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  • How can I start Consultancy and/or Project Execution entity in India?

     You can explore the option of either opening
    (1) Liaison Office or

    (2) Project Office

    For more information, click here.

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  • Which form has to be filed in case of voluntary conversion of One Person Company?

    Form INC-6 has to be filed within 30 days of voluntary conversion of One-Person Company after two years of its incorporation and within six months of mandatory conversion (in case paid up share capital of an One-Person Company exceeds INR50 lakhs or its average annual turnover).

    For more information, click here.

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  • Can limited liability partnerships (LLP) be formed utilizing SPICe frames?

    No, LLPs cannot be incorporated using SPICe forms

    For more information, click here.

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  • How long will the directors be liable for the offences occurred during his tenure?

    A director shall be liable for the offences / non-compliances occurred during his tenure even after his resignation and disassociation with the company.

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  • What is the duration for preserving the books of account?

    The books of account shall be preserved by the company for eight financial years preceding the financial year. However, there are certain registers and documents which are required to be kept permanently.

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  • What are the modes available for the company to maintain the books of account?

    The company may maintain books of account in either physical or electronic form. In case the books of account are maintained electronically, the back-up of the books of account and other books and papers of the company shall be kept in servers physically located in India on a periodic basis.

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  • Is it mandatory to appoint Company Secretary in an Indian subsidiary?

    Any company having a paid-up share capital of Indian INR 50 million or above is required appoint a whole-time Company Secretary.

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  • What are the implications of establishment of PE (Permanent Establishment) in India, on the expats?

    The assignees would be denied the benefit of short stay exemption under tax treaty as their salary expenditure would be deemed as deduction claimed by the foreign entity. Thus, the salary income earned by expats would become taxable in India.

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  • Is issue of prospectus mandatory in case of LLP in India?

    No, issue of prospectus is not mandatory in case of Limited Liability Partnership (LLP) in India.

    For more information, click here.

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  • Which authority allots the Director Identification Number (DIN)?

    Any person intending to become a director in an existing company shall file Form DIR-3 and the same gets processed by the Central Government (Office of Regional Director (Northern Region), Ministry of Corporate Affairs). Further, the person who is appointed as a director upon filing Form SPICe INC-32 (which is a Simplified Proforma for Incorporating Company Electronically) will be issued a unquie 8-digit DIN by the approving authority (Central Registration Centre).

    For more information, click here.

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  • Is it permissible for Start-ups to secure foreign funding?

    RBI via the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (FEMA 20) has allowed startups to issue convertible notes to foreign investors apart from FDI in startups by foreign venture capital investors through subscribing to equity or equity-linked instruments or debt instruments.

    For more information, click here.

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  • Are the investments and profits earned in India repatriable?

    All foreign investments are repatriable (net of applicable taxes) except in cases where the investment is made or held on non-repatriation basis.

    For more information, click here.

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  • What is to be done after the investment is made under the Automatic Route or with Government approval?

    On receipt of the foreign direct investment (FDI), the Indian company receiving the investment for issuing shares/ debentures should report the details to the Regional Office concerned of the Reserve Bank of India (RBI) within 30 days from the date of receipt in the Advance Reporting Form in Section 1, Annexure 6

    Steps for reporting of investment varies for shares, depository receipts and other instruments.

    To know more about the detailed process of reporting, refer to section 2, Annexure 6 of the Consolidated FDI Policy, 2017.

    For more information, click here

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  • What are the guidelines for the issue price of shares against FDI received for a company listed in India?

    The price of shares issued to persons residing outside India under the FDI Policy, should not be less than the price worked out with the Securities and Exchange Board of India (SEBI) when shares are listed on a recognized stock exchange in India.

    For more information, click here

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  • What is the institutional framework governing FDI in India?

    FDI in India is regulated under Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (Original notification is available at link; subsequent amendment notifications are available at link2.

    Besides FEMA, 1999, FDI is also subject to other regulations as per Reserve Bank of India (RBI) and DPIIT. DPIIT is the nodal agency entrusted to formulate FDI Policy. It issues press notes to make amendments in the existing policy and also issues consolidated FDI Policy on an annual basis.

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  • What is apostille and how to get the documents apostilled and notarized from the foreign country?

    An "apostille" is a form of authentication/certification issued to documents for use in countries that participate in the Hague Convention of 1961. Apostille is to confirm the legal authenticity of any document. A list of countries that accept apostilles is provided by the US State Department.
    Apostilles are affixed by Competent Authorities designated by the government of a state which is party to the convention.
    A list of these authorities is maintained by the Hague Conference on Private International Law. Examples of designated authorities are embassies, ministries, courts or (local) governments.
    An Apostille Certificate is official government Certificate printed or stamped onto the reverse side of a single page document or attached to multiple paged documents with green notary ribbon making it become one inseparable document. It authenticates the seal and or signature of the public official or authority such as a notary or registrar issuing the document.
     

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  • Can one increase the Company's authorized capital to get more external funding?

    The authorized capital of a Company can be increased at any time as per the Companies Act, 2013 and in case the Article of Association does not allow this, the AoA can be amended by passing a “special resolution”. One may also consider getting External Commercial Borrowings.

    For more information, click here.

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  • How can foreign investors put money in Portfolio Investments in India?

    Investment by FPI registered in accordance with SEBI guidelines including deemed RFPI (erstwhile FII) is permitted in the capital of an Indian Company under the Portfolio Investment Scheme. Investment by individual FPIs should be less than 10% of the paid-up capital of the Indian Company on a fully diluted basis. The aggregate investment by FPIs should not exceed 24% of the paid-up capital of an Indian Company on a fully diluted basis. This aggregate limit of 24% can be increased by the Indian Company concerned up to the sectoral cap/ statutory ceiling, as applicable, with the approval of its Board of Directors and its General Body through a resolution and a special resolution, respectively and subject to prior intimation to RBI. The aggregate FII/FPI investment, individually or in conjunction with other kinds of foreign investment, cannot exceed sectoral/statutory cap.

    For more information, click here.

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  • What are the regulations for a foreign company to set up business operations in India?

    A foreign company can set up business in India via Foreign Direct Investment (FDI) either by incorporating an Indian company or foreign company or LLP under the Companies Act, 2013 or by setting up a Liaison Office, Project Office or a Branch Office of the foreign company. Entry into India is however as per the provision of FDI policy and FEMA rules.

    For more information, click here.

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  • What is the amount Foreign Direct Investment is permissible under railroads?

    100 % FDI under automatic route is available for the following: 

    1.     Construction, operation and maintenance of suburban corridor projects through PPP

    2.       High speed train projects

    3.       Dedicated freight corridors

    4.       Railway electrification

    5.       Signaling systems

    6.       Freight terminals

    7.       Passenger terminals

    8.       Infrastructure in industrial parks pertaining to railway line/siding including electrified railways lines and connectivity to main railway line

    9.       Mass Rapid Transport Systems (MRTS)

    For more information, click here.

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  • Is stamp duty applicable on units of Mutual Fund?

    Sub-Section 23A of Section 2 of the Indian Stamp Act, 1899 defines securities as including securities defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (SCRA). Further, it may be noted that clause (h)(id) of Section 2 of SCRA, 1956, which defines “securities” includes “units or any other such instrument issued to the investors under any mutual fund scheme” under its ambit. Therefore, units of Mutual Fund Schemes are to be considered as securities for the purpose of applicability of stamp duty also.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • Which section of amended Indian Stamp Act, 1899 (section 9A or 9B) is applicable for Mutual Funds for the purposes of collection and transfer of stamp duty to States/UTs?

    Since RTI and/or STA of Mutual Funds have been declared as Depositories under the Stamp Act vide gazette notification dated 8th Jan, 2020, the entire mutual fund business gets covered under Section 9A of the Indian Stamp Act. Section 9B is not applicable to them. RTAs have to function like a Depository in respect of collection of Stamp Duty on issue and sale or transfer of mutual funds in SoA form. The extant Stamp Rules applies to them as well i.e. the operational clause for them is Section 9A and not 9B of the Indian Stamp Act.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • Who will collect and transfer the Stamp duty to States in case of transactions in units of Mutual Funds and AIFs in Statement of Account/ Physical (non-demat form)?

    To provide for collection of Stamp Duty on transactions in mutual fund and AIF units in the statement of account/physical (non-demat) form, RTI and/or STA have been notified (vide Gazette Notification dated 8th January, 2020) as a “Depository” for the limited purposes of acting as a “collecting agent” under the said Act and the Rules made thereunder. Accordingly, for non-demat Mutual Fund and AIF transactions, collection of stamp duty by RTAs shall be governed by the provisions of Section 9A(1)(b) and 9A(1)(c) and the transfer of stamp duty to the respective States shall be governed by the provisions of Section 9A (4). Thus, the transfer of collected stamp duty to respective States/UTs by RTAs also is governed by buyer-based principle as covered in Section 9A(4) and not on the basis of registered office of the issuer.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • Is stamp duty is applicable on redemption of Mutual Fund units ?

    Redemption is not liable to duty as it is neither a transfer nor an issue nor a sale.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • What are the stamp duty rates being implemented through the Amended Indian Stamp Act?

    Stamp Duty Rates w.e.f. 1st July 2020

    Instrument Rate
    Issue of Debenture 0.005%
    Transfer and Re-issue of debenture 0.0001%
    Issue of security other than debenture 0.005%
    Transfer of security other than debenture on delivery basis 0.015%
    Transfer of security other than debenture on non-delivery basis  0.003%
    Derivatives  
    (i) Futures (Equity and Commodity) 0.002%
    (ii) Options (Equity and Commodity) 0.003%
    (iii) Currency and Interest Rate Derivatives 0.0001%
    (iv) Other Derivatives 0.002%
    Government Securities 0%
    Repo on Corporate Bond 0.00001%

     

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  • Is stamp duty applicable at multiple levels of a single transaction (on account of procedural requirements) and to which state government should the stamp duty amount be transferred in such cases?

    It should be ensured that a double incidence of stamp duty doesn’t occur on any transaction. Where, before being credited in the buyer’s Demat account, the securities were transferred from the Demat accounts of an issuer to the clearing corporation, member, etc., the stamp duty shall be transferred to the state government where the residence of the buyer is located.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • Will stamp duty be charged on off-market transfer of securities without consideration such on gift, legacy transfer etc?

    No, Section 21 of the Amended Indian Stamp Act read with sub-section 16B of Section 2 clearly indicates that stamp duty is to be collected on market value which is based on price or consideration involved.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

     

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  • How is stamp duty calculated in case of issuance of Mutual fund Units?

    Stamp duty is imposed on the value of units excluding other charges like service charge, AMC fee, GST etc. If the units are issued for INR1 crore then INR 500 would be the stamp duty to be remitted to States.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • On transfer of units of Mutual Funds and AIFs held in physical form stamp duty is to be collected from the transferor. As these transfers happen outside the purview of RTAs what will be process of collection and remittance of stamp duty?

    Stamp duty has to be collected and remitted only by collecting agents (RTA for physical units and Depositories for demat units). Where Mutual Fund and AIF units are issued in physical form, stamp duty has to be collected and remitted by RTA. Accordingly, when the transferee approaches RTA for effecting the transfer in their books, RTA will be collecting the stamp duty from the transferor before effecting the transfer which will then be remitted to the state of domicile of the transferee.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • How will the State Government communicate regarding stamp duty matter?

    The State Government shall appoint a nodal officer for all official communications with the principal officers (appointed representatives of collecting agents) for the purposes of collection of stamp-duty in accordance with stamp duty Rules.

    For more information on Indian Stamp Act, 1899, click here. For more details about the amendments, refer here.

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  • What are the different kinds of duties of custom levied on imported goods?

    Different kinds of duties of customs levied on imported goods are

    (i) Basic Customs Duty

    (ii) Additional levies like Countervailing duty, Anti dumping duty, safe guard duty etc.

    In addition, cess duty is leviable on certain goods.

    Section 12 of the Customs Act, 1962 authorises the Customs Officers to levy and collect these duties.

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  • What is custom duty and its different types ?

    Customs duty is the duty charged on goods on their importation into India or exportation out of India.

    There are two types of rates of duty of Customs:

    1. Ad valorem rate i.e., the duty is charged on the basis of value.

    2. Specific rate i.e., on the basis of quantity/number/ volume

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  • Can an Indian company invoice in Indian Rupees? Will such a company be eligible for exports benefits?

    As per para 2.52 FTP 2015-20, all export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency. However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan. Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting bank service charges) on account of this transaction would be taken as export realization under export promotion schemes of FTP.

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  • What is provisional assessment?

    When an importer/ exporter is unable to produce necessary  documents or information for assessment of duty on goods, or when the necessary documents are needed to produce but the proper officer of customs may deem it necessary to make further enquiry for assessing the duty, he may resort to provisional assessment, pending such enquiry a provisional assessment of goods maybe be requested. 

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  • What are ‘Project Imports’? What are the advantage of importing under project import regulation?

    Project Imports are the imports of machinery, instruments, and apparatus etc., required for initial sating up of a unit or for substantial expansion of an existing Unit. The exported goods are charges duty at a flat rate of duty under the same tariff heading. Project Imports assessment is a scheme of assessment which is designed to help expeditious and easy assessment of variety of industrial goods falling under different chapters of the Customs Tariff.

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  • What are the documents to be filled to clear the imported goods for home consumption?

    1) Supplier’s invoice.

    2) Import Authorisation, if applicable

    3) Bill of lading (original and non-negotiable).

    4) Packing list (2 copies).

    5) If invoice is for FOB, freight charges and insurance premium amount certificate should be attached.

    6) Catalogue/write/up/drawing for machinery items.

    7) If second hand machinery is being imported then Chartered Engineers certificate is necessary as per the Import Export Policy

    8) If steel is being imported then analysis certificate from manufacturers.

    9) In the case of chemicals & allied products like synthetic resin wax, literature showing chemical composition.

    Apart from the above the importers are also required to file declaration in the prescribed form by the importers regarding correctness of the contents and the value of the goods.

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  • When should the bill of entry be filed and what are its different kinds?

    Bill of entry can normally be filed to clear the goods after the Import General Manifest (IGM) is presented to the Customs Officers by the Steamer Agents / Airlines, as the case may be. 

    The following are the types of Bill of Entry 

    •Home consumption Bill of entry: This has to be filed when the importer wants to clear the goods on payment of duty and remove them to his premises immediately. 

    •Into bond Bill of entry:  It is also known as Warehousing Bill of Entry.  This has to be filed when the importer does not want to pay duty immediately but prefers to keep the goods in a warehouse and pay the duty subsequently and clear the goods for home consumption.

    •Ex-bond Bill of entry:  This has to be filed when the importer wants to clear the warehoused goods for home consumption on payment of duty

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  • What are Rules of Origin (ROO)?

    They are the criteria needed to determine the of a product for purposes of international trade. It is important because duties and restrictions in several cases depend upon the source of imports. Rules of origin are used: to implement measures and instruments of commercial policy such as antidumping duties and safeguard measures;, whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment, for trade statistics; for the application of labelling and marking requirements; and for government procurement.

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  • What are the goods eligible for being financed under the LOCs?

    Under the LOCs, export of capital goods, plant and machinery, industrial manufactures, consumer durables and any other items eligible for being exported under the 'Exim Policy' of the Government of India can be financed.

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  • What are the benefits of the LOC to the overseas importer of Indian goods and services?

    Exim Bank has been using the LOC mechanism for promoting India's exports to the traditional as well as new markets in developing countries, which need deferred credit for buying Indian machinery, goods and services. As the LOC is extended by Exim Bank on internationally competitive terms, the overseas importer of Indian goods is allowed access to the credit facility at competitive interest rates. The overseas importer and the Indian exporter do not have to negotiate credit terms separately as the credit arrangement between Exim Bank and the overseas borrower financial institution is already in place. 

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