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Inputs/raw materials can be imported and deposited in the licensed warehouse without payment of BCD and IGST. No interest liability arises when the duties are paid at the time of ex-bonding the resultant goods. The duties (without any interest) are to be paid only when the resultant goods are being cleared for home consumption.
Refer to the Bonded Manufacturing microsite for more details.
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A warehouse keeper has to be appointed, for a premise to be licensed as a private warehouse under Section 58 of the Customs Act. The warehouse keeper is expected to discharge duties and responsibilities, maintain accounts and also sign the documents, on behalf of the licensee. The warehouse keeper is expected to supervise and satisfy himself about the veracity of the declaration/accounts that he is signing. The inspection of goods by customs at the stage of ex-bonding would be done, only if there is indication of risks and not as a matter of routine practice. Approval of the bond officer is not required for clearance of the goods from the warehouse.
Refer to the Bonded Manufacturing microsite for more details.
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The audit of units operating under Section 65 would also be based on risk criteria. There is no prescribed frequency for such audit.
Refer to the Bonded Manufacturing microsite for more details.
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Following are the customs document for movement of imported goods on which duty has been deferred to/ from a unit undertaking manufacture and other operations in a bonded warehouse:
The goods will not be under customs escort during movement.
Refer to the Bonded Manufacturing microsite for more details.
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No. Depreciation is not available if imported capital goods (on which duty has been deferred) are cleared for home consumption after use in a Section 65 unit.
Refer to the Bonded Manufacturing microsite for more details.
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The imported capital goods (on which duty has been deferred) after use in a Section 65 unit can be exported without payment of duty as per Section 69 of the Customs Act. For the purposes of valuation of the export goods, the same will be as per the Section 14 of the Customs Act read with the Customs Valuation (Determination of Value of Export Goods) Rules 2007.
Refer to the Bonded Manufacturing microsite for more details.
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The eligibility to export benefits under FTP or IGCR would depend upon the respective scheme. If the scheme allows, unit operating under Section 65 has no impact on the eligibility. In other words, a unit operating under Section 65 can avail any other benefit, if the benefit scheme allows.
Refer to the Bonded Manufacturing microsite for more details.
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The Generally Accepted Accounting Principles will be followed for inventory control in a Section 65 unit. Thus FIFO method can be followed.
Refer to the Bonded Manufacturing microsite for more details.
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Once the goods are cleared from the warehouse, they will no longer be treated as warehoused goods. Thus if the resultant goods cleared from the warehouse are returned by the customer for repair, they will be entered as DTA receipts (this is provided in the accounting form). After repair, when the same is cleared from the warehouse, the same will be entered in the prescribed accounting form. If the goods were exported and subsequently rejected or sent back for repair by the customer, then the goods upon re-import have to be entered as Imports receipts in the accounting form. The relevant customs notification for re-imports has to be followed while filing the Bill of Entry for re-import of the goods.
Refer to the Bonded Manufacturing microsite for more details.
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Since the unit operating under Section 65 is also licensed as a Private Bonded warehouse under Section 58 of the Customs Act, the procedure for surrender of licence will be as per the regulation 8 of the Private Warehouse Licensing Regulations, 2016. A licensee may therefore, surrender the licence granted to him by making a request in writing to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be. On receipt of such request, the licence will be cancelled subject to payment of all dues and clearance of remaining goods in such warehouse.
Refer to the Bonded Manufacturing microsite for more details.
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You can print your Visa Application Form within 30 calendar days of completing it online. To access your completed online application, you are required to note your Web Reference number before you exit. An Email with this information will also be sent to your valid email ID, if provided. . If your application is not submitted for processing within this time, the information will be purged out/deleted from the system and you will need to commence enter your details afresh.
Visa Fees will not be refunded in this situation.
For more information, click here
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You need to apply for a Transit Visa if you are going to change from the International Terminal to the Domestic Terminal of any Indian Airport or if you are going to stay in an airport hotel even for a few hours. In case you remain within limits of the waiting area reserved for International Transit Passengers of the Indian Airport and are not going to cross Immigration Controls at any time, you do not need a transit visa.
Please note: the maximum period of stay in India permitted for a Transit Visa is 72 hours/3 days for each entry and is issued only when Transit/Travel is by Air. The Transit Visa is valid for 15 days only.
For more information, click here
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The salary threshold limit of $ 25,000 per annum includes salary and all other allowances paid to the foreign national in cash. Prerequisites like rent free accommodation, etc. which are included in ‘salary’ for the purpose of calculating the income tax may also be taken into account for this purpose. However, prerequisites which are not included for working out the income tax should not be taken into account for working out the salary threshold limit of $ 25,000 per annum.
The company / organisation concerned should clearly indicate in the employment contract:
i) the salary and allowances being paid in cash.
ii) all other prerequisites like rent free accommodation, which would be taken into account for the purpose of working out the income tax payable by the employee. Such prerequisites should also be quantified and indicated in the employment contract.
For more details, please refer the following link.
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Yes, a relaxation has been provided in this regard. Now, while having a long duration visa (say employment visa, business visa, etc.), a foreigner can also avail a short duration visa (conference visa, transit visa, e-visa and visa-on arrival). In such a scenario, unlike in the past, the long duration visas will not be cancelled but “kept on hold”.
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No, a foreign citizen cannot undertake employment on the basis of a business visa. Only on an employment visa can a foreign citizen undertake employment in India
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Senior management personnel and/or specialists employed by foreign firms, who are relocated to India to work on specific project/management assignment can apply for employment visa.
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No, in case the foreign entity does not have any office in India, it cannot sponsor an employment visa. The visa can be sponsored by an Indian ‘host’ company,The visa can be sponsored by an Indian ‘host’ company subject to following conditions:
For more information, click here
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No, it is not necessary for Indian organization/entity sponsoring an employment visa to necessarily be the legal employer of the person.
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Business Visa shall be non-convertible to any other type of visa except in specific cases.
For more details, please refer the following link.
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Tourist Visa can be granted to a foreigner whose sole objective of visiting India is recreation, sight seeing, casual visit to meet friends or relatives, attending a short-term yoga programme, etc. and no other purpose/ activity.
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The first auditors should be appointed by the board within 30 days of incorporation of the company. In case of failure by the board to appoint auditors, the auditors shall be appointed by the shareholders in general meeting within 90 days from the expiry of the 30 days period
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The first board meeting should be held within 30 days from the date of incorporation.
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The first financial year of a company means a period beginning from the date of incorporation and ending on 31 March of the following year. However, if the company is incorporated on or after 1 January of the year, the financial year will be from the date of incorporation till 31 March of the following financial year. For example, if a company is incorporate on 1 February 2019, the first financial year will be 1 February 2019 to 31 March 2020.
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The company should issue and deliver the share certificates within a period of two months from the date of incorporation of the proposed company.
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Yes. One Person Companies are eligible to avail benefits under the Start-up India initiative.
For more information, click here.
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Under the following scenarios, prior approval of RBI shall be required:
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Generally, the application for establishing BO / LO/ PO in India may be submitted by the non-resident entity in the prescribed form to Authorised Dealer Bank (AD Bank) identified by the applicant along with the prescribed documents.
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Yes. A maximum fee of INR 5,000 can be charged by the incubators for issuing a letter of recommendation to Start-ups. In cases where an incubator is required to form a panel of external experts to assess the innovativeness of the product/service/process, a maximum fee of Rs. 10,000 can be charged by the incubators.
For more information, click here.
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The non-resident entity applying for a BO/LO in India should have a financially sound track record as below:
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Incorporating a company through Simplified Proforma for Incorporating Company electronically (SPICe -INC-32), with eMoA (INC-33), eAOA (INC-34), is the default option and most companies are required to be incorporated through SPICe only.
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Up to 100% FDI is permitted for Asset Reconstruction Companies registered with Reserve Bank of India without government route.
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Fungibility window is the time period specified by the issuer company during which IDR holders can apply for conversion/ redemption of IDRs into underlying equity shares.
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Yes, an IDR holder can at any time nominate a person to whom his IDRs shall vest in the event of his death.
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On the receipt of dividend or other corporate action on the IDRs, the Domestic Depository shall distribute the corporate benefits to the IDR holders in proportion to their holdings of IDRs.
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The Investor may trade the IDRs in India or can request for redemption of the IDRs to the issuer company.
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IDRs can be converted/ redeemed into the underlying equity shares only after the expiry of one year from the date of the listing of the IDRs, subject to the compliance of the related provisions of Foreign Exchange Management Act and Regulations issued thereunder by RBI & SEBI in this regard.
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Yes, The IDRs are required to be listed in at least one stock exchange in India having nationwide terminals.
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Yes, the issuer company is required to obtain in-principle listing permission from all the recognized stock exchanges in which the issuer proposes to get its IDRs listed.
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Yes. Foreign issuer is required to file the draft prospectus with SEBI while complying with the requirements of SEBI (ICDR) Regulations, 2009. Any changes specified by SEBI shall be incorporated in the final prospectus to be filed with Registrar of Companies
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The eligibility criteria given under IDR rules and guidelines as mentioned under:
The foreign issuing company shall have the following:
Note: The size of an IDR issue shall not be less than INR. 50 Cr
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Alternative Investment Fund or AIF means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
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SEBI has a web-based centralized grievance redress system called SEBI Complaint Redress System (SCORES) where investors can lodge their complaints against AIFs.
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Category I of the Alternative Investment Funds (AIF) include funds which invest in start-up, early stage ventures, social ventures, small & medium enterprises (SME), infrastructure or other sectors or areas which the Government or regulators consider as socially or economically desirable.
It shall include venture capital funds, SME funds, social venture funds, infrastructure funds and such other AIF.
For more information, click here
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Alternative Investment Funds (AIF) which do not fall in Category I and III and which do not undertake borrowing other than to meet day-to-day operational requirements and as permitted in the SEBI (Alternative Investment Funds) Regulations, 2012 are Category II AIF.
Various types of funds such as real estate funds, private equity funds, funds for distressed assets, etc. are registered as Category II AIF.
For more information, click here
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Alternate Investment Funds (AIFs), which employ diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives. Various types of funds such as hedge funds, PIPE Funds, etc. are registered as Category III AIFs.
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"Angel Fund” is a sub-category of Venture Capital Fund under Category I Alternative Investment Fund that raises funds from angel investors and invests in accordance with the provisions of AIF Regulations.
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Debt fund is an Alternative Investment Fund (AIF) which invests primarily in debt or debt securities of listed or unlisted investee companies according to the stated objectives of the Fund. These funds are registered under Category II.
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Fund of Funds, in general, is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. In the context of Alternative Investment Funds (AIF), a Fund of Fund is an AIF which invest in another AIF.
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No scheme of an AIF (other than angel fund) shall have more than 1000 investors. (Please note that the provisions of the Companies Act, 1956 shall apply to the AIF if it is formed as a company). In case of an angel fund, no scheme shall have more than two hundred angel investors. However, an AIF cannot make invitation to the public at large to subscribe its units and can raise funds from the sophisticated investors only through private placement.
Please refer to section 4(b), 10(f) and 19E(4) of SEBI (Alternative Investment Funds) Regulations, 2012 at the link for more information
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The venture capital funds (VCF) registered under the repealed SEBI (Venture Capital Funds) Regulations, 1996 shall continue to be regulated by the said regulations until existing fund is wound up and no new fund or scheme shall be launched after that under the said regulations.
However, the existing VCF may seek re-registration under SEBI (Alternative Investment Funds) Regulations, 2012 subject to approval of two-third of its investors by the value of their investment.
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All-in-cost shall include rate of interest, other fees, expenses, charges, guarantee fees, ECA charges, whether paid in foreign currency or INR but will not include commitment fees and withholding tax payable in INR. In the case of fixed rate loans, the swap cost plus spread should not be more than the floating rate plus the applicable spread
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Lender for ECB purposes should be:
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Entities looking to raise ECB may approach the RBI with an ECB application form in prescribed format for examination through their AD Category I bank. Cases shall be considered keeping in view the overall guidelines, macroeconomic situation and merits of the specific proposals.
ECB proposals received by the RBI above certain threshold limit (re-fixed from time to time) would be placed before the Empowered Committee set up by the Reserve Bank. The Empowered Committee will have external as well as internal members and the Reserve Bank will take the decision based on the recommendation of the Empowered Committee.
Entities desirous to raise ECB under the automatic route may approach an AD Category I bank with their proposal along with duly filled Form 83. Formats of ECB Form and Form 83 are available at Annex I and II respectively of Part V of the Master Directions Reporting under Foreign Exchange Management Act, 1999.
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Under the (External Commercial borrowing) ECB/Trade Credit (TC) framework, ECB/TC can be raised either under the automatic route or under the approval route. Under the approval route, the prospective borrowers are required to send their requests to the RBI through their banks for examination.
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Master Direction No. 5 on ‘External Commercial Borrowings, Trade Credits and Structured Obligations dated March 26, 2019 may be referred to for guidance on the extant framework on ECB and TC. ECBs and TCs raised under the prior frameworks should continue to be in compliance with the corresponding guidelines applicable at the time of availing the ECBs and TCs.
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External Commercial Borrowing (ECB) can be raised either under the automatic route or under the approval route. For the automatic route, a case is examined by the Authorised Dealer (AD) Category-I bank. Under the approval route, the borrower is required to send the request to the Reserve Bank of India (RBI) through the AD for examination. While the regulatory provisions are mostly similar, some differences between the two routes include the amount of borrowing, eligibility of the borrowers and the permissible end-uses.
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ECB can be raised in Indian Rupees (INR) and / or any convertible currency. Any entity raising INR denominated ECB is not permitted to convert the liability arising out of this ECB into foreign currency liability in any manner or assuming foreign currency risk is any manner by either entering into a derivative contract or otherwise.
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For the purpose of raising ECB, Infrastructure Sector has the same meaning as given in the Harmonised Master List of Infrastructure sub-sectors approved by the Government of India vide Notification F. No. 13/06/2009-INF as amended / updated from time to time. Further, for the purpose of ECB, Exploration, Mining and Refinery sectors are also deemed as in the infrastructure sector.
For more information, click here.
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The conversion of External Commercial Borrowings (ECB) in convertible foreign currency into equity is subject to the following conditions:
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Yes, ECB can be raised under Track III (i.e. INR denominated ECB) for general corporate purpose (including working capital). The minimum average maturity period will be 3 years for ECB up to $ 50 million or equivalent and 5 years for ECB beyond $ 50 million or equivalent.
For more information, click here.
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A. For listed companies
B. For unlisted companies
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There is no subsidy for the loan given under Pradhan Mantri Mudra Yojana (PMMY). However, if the loan proposal is linked to some Government scheme, wherein the Government is providing capital subsidy, it will be eligible under PMMY also.
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Yes, however, it is only permitted if external commercial borrowing (ECB) is raised from direct and indirect equity holders or from a Group company, and provided the loan is for a minimum average maturity of five years.
ECB raised under Tracks I or III for repayment of Rupee loans, must be raised from a foreign equity holder.
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The domestic custodian needs report the issue/transfer of sponsored/unsponsored depository receipts as per DR Scheme 2014 in ‘Form DRR’ given in Section 5, Annexure 6 of the Consolidated FDI Policy, 2017, within 30 days of close of the issue/ program.
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A limited two-way Fungibility Scheme has been put in place by the Government of India for American Depository Receipts (ADR)/ Global Depository Receipts (GDR). Under this Scheme, a stock broker in India, registered with Securities & Exchange Board of India (SEBI), can purchase shares of an Indian company from the market for conversion into ADR/GDR based on instructions received from overseas investors. Re-issuance would be permitted to the extent of ADR/GDR which have been redeemed into underlying shares and sold in the Indian market.
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As per the notification no. G.S.R 180(E) dated February 17, 2016, Alternate Investment Funds, Venture Capital Funds, Angel Fund and Seed Funds registered with SEBI can be classified as Funding bodies. These bodies are eligible for providing recommendation/ support/ endorsement letter to entities in which more than 20 percent equity is taken up by such funds.
A list of SEBI registered VCFs and AIFs has been published on Start-up India portal on http://startupIndia.gov.in
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An entity established or incorporated outside India which proposes to make investment in India and which is registered as a FII in accordance with the Securities and Exchange Board of India (SEBI) (Foreign Institutional Investor) Regulations 1995.
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Documents to be submitted by a resident person for transfer of shares to a person resident outside India by way of gift:
i) Name and address of the transferor (donor) and the transferee (donee).
ii) Relationship between the transferor and the transferee.
iii) Reasons for making the gift.
iv) In case of Government dated securities and treasury bills and bonds, a certificate issued by a CA on market value of such security.
v) In case of units of domestic mutual funds and units of Money Market Mutual Funds, a certificate from the issuer on the Net Asset Value of such security.
vi) In case of shares and convertible debentures, a certificate from a Chartered Accountant on the value of such securities according to the guidelines issued by Securities & Exchange Board of India or as per any internationally accepted pricing methodology on arm’s length basis for listed companies and unlisted companies, respectively.
vii) Certificate from the concerned Indian company certifying that the proposed transfer of shares/convertible debentures by way of gift from resident to the non-resident shall not breach the applicable sectoral cap/ FDI limit in the company and that the proposed number of shares/convertible debentures to be held by the non-resident transferee shall not exceed 5 per cent of the paid up capital of the company.
viii) An undertaking from resident transferor that value of security to be transferred together with any security already transferred by transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of $ 50,000during a financial year*.
ix) A declaration from donee accepting partly paid shares or warrants that donee is aware of the liability as regards calls in arrear and consequences thereof.
Please refer to 'section 2' of Annexure-3 Consolidated FDI Policy at link for more information.
*RBI’s A.P. (DIR Series) Circular No. 14 Dated 15.09.2011
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If the capital instruments are not issued by the Indian company within 60 days from the date of receipt of the inward remittance, the amount so received must be refunded to the person concerned by outward remittance through banking channels or by credit to the person’s Non-Resident External (NRE)/ Foreign Currency Non-Resident (FCNR) (B) accounts, as the case may be, within 15 days from the date of completion of 60 days.
Non-compliance of instructions shall be a contravention of Foreign Exchange Management Act 20 (R) notwithstanding the fact that interest for delayed refund has been paid as per the Companies Act, 2013.
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Eligibility criteria for the grant of certificate for a trustee in the Infrastructure Investment Trusts (InvITs) are
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MUDRA, which stands for Micro Units Development & Refinance Agency Ltd, is a financial institution being set up by the Government of India under Pradhan Mantri Mudra Yojana (PMMY) for development and refinancing micro unit enterprises. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for 2015-16. The purpose of MUDRA is to provide funding to the non-corporate small business sector through various last-mile financial institutions like banks, non-banking financial institutions (NBFC) and micro finance institutions (MFI).
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Any grievance against non consideration of MUDRA loan can be registered with the higher authorities in the respective Bank like Regional Manager/Zonal Manager of the Bank, provided there is any lapse from the bank officials in sanctioning the loan.
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List of documents required for availing MUDRA loans are Application form, Address Proof, ID proof, Bank Statement of defined period, Statutory return and others as may be required. This is just an indicative list.
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MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner. It will provide a facility of working capital arrangement in the form of CC/OD to the borrower. Since MUDRA Card will be RuPay debit card, it can be used for drawing cash from ATM or Business Correspondent or make purchase using Point of Sale (POS) machine. Facility is also there to repay the amount, as and when, surplus cash is available, thereby reducing the interest cost.
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Any Indian citizen who has a business plan for a non-farm income-generating activity such as manufacturing, processing, trading or service sector whose credit need is less than INR 1 m can approach either banks, micro finance institutes or non-banking financial companies for availing of MUDRA loans under PMMY. The usual terms and conditions of the lending agency may have to be followed for availing of loans under Pradhan Mantri Mudra Yojana (PMMY). The lending rates are as per the RBI guidelines issued in this regard from time to time.
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Pradhan Mantri Mudra Yojana (PMMY) loans will be extended by all Public sector Banks such as PSU banks, Regional Rural Banks (RRBs), Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions and Non-Banking Finance Companies.
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MUDRA operates a special refinance scheme for traders and shopkeepers. You can avail the facilities under the scheme as per your requirements from any banks/MFIs/NBFCs in the area.
Please refer to link for more information
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For Shishu loans, normally 7 to 10 days is the turn around time for processing the loan proposals on receipt of complete information.
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The interest rates are deregulated and the banks have been advised to charge reasonable interest rates within the overall RBI guidelines.
Please refer to link for more information.
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Non–Corporate Small Business Segment (NCSB) comprising of millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits/ vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
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An Indian company should file Form , not later than 30 days from the date of issue of shares. The Form should be duly filled and signed by the Managing Director/Director/ Secretary of the company and submitted to the Authorised Dealer of the company who will forward it to the RBI.
For detailed list of documents, refer to Sub-section 2.2 of Annexure 6 of the FDI policy.
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No, there is no entry norm for a listed company making a Rights Issue.
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Draft Offer Document, Red Herring Prospectus, Prospectus and Letter of Offer are all types of offer documents. Since 1992, entire IPO/ FPO of companies is driven by disclosures, i.e., informing the investors as much as possible to enable them to take informed decision. The offer documents contain all the relevant information about the company, promoters, projects, financial details, objects of raising money, forms of the issue, etc.
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An offer document contains all the relevant information about the company, promoters, projects, financial details, objects of raising the money, terms of the issue, etc. and is used for inviting subscription to the issue being made by the issuer. Offer document is called a ’Prospectus’ in case of a Public Issue and ’Letter of Offer’ in case of a Rights Issue.
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A Private Placement is the issue of shares or convertible securities to a select group of persons not exceeding 49%.
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A Bonus Issue is an issue of shares to its existing shareholders without any consideration based on the number of shares already held by them as on a record date. The shares are issued out of the company’s Free Reserve or Share Premium Account in a particular ratio to the number of securities held on a record date.
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A Right Issue is an issue of shares or convertible securities to existing shareholders as on a particular date (record date) fixed by the issuer. The rights are offered in a particular ratio to the number of shares or convertible securities held as on the record date.
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The various instruments that can be issued by an Indian company include:
1) Equity shares; fully, compulsorily and mandatorily convertible debentures/ preference shares
2) Non-convertible, optionally convertible or partially convertible debentures/ preference shares
3) Rights issue
4) Composite issue
5) Bonus issue
6) Institutional placement program
7) Convertible note
8) Depository receipt (DR)
9) Foreign currency convertible bonds (FCCB)
10) Security receipt
11) Two-way fungibility scheme
12) Warrants & partly-paid shares
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DRs refer to negotiable securities representing INR denominated equity shares of a company and issued outside of India by a Depository bank on behalf of the company. The DRs listed and traded in US markets are known as American Depository Receipts (ADRs). The DRs listed and traded except in the US markets are known as the Global Depository receipts (GDRs).
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Arm's length price is the price which is applied or proposed to be applied to transactions between persons other than the Associated Enterprises in uncontrolled conditions.
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Transfer pricing documentation requirements are provided under Section 92D of the Act and Rule 10D of the Income-tax Rules, 1962 (Rules).
The categories of documentation required are:
A list of additional optional documents is provided in Rule 10D(3).
In addition, the taxpayer is required to obtain and furnish an Accountant’s Certificate (Form 3CEB) regarding maintenance of documentation. This has to be filed irrespective of the transaction value.
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Where a foreign enterprise has a BO/PO in India, the BO/PO would constitute a non-resident for Indian tax purposes and a separate enterprise under Section 92F(iii) of the Act. Accordingly, the transaction between the BO/PO and the HO will constitute as an international transaction under section 92B of the Act and will be required to meet the arm’s length criteria from an Indian transfer pricing perspective.
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The residential status of LO in India of an enterprise outside India is that of a “non-resident” for Indian tax purposes. Since the LO is not taxable in India as they do not indulge in income generating activities, transfer pricing provisions are not applicable for LO. However, if a LO constitutes a PE in India, it will be subject to tax in India and will be subject to an appropriate attribution of profit generated by the foreign enterprise from its operations in India.
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An enterprise is required to comply with the transfer pricing regulations when:
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The term international transaction as defined under Section 92B of the Act as:
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All the taxpayers are mandatorily required to file an accountant's report prepared by an independent professional through Form No. 3CEB for all international transactions irrespective of the value of international transactions and specified domestic transactions if the value exceeds INR 20 crore in a financial year.
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Taxpayers indulging in any international or specified domestic transactions are required to maintain a set of documents specified in Rule 10D of the Income - tax Rules, 1962. The transfer pricing documentation shall be required if the value of international transactions exceeds INR 1 crore and specified domestic transactions exceed INR 20 crore in a financial year.
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As per Section 92C of the Income - tax Act, 1961, the following methods can be used for computing arm's length price:
a) Comparable Uncontrolled Price (CUP) Method
b) Resale Price Method (RPM)
c) Cost Plus Method (CPM)
d) Profit Split Method (PSM)
e) Transactional Net Margin Method (TNMM)
f) Any Other Method
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Section 92A of the Income - tax Act, 1961 specifies that two or more enterprises become associated enterprises when one of them participates, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise(s).
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No. Acquisition of copyright is automatic and it does not require any formality. Copyright comes into existence as soon as a work is created and no formality is required to be completed for acquiring copyright.
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Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations in the composition of the rights depending on the work.
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Intellectual Property is the Property, which has been created by exercise of Intellectual Faculty. It refers to creation of mind such as inventions, designs for industrial articles, literary, artistic work, symbols which are ultimately used in commerce. Intellectual Property rights allow the creators or owners to have the benefits from their works when these are exploited commercially. These rights are statutory rights governed in accordance with the provisions of corresponding legislation. Intellectual Property rights reward creativity & human endeavour which fuel the progress of humankind.The intellectual property is classified into seven categories i.e.
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The Copyright Act, 1957 protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses. Unlike the case with patents, copyright protects the expressions and not the ideas. There is no copyright protection for ideas, procedures, methods of operation or mathematical concepts as such (Please see Article 9.2. of TRIPS).
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Copyright does not ordinarily protect titles by themselves or names, short word combinations, slogans, short phrases, methods, plots or factual information. Copyright does not protect ideas or concepts. To get the protection of copyright a work must be original.
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No. Because once the alleged Design i.e., ornamentation is removed only a piece of paper, metal or like material remains and the article referred ceases to exist. Article must have its existence independent of the Designs applied to it.
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Object of the Design Act is to protect new or original designs so created to be applied or applicable to particular article to be manufactured by Industrial Process or means.
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Under the Designs Act, 2000 the "article" means any article of manufacture and any substance, artificial, or partly artificial and partly natural; and includes any part of an article capable of being made and sold separately.
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‘Design’ means only the features of shape, configuration, pattern or ornament or composition of lines or colour or combination thereof applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye, but does not include any mode or principle or construction or anything which is in substance a mere mechanical device, and does not include any trade mark.
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Yes, it is possible to transfer the right through assignment, agreement, transmission with terms and condition in writing or by operation of law subject to certain restrictive conditions. An application in form-10, with prescribed fees in respect of one design and appropriate fees for each additional design, for registration of the transfer documents is required to be made by the beneficiary to the Controller within six months from the date of execution of the instruments or within further period not exceeding six months in aggregate. An original/notarized copy of the instrument to be registered is required to be enclosed with the application.
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First-to-file rule is applicable for registrability of design. If two or more applications relating to an identical or a similar design are filed on different dates only first application will be considered for registration of design.
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Object of the Designs Act is to protect new or original designs so created to be applied or applicable to particular article to be manufactured by Industrial Process or means. Design Registration is a means to ensure that the artisan, creator, originator of a design having aesthetic look is not deprived of his bonafide reward by others applying it to their goods.
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If a group of articles meets the following requirements then that group of articles may be regarded as a set of articles under the Designs Act, 2000:
• Ordinarily on sale or intended to be used together
• All having common design even though articles are different (same class)
• Same general character
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India is one of the countries party to the Paris Convention so the provisions for the right of priority are applicable. On the basis of a regular first application filed in one of the contracting state, the applicant may within the six months apply for protection in other contracting states, latter application will be regarded as if it had been filed on the same day as the first application.
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A registration of design will cease to be effective on non-payment of extension fee for further term of five years if the same is not paid before the expiry of original period of 10 years. However, lapsed designs may be restored provided the following conditions are satisfied:
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The Controller General of Patents, Designs and Trademarks has information regarding trademark form and fees.
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The legal requirements to register a trademark under the Act are:
The selected mark should be capable of being represented graphically (that is in the paper form).
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It can be removed on application to the Registrar on prescribed form on the ground that the mark is wrongly remaining on the register.
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Yes, the applicant can make a request for early publication in Form 9 along with the prescribed fee.
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The Patent Office has no role beyond grant of patent. Since patents are private rights the patent owner is responsible for commercializing the patent either himself or through licensee. However, the information relating to grant of patent is published in the Patent Office journal and also published on the Patent Office website which is accessible to the public worldwide.
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Generally, an invention which has been either published or publicly displayed cannot be patented as such publication or public display leads to lack of novelty. However, under certain circumstances, the Patents Act provides a grace period of 12 months for filing of patent application from the date of its publication in a journal or its public display in an exhibition organised by the Government or disclosure before any learned society or published by applicant.
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If the applicant does not file a reply within 6 months or does not take an extension of 3 months, the application is deemed to have been abandoned.
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Yes. All the patent applications are kept secret upto 18 months from the date of filing or priority date whichever is earlier and thereafter they are published in the Official Journal of the Patent Office which is published every week and also available on the IPO website.
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An invention can become patentable subject matter must meet the following criteria:
1) It should be novel.
2) It should have inventive step or it must be non-obvious.
3) It should be capable of industrial application.
4) It should not fall within any of the provisions of sections 3 and 4 of the Patents Act 1970
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After filing the applicant for the grant of patent, a request for examination is required to be made by the applicant or by third party and, thereafter, it is taken up for examination by the Patent Office. The first examination Report is issued to the applicant to give him an opportunity to correct the deficiencies in the application and meet the objections raised in the said report. The applicant must comply with the requirements within the prescribed time otherwise his application would be treated as deemed to have been abandoned.
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After grant of patent, every patentee has to maintain the patent by paying renewal fee every year as prescribed in the schedule I. for first two years, there is no renewal fee.
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The Patent Office e-journal is freely available on patent office site: www.ipindia.nic.in
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The Patent office Journal contains information relating to patent applications which are published u/s 11A, post grant publication, restoration of patent, notifications, list of nonworking patents and public notices issued by the Patent Office.
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In India, child below 14 years cannot be employed. However, there are following exceptions which includes non-hazardous family enterprises and child working as an artist in an audio-visual entertainment industry.
Additionally, a child above 14 years but below 15 years of age can be employed only for 4.5 hours a day and cannot work during the night.
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The following need to be adhered to for recruiting women in a company:
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Workers who have completed one year of services are eligible for compensation equal to 50% of total Basic wages and Dearness Allowance.
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Yes, The National Policy on Child Labour declared in August 1987, contains the provisions with respect to employment of child labour.
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In an industrial establishment wherein one hundred or more workmen are employed or have been employed on any day in the preceding twelve months, the appropriate Government may by general or special order require the employer to constitute a Works Committee in the prescribed manner.
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Retrenchment means the termination of employee's service by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action.
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Payment can be made online through shram Suvidha Portal.
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Section 24 of the Industrial disputes Act does not bar the jurisdiction of an Industrial Tribunal to adjudicate upon a dispute relating to the fixation of wages of employees covered under the Act.
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The limit of 'ten times the amount of such excess' mentioned in section 20(3)(i) of the Minimum Wages Act, 1948 is the maximum limit. When the Authority awards heavy compensation under the said section, it must give reasons for doing so.
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Registration fee:
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The Competition Act requires mandatory notification of all combinations within stipulated timelines. Combinations must be notified to CCI within 30 days of a trigger event
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When an ‘acquirer’ takes over the control of the ‘Target Company’, it is termed as a Takeover. When an acquirer acquires ‘substantial quantity of shares or voting rights’ of the Target Company, it results into substantial acquisition of shares.
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The National Court of Law Tribunal has been formed under the Companies Act, 2013 setup as a quasi-judicial body for corporate law purposes. NCLT is one of the recent reforms undertaken by the government in corporate law.
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A 'Target Company' is the company/body corporate or corporation whose equity shares are listed in a stock exchange and in which a change of shareholding or control is proposed by an acquirer.
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Officially, there is no such term as hostile bid in the regulations. Hostile bid is generally understood to be an unsolicited bid by a person, without any arrangement or MOU with persons currently in control. Any person with or without holding any shares in a target company, can make an offer to acquire shares of a listed company subject to minimum offer size of 26%.
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An open offer, other than a voluntary open offer under Regulation 6, must be made for a minimum of 26% of the target company’s share capital. The size of voluntary open offer under Regulation 6 must be for at least 10% of the target company’s share capital. Further the offer size percentage is calculated on the fully diluted share capital of the target company taking into account potential increase in the number of outstanding shares as on 10th working day from the closure of the open offer.
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'Minimum level of acceptance’ implies minimum number of shares which the acquirer desires under the said conditional offer. If the number of shares validly tendered in the conditional offer are less than the minimum level of acceptance stipulated by the acquirer, then the acquirer is not bound to accept any shares under the offer.
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No, in respect of certain acquisitions, SAST Regulations, 2011 provide exemption from the requirements of making an open offer, subject to certain conditions being fulfilled. For example, acquisition pursuant to inter- se transfer of shares between certain categories of shareholders, acquisition in the ordinary course of business by entities like underwriter registered with SEBI, stock brokers, merchant bankers acting as stabilizing agent, Scheduled Commercial Bank (SCB), acting as an escrow agent, etc.
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A voluntary open offer under Regulation 6, is an offer made by a person who himself or through persons acting in concert, if any, holds 25% or more shares or voting rights in the target company but less than the maximum permissible non-public shareholding limit.
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A constituent entity means
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Taxability in India:
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The major advantages of IGST model are
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The following categories of persons are liable to pay GST:
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Major indirect taxes in India are:
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Major direct taxes in India are:
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From 1st July 2017, indirect taxes such as service tax, VAT would be subsumed by Goods and Service tax (GST) which is a comprehensive levy on manufacture, sale, and consumption of goods and services. Major compliances are as follows:
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Applicability of Statutory Audit for different types of entities is as follows:
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An e-way bill is an electronic document generated on common portal evidencing movement of goods of consignment value more than INR 50,000.
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Any person who has been involved in an international and/or specified domestic transactions (if aggregate value exceeds INR 200 million) in the previous year shall submit the report in Form 3CEB through a Chartered Accountant, duly verified and certified by him, on or before the date (i.e., 30th November of every year) prescribed by the authority, furnishing all the required details.
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Normally IEC number is issued within two to three days, if all documents are in order.
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No, IEC need not be revalidated if the PAN is incorporated in it, but the same needs to be updated for changes in name / address / constitution.
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Yes, Modifications in IEC number are applied online in ANF 2A.
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The requirements are as follows :-
•submit an application to the Directorate General of Foreign Trade and obtain Importer and Exporter Code (IEC) number
•IEC has to be indicated in the documents filed with the Customs for clearance of the imported goods
•In the case of 100% EOUs / EPZs the importer and Exporter Code (IEC) numbers are allocated by the Development Commissioner of Export Processing Zone concerned.
•Every good imported shall be in conformity with Section 11 of the Customs Act 1962, Foreign Trade (Development & Regulation) Act 1992 read with the EXIM policy in force.
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All goods, import of which is permitted only with an authorisation / permission / license or in accordance with the procedure prescribed in a notification / public notice are ‘restricted’ goods. For import of goods mentioned in Schedule 1 of ITC (HS) Classification of Export & Import 2012, an application for grant of an Import Authorisation may be made to the concerned Regional Authority of DGFT in Aayaat Niryaat Form 2B(ANF 2B) along with documents prescribed therein, with two copies of the complete set to DGFT(HQ) at Udyog Bhawan, New Delhi. The requests for such imports are considered by Inter Ministerial Committee meeting.
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Import of new / second hand prototypes / second hand samples may be allowed on payment of duty without an authorisation to an actual user (Industrial) engaged in production of or having industrial licence / letter of intent for research in item for which prototype is sought for product development or research, as the case may, upon a self – declaration to that effect, to satisfaction of customs authority.
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Freely importable goods can be transferred by sale or otherwise by importer freely. Transfer of imported goods, which are subject to actual user condition and have become surplus to the needs of actual user, shall be made only with prior permission of DGFT (HQ). For details relevant para 2.43 of Handbook of Procedures may be seen.
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No. However, the name of each concern owned by such a company may be included in the IEC of the firm in whose name PAN exists, as a branch.
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ITC(HS) Code or better known as Indian Trade Classification (Harmonized System) Code was adopted in India for import – export operations. ITC (HS) is a compilation of codes for all merchandise / goods for export/ import. Goods are classified based on their group or sub-group at 2/4/6/8 digits. ITC (HS) is aligned at 6 digit level with international Harmonized System goods nomenclature maintained by World Customs Organization Link. However, India maintains national Harmonized System of goods at 8 digit level which may be viewed through the following Link
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If you want to know the HS Code, Click on ‘ITC HS Based Policy’ on the website of DGFT. A new window will open as ITC(HS) Query Form. Insert the name of the product in the description option to know the HS Code of your product. Similarly, if you want to know the product and are already aware of the HS Code, enter the ITC(HS) Code (e.g. 0324) option to know the product.
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There are no restrictions on BOE if they are authorized under section 34(3) of the Boilers Act 1923.
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Rule 31 of the BOE Rules, 2011 provides for minimum eligibility criteria i.e. age, qualifications and experience for obtaining a certificate of proficiency and operate a boiler as a Boiler Operation Engineer. The said criteria is Stated for both, Diploma and Degree Holders.
However, under BRAP 2019, distinction form the qualifications under Rule 31 of the BOE Rules, 2011 has been made in relation to third-party certification. For the purpose of issuing/granting third-party certification, only a BOE who holds a degree/is a graduate in Mechanical/ Production/ Power Plant/ Metallurgical engineering from a recognised institution and has minimum 5 years of experience in the field related to boilers is eligible. The said reform excludes diploma holders to grant third-party certificate.
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No, there is no requirement of empanelment of BOE.
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No.
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Yes. There is no need for empanelment of the same third party agencies by the State.
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The “Departments involved” means the Departments whose clearances/ approvals/ NOCs are required prior to applying for a particular service.
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The plan must have been adopted by the ULB/ relevant Department in the State and must not be in a draft or consultation stage.
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The reform does not refer to lift and escalator installation
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The State should coordinate with their respective High Courts and in case of any concern, DIPP shall discuss the same with the D/o Justice.
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Details of land transaction deed, property tax etc. must be displayed on a single web page on one website in a consolidated format.
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