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Change in additional fee for delays in filing Forms of ROC

General Circular No: 4/2010

No.  2/7/2010-CL.V

Government of India

Ministry of Corporate Affairs

5th floor, `A’ Wing, Shastri Bhavan,

Dr. Rajendra Prasad Road,

New Delhi-110 001.

Dated the 22nd November, 2010

To

All Regional Directors

All Registrars of Companies

Subject:- Change in additional fee to be levied for delays in filing Forms

In partial modification of the earlier Circular No.14/3/87-CL-V Vol.III dated 21.3.1995, the following table shall be applicable for additional fee to be levied for delays in filing Forms other than Form 5:-

Period of Delay Fixed rate of additional fee
Upto 30 days Two times of normal fee
More than 30 days and upto 60 days Four times of normal fee
More than 60 days and upto 90 days Six times of normal filing fee
More than 90 days Nine times of normal filing fees

2. The above table shall be applicable from 5-12-2010.

( E.Selvaraj )

Director (Inspection & Investigation)

Tel: 23384502

Any registration document will be enough for opening sole proprietorship bank account

RBI/2010 -11/187
DBOD. AML.BC. No. 38 /14.01.001/2010 -11

August 31, 2010

The Chairmen and Chief Executive Officers

All Scheduled Commercial Banks excluding  RRBs/
All India Financial institutions/ Local Area Banks

Dear Sir,

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

Please refer to our circular DBOD.AML.BC.No. 80/14.01.001/2009-10 dated March 26, 2010 advising banks to lay down criteria in their  customer identification procedure for opening accounts of proprietary concerns.

2.  In this connection, it is clarified that in addition to the documents listed in paragraph 2(i) of our circular referred to above for opening a bank account in the name of a proprietary concern, banks may also accept any registration/licensing document issued in the name of the proprietary concern by the Central Government or State Government Authority/Department.  Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening of bank account.

Yours faithfully,

(Vinay Baijal)
Chief General Manager

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FAQs RELATING TO WORK RELATED VISAS ISSUED BY INDIA

Basically there are two (2) types of work related Visas, namely:-

1. Business Visa designated as ‘B’ Visa

2. Employment Visa designated as ‘E’ Visa

Frequently asked questions with regard to the above issues and replies thereto are outlined below for information, guidance and compliance of all concerned:-

A

Q1. What is a Business Visa?

Ans. Business Visa is granted to a foreign national who wants to visit India to establish an industrial/business venture or to explore possibilities to set up industrial/business venture, or wants to purchase/sell industrial products in India. This Visa is granted subject to following conditions:-

(i)      The applicant is a person of assured financial standing and expertise in the field of the intended business.

(ii)      The applicant is not visiting India for the business of money lending or petty trading, or for a full time employment in India involving payment of salary in India etc.

(iii)     The facility of Business Visa will also be extended to senior executives of firms, experts, tour conductors and travel agents, etc., visiting India in connection with work related to projects of national importance, including those undertaken by public sector undertakings, and conducting business tours of foreigners or business relating to it, etc.

(iv)    A foreign national will have to comply with all other requirements like payment of tax liabilities etc.

(v)     The grant of Business Visa is subject to any instructions issued by the Government of India on the basis of reciprocity with other foreign countries from time to time.

(v)   The Business Visa must be issued from the country of origin, or from the country of domicile of the foreigner provided the period of permanent residence of that applicant in that particular country is for more than 2 years.

Q.2. Who are eligible for a Business Visa?

Ans.

(i)           Foreign nationals who want to visit India to establish industrial/business venture or to explore possibilities to set up industrial/business venture in India.

(ii)          Foreign nationals coming to India to purchase/sell industrial products or commercial products or consumer durables.

(iii)        Foreign nationals coming to India for technical meetings/discussions, attending Board meetings, general meetings for providing business services support.

(iv)        Foreign nationals coming to India for recruitment of manpower.

(v)         Foreign nationals who are partners in the Business and/or functioning as Directors in the company.

(vi)        Foreign nationals coming to India for consultations regarding exhibitions, for participation in exhibitions, trade fairs, business fairs, etc.

(vii)    Foreign buyers who come to transact business with suppliers/ potential suppliers at locations in India, to evaluate or monitor quality, give specifications, place orders, negotiate further supplies etc., relating to goods or services procured from India.

(viii)   Foreign experts/specialists on a visit of short duration in connection with an ongoing project with the objective of monitoring the progress of the work, conducting meetings with Indian customers and/or to provide some high level technical guidance.

(ix)    Foreign nationals coming to India for pre-sales or post-sales activity not amounting to actual execution of any contract or project.

(x)     Foreign Trainees of multinational companies/corporate houses oming for in-house training in the regional hubs of the concerned company located in India.

(xi)    Foreign students sponsored by AIESEC for internship on project based work in companies/industries

Q.3. What is the duration of a Business Visa?

Ans. A Business Visa with multiple entry facilities is granted for a period upto 5 years or for a shorter duration as per the requirement. A stay stipulation may be prescribed for each visit by the concerned Indian Mission.

Q.4. What documents are required to be submitted alongwith application for a Business Visa?

Ans. (i)       The foreign national must have a valid travel document and a re-entry permit, if required under the law of the country concerned.

(ii)      Proof of financial standing and expertise in the field of intended business.

B

Q.5. What is an Employment Visa?

Ans.           Employment Visa is granted to foreigners desiring to come to India for purpose of employment, subject to following conditions:-

(i)      The applicant is a skilled and qualified professional or person who is being engaged or appointed by a company, organization, industry, or undertaking, etc. in India on contract or employment basis at a senior level, skilled position such as technical expert, senior executive, or in a managerial position, etc.

(ii)      Employment Visa is not granted for jobs for which large numbers of qualified Indians are available.

(iii)     Employment Visa is not granted for routine, ordinary or secretarial/clerical jobs.

(iv)    The Employment Visa must be issued from the country of origin, or from the country of domicile of the foreigner provided the period of permanent residence of that applicant in that particular country is for more than 2 years.

(v)   The Indian company/organization engaging foreign nationals for executing projects/contracts would be responsible for the conduct of the foreign national during their stay in India and also for the departure of such foreign national upon expiry of Visa.

(vi)    A foreign national will have to comply with all other requirements like payment of tax liabilities, etc.

Q. 6. Who are eligible for Employment Visa?

Ans. Subject to the conditions enumerated in Question B5 above, the following will be eligible for Employment Visa:-

(i)      Foreign nationals coming to India for execution of a project/contract [irrespective of the duration of the visit].

(ii)      Foreign nationals who are coming to India on short visits to customer location to repair any plant or machinery as part of warranty or annual maintenance contracts.

(iii)     Foreign engineers/technicians coming to India for installation and commissioning of equipments/machines/tools in terms of the contract for supply of such equipment/machine/tools.

(iv)    Foreign experts coming to India for imparting training for the personnel of the Indian company.

(v)     Foreign personnel deputed for providing technical support/services, transfer of know-how, services supplies for which the Indian company pays fees/royalty to the foreign company.

(vi)    Foreign nationals coming to India as consultant on contract for whom the Indian company pays a fixed remuneration, (may not be in the form of monthly salary).

(vii)    Foreign artists engaged to conduct regular performances for the duration of the employment contract given by Hotels, Clubs, other organizations.

(viii)   Foreign nationals who are coming to India to take up employment as coaches.

(ix)   Foreign sportsmen who are given contract for a specified period by the Indian Clubs/organizations.

(x)     Self-employed foreign nationals coming to India for providing engineering, medical, accounting, legal or such other highly skilled services in their capacity as independent consultants.

Q.7. What is the duration of an Employment Visa?

A foreign national coming to India for employment may initially be granted an Employment Visa by the Indian Missions abroad upto one year. The first extension, if necessary, would be granted by MHA. Further extensions, if required, can be granted by concerned State Government/FRO upto maximum period of five years from the date of issue of the Visa. Foreigners coming on Employment Visa are required to register with concerned FRRO/FRO within two weeks from the date of arrival.

Q.8. What documents are required to be submitted alongwith application for Employment Visa?

Ans. (i)       The foreign national must have a valid travel document and a re-entry permit, if required under the law of the country concerned.

(ii)      The foreign national must submit proof of his/her employment or contract or engagement by the company/organization, etc. in India.

(iii)     The foreign national must submit documentary proof of his educational qualifications and professional expertise.

Q.9 Can foreign nationals coming to execute projects in India be granted Business Visas?

Ans. No. A foreign national coming for executing projects/contracts will have to come only on an Employment Visa.

Q10 Can foreign nationals already in India for executing projects on Business Visas be allowed to extend their Business Visas beyond 31.10.2009?

Ans. No. A foreign national who is already in the country on Business Visa and engaged in executing project/contract should leave the country by 31.10.2009.

Q11 Can foreign nationals already in India for executing projects on Business Visas be allowed to convert their Business Visas to Employment Visas without leaving the country?

Ans. No.

Q12 Which category of Visa will be granted to family members of foreign nationals coming to India on Business Visas?

Ans. Indian Missions may grant an ‘X’ Visa [i.e. a Dependent Visa] to the family members of a foreign national granted a Business Visa at their discretion, subject to usual security checks provided the family members are otherwise eligible for grant of such a Visa.

Q13 Which category of Visa will be granted to family members of foreign nationals coming to India on Employment?

Ans. In respect of family members of a foreign national who is granted ‘E’ Visa, Indian Missions may grant an ‘X’ Visa [i.e. Dependent Visa]. The validity of the ‘X’ Visa could be co-terminus with the validity of the Visa of the principal Visa holder or for such shorter duration as may be considered necessary by the Indian Mission, subject to usual security checks provided the family members are otherwise eligible for grant of such a Visa.

Q15 Whether a foreign company/organization that does not have any Project Office/subsidiary/joint venture/branch office in India can sponsor a foreign national/employee of a foreign company for Employment Visa?

Ans. No.

Q16 Whether an Indian company/organization which has awarded a contract for execution of a project to a foreign company that does not have any base in India, can sponsor employee of foreign company for Employment Visa?

Ans. Yes.

Q17 If the Indian organization/entity sponsors an Employment Visa, does this mean that the Indian organization/entity has to necessarily be the legal employer of the person?

Ans. No.

Q.18 Which category of Visa will be granted to the foreign language teachers/interpreters?

Ans. Employment Visa.

Q19 Which category of Visa will be granted to the foreign specialist Chefs?

Ans. Employment Visa.

Q.20 Which type of Visa would be granted to senior management personnel and/or specialists employed by foreign firms who are relocated to India to work on specific project/management assignment?

Ans. Employment Visa.

 

Courtesy: Ca. Sudha Gupta

TIME LIMIT FOR FILING ITR-V EXTENDED TO 60 DAYS

The Central Board of Direct Taxes had, vide circular No.3/2009 dated 21.05.2009, allowed assessees who file their income tax returns inelectronic form without digital signatureto submit their verified ITR-V form, within a period of 30 days, thereafter. The ITR-V form was required to be sent to Post Bag No.1, Electronic City Post Office, Bengaluru, Karnataka-560100, by ordinary post.
It has now been decided to extend the time limit for filing the ITR-V form by relaxing the stipulations in the circular dated 21.05.2009. The ITR-V form relating to returns which have been filed electronically (without digital signature) on or after 1st April, 2009 can now be filed on or before the 30th September, 2009 or within a period of 60 days of uploading of the electronic return data, whichever is later. The ITR-V should continue to be sent by ordinary post to Post Bag No.1, Electronic City Post Office, Bengaluru, and Karnataka-560100.

What is the latest policy for Investment in India?

What is the latest policy for Investment in India? 

A detail study on subject is in the attached file.

Article on FDI

Service tax on renting of immovable property

In a recent landmark judgment, in Home Solution Retail India Ltd. & Others vs. UOI & Others, the Delhi High Court has pronounced its judgment with regard to several writ petitions which had challenged the applicability of the levy of service tax on renting of immovable property.

The High Court has held that the taxable service in respect of renting of immovable property, as defined under the relevant Section 65(105)(zzzz) of the Finance Act 1994 thereof, was with regard to any service in relation to renting of property and was not on the renting of immovable property as such.

Consequently, the High Court has held that the levy of service tax on the renting of immovable property itself, in terms of the relevant notification issued consequent to the introduction of the taxable service, was ultra virus the provisions of the Act.

In arriving at its decision, the court has relied on the wordings of the particular taxable service in order to hold that since the activity of renting of immovable property was itself not a service, the expression ‘service in relation to renting of immovable property’, occurring in the definition of the taxable service, can only extend to services which are provided in relation to the renting of immovable property.

Accordingly, the Court distinguished the particular definition of service in relation to renting of immovable property from several other definitions in service tax law which were similarly worded and held that in those other definitions, the expression ‘in relation to’ itself referred to a service and consequently not only was the core service taxable but also the allied and ancillary services in relation thereto were also taxable.

The court illustrated this distinction by referring to the taxable service of dry cleaning where the expression was a service in relation to dry cleaning and held the activity of dry cleaning was itself also a service which was taxable therein. As opposed to this situation, the taxable service provided by a real estate agent, for instance, was a service in relation to real estate and since real estate was not a service, the definition could only extend to services in relation thereto.

On a similar analogy, the court came to the conclusion that in the present case, the renting of immovable property could not be construed as a service by itself and hence the taxable service in question could only extend to services in relation to renting of immovable property and not to the activity of renting itself.

In arriving at the aforesaid finding, the court has relied on the decision of the Supreme Court in T N Kalyana Mandapam Association Vs. UOI (2004) 5 SCC 632) which, interestingly enough, was relied upon both by the appellants, who had challenged the legality of the levy, as well as by the respondents i.e. Government of India. Based on a detailed consideration of the aforesaid judgment, the Delhi High Court has come to a determination that the decision of the Supreme Court supported the argument of the appellants and not that of the respondents.

With regard to the nature of the service tax itself, the High Court has held that it is a value added tax and the tax is a tax on value addition done by the service provider and it must have a connection with the service. Consequently, since the mere renting of immovable property does not entail any value addition, it could not be regarded as a service for that reason as well.

Here again, the High Court has relied upon another decision of the Supreme Court, in All India Federation of Chartered Accountants Vs. UOI (2007) 7 SCC 527), which had held that just as excise duty was a tax on value addition in regard to goods, the service tax was a tax on value addition by rendition of services.

Accordingly, the Supreme Court, in that case, had distinguished property-based services and performance-based services and had arrived at a conclusion that the expression ‘in relation’, occurring in the various relevant definitions, needed to be construed in accordance with this principle of value addition.

The High Court h as, relying on the above decision, consequently come to the conclusion that the levy of service tax on the activity of renting of immovable property was ultra vires the relevant definition of the taxable service, as contained in the Finance Act, 1994.

While upholding the arguments contained in the writ petitions in regard to the above points, the High Court has held that it has therefore not been required to examine the alternate argument as contained in the petitions that the relevant definition, should it be construed as applicable to the activity of renting of immovable property as well, would be violative of the Constitution of India in that the Central Government could not, in terms thereof, impose a tax on land, as it was a State subject.

Hence, the decision is limited to the point that the taxable service as understood and interpreted through the relevant impugned notification and hence the tax so collected, was not in accordance with the statute and hence without basis in law and the decision is not with regard to whether or not the definition of taxable service itself is unconstitutional.

This judgment is applicable on an all India basis, as it is on a point of legality, and would have far reaching consequences for all and in particular for those who carry on business in rented premises and who do not have an output excise or a service tax liability so as to be able to offset this tax on rentals. The Retail Sector is thus a very major beneficiary, as the service tax on rentals is a very significant unrecovered tax cost for the sector. Further, the judgment has ramifications with regard to other taxable services as well since these are also similarly worded.

The Central Government is almost certain to file an appeal against the aforesaid judgment with the Supreme Court. It remains to be seen whether it will request a stay of the judgment in the interim and whether such a request would be granted. It is also possible that the Government may consider amending the provisions of the Finance Act, 1994, possibly with retrospective effect, in order to overcome the above judgment of the Delhi High Court. The picture will become clear in this regard in the near future.

However, until such time as these eventualities do not occur, taxpayers can take effective steps to avail the benefit of non payment of service tax on renting of immovable property. Several issues such as discontinuance of payment of tax for future period, filing of refund claims for past taxes paid on such rentals, for the period of one year and beyond, availment of CENVAT credits on such taxes, payment of such taxes to the Government, if already collected as such, the person entitled to file such claims will need to be addressed in detail, in order for the benefits to flow to tax payers.

Source: cainindia.org

E- form 23AC can be filled in without getting SRN of form 23B

The Ministry of Corporate Affairs (Ministry) has revised e-form 23AC effective from 28th September 2008 wherein filling in SRN of 23B was made compulsory. In many a cases, it was reported by our members that SRN of form 23B was not available which ultimately resisted to file e-form 23AC required to be filed pursuant to section 220 of the Companies Act, 1956 by the Companies.

The matter was represented by the Institute of Company Secretaries of India before the Ministry. We are pleased to inform you that the Ministry has revised the Instruction Kit in respect of Point No. 10(e) of e-form 23AC which states that:

“Enter the SRN of Form 23B filed in relation to the appointment of the auditor who has audited the attached balance sheet, if available. If the SRN of Form 23B is not available or in case information by auditor to ROC in Form 23B is not required to be filed, you may enter Z99999999”

Accordingly, in case you don’t get SRN of Form 23B, please enter Z99999999 and proceed filing of e-form 23AC.

Courtesy: icsi.edu

Is it necessary to register the Sole Proprietorship firm in India?

No.

There is no formal registration is required for a sole proprietorship. You simply have to open a bank account with the name & style you want to work. But if you are liable for state VAT or service tax registration, then you have to obtain VAT and/or service tax registration. Further, for sole proprietorship, no separate income tax PAN is required. The PAN of the proprietor will be the PAN of the firm and proprietor will have to file income tax return in his personal name.

Now after announcement of KYC norms by RBI, it is mandatory to have at least two registration in the name of sole proprietorship firm. So now you have to submit two documentary proof for the name of sole proprietorship firm. Normally owner can get registration under shop & establishment act and under service tax or VAT.

 

Visit our new website: www.mukeshraj.com

 

Stamp duty payment to be made online

Entrepreneurs will soon be able to incorporate a company in India sitting anywhere in the world without having to face red tape. The government is all set to introduce a centralised electronic stamp duty payment and online vetting of charter of new companies, irrespective of the states where they are set up.

Doing away with the need for a physical interface between the entrepreneur and a government official will eliminate occasions for corruption too.

Now, physical presence at the registrar of companies is essential for stamp duty payment in the state of incorporation and vetting of the company’s charter. The Centre has already started talking to state governments to tackle legal issues related to amending the Stamp Act of states and administrative issues related to duty payment. Being a state subject, implementation of any decision related to stamp duty at the national level needs the concurrence of all state governments.

The move will not, however, lead to uniform stamp duty and the proposed online payment system will manage accounting for varying duty in different states. The system would generate electronic stamp papers, on which the entrepreneur has to file affidavits using digital signature. The existing online filing system only provides for filing statutory documents like annual reports but not for starting a new company.