Goods and Services Tax- GSTEasily Available by Us
We all know that we’re required to pay certain taxes to the government from time to time. These are broadly classified into direct and indirect taxes. Direct taxes are taxes that we pay directly to the government, like income tax and corporation tax. Indirect taxes, on the other hand, are taxes that are paid by individuals to an intermediary who shall then pay it to the government. Common examples of indirect taxes are Value added Tax (VAT) and Goods and Services Tax (GST).
Up until 2017, goods and services in India were taxed in varied ways like Value Added Tax (VAT) and service tax. To make the tax structure simpler and bring it under one umbrella, the government implemented the concept of one single tax called the Goods and Services Tax (GST).
The GST Council meets regularly to decide or modify the GST on various commodities and services. For example, some commodities were initially placed in the higher GST tax bracket (18%-28%). But after inputs from states and industries, these commodities were reconsidered more as necessities than luxuries and their GST rates were reduced.
Types of Goods and Services Tax:
Central Goods and Services Tax (CGST)
State Goods and Services Tax (SGST)
Integrated GST (IGST)
The GST rate is broadly classified into 4 categories: 5%, 12%, 18% and 28%. Goods and services are bracketed under these categories depending on whether the item is essential, non-essential, a necessity or a luxury.
Let us look at the GST rates of a few common items:
||Cut and semi-polished polished diamonds and other precious stones.
||Essential household commodities like edible oil, sugar, spices, tea, and coffee (except instant coffee). Coal, Indian Sweets and Life-saving drugs also attract a 5% GST rate.
||Computers and processed food.
||Soaps, hair oil, toothpaste and cream are covered in this bracket.
||Luxury commodities like small cars, consumer durables like AC and Refrigerators, premium cars and high-end motorcycles, cigarettes and aerated drinks.
Some very essential items like milk attract no GST. This is to ensure that essential commodities that are consumed in almost every home are readily available without tax.
GST Rates for Common Services
GST Rates on loans
||Services offered under Bank Service Bank Deposit (BSBD) under Pradhan Mantri Jan Dhan Yojana (PMJDY). Hotel accomodation for transactions below Rs. 1000 per day.
||Working for newspaper printing, Renting cabs, Tour operator services, Print media ad spaces
||Building construction for sale, Food and drink at restaurants (without AC or Liquor license), Movie tickets costing less than or equal to Rs. 100
||Food and Drink at AC restaurants with liquor license, Outdoor catering, circus, drama, theatre.
||Amusement parks, Theme parks, water parks, sporting events like the IPL, casinos, ballet, race course, go-karting, Food and drink in AC 5 star hotels.
The earlier service tax applicable on loans has now been replaced by GST. The rate of GST is set at 18% and is only levied at the loan processing charges.
Home loan: 18% GST
Personal Loan: 18% GST
Car loan: 28% GST
GST on Gold
The gold itself is levied with a GST of 3%, whereas the making charges are taxed at 5% if the manufacturing is outsourced to a job worker.
Taxes in India are mainly of two types: Direct Taxes and Indirect Taxes. Direct taxes are those taxes that a tax paper pays directly to the government, like the Income Tax that earning individuals pay every year and the Corporate Tax that firms and companies pay to the government.
Indirect taxes are those taxes that an intermediary collects on your behalf and pays it to the government. Examples of indirect taxes are service tax, Value Added Tax (VAT) and Goods and Services Tax (GST) that we pay for commodities and services.
Let us look at Direct Taxes and there two main types:
Income Tax: Any individual or Hindu Undivided Family (HUF) who earns an income in India (including NRIs) has to pay a tax to the government on their income. This is called an Income Tax and the rate of taxation is decided by the government.
Corporate Tax: Just like individuals have to pay income tax on their earned income, companies and firms have to pay corporate tax on the profits that they generate. The rate of corporate tax is decided by the government.
Income Tax - Basic Principles
Income Tax has to be paid for any income that an individual generates, unless it is tax exempted. Whether it is a salary that an individual earns, a pension amount, income from rented property, income from stocks and mutual funds and even the interest earned from keeping your funds in a savings account, all of it levies a tax.
Tax Slabs and Taxpayers
The term ‘taxpayer’ can mean any of the following:
- An individual, Hindu Undivided Family (HUF), Body of Individuals (BOI), Association of Persons (AOP).
Now it is true that all of the above groups of persons do not have similar incomes. They all have a varied level of annual income, and hence they cannot be taxed equally. Therefore, people’s incomes are bracketed or grouped into tax slabs or tax brackets. Each of the four different tax slabs attract a different rate of income tax.
|Income Tax Slab
||Tax Applicable as per New Regime
|Rs.0 – Rs.2,50,000
|Rs.2,50,001 – Rs. 5,00,000
|Rs.5,00,001 – Rs. 7,50,000
||Rs.12500 + 10% of total income exceeding Rs.5,00,000
|Rs.7,50,001 – Rs. 10,00,000
||Rs.37500 + 15% of total income exceeding Rs.7,50,000
|Rs.10,00,001 – Rs.12,50,000
||Rs.75000 + 20% of total income exceeding Rs.10,00,000
|Rs.12,50,001 – Rs.15,00,000
||Rs.125000 + 25% of total income exceeding Rs.12,50,000
|Above Rs. 15,00,000
||Rs.187500 + 30% of total income exceeding Rs.15,00,000
Corporate tax is paid by companies and it is calculated against profits earned by the company, capital gains, income from rented property, and income from other sources like dividends and interest.
|Range of income
||Rate of tax
|Companies with up to Rs.400 crore gross turnover
|Gross turnover that exceeds Rs.400 crore
||Domestic Companies Tax rate
|If total income range is between Rs.1 crore and Rs.10 crore
||7% as per rate of tax above
|If total income range exceeds Rs.10 crore
||12% as per rate of tax above
When you start a new business in India, it is always prudent to get your company registered with the Ministry of Corporate Affairs (MCA). Before you can register your business, you must choose what type of business structure you want your company to take. In India, we have four types of company structures:
1) One Person Company (OPC)
2) Limited Liability Partnership (LLP)
3) Private Limited Company (PLC)
4) Public Limited COmpany (PLC)
Whatever the business structure you choose, registering your company will drastically increase
its credibility and also give you a lot of benefits.
Benefits of Registering a Company
- A licensed company effectively makes the company genuine, and hence builds trust.
- Registering your company protects it against personal obligation and other risks and losses.
- Registration will attract customers.
- It will attract more bank credits and good investments from reliable investors.
- It greatly increases the growing potential of a company.
Procedure for registering your company
You can easily get your company registered using the online portal for the Ministry of Corporate Affairs.
Step 1: Apply for a Digital Signature Certificate (DSC)
Step 2: Apply for a Director Identification Number
Step 3: Application for company name availability.
Step 4: Filing of eMoA (e-Memorandum of Associations) and eAoA (e-Articles of Associations)
Step 5: Apply for PAN and TAN of the company
Step 6: Submit certificate issued by the Registrar of Companies
Step 7: Open current bank account for the company.
Step 8: Done!
That is how you can get your company registered. Feeling that it’s too much of a hassle? Do not worry. Let us handle it for you. At Cat-Eye Consultancy, we can guide you with getting your company registered in the blink of an eye.
A partnership firm is a firm where two or more individuals come together to form a business and
agree to divide the profits among themselves in an agreed upon ratio. A partnership is much
easier to form than an LLP and the compliance required is minimal as compared to companies.
Creating a partnership.
Choose a name
A name must be given to the partnership firm but a couple of guidelines need to be followed
when choosing a name:
a) The name must not be too similar to another existing business. This rule ensures that people
do not confuse one business with the other and the reputation of existing businesses could be
mistaken if new businesses adopt similar sounding names.
b) The name must not contain words like Empire, Crown, Emperor, Empress or anything that
hints that the business is sanctioned or approved by the government.
How to form a partnership agreement?
The document that signifies that a firm is a partnership and contains all terms of the partnership
is called a partnership deed. It contains all details regarding the rights, shares, duties and
obligations of each partner.
Details required for a partnership deed
a) General Details:
1. Name and address of the firm.
2. Names and addresses of all the partners.
3. Nature of the business
4. Date on which the business was started or is to be started.
5. Initial investment contributed by each partner
6. Profit/loss sharing ratio among the partners
b) Specific Details:
Apart from the above general details, further specific details must also be mentioned in the
partnership deed that could avoid future conflicts.
1. Interest on invested capital, details of funds drawn by partners or any loans provided by
partners to the firm.
2. Salaries or commissions to be paid to the partners.
3. Details of the partners’ rights within the firm, including additional rights that active partners
4. Duties and obligations of all the partners
5. Procedure or protocol to be followed in case of death of a partner, or dissolution of the firm.
6. Any other special clauses that the partners want to include.
Registering your partnership firm.
To register your partnership firm, you must submit an application, alongwith the required fees, to
the Registrar of Firms of the State where your business is located. You’ll be required to furnish
the following documents:
- Application form for partnership registration (Form 1)
- Specimen of Affidavit
- Original copy of your partnership deed.
- Proof of principal place of business (ownership documents or rental agreement)
After completing all formalities the registrar will verify all your documents. If they are satisfied,
they will register your firm in the Register of Firms and issue a Certificate of Registration.
To make your registration process easier, we at Cat-Eye Consultancy can guide you with
forming your partnership deed as well as registering your firm. Our services will ensure that your
partnership firm is established and registered in quick time and with a process that is more
streamlined and hassle-free.
A creative person that writes stories, novels, creates music and draws art, would always want that their work be identified as their own, and an assurance that no one else could copy their work. That is exactly what a copyright is. It is a right of the creator that doesn’t allow anyone else to copy their work. When someone holds a copyright over a creative work, they hold exclusive rights to that work and no one else can copy, imitate, or reproduce that work in any form.
The following things can be copyrighted:
- Literary Work
- Training Manuals
A copyright in India lasts for 60 years, and it is issued by the Registrar of Copyrights. The register of the Registrar of Copyrights contains 6 categories:
PART – 1: Literary works other than computer Programs
PART – 2: Musical Works
PART – 3: Artistic Works
PART – 4: Cinematography Films
PART – 5: Sound Recording
PART – 6: Computer Programs, tables & Compilations
Is it mandatory to get a copyright?
It is not necessary to get a copyright for every piece of creative work. However, getting a copyright provides many benefits. You get the assurance that you will have the legal advantage if anyone were to copy your work. If your work was copyrighted and someone copies it, you have every right to sue that person in a court of law.
Procedure for copyright registration
The process of getting your copyright can be done online with the following steps:
Step 1: Visit www.copyright.gov.in
Step 2: Register as a new user.
Step 3: Login with your username and password.
Step 4: Click on ‘Click for Online Copyright Registration’.
Step 5: Follow the instructions to fill Form XIV
Step 6: Fill up the Statement of Particulars and the Statement of Further Particulars (if applicable)
Step 7: Make the payment.
Once you make the payment, you will be issued a Dairy No., after which a waiting period of 30 days commences. These 30 days are reserved for others to make an objection over your copyright claim. If no objection is received, the scrutineer will scrutinize your application and forward your application to be registered, If everything is in order, your copyright will be entered into the Register of Copyrights.
For a hassle-free and smoother copyright registration process, you can always let us at Cat Eye Consultancy provide our excellent services in this regard. Our quick and streamlined copyrighting process will ensure that your application is error-free and has no chance of getting rejected.
Import Export Code (IEC)
If you think that circulating your product in India is limiting your growth potential, then the next thought that you may have is going global. That is, exporting your products abroad and targeting the global market. Similarly, you may be looking to import certain products looking to sell them in India. In either case, you will be required to acquire certain licenses, follow protocols and get registrations done in order to import or export in and out of India. The Import Export Code (IEC) license is one such license that you must have if you want to move goods in and out of India.
The Import Export Code is a 10-digit code that is required by anyone who wants to start an Import/Export business in India. It is issued by the Director General of Foreign Trade (DGFT) and once you get your code, it will be valid for life. Importer merchants cannot import goods without the IEC code and similarly, exporter merchants cannot export goods or avail benefits like the export scheme without the IEC license.
When do you need an IEC?
The IEC is required in the following situations:
- When a goods importer needs to clear their shipment in customs, the customs authority of India requires the Import Export Code before they can release the shipment.
- Whenever a goods importer has to send funds abroad for the items they’re importing, the banks require the Import Export Code.
- When an exporter merchant has to export their product out of India, the IEC is required by the port customs.
- When an exporter receives funds in exchange for their exported goods, the concerned bank requires the IEC code.
Steps involved in acquiring an IEC Code:
Fill out the application form in the required format, that is: Aayaat Niryaat Form no. 2A format. and file it with the Regional office of DGFT where your business is located.
Compile all the required documents like identity proofs ( given below), legal documents and address proof with your bank details & the certificate in respect of ANF2A form.
Once your application process is complete, you are required to file it with the DGFT in the form of a Digital Signature Certificate (DSC). During this step you will also be required to make the necessary payment for the IEC registration.
If everything is in order and your application is approved, you will receive your Import Export Code as a soft copy from the DGFT.
Documents required for the IEC (Import Export Code) Registration
You will need to furnish the following documents when applying for the IEC.
- PAN card copy of individual, firm or company.
- ID proof of the individual liek passport copy, Voter’s ID and Aadhar Card.
- Copy of a cancelled cheque from the applicant's or company’s current bank account.
- Address proof in the form of rent agreement copy or Electricity Bill copy of the business premises.
If you require some guidance in getting your IEC registered without any hassles, we’ll be more than happy to assist you in the process. At Cat Eye Consultancy, we pride ourselves in getting IEC registrations done in quick time and make the process smooth and obstacle-free for the applicant.
When looking at brand names and logos, usually we either see a ‘ ™ ‘, or a ‘ ® ‘ symbol next to the name. These symbols simply mean that the brand name or logo that you're looking at has been trademarked or is a registered trademark. This signifies that that particular idea, concept, logo, or the name itself is unique to that particular brand and cannot be copied by any other brand.
Thus, a trademark is nothing but a unique sign or identity that makes your brand stand out from others. A trademark can be a logo, a brand name, a design, a tag line, a combination of colours or a sound. If you’ve come up with a creative idea to make your business unique, then you must safeguard it from plagiarism and emulation by registering it as your own trademark. Once you register your trademark, it is part of your business’s intellectual property and you have the right to sue anyone that tries to copy it.
In India , trademark registrations are carried out by the Controller General of Patents, Designs and Trademarks, Ministry of Industry and Commerce. Your trademark is registered under the Trademark Act of 1999 and is valid for 10 years. You can always renew your trademark registration again after 10 years.
™ - The ™ sign can be used as soon as 3 days after the application is. It does not signify that your trademark is registered, it only shows that your trademark application has been filed.
® - The ‘R’ sign properly denotes that your trademark has been duly registered and it usually takes upto 2 years to be approved.
What can you trademark?
The trademark rules of India mention that any item that is used to build your brand and makes it stand out can be trademarked. This includes names, logos, graphics, colour combination, photograph, smell, sound, phrases, symbols, initials or a combination of any of these.
A trademark can be registered by individuals, private firms, companies, LLPs and NGOs.
Benefits of trademark registration:
- Builds trust and assurance of reliability and quality in the minds of customers.
- Protects your trademark from being copied or emulated. A registration gives you the right to approach the courts if you feel that your registered trademark is being plagiarised.
- A registered trademark can be sold, franchised or commercially contracted.
- It gives your brand a unique identity because a registered trademark cannot be used by your competitors.
Trademark Registration Procedure
You can either file your application manually by submitting it to the Registrar Office of Trademarks situated in all major cities, or do the entire registration online by using the government portal.
Once you choose your trademark, you need to do the following steps to get your trademark registered online:
- Prepare your application by collecting documents like your ID proofs and residence proofs, alongwith the business address proof, soft copy of the trademark itself, and power of attorney of the applicant.
- Visit the government portal and file your application.
- Get the acknowledgment instantly and start using the ™ symbol.
- Publication of your trademark in the Indian Trademark Journals
- Get your Registration Certificate.
Once you get your registration certificate, your trademark is officially registered and you can start denoting it with the symbol ®.
Cat Eye Consultancy can help you get your trademark application done and dusted in a jiffy. We’ll guide you towards getting your inque trademark right from the start. This includes searching for a unique trademark, comparing and contrasting it with other existing trademarks (if any), and performing the entire registration process on your behalf. This will ensure that you get your trademark registered as soon as possible and flaunt the ® sign next to your logo.