Notices under GST

According to Section 46 of the CGST, 2017, where a registered person fails to furnish return under section 39, or section 44 or section 45, a notice shall be issued requiring him or her to furnish such return within fifteen days in such form and manner as may be prescribed.

Few section herewith reproduced below for understanding:

Sec 46 of CGST Act –

“Notice to return defaulters – Where a registered person fails to furnish a return under section 39, or section 44 or section 45 a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.”

Sec 62 of CGST Act,2017 –

“(1)Notwithstanding anything to the contrary contained in Section 73 or Section 74 where a registered person fails to furnish the return under section 39 or section 45 even after service of notice under section 46 , the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 or furnishing of the annual return for the financial year to which the tax not paid relates.

.(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order shall be deemed to have been withdrawn. But the liability for payment of interest under sub-section (1) of section 50 or for the payment of late fee under section 47 shall continue”

Rule 68 of CGST Rules, 2017 –

“A notice in Form GSTR 3A shall be issued, electronically, to a registered person who fails to furnish return under section 39,or section 44 or section 45 or section 52.” 

Penalty for Non Filers

♠ For non filers the late filing fees are as follows:

NIL Return: Rs 20/per day

Other: Rs 50/Day

Along with late fee interest on delayed payment is also applicable.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Breather for startups: Govt raises Investment cap for Angel Tax Concession

Giving a major relief to startups, the government has decided to relax angel tax norms for startups, including increasing the investment limit to Rs 25 crore for availing income tax concessions by startups, an official said Tuesday.

Currently, startups avail tax concession only if total investment, including funding from angel investors, does not exceed Rs 10 crore.

A notification regarding simplifying the process for startups to get exemptions on investments under section 56(2)(viib) of Income Tax Act, 1961, will be issued shortly, the official said.

The definition of startups has been enhanced to an entity which has been in operation for up to ten years from its date of incorporation or registration, instead of the current seven years.

“An entity shall be considered as startup if its turnover for any of the financial year, since its incorporation or registration, has not exceeded Rs 100 crore instead of the existing Rs 25 crore,” the official said.

Besides, investments by listed companies with a net worth of Rs 100 crore or turnover of Rs 250 crore into an eligible startup shall be exempt from the section 56 (2) (viib) of the Income Tax Act, beyond the Rs 25 crore limit.

“Considerations of shares received by eligible startups for shares issued or proposed to be issued by all investors shall be exempt up to an aggregate limit of Rs 25 crore,” the official added.

Also, investments into eligible startups by non-residents, alternate investment funds – category I – shall also be exempt under this section beyond the limit of Rs 25 crores.

“For being eligible for exemption under Section 56(2)(viib), a startup should not be investing in immovable property, transport vehicles above Rs 10 Lakh, loans and advances, capital contribution to other entities and some other assets except in the ordinary course of its business,” the official said.

A startup shall also be eligible for exemption under Section 56(2)(viib) if it is a private limited company recognised by the department for promotion of industry and internal trade (DPIIT) and is not investing in specified asset classes.

Eligible startups only have to file a duly signed self-declaration by with DPIIT for availing exemption. DPIIT shall transmit these declarations to Central Board of Direct Taxes (CBDT).

Further, there is no requirement of making any application for exemption under this section and there will be no case-to-case examination of startups for exemption under Section 56(2)(viib) of Income Tax Act.

“The valuation of shares is no more a criterion for exemption of investments into eligible startups under Section 56(2)(viib) of Income Tax Act, the official added.

The development assumes significance as several startups have claimed to receive angel tax notices, impacting their businesses.

Various startups have raised concerns on notices sent to them under the Section 56 of Income Tax Act to pay taxes on angel funds received by them.

Section 56(2)(viib) of the Income Tax Act provides that the amount raised by a startup in excess of its fair market value would be deemed as income from other sources and would be taxed at 30 per cent.

Touted as an anti-abuse measure, this section was introduced in 2012. It is dubbed as angel tax due to its impact on investments made by angel investors in startup ventures.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Licenses Requisite To Start A Restaurant In India

According to the Indian Food Services Report (2016), the restaurant industry in India is worth approximately 3 lakh crore and is estimated to reach 5 lakh crore by 2021. A lucrative industry, it contributes 2.1 percent to the country’s Gross Domestic Product (GDP). With a growth of 7.7 percent, it scores high on employability as it is expected to create5.8 million direct jobs. However, one shouldn’t let the picture of profitability cloud the legal obligations to be undertaken as a single fallacy can cost you your dream.

The Food and beverage industry is one of fastest evolving industry in India. Backed by urbanization, Tier II and tier III and an increasing urge to eat outside, the industry is growing at a real rapid rate. Currently estimated at 75000 Crore and is estimated to reach 1, 37000 Crore by the next fiscal the industry is tempting in many new entrepreneurs.

So if you too are one amongst the much, willing to dive into this ever growing industry, you need to thoroughly revise all the prerequisites in order to save yourself from that legal mess.

Choice of Business type:

One of the most crucial decision to be taken, while planning to start a restaurant business is the choice of business entity. The entrepreneur can choose from a Limited liability partnership, Sole proprietorship, partnership, or one person company, depending on the risk involved and costs associated each entity has its own pros and the cons. One has to well consider the fact that proprietorships and partnerships do not provide limited liability, continuous existence or separation of assets, so these aspects to be taken good care of while choosing the form of entity.

Licenses Required To Start A Restaurant In India

Here we have listed the most critical restaurant licenses required to open a restaurant in India, obtaining which will ensure that your restaurant operates legitimately.

1. FSSAI Food Safety and Standards Authority License

The FSSAI license, also known as the Food License is one of the most important licenses required to open a restaurant and is obtained from the FSSAI (Food Safety and Standard Authority Of India). This license is not merely a license, on the contrary, it also serves as an approval by the authority and ensures the customers that the food of that particular restaurant affirms to the food safety standards of India. This license is necessarily a unique 14 digit registration number that is given to manufactures, traders, and restaurants which should mandatorily be printed on food packages. This confirms your consumers that they are dining at the right place which adhered to all the safety standards.  Learn how the FSSAI License can also be used as a means to attract customers to your restaurant here.

Documents Required for the FSSAI License

Here we have mentioned below the list of documents that are needed to apply for the FSSAI License.

• Id Proof and Address Proof
• Valid Email Id
• Phone Number
• Affidavit
• Declaration Of Food Safety Management Plan
• Kitchen Layout Plan
• List Of Food Category
• Water Testing Report from ISI approved Facility
• No Objection Certificate (NOC) from the owner or the partner
• Medical Certificates of Employees

How to Obtain the FSSAI License for Your Restaurant

Once you have these documents in place, you can apply for the license which would approximately cost you around Rs.2000 per year for a new license.

2. Liquor License

If your restaurant serves liquor, then procuring the Liquor License is a must. This can be obtained from the Local Excise Commissioner, and the forms are available at the respective State Government websites. Having this license is exceptionally crucial since if you sell liquor without the above-said license, you can incur a huge penalty and also be forced to shut down the premises permanently.

Documents Required for the Liquor License

Here’s the list of documents required for getting the Liquor License for a restaurant and bar.

• Documentary proof regarding the legal status of the restaurant or the hotel, that is, whether it is a company, partnership firm or any other type of setup.
• Whether the restaurant or the hotel is in legal possession of the plot.
• A certificate that validates the completion of the restaurant or the hotel building
• Trade License from the Local authority, that is, MCD/NDMC  or such other authorities
• Certificate of registration of Eating house license issued by the DCP.
• Documentary proof regarding applicant being an Income Tax Assessment and Sales Tax-Assesse.
• A complete layout plan of the establishment, site plan of the license outlets and the liquor stores
• NOC from the state Fire Service

Health Trade license:

Another important license to start your restaurant with. It gives permission to trade in those articles that have a direct impact on public’s health. It is issued by the Municipal Corporation of the health department of that state.

License for eating house: Every eating house needs to have a license for eating house, authorized by the city or state police headquarters and the police commissioner licensing.

Fire security certificate: Since every eatery or would be eatery has to declare themselves as a fire safe, they need to furnish an NOC from the Fire Department of the city. Upon the acceptance of your application, a detailed examination is too carried out of your premises, followed by the grant of NOC.

Eating House License

The Eating House License is given by the Licensing Police Commissioner of that particular city where you are opening the restaurant. The estimated cost to get this license is Rs.300 for the span of three years.

Shop and Establishment Act

To run a restaurant in India you must first register it under the Shops and Establishment Act. The restaurant should be registered within the 30 days of its commencement. This license is based on which city you are operating the restaurant.

GST Registration

GST which came into force from July 1st, 2017, has kept everyone hooked to it with its frequent changes. Both the restaurant business and the government have been in trouble for long. Even then registering in GST is one of the main things that your restaurant must do, which will ensure running of your restaurant seamlessly.

Fire Department

The restaurant’s main motive must be to guard their customers against all things which are injurious, be it food products or dangers such as fire. A No Objection Certificate (NOC) from the fire department of the particular state is a must to run a restaurant.

Lift Clearance

If a lift is installed in your restaurant you need to get permission from the inspector of the electricity department and the labor commissioner of that particular city. This license is given by the Electrical Inspector from the labor commissioner office after verifying the installation of the lift, layout, safety gears etc.

Music License

If your restaurant is playing music then you should obtain a music license from the Phonographic Performance Limited (PPL). If it is found that your restaurant is playing the music without obtaining a proper license then you will face huge penalties.

Certificate of Environmental Clearance

The restaurant is not only responsible for the health of the customers, but also legally and morally responsible to make sure that its operations are not harming the nature. Therefore, restaurants are required to obtain the Certificate of Environmental Clearance.

Signage License

You need marketing strategies for your product to make sure that your business will gain huge profits. However, if you want to make use of marketing strategies for your restaurant either through word of mouth, pictures, logos, symbols, posters etc. you are required to acquire a legal permission which is the signage license. You can acquire this license from local civil authorities like the Municipal corporations of that particular city.

These are the important licenses which will legally permit you to carry on with your restaurant business in India without getting involved in any kind of legal troubles.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

Website :  http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

Residential Properties: GoM favours cut in GST to 5% from effective rate of 12%

New Delhi, Feb 8 (IANS) A ministerial panel set up to look into GST-related issues of the real estate sector on Friday indicated that it would recommend taxing under-construction residential properties at 5 per cent, down from 12 per cent currently.

Currently, GST is levied at 12 per cent with input tax credit (ITC) on payments made for under construction property or ready to move in flats where the completion certificate has not been issued at the time of sale.

A Group of Ministers (GoM) formed to analyse tax rates and issues being faced by the real estate sector under the goods and services tax (GST) regime has favoured reducing GST rate on under-construction residential properties to 5 per cent without input tax credit from current effective rate of 12 per cent, after abatement of value of land. The panel is also leaning in favour of a lower rate for affordable housing at 3 per cent from 8 per cent at present, a government official said.

The seven-member GoM, headed by Gujarat Deputy Chief Minister Nitin Patel, will finalise its recommendations in 1-2 days and then submit its recommendations to the GST Council, which will take the final decision on the proposal. “The industry players have asked for a higher rate with input tax credit but the ministers felt that the benefits of input tax credit don’t get passed on to homebuyers. That’s why like in the case of restaurants, the GoM has favoured lowering the GST rates on residential houses to 5 per cent without input tax credit and to 3 per cent for affordable housing,” the official said.

Currently, GST is levied at 12 per cent with input tax credit (ITC) on payments made for under construction property or ready to move in flats where the completion certificate has not been issued at the time of sale.

The effective pre-GST tax incidence on such housing property was 15-18 per cent. GST, however, is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. There have been complaints that builders are not passing on the ITC benefit to consumers by way of reduction in price of the property after the rollout of the GST.

We want to ensure lower tax rates for housing for the middle class and homebuyers, Gujarat’s Deputy Chief Minister Nitin Patel told reporters after the meeting. Tax experts, however, said this may lead to breaking of inputs tax credit chain as some inputs such as cement are taxed at a much higher rate of 28 per cent.

Pratik Jain, Leader, Indirect Tax, PwC India said, “While the intention of the government is to provide relief to the end customer, from a structural standpoint, it should be ensured that the chain of GST credit is not broken. Perhaps a better approach would be to reduce prevailing GST rate on residential property, say bringing the effective tax rate down to 8 per cent from 12 per cent, while continuing the benefit of input tax credit.”

“For real estate properties where the cumulative impact of  tax cost on account of denial in credits and 5 per cent output GST rate is lesser than the current 12 per cent rate, this rate cut would be quite positive.  But where the cumulative cost is higher than 12 per cent, this rate reduction could entail an increased tax cost.”

The GST Council, headed by the Union Finance Minister and comprising his State counterparts, on January 10 decided to set up the GoM. The other Ministers in the seven-member GoM are the Finance Ministers of Maharashtra Sudhir Mungantiwar, Karnataka’s Krishna Byre Gowda, Kerala’s Thomas Isaac, Punjab’s Manpreet Singh Badal, Uttar Pradesh’s Rajesh Agarwal and Goa Panchayat Minister Mauvin Godinho.

The Group of Ministers headed by Gujarat Deputy Chief Minister Nitin Patel also favoured 3 per cent tax on the affordable housing category, down from 8 per cent. However, claiming input tax credit would no longer be possible on such transactions, an official said after the meeting of the GoM.

The panel set up by the Goods and Services Tax (GST) Council is expected to finalise its report in a week’s time and table it in the next meeting of the Council for final approval.

GST is currently levied at 12 per cent on premium housing and 8 per cent on affordable housing on payments made for under-construction properties where completion certificate has not been issued at the time of sale. No GST is charged if a property is bought after the issue of completion certificate.

The government had last month constituted a seven-member GoM to look into GST-related issues of the real estate sector. Its agenda was to analyse the tax rate of GST on the under-construction residential properties for boosting the realty segment.

There had been demand from many quarters to slash the rate on the segment to 5 per cent from the current 12 per cent.

Other members of the GoM are finance ministers of five states — Sudhir Mungantiwar of Maharashtra, Krishna Byre Gowda of Kerala, T.M. Thomas Isaac of Karnataka, Manpreet Singh Badal of Punjab and Rajesh Agarwal of Uttar Pradesh. Goa’s Panchayat Minister Mauvin Godinho is also a member. — IANS

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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