3 Things Modi Government should do post GST Rollout

GST, arguably the biggest Tax Reform since Independence, was rolled with much Fanfare and over 80 million Businesses got their GST enrolment done and record Tax was collected (As per an estimate, the Tax base was increased by over 30%). But the life post GST enrolment has been anything but smooth. Though no one expected GST road to be free of any hiccup especially in a country where people feel (and blatantly proclaim) that Tax Evasion is their fundamental right, there are few steps which needs to be taken on priority to ensure that Road Ahead for GST is a smooth one.

Rockstar Portal for GST Registration Online: GST has been launched in digital era where everything from comb to Charter planes are available Online. GST website not working is not an option at all. You cannot expected Accountants or Business owners to waste their Energy in Online GST Return or Online GST Registration and getting error messages. Apart from this, UI and functionality of this website has to be better than all e-commerce site. Period.

Therefore Government should immediately look for world class player to maintain the GST site with focus on zero down time, privacy, security of data and ease of usage. The job needs to be given to best company across the globe with heavy fines to be placed for any downtime.

Proper Training for GST Return Filing: GST return filing is an Online Process. Though tedious, it is nothing which majority of people cannot understand (especially in Online era). The problem is that, without proper training, it appears more daunting than it actually is.

There has be regular seminars for few months on all Industrial platform like FICCI and at local industrial body for CA, Accountants etc. An easy demonstration of Online GST Enrolment and Online GST return filing should be showcased on all Channels (especially Doordarshan) and people need to be informed about the timelines of broadcast of these seminars through TV Ads and Newspaper Ads.

Reducing GST Tax Slabs: GST was introduced with prime objective to make Tax simpler. Hence the government should focus on achieving this objective at the earliest.
There has to be 3 Tax Slabs at the most. 0% for all the necessary items like food, milk etc. etc. 15% for Items of common use and Financial Service etc. and 28% for all the Luxury Items. Anything over and above this will create unnecessary confusion.

As a country, we required GST and required it earliest. Traders, Small Business Owners should be ready to face issues for atleast a month or so. But it is duty of government to ensure that all the issues are ironed out and businessmen face as little problem as possible.

Provisional release of 90% refund to exporters with ,Interest payable if refund not sanctioned in time ,Refund to be directly credited to bank accounts ,Comprehensive transitional provisions for smooth transition of existing tax payers to GST regime ,Special procedures for job work

3 ways your Accounting Consultant can help you grow your business

Accounting is a serious job. An accounting consultant can save lot of money for their clients through Tax Advisory, can help in fund raising (Debt or Equity) by ensuring proper accounting and due diligence are maintained and keep their client safe by doing proper regulatory compliance.

There are various accounting firms in Delhi and hundreds of accounting consultants in Delhi but it is important to know how to make best use of the immense knowledge an accounting consultant possess. Here we will mention 3 advice you would need from your Accounting Consultant.

Tax Optimization: An accounting consultant helps a client to optimize their taxes properly and in the process saves a lot of money for their clients. There are various ways to optimize your tax like booking the expense, taking credit on GST etc. etc. We have observed empirically that a company can save up to 5% of their operations tax with correct advice from accounting consultants.

Fund Raising: Correct accounting practices and proper due diligence is a pre-requisite for raising any form of funds, be it equity or debt. One of the major way an accounting consultant can help you is to ensure that you are always covered on this front. A competent Accounting Consultant would ensure that every revenue earned by company is reported and every expense made is accounted for.

Regulatory Compliances: Accountancy firms helps a company to always ensure that they are compliant and there is no chance of any unwanted notice from any government department such as I.T, PF, ESI, GST etc. etc.

Hence it makes sense for owners/founders/managers to opt for best accountant firms and use their accounting consultant proactively to grow the business. Just to add, an Accounting Consultant is as good as the client and hence it is duty of owners to ensure that they are able to use the Accounting Services in best possible manner.

If you own a start-up or business, click here to get all the support related to your accounts.

Things you should know before taking Employees Stock Option Plan (ESOP

The biggest challenge for a start-up company or even Multi-National Company is to make its employees feel connected and valued. Various monetary and non-monetary benefits are given to an employee so that he takes a step towards ensuring the organization’s as well as his personal growth. In our humble opinion Employee Stock Option Plan (ESOP) is the best possible way to do so.

In order to bridge the gap between the position of the top management and the middle and the lower management most of the companies nowadays, offer its shares to its employees at a lower or same rate, so as to make their employees believe that they are one of the owners of the company, and that they should work harder to make their company grow. This scheme is known as the Employees Stock Option Plan.

In abroad, this scheme is usually undertaken when an employee takes over the shares of a person who is willing to leave its position as a shareholder, and thus it’s called the Employees Stock Ownership Plan, where the ‘O’ stands for Ownership and not Option. However, in India it is largely used as a motivating source to make the employees feel valued to the company. It is one amongst the many fringe benefits offered by the employers.

The Employees Stock Option Scheme offers many advantages to the employees, employers, as well as the company. Some of those are:

AN EASY WAY TO MAKE MONEY:

Shares are undoubtedly a very easy way to make money. However, it is very important to know the share market in order to invest in a company. The advantage that the employees under the Employees Stock Option Scheme have over others is that they know the whereabouts of the company very well, and thus, they can take the right decision by investing in them or not. Once they have invested, the share price of the company goes high, and thus it benefits the company while benefiting its employees.

OFFERS VARIOUS TAX BENEFITS:

The employees under the Employees Stock Option plan do not have to pay tax on the income earned by those shares until and unless the shares are sold. However, if an employee owns the shares two years after receiving the option grant and one year after exercising the Employees Stock Option Grant, then he is liable to pay a tax of 20% as a Long Term Capital Gain under Section 112 of the Income Tax Act, 1961. In case an employee suffers loss, then he is eligible to set off that loss by other gains. The tax benefit offered by this scheme, attracts a lot of employees to invest and buy shares of their company.

MAKING MONEY BY SELLING THE SHARES:

There is no doubt regarding the fact that the Employees Stock Option Plan offers a way to make easy money, as regular income is achieved through shares. However, some companies offer shares to its employees at a lower rate than the market price. Thus, employees buy shares at a lower rate and then sell those shares once its price hikes. Thus, the Employees Stock Option Scheme is very safe, as regular income is earned and the option of selling the shares is always available to the shareholder.

A MOTIVATING FORCE:

As discussed earlier, in India, the Employees Stock Option Plan usually serves as a motivating force so that the employees feel that it is their company and that they have to make it reach to new heights. This benefit is for the company as well as the employees, as the employees work thinking that it’s their company, and thus, they work harder and better, benefiting the company. On the other hand, when the employees work harder, they grow, thus benefiting themselves. Hence, this fringe benefit, serves as betterment to the whole organization.

INDIRECT GROWTH OF THE INDIAN ECONOMY:

In India, it is a myth that the share market is only for the rich. Hence, the upper and the lower middle class does not invest in shares and prefers gold, which is considered a dead investment as there is hardly any return on investment.

When employees register themselves under the Employees Stock Option Plan, they get a hand of the share market and then they start purchasing shares outside work. Once they are satisfied by their earnings they communicate this thing to their peer network, and suggest them to purchase shares as well. As a result, people purchase less of dead investments like gold, and more of shares.

Thus, there is enough money flow in the economy, and the Reserve Bank of India, does not have to take loan from the World Bank and the International Monetary Fund. There is no problem maintaining the gold reserve as well.

Thus, it strengthens the Indian economy as a whole. The general public is also benefited by this, as they get a regular return on investment, and the option of selling of shares is always available to them.

QUESTIONS AN EMPLOYEE MUST ASK BEFORE ACEEPTING THE EMPLOYEES STOCK OPTION PLAN:

The employers of the company always think in the best interest of their employees and the company. However, there are some questions you must ask before investing your hard earned money into the Employees Stock Option Plan:

Question 1: What are the terms of the contract regarding the Employees Stock Option Plan if I decide to resign from the company?

Question 2: How many shares will I be offered in the initial agreement, and in the coming years?

Question 3: What is the market rate of the shares and the rate at which the company is willing to offer?

Question 4: What is the company’s total capitalization/Valuation?

Question 5: What is the exercise price of my initial options?

Question 6: What is the vesting period of the Employees Stock Option Scheme?

Question 7: What percentage of the company’s total ownership do my shares represent?

Question 8: Have there been any changes in your Stock Option Plan in the past two years?

Question 9: Is there a minimum period of time, which I have to comply with before selling the shares?

No matter, how easy and safe the Employees stock Option Plan seems, it is very important to consult a professional before investing in them. A legal and binding contract must always be made. It is very important to read and understanding everything that might enlighten you more about the Employees Stock Option Plan. Before taking up a job offer it is advised to know and understand their Stock Option plans, so that you have no problem in the future.

While investing, it is advised not to buy many shares at once, and understand the share market before investing any further.

Thumb rules of Registration of company in India

With over 50 million SMEs, India Inc faces accounts issues regularly. To put things into perspective, there were more than 0.5 million Registration of company done last year itself in India. Registration of company in India is a good indicator of economic development and there is no denying the fact that India happens to be one of the fastest growing economy across globe.

With number of Registration of company in India increasing, it is equally important to understand the process to register a company in India. To register a company in India, the best way is to contact a professional Chartered Accountant or Online Accounting Company and try to understand what kind of company structure would be the best suited for your business need. Typically it takes about 10-15 working days for Registration of Company in India, though the time to register a company differs from state to state

Every entrepreneur should also understand that there is regular need of compliances to be done after registration of company is completed. There is a requirement of Annual Audit and IT filing post Registration of Company is done and there is a cost attached to it.

As per an estimate about 20% of the registered companies do not do any compliances which basically means that there is heavy fines which could be levied on such companies.

As a professional, we advise any entrepreneur to only get the registration of company done if you are actually planning to run the company.

For further support on Company Registration, please go to Company Registration in India

Dos and Don’ts of choosing the right Accounting Company in Delhi

Basic Principle of any Company, be it a conglomerate or a family run business or be it a funded/non funded start-up or a small business such as Kirana Shop remains the same, to earn profits for all the stakeholder. Stakeholders would include Shareholders, employees and even customers. Many Company, especially the start-ups and family run businesses, makes the cardinal sin of not taking their accounting function seriously and more often than not, they are in dark about how their business is actually performing and what needs to be done to improve their performance.

There is no denying the fact that cost saving is very important in any start-up but hiring right Accounting Company for your business is an investment which will give you great returns. Also, just to think of it, you can hire an Accounting Company in Delhi for your business for as low as Rs 1200/- month (or Rs 40/- per day).

There are few Dos and Donts of hiring the Small Business Accountant, which will be detailed below:

Point No. 1: Always speak to the Accounting Company Representative who would be overseeing your accounting function and clearly define the deliverables every month in terms of MIS etc

Point No. 2: Cost quoted by Accounting Company is also important. Though cost in Metros is always greater than cost in Tier 2 cities for eg. Accounting Company in Delhi would charge atleast 10% more than Accounting Company in Patna

Point No. 3: Specify to the accounting company the requirement of providing account receivables every month. This is especially important for small business accountants.

In nutshell, though it is important for all businesses (especially small business) to hire accounting company but it is equally important to choose the accounting company carefully and define deliverables well in advance.

Government postpones punishment on late GST returns for July

New Delhi: The government, on the proposals of the Goods and Services Tax Council, has deferred the punishment of Rs 200 every day for taxpayers who neglected to record the primary GST returns inside the due date.

The taxpayers will, be that as it may, need to hold up under the enthusiasm on late installment of contribution, the Finance Ministry said on Saturday.

"Late charge for all taxpayers who couldn't document GSTR-3B for month of July has been deferred, yet not the enthusiasm on late installment of duty. Intrigue will be appropriate to all taxpayers who have not released their entire GST risk for July by August 25," Finance Ministry said in a tweet on Saturday.

The taxpayers needed to file the GST returns for July by August 25 and those guaranteeing transitional input tax credit by August 28.

Prior, Finance Minister Arun Jaitley had said that the taxpayers who neglected to meet the due date should bear a punishment of Rs 200 every day - Rs 100 for Central GST and Rs 100 for State GST.

An aggregate of around 5.95 million taxpayers for July ought to have documented the GST returns, however till August 29 just around 3.83 million (or 64.42 for each penny) had agreed, Jaitley had said prior. In this manner, the staying 2.1 million citizens were confronting punishment for late recording.

The Finance Ministry in a circular on Friday evening likewise said that the citizens who may have made mistakes in documenting the primary GST returns could make remedies while recording the GSTR-1 and GSTR-2 frames for the long stretch of July.

Form GSTR-1 reflects offers of a business while GSTR-2 reflects buys.

For July, GSTR-1 should be documented between September 1 and 5 and GSTR-2 between September 6 and 10.

Government postpones punishment on late GST returns for July

The revised information would be auto-populated and reflected in GSTR-3, which is a mix of offers and buys. GSTR-3 for July should be documented between September 11 and 15.

In case there was additional tax liability, the taxpayers ought to present the extra installment with intrigue.

On the off chance that there was diminishment in obligation, the abundance input impose credit would be conveyed forward to the following month`s return and if there was extra information charge credit, extra credit would be made accessible, the round expressed.

"It might be noticed that the circular is quiet on situations where there is abundance installment of GST in real money and whether the same could be conveyed forward to the following return and how," GST master Pritam Mahure told IANS.

Flipkart has applied for a licence to become a GST Suvidha Provider

Flipkart Internet Pvt Limited, the company that possesses and runs India's leading ecommerce portal. Flipkart, is expanding its paid up capital in an offer to gain a permit to wind up plainly a GST Suvidha Provider.

Flipkart, which has recently recieved about $2.5 billion from SoftBank, has specified in filings with the Registrar of Companies that it expects to wind up plainly a GSP since there are numerous online merchants and dealers who may not be consistent with GST.

Subsequently , the organization has expanded its paid-up to Rs 2 crore from its current Rs 48.43 lakh to wind up plainly qualified for GST Suvidha Provider (GSP) permit. Under existing guidelines , GSP need a base paid up capital of Rs 2 crore.

In its filing to the Registrar of Companies, that was gotten to on business reserch platform Tofler, Flipkart has said that the organization has expanded the paid-up cash-flow to Rs 2 crore to acquire a GSP permit. The organization intends to issue extra offers by issuing 7 new offers for each 2 shares held. The organization, in an executive meeting hung on 24th August 2017, has affirmed to issue extra offers by method for an uncommon determination, the RoC document stated.