LIMITED LIABILITY PARTNERSHIP (LLP)

A new trend that has been observed of-late is that more and more entreprenuers have start adopting for Limited Liability Partnerships. But What is a Limited Liability Partnership?

Before answering this question we’ll explain you reasons behind the emergence of LLP’s. Till a few years back there used to be only 2 forms of Organisations

1.       Limited Liability Organisations i.e. Companies

2.       Unlimited Liability Partnerships i.e. Partnership/ Proprietorship

the concept of Limited Liability Partnership was evolved which incorporates the benefits of both Companies as well as Partnerships.

Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act, 2008. A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization.

ADVANTAGES

• Renowned and accepted form of business worldwide in comparison to Company.
• Low cost of Formation.
• Easy to establish.
• Easy to manage & run.
• No requirement of any minimum capital contribution.
• No restrictions as to maximum number of partners.
• LLP & its partners are distinct from each other.
• Partners are not liable for Act of partners.
• Less Compliance level.
• No exposure to personal assets of the partners except in case of fraud.
• Less requirement as to maintenance of statutory records.
• Less Government Intervention.
• Easy to dissolve or wind-up.
• Professionals can form Multi-disciplinary Professional LLP, which was not allowed earlier.
• Audit requirement only in case of contributions exceeding Rs. 25 lakh or turnover exceeding Rs. 40 lakh.

DISADVANTAGES

• Any act of the partner without the other partner, may bind the LLP.
• Under some cases, liability may extend to personal assets of partners.
• Cannot raise MONEY from Public

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Export Promotion Council

EPC (Export promotion council)

From country perspective:

The Export Promotion Councils are non-profitable organizations, registered under the Indian Companies Act or the Societies Registration Act. They are supported by FINANCIAL assistance from the Government of India. Each Council is responsible for the promotion of a particular group of products, projects and services. The main role of the EPCs is to project India's image abroad as a reliable supplier of high quality goods and services.

No. of Export Promotion Councils in India are:

1.  ENGINEERING EXPORT PROMOTION COUNCIL 
2. PROJECT EXPORTS PROMOTION COUNCIL OF INDIA
3. BASIC CHEMICALS, PHARMACEUTICALS AND COSMETICS EXPORT PROMOTION COUNCIL 
4. CHEMICALS AND ALLIED PRODUCTS EXPORT PROMOTION COUNCIL
5. PLASTICS EXPORT PROMOTION COUNCIL
6. COUNCIL FOR LEATHER EXPORTS
7. SPORTS GOODS EXPORT PROMOTION COUNCIL
8. GEM AND JEWELLERY EXPORT PROMOTION COUNCIL
9. SHELLAC &  FOREST PRODUCTS EXPORT PROMOTION COUNCIL
10. CASHEW EXPORT PROMOTION COUNCIl
11. EXPORT PROMOTION COUNCIL FOR EOUS & SEZ UNITS
12. PHARMACEUTICAL EXPORT PROMOTION COUNCIL
13. APPAREL EXPORT PROMOTION COUNCIL
14. CARPET EXPORT PROMOTION COUNCIL
15. COTTON TEXTILE EXPORT PROMOTION COUNCIL
16. EXPORT PROMOTION COUNCIL FOR HANDICRAFTS
17. HANDLOOM EXPORT PROMOTION COUNCIL
18. INDIAN SILK EXPORT PROMOTION COUNCIL
19. POWERLOOM DEVELOPMENT & EXPORT PROMOTION COUNCIL
20. SYNTHETIC & RAYON TEXTILE EXPORT PROMOTION COUNCIl
21. WOOL & WOOLENS EXPORT PROMOTION COUNCIL

From exporter perspective:

The EPCs shall keep abreast of the trends and opportunities in international MARKETS for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports.

The major functions of the EPCs are:

• To provide commercially useful information and assistance to their members in developing and increasing their exports.
• To offer professional advice to their members in areas such as technology upgradation, quality and design improvement, standards and specifications, product development, innovation, etc
• To organize visits of delegations of its members abroad to explore overseas MARKET opportunities.
•  To organize participation in TRADE fairs, exhibitions and buyer-seller meets in India and abroad.
• To build a statistical base and provide data on the exports and imports of the country, exports and imports of their members, as well as other relevant international TRADE data.

An exporter may, on application, register and become a member of an Export Promotion Council. On being admitted to membership, the applicant shall be granted forthwith Registration-cum- Membership Certificate (RCMC) of the EPC concerned, subject to such terms and conditions as may be specified in this behalf.

How to register for RCMC, will be discussed in the next blog?

For further Consultation or Help regarding IEC registration/modification please write to us on contact@munim.in

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How to Register Import Export Code (IEC Registration)

As mentioned in the earlier blog that IEC is mandatory to import or export goods and services. Now the question arises, How to register IEC and Who is the issuing authority.

Import Export Code is registered with Directorate General of Foreign Trade (DGFT) and issued by Addl/Jt. DGFT of the Regional Area. The Ayaat Niryaat Form 2A (ANF 2A) is required to be filled in totality before applying for the IEC.

The ANF 2A comprises four Parts (A, B, C, D). 

Part A is the main body of the form that seeks basic and crucial information (including incorporation details, director details, etc.). It also ask for an unattested photograph of the director (in case of the company) or proprietor  (incase of the Proprietorship).

Part B is the bank certificate that certifies the Company/Proprietorship and its director/owner (authorized signatory). The applicant is advised to use the same photograph in Annexure A and B. The certificate is to be issued by the bank the details of which are mentioned in Annexure A.

Part C is for the modification of an existing IEC. It seeks modification of the information like change in address of the company/proprietorship , addition of the branch address, changes in the details of the director or name of the director etc.

Part D is the declaration which authorized signatory needs to sign.

Submission of Documents with Addl/Jt DGFT for new IEC:

1. One copy of the ANF2A (Parts A, B, D)

2. Each individual page of the application has to be signed by the applicant.

3. Application must be accompanied by documents as per details given below :

        i. Demand Draft of the prescribed fee in favour of the concerned Regional Office of DGFT. Money can also be paid through Electronic Fund Transfer (EFT).

       ii. Certificate from the Banker of the applicant firm in the specified format (Part B).

      iii. Self certified copy of Permanent Account Number (PAN) issued by Income Tax Authorities.

      iv. Two copies of passport size photographs of the applicant

       v. Photograph on the banker’s certificate should be attested by the banker of the applicant.

      vi. Self addressed envelope and stamp of Rs. 30.

     vii. Incase of company, a Board Resolution for nominating an Authorized Signatory

    viii. Incase of company, self certified Incorporation Certificate of the company. For proprietorship, self certified document proof of the Date of Birth of the owner is required and Documentary proof of Date of Formation in case of others.

     ix. These documents may be kept secured in a file cover.

4. A cover letter for Application of new IEC.

Submission of Documents with Addl/Jt DGFT for modification of IEC:

1. One copy of the ANF2A (Parts A, C, D)

2. Each individual page of the application has to be signed by the applicant.

3. Application must be accompanied by documents as per details given below :

        i. Self Certified copy of Document proof of Date of Birth of the owner in case of Proprietorship and number of IEC held along with their details. Self Certified copy of Incorporation Certificate incase of company. Documentary proof of Date of Formation in case of others.

       ii. Original IEC certificate is required to be submitted.

      iii. Proof of change in name and/or constitution of the company. Self certified copy of Certificate of ROC indicating the change of name. In case of change in Directors, copy of Form 32 and Receipt of payment made to ROC.

      iv. As proof of change in the address of the company, a self certified copy of Form 18 filed with  ROC, copy of Receipt of payment made to ROC and the self certified downloaded copy of page of Ministry of Corporate Affairs website indicating the change of address of company.

       v. For proof of addition of branch/factory, etc., documentary evidence like (any one): Shop & Establishment Certificate/Excise Registration Certificate/Sales Tax Registration Certificate / Electricity Bill / LandlineTelephone Bill, etc

      vi. In case there is change in PAN number of the company due to change in constitution or ownership of company (for example, from Private Limited Company to Public Limited Company, etc.), Self certified copy of new PAN card is required to be submitted.

     vii. Incase of company, a Board Resolution for nominating an Authorized Signatory

    viii. These documents may be kept secured in a file cover.

4. A cover letter for Application of modification in IEC.

DGFT, generally, issues/modifies IEC within 2/3 days of the application, if the application and documents are found to be in order.

For further Consultation or Help regarding IEC registration/modification please write to us on contact@munim.in

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What is IEC (Import Export code)?

Our country is having huge fiscal deficit, and ministry of finance is always trying to control the same by limiting and balancing imports with exports called as balance of payments. Hence, these 2 things are very important from the economic point of view. Keeping track of the same government has implemented various tools and providing an identity code for all those involving in such transaction called as IEC code.

The first requirement before you start an import/ export business in India is to obtain an IEC. An IEC is necessary for import/export of goods. In case the import/export is of services or technology, IEC is required in only limited circumstances, when import/export is in ‘specified services’ or ‘specified technologies’, i.e. services or technologies in which international trade is restricted by the Government of India as they pertain to national security, such as dealing in nuclear weapons, automatic guns, etc.

IEC (importer Exporter Code) number is a 10 digit code number given to an exporter or importer by the regional office of the Director General of Foreign Trade (DGFT), Department of Commerce, Government of India

The following categories of importers or exporters are exempted from obtaining Importer - Exporter Code (IEC) number:

 1.    Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters covered by clause 3(2) [except sub-clauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.

2. Ministries/Departments of the Central or State Government.

3.Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.

4. Persons importing/exporting goods from/to Nepal provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

5. Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

However, the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of the ITC(HS) except in the case of exports by category(ii) above.

In simple words, each and every body engaged in import/export business needs to have IEC code (exept the ones in the exempted list).

However, IEC code is not necessary in importing/exporting small consignment (upto Rs 20,000) with very less frequency (say once in a month or two).

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Why GST implementation is a big reform?

Elections are over and Modi effect is gripping the world as expected, whether it is Obama or Tony. Time to act now, conditions are favorable (markets at its best, oil prices dipped). A long pending issue started in 2000, by vajpayee Government for reforming the tax system India by introducing GST in India.

But is it really critical and much needed agenda to be resolved under this era of BJP. Yes actually, as after a long time Indian politics is governed under one sky.  

First let’s understand what GST is and how it will work?

GST(Goods and Service tax) is a comprehensive tax levy on manufacture, consumption and sale of goods and services at a national level. The basic philosophy of GST is to tax every goods and services in such a manner that the producer at each stage of the value chain can credit for tax paid on his inputs. The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.

That sounds great, but, why GST when we already have VAT? Isn't the VAT framework similar to that of GST? VAT regulations and rates generally vary across states. There is a tendency, as has been observed, that states may resort to undercutting of rates to attract more investors. This generally leads to a loss of revenue to both the state and centre. GST would introduce uniform taxation laws across states and different sectors. The taxes would be divided between the state and centre, based on a formula that would be acceptable to both. Also, it would be easier to supply goods and services uniformly across the country, as no additional taxes would have to be paid across different states. Currently, no tax credits are provided for interstate transactions.

India will implement a dual GST system. A Central Good and Service Tax and a State Goods and Service Tax will be levied on taxable value of transaction. All goods and services barring few like alcohol, tobacco and petroleum will be brought into the GST base. There will be no distinction between goods and services.

It will not be an additional tax. CGST will include central excise duty (Cenvat), service tax, and additional duties of customs at the central level; and value-added tax, central sales tax, entertainment tax, luxury tax, octroi, lottery taxes, electricity duty, state surcharges related to supply of goods and services and purchase tax at the State level.

Comprehensive Tax Schemer (CTS)

MUNIM

COMPREHENSIVE TAX SCHEMER (CTS) – NOVEMBER 2014

Date	Tax	Form	Description
5th	Service Tax	Challan No. GAR-7	Payment of Service Tax  for Oct by Companies
6th	Service Tax	Challan No. GAR-7	Payment of Service Tax for month ending Oct for corporate assesses making E-PAYMENT
7th	Income Tax	Challan No. ITNS-281	Payment of TDS/TCS deducted/collected in Oct
7th	Income Tax	Form No.15G, 15H,27C	Submission of Forms received in Oct  to IT Commissioner
10th	Excise	ER-1	Return for Non SSI assesses for Oct
10th	Excise	ER-2	Return for EOUs for Oct
10th	D-VAT	Form 16 and CST 1	E- Return of VAT for the quarter ended Sep
10th	D-VAT	DVAT - 56	Filing of Return verification form DVAT-56 for (all Dealers) quarter ended Sep 2013
10th	D-VAT	DVAT - 48	Return of TDS for Sep quarter in DVAT-48
10th	Excise	ER-6	Return by units paying duty greater than Rs 1 crore (CENVAT + PLA) for Oct
12th	D-VAT	BE - 2	Furnish advance information for functions in Banquet Halls, hotels etc. where food &/or liquor items supplied & booking cost > Rs 1 lakh per function for 2nd fortnight of November
14th	Service Tax	ST - 3	Filing of Half Yearly Service Tax return. ( April to September)
15th	Company Law	CLSS	Filing of Annual Reports etc. to be filed by 30-6-2014 with 25% Additional fee, No Prosecution/ Disqualification u/s 164(2)
15th	D-VAT	DVAT-20	Deposit of DVAT TDS for Oct
15th	Income Tax	Form 16A/ 27D	Issue of Quarterly TDS/TCS certificate for Sep quarter for Govt. deductors
15th	Provident Fund	Electronic Challan cum Return (ECR)	E-Payment of PF for Oct ( Cheque to be cleared by 20th)
21st	M-VAT	MVAT Challan	Payment of VAT & WCT TDS under MVAT for Oct
21st	D-VAT	DVAT-20 & Central	Deposit of VAT & CST for Oct
21st	M-VAT	Form 231-235 & CST 1	Submission of MVAT return for Oct
21st	ESI	ESI Challan	Payment of ESI of Dec
22nd	D-VAT	DVAT- 43	Issue of DVAT Certificate for deduction made in Oct
22nd	Income Tax	Form 16A	Issue of TDS Certificate for tax deducted under Section 194-IA in the month of October, 2014
27th	D-VAT	BE - 2	Furnish advance information for functions in Banquet Halls,hotels etc. where food &/or liquor items supplied &booking cost > Rs 1 lakh per function for 1st fortnight of December
28th	D-VAT	Form No. 9	Reconcillation of Statutory forms for 2013-14
30th	Professional Tax	Form No. IIIB	Return of Monthly Profession Tax (Liability equal to more than Rs. 50,000)
30th	Professional Tax	MTR - 6	Payment of monthly profession tax (Liability greater than equal to Rs. 50000)
30th	Income Tax	ITR-6	Filing of I.T. Returns by Companies(Tax Audit applicable)
30th	Income Tax	Form No. 3CEB	Obtaining Audit report u/s 92E
30th	Income Tax	Form No. 3CD, 3CA/3CB	Obtaining Tax Audit Report
30th	Income Tax	ITR - 4,5	Filing of I.T. Return by Individuals, Firms,AOPs, BOIs (Audit applicable)
30th	Wealth Tax	Form No. BB	Filing of wealth tax returns (Tax Audit applicable)
30th	Excise	ER-4	Annual Return by units paying duty more than Rs 1 crore (CENVAT + PLA)
30th	Income Tax	ITR-4,5,6	Filing of I.T. Returns by assesses where Transfer Pricing provisions are applicable