Author: Company Formation

GST For Goods Transport Agency

Transport of goods by road is the most commonly used mode of transportation for businesses which supply goods. This transportation by road is facilitated either by a Goods Transport Agency (GTA) or common carriers such as autorickshaw or courier agencies. In this blog, we will understand what is meant by a Goods Transport Agency (GTA) and the GST rates for transportation service provided by a Goods Transport Agency. This is the first blog in the series wherein, we will understand the various tax provisions with respect to services provided by Goods Transport Agencies and the tax impact on persons taking their services.

GST Registration

GST registration is mandatory in India for entities having more than Rs. 20 lakhs of aggregate turnover in a year (Rs. 10 lakhs in Special Category states). However, some of the supplies provided by a goods transport agency would be liable for GST under reverse charge basis. In a reverse charge transaction, the recipient of the goods is made liable for payment of GST. Hence, while providing services, goods transport agency must be aware of the reverse charge mechanism and raise invoice accordingly.

What is a GTA?

As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, “goods transport agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

This means, while others might also hire out vehicles for goods transportation, only those issuing a consignment note are considered as a GTA. Thus, a consignment note is an essential condition to be considered as a GTA.

What are the services provided by a GTA?

The service includes not only the actual transportation of goods, but other intermediate/ancillary service provided such as-

  • Loading/unloading
  • Packing/ unpacking
  • Trans-shipment
  • Temporary warehousing etc.
  • If these services are included and not provided as independent activities, then they are also covered under GTA.

What will be the rate of Tax in Case of the Goods Transport Agency (GTA Services) under GST Per se?

Looking at the entry no. 3, Services of goods transport agency (GTA) in relation to transportation of goods [other than used household goods for personal use]. The rate mentioned in the rate schedule is 5% (without ITC)

Entry no. 4 of the rate schedule prescribed says that Services of goods transport agency in relation to transportation of used household goods for personal use. The rate prescribed is 5% even in this case.

Important point to highlight here is that the transporter providing any other services like “Right to use” or “Leasing” of the vehicles, he will have to review the rates separately and not take the 5% as his rate.

This means that generally the rate is 5% for the GTA under GST. The point to be highlighted is that NO ITC is available to the transporter in this case.


Persons Required to Pay GST on Reverse Charge

When taking the services of a goods transport agency, the following types and class of entities would be required to pay GST on reverse charge basis.

  • Factories registered under the Factory Act.
  • Societies registered under the Society Act.
  • Any co-operative society.
  • Any person who is registered under GST.
  • Any Body Corporate (Company or LLP)
  • Any partnership, if registered or not as well as AOP.

 

If you have any query regarding this Click Here

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Steps by Step Guide to File GST Returns

GSTR-3B filling is under progress and the last date for GSTR-3B filling is 20 August 2017. Please find below the step by step guide on how to file GST Return-3B.

Step by step guide on how to file GST Return-3B

1. After login, select Return Dashboard

2. Select Financial Year 2017-18 and Month July. Click Search and Select GSTR-3B

3. Declare your liabilities and ITC claims in Section 3.1 and 4 respectively by clicking on the tiles and furnishing the required information. Transitional ITC cannot be claimed in GSTR 3B. It can be claimed only through TRANS 1 and TRANS 2.

4. Enter details of interest, if payable, in Section 5.1. Late fee will be computed by the system

5. Click on Save GSTR-3B After you save the data, Submit button will get enabled. Please note that after submit, no modification is possible. Hence ensure that details are filled correctly before clicking on Submit button.

6. On clicking Submit GSTR-3B button, System will post (debit) the self-assessed liabilities including system generated late fee in Liability Register and credit the claimed ITC into ITC ledger.

7. After this the Payment of Tax tile will be enabled, please click it and declare your payment details to pay the taxes and offset the liability.

8. Click CHECK BALANCE button to view the balance available for credit under Integrated Tax, Central Tax, State Tax and Cess. (This includes transitional credit also, if TRAN-1 and 2 are submitted). This will enable you to check the balance before making the payment for the respective minor heads. The balance is also displayed when the mouse is hovered on the applicable data entry field in payment section.

9. Please fill out the section that specifies how you wants to set-off your liabilities using a combination of Cash and ITC.

System checks if you have sufficient Cash/ITC balance.

It also checks if the Reverse charge liabilities are set-off only through CASH.

System also checks if all liabilities are set-off. Part payment is not allowed in GSTR-3B. Hence, ensure sufficient balance in Cash and ITC Ledger to Offset liability

In case of ITC utilisations, the system checks the prioritization rules viz. IGST Credit has to be first utilised for paying IGST liability and remaining for CGST liability and thereafter SGST liability; SGST credit has to be first used for paying SGST liability and then IGST liability; CGST Credit has to be first used for CGST liability and the remaining for IGST Liability; SGST credit cannot be used for paying CGST liability and CGST credit cannot be used for paying SGST liability

Transition ITC, if available in ITC ledger, can be used for payment of liabilities of GSTR 3B

10. Click the OFFSET LIABILITY button to pay off the liabilities

11. Click on declaration statement

12. Select Authorized Signatory filing the Form

13. Click on File GSTR-3B button with DSC or EVC

14. Message for successful filing will appear and Acknowledgement will get generated

If you have any query regarding this Click Here

Step by Step Guide to File GST Return-3B

GSTR-3B filling is under progress and the last date for GSTR-3B filling is 20 August 2017. Please find below the step by step guide on how to file GST Return-3B.
Company formation in India

Step by step guide on how to file GST Return-3B
1. After login, select Return Dashboard
2. Select Financial Year 2017-18 and Month July. Click Search and Select GSTR-3B
3. Declare your liabilities and ITC claims in Section 3.1 and 4 respectively by clicking on the tiles and furnishing the required information. Transitional ITC cannot be claimed in GSTR 3B. It can be claimed only through TRANS 1 and TRANS 2.
4. Enter details of interest, if payable, in Section 5.1. Late fee will be computed by the system
5. Click on Save GSTR-3B After you save the data, Submit button will get enabled. Please note that after submit, no modification is possible. Hence ensure that details are filled correctly before clicking on Submit button.
6. On clicking Submit GSTR-3B button, System will post (debit) the self-assessed liabilities including system generated late fee in Liability Register and credit the claimed ITC into ITC ledger.
7. After this the Payment of Tax tile will be enabled, please click it and declare your payment details to pay the taxes and offset the liability.
8. Click CHECK BALANCE button to view the balance available for credit under Integrated Tax, Central Tax, State Tax and Cess. (This includes transitional credit also, if TRAN-1 and 2 are submitted). This will enable you to check the balance before making the payment for the respective minor heads. The balance is also displayed when the mouse is hovered on the applicable data entry field in payment section.
9. Please fill out the section that specifies how you wants to set-off your liabilities using a combination of Cash and ITC.
a. System checks if you have sufficient Cash/ITC balance.
b. It also checks if the Reverse charge liabilities are set-off only through CASH.
c. System also checks if all liabilities are set-off. Part payment is not allowed in GSTR-3B. Hence, ensure sufficient balance in Cash and ITC Ledger to Offset liability
d. In case of ITC utilisations, the system checks the prioritization rules viz. IGST Credit has to be first utilised for paying IGST liability and remaining for CGST liability and thereafter SGST liability; SGST credit has to be first used for paying SGST liability and then IGST liability; CGST Credit has to be first used for CGST liability and the remaining for IGST Liability; SGST credit cannot be used for paying CGST liability and CGST credit cannot be used for paying SGST liability
e. Transition ITC, if available in ITC ledger, can be used for payment of liabilities of GSTR 3B
10. Click the OFFSET LIABILITY button to pay off the liabilities
11. Click on declaration statement
12. Select Authorized Signatory filing the Form
13. Click on File GSTR-3B button with DSC or EVC
14. Message for successful filing will appear and Acknowledgement will get generated

Company registration in India

Having any Query? Please Click Here

Company registration in India

b03Company registration in India means legally getting the right to do business.In India, registration of company is also known as formation of business or incorporation of company.
Let us see what is this Company thing all about and then move on to Company Registration.

 

What are the documents required to register your startup?

An entity required to be incorporated as a Private Limited Company or a Limited Liability Partnership has to be registered with the Ministry of Corporate Affairs. Now the government has come up with several initiatives where an entity can be incorporated in just 1 day.

 

Private Limited Company

A Pvt. Ltd company allows you to play around with the capital structure, you can also play around with the rights distribution, which isn’t so easy in a limited liability partnership. Hence, investors will ask you to convert from an LLP to a Pvt. Ltd. company.

The Directors of the proposed company must have a Digital Signature Certificate (DSC) to sign the e-forms.
The proposed name of the company should be given along with the main line of business.
The directors and the subscribers of the proposed company should have the following:
(a) PAN as nationality proof

(b) Photo

(c) Aadhar/ Driving Licence/ Voter Card/ Passport as identification proof

(d) Utility Bill i.e, electricity bill/ telephone bill/ bank statement etc.

(e) email-id

(f) mobile number
The incorporation documents required are as follows:
(a) Affidavit by the promoters

(b) Declaration in DIR – 2 by the directors

(c) Declaration in INC – 9 by the promoters

(d) Declaration in INC – 8 by a Chartered Accountant/Company Secretary/Lawyer/Cost
Accountant

 

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.

The partners of the proposed LLP must have a Digital Signature Certificate (DSC) to sign the e-forms.
The proposed name of the LLP should be given along with the main line of business.
The partners of the proposed LLP should have the following:
(a) PAN as nationality proof

(b) Photo

(c) Aadhar/ Driving Licence/ Voter Card/ Passport/ electricity bill/ telephone bill/ bank statement

(d) email-id

(e) mobile number
For Registered office of the LLP:
(a) Ownership deed (if the property is owned) or

(b) Rent agreement along with latest Rent receipt and P.Tax (if the property is rented) or

(c) NOC from the owner of the property and

(d) Latest Utility Bill in the name of the owner i.e, electricity bill/mobile bill/ telephone
bill/ gas bill.

The LLP agreement should be prepared and executed on the stamp paper.

 

Related : HOW GST WORKS IN INDIA

How GST impact the wallet of common man

gst-700x300-1.jpgSince the passing of the GST Constitutional Bill by the Rajya Sabha in August last year, the country has been preparing itself for the new tax regime. The new GST law is India?s biggest tax reform initiative which is expected to improve compliance levels, increase government revenue in company registration in India and create a common playing field for businesses by amalgamating a host of central and local taxes.

On the face of it, GST seems to be a mixed bag with some of the necessities becoming cheaper, while the others might get more expensive. While in the longer run the Goods and Service Tax might have a favorable effect on most of the sectors of the economy, in the short run, as with the most of the reforms, the benefits seem to be limited. Based on the experience of GST implementation in other countries, India could observe an inflationary impact at the onset of the reform, which might fade away once the legislation sinks in.

The present rate of service tax is 15 percent and is applicable to most of the services, excluding essential ones like cultural activities, ambulance services, and certain pilgrimages and sports events. Under Goods and Service Tax, this rate would increase to 18 percent making the services more costly. For some goods like edible oil, textiles, etc. the excise duty is nil and the VAT in several states is 5 percent. Hence, the total cost of such goods is close to 8%-9%. With GST, the cost of such goods is likely to increase and this might put a hole in the budget of a common man to wholly owned subsidiary in India.

Reasons to set up a limited company

ssdfszgfvb cSetting up a limited company will mean more administration and more paperwork than if you are a sole trader but there are many advantages to being a limited company, not least eliminating and personal financial liability.

When a sole trading business fails then the owner is personally responsible for any debt, which can have a negative effect on your credit rating and ability to obtain personal loans in the future. You could risk becoming personally bankrupt if the debts are too high for your to pay off.

If you set your business up as a limited company you are protected from this risk.

What are the Benefits :

Whilst running a limited company does have its fair share of responsibility, and the administrative responsibilities are certainly greater than other ways of working, there are many advantages too.

    • Limited liability – In simple terms, if you run a Limited Company you are protected should things go wrong. Assuming all rules have been followed, as a director you will not be personally liable for any financial losses made by the company.
    • Separate entity – A Limited Company is a legal entity in its own right. This means that everything from the company bank account, to the ownership of assets relates to the business. They are totally separate from the interest of the directors and shareholders.
    • Tax – As a director and shareholder of a limited company you could elect to take the majority of your income in the form of dividends, which enables you to manage your own tax liability and potentially save on National Insurance costs.
    • Perception – If you plan to do business with larger companies, it can help if you are working via a Limited Company as it gives off a more professional image. In some industries, it may even be a mandatory requirement as they will not deal with sole traders or partnerships.
    • Protection – As well as the limited liability protection mentioned above, once you have successfully registered your company, your company name is protected by law. Companies House has very stringent rules for the naming of companies so no one else can use the same name as you, or anything deemed too similar.
    • Ownership and succession – As the sole shareholder in your business, you own the business. However, a Limited Company can easily transfer ownership of shares, or existing shareholders can sell a stake in the company to other parties at any time. If for example a shareholder wishes to retire, or bring a new director on board, it is far easier to transfer ownership, or part ownership, of a Limited Company than it is with a less formal business structure.
    • Take home pay – It’s safe to say that this is the area where you can really reap the rewards of running your own Limited Company. The only person you need to pay as a Limited Company is yourself – combined with the tax efficiencies on offer, this means you can keep anything from 81 to 86 percent.

Accounts

Accounts must be prepared each year but most small companies are not required to have them audited so the process is relatively simple, especially now that the process can be done online.

Source :-http://www.ajsh.in/blog

Audits Under PCAOB Standards

A yearly audit is a key safeguard for your money and a planning tool for the year ahead. Think of it as a “year in review” for your finances.

 

The primary benefit of an annual audit under PCAOB standards  is the confidence it gives you and your members that the PTO’s financial house is in order. Basically, the audit verifies the numbers, ensures accuracy, and assesses procedures. A comprehensive audit also identifies internal controls that should be implemented to improve the integrity of your financial systems. Furthermore, the audit gives closure to the treasurer and sets a starting point for the new year’s activity. An audit is also the primary tool for uncovering financial mismanagement. Hopefully you won’t need to conduct an audit for this reason, but an annual audit can uncover problems before they become significantly more serious. Your PTO might also choose to include in your audit a review of how closely your group’s income and expenditures matched the year’s budget. This type of review can be a strong planning tool.

 

The audit is not within the jurisdiction of the PCAOB. This seems like a strange request.  Perhaps the client is a clearing agency or futures commission merchant registered with the Commodity Futures Trading Commission, which requires that entities registered with it have an audit performed in accordance with PCAOB standards. Maybe the client has entered into a contractual agreement that requires an audit conducted under PCAOB standards. Or maybe, for whatever reason, the client just wants an audit conducted under PCAOB standards.

 

The PCAOB determines which audits are within its jurisdiction, including audits of the financial statements of issuers and nonissuer brokers and dealers registered with the SEC. A regulator (other than the PCAOB) requiring that the audit be conducted in accordance with PCAOB standards does not make the audit fall within the jurisdiction of the PCAOB. Therefore, even though the regulator— for example, the CFTC— requires an audit to be conducted in accordance with PCAOB standards, that audit is required to also be conducted in accordance with GAAS.

 

The Auditor’s Report

The report from the auditor will mark the completion of the review. If you are using volunteers, you should clearly itemize what you expect back, so your auditors know when they have completed their job.

Ensure that your auditor has returned the files you provided, and file the original report in the PTOs permanent archives. At the first meeting of the new school year, you should present the auditors report and move that it be adopted. According to Robert’s Rules of Order, once the annual report of the auditor is adopted, it is no longer necessary to move to adopt each month’s treasurer’s report. The reports are presented and then simply filed for next year’s audit.

 

Related Things you should Know before Registering a Company in India

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