Entries from March 2010 ↓

How to open a Bank account for Sole Proprietorship

To open a Current account in the name of sole proprietary firm, RBI has issued certain guideline regarding KYC for such account.

Know your Customer (KYC) guidelines – accounts of proprietary concerns

A reference is invited to Para 2.4(a) of the Master Circular on KYC/AML/CFT/Obligation of banks under Prevention of Money laundering Act (PMLA), 2002 issued to banks vide DBOD.AML.BC.No.2/14.01.001/2009-10 dated July 1, 2009. It has been advised to banks that internal guidelines for customer identification procedure of legal entities may be framed by them based on their experience of dealing with such entities, normal bankers’ prudence and the legal requirements as per established practices. If the bank decides to accept such accounts in terms of the Customer Acceptance Policy, the bank should take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are

2.  For sake of clarity, in case of accounts of proprietorship concerns, it has been decided to lay down criteria for the customer identification procedure for account opening by proprietary concerns. Accordingly, apart from following the extant guidelines on customer identification procedure as applicable to the proprietor, banks / financial institutions  should  call  for and  verify  the  following documents before opening of accounts in the name of a proprietary concern:

  • Proof of the name, address and activity of the concern, like registration certificate (in the case of a registered concern),
  • Certificate/licence issued by the Municipal authorities under Shop & Establishment Act,
  • Sales and income tax returns,
  • CST/VAT certificate,
  • Certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities,
  • Licence issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.
  • The complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected duly authenticated/ acknowledged by the Income Tax Authorities.

  • Utility bills such as electricity, water, and landline telephone bills in the name of the proprietary concern.

ii) Any two of the above documents would suffice. These documents should be in the name of the proprietary concern.

4. These guidelines will apply to all new customers, while in case of accounts of existing customers, the above formalities should be completed in a time bound manner and should be completed before December 31, 2010.

 

Delhi VAT Budget 2010 Proposals

Ca. Vinay Bhushan

VAT rates of various commodities in Delhi, which are less than the rates suggested by the Empowered Committee of State Finance Ministers, are termed as deviations. A number of deviations have been done in the past. On account of these deviations Delhi Government have incurred losses in revenue collection as well as reduced compensation from the Central government. It has been proposed to remove such deviations on items / commodities and levy VAT as follows:-

From exempted 0% to 5%

1. Compressed natural gas (CNG) for use in transport sector

2. Rassi, Ban & Newar

3. Bio inputs like Fertilizers and Micro-nutrients and plant growth promotors

4. Kerosene stoves, lanterns and petromax and their spares

5. Embroidery and zari items

From exempted (0%) to 12.5%.

1. Motion Picture distribution when treated as right to use goods

2. Plastic scrap/ glass scrap.

From 5% to 12.5%

1. All other scraps

2. Dry fruits and kesar and magaj of all kind

3. Desi Ghee

4. Household plastic items

5. Plastic and tin containers including barrels

6. Wood and timber and plywood and laminated boards

7. Fitting for doors and windows and furniture

8. Wire mesh and metal mesh

9. Paintbrushes

10. Tractor tyres and tubes

11. Cocoa and coffee including coffee beans

12. Invertors

13. All Utensils and cutlery items (including Pressure cookers / Pans) except those made of precious metals

14. Fertilizers, pesticides, weedicides, insecticides, herbicides, rodentecides and plant growth regulators (other than those covered in First Schedule)

15. Glucose D

16. Locks

17. Weights and Measures

18. Fibre Board and particle board

19. Tea

Diesel From 12.5% to 20%

Concessions continue on following items :

1. Kirana Items except dry fruits, kesar and magaj of all kind

2. Foodgrains, Atta, Maida, Suji

3. Amla, Harad, Bahera, Shikakai, Supari, Ratanjot, Khusak, Pudina

4. Hawan Samagri and Incense Sticks

5. Unbranded goli and toffee

6. Midday Meal supplied by agencies approved by the Delhi Govt. and Local Bodies to schools

7. Jute and all kind of jute products including natural dyes and bleached, diversified, plain and laminated jute products

8. School Bags with MRP upto Rs.300/-

9. Tricycles meant for use by persons with disability

10. Blood filters

11. Compact Fluorescent Lamp and electronic Choke

12. Natural Gas and R-LNG (Re-gassified Liquid Natural Gas) sold to power generation companies owned by Government of NCT of Delhi for generation of power meant for sale in Delhi)

13. Piped Natural Gas

Luxury Items :- It is proposed to increase VAT on writing instruments costing above Rs.1,000/- from present 5% to 12.5%, watches above Rs.5,000/- from 12.5% to 20%, Mobile Phones and all mobile accessories above Rs.10,000/- from 5% to 12.5%, readymade garments above Rs.5,000/- from 5% to 12.5%. This measure is likely to generate approximately Rs.100 crores as additional revenue.

It is proposed to enhance VAT on aerated drinks from 12.5% to 20% as a measure to generate additional revenue to the tune of Rs.10 crores.

To give relief to Thalesemia patients we have already exempted “Desferrioxamine” “Deferiprone” and Blood Filters (Lucocites Filter) used for treatment of Thalassemix. I also propose to exempt new Oral Iron Chelator Defarasirox by including it in the First Schedule of the Act.

Government of Delhi has constituted the Delhi Dispute Resolution Society with the objective to establish institutionalized mechanism of alternate dispute resolution. I propose to frame a mechanism of mediation to resolve disputes of Sales Tax / Value Added Tax cases by appropriately amending the DVAT Act, 2004.

Subsidy on Domestic LPG:-

Due to subsidy of Rs.40/- on domestic LPG cylinder (14.2 Kg.), Government of Delhi is bearing a burden of approximately Rs.160/- to Rs.170 crores per annum. It is proposed to withdraw this subsidy.

Stamp & Registration

The registration fee charged on various documents under Indian Registration Act, as applicable to Delhi, is meager. The maximum registration fees is Rs.100/- in NCT of Delhi. It is proposed to bring it at more realistic level by raising maximum registration fee to Rs.500/- and registration fees in other slabs will also be enhanced proportionately. It is likely to generate additional revenue of Rs.6 crores.

(Please note that these are only proposals and will be effected only after passing of the budget and notification)

Payment of Interest on Savings Bank Account on Daily Product Basis

RBI/2009-10/339
UBD (PCB) BPD.Cir.No. 48/13.01.000 / 2009-10

March 4, 2010

Chief Executive Officer
All Primary (Urban) Cooperative Banks

Dear Sir,

Payment of Interest on Savings Bank Account on Daily Product Basis

Please refer to our circular UBD (PCB) BPD.Cir.No. 7/13.01.000/2009-10 dated September 1, 2009 advising banks to put in place requisite infrastructure so that transition to the revised procedure of calculating interest on balances in savings bank accounts on a daily product basis could be implemented smoothly.

2.  We advise that payment of interest on savings bank accounts may be made by banks on a daily product basis with effect from April 1, 2010.

Yours faithfully,

(A.K. Khound)
Chief General Manager-in-Charge