filing tax audit report?

A. According to section 44AB, every person who is required to get its accounts audited should get its audit report on or before due date of filing of return of income i.e. 30th September of following assessment year.

For example: tax audit report for the financial year 2017-18 must he furnished on or before 30th September, 2018.

Exception: International transaction/domestic transaction specified under section 92E, must file the audit report in format (Form 3CEB) on or before 30th November of the assessment year.

Q. Who will audit the books of accounts?

A. Chartered accountant authorised by ICAI are required to prepare and audit the accounts as specified by the Income tax act.

Q. What is the format of these audit reports?

Form 3CA: case where the accounts of the business or profession of a person have been audited under any other law

Form 3CB: Audit report under section 44AB of the Income -tax Act 1961, in the case of a person referred to in clause (b) of sub – rule (1) of rule 6G

Form 3CD: Statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961 PART – A

Form 3CEB: Report from an accountant to be furnished under section 92E relating to international transaction(s) and specified domestic transaction(s).

Q. What is the penalty in case of any delay in account audit?

A. If any person fails to gets his accounts audited for year(s), the Assessing officer (AO) can impose a penalty. The penalty shall be lower of the two:-

(1) 0.5% of the Total sales/Turnover/Gross receipts

(2) INR 1, 50,000

Q. If any person is required to get its accounts audited under any other law, then is it mandatory to get his accounts audited once again as per section 44AB?

A. No, Section 44AB categorically specifies that if any person get its accounts audited under any other law, then he does not have to comply with requirements mentioned under the section