HOW TO CLAIM REFUND UNDER GST?

Tax refund refers to the money received back from a tax return. They are a return of excess amounts of tax that a taxpayer has paid to the state or central government throughout the past year. However there are varied situations under which refund can be claimed. GST or Goods and Service Tax is the comprehensive tax brought into effect in order to replace all the other indirect taxes imposed by the state and central government. It is levied on manufacture, sale and use of the goods and services. The amount collected after levying GST will be used to propel the economic growth of the country.

The provisions pertaining to refund contained in the GST law aim to streamline and standardise the refund procedures under the GST regime. Thus, under the GST regime, there is a standardised form for making any claim for refunds. The claim and sanctioning procedure are completely online and time-bound, which is a marked departure from the existing time consuming and cumbersome procedure.

Situations when refund can be claimed

A claim for refund (Source: CBEC GST) may arise on account of:

  1. Export of goods or services
  2. Supplies to SEZs units and developers
  3. Deemed exports
  4. Refund of taxes on purchase made by UN or embassies etc.
  5. Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
  6. Refund of accumulated Input Tax Credit on account of inverted duty structure
  7. Finalisation of provisional assessment
  8. Refund of pre-deposit
  9. Excess payment due to mistake
  10. Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India
  11. Refund on account of issuance of refund vouchers for taxes paid on advances against which, goods or services have not been supplied
  12. Refund of CGST & SGST paid by treating the supply as intra state supply which is subsequently held as inter-State supply and vice versa

The GST law requires that every claim for refund is to be filed within 2 years from the relevant date.

Procedure for making a refund claim

1. Documentation

Whenever one makes a refund claim, there are a certain set of documents that need to be submitted along with the refund claim. For every claim, the main document prescribed is a statement of relevant invoices (not the invoices itself) pertaining to the claim. In case refund is on account of export of services, apart from the statement of invoices, the relevant bank realisation certificates evidencing receipt of payment in foreign currency is also required to be submitted. If it is a claim made by the supplier to the SEZ unit, an endorsement from the Proper Officer evidencing receipt of such goods/services in the SEZ also needs to be submitted. Further, a declaration is also required from the SEZ unit to the effect that they have not availed ITC of the tax paid by the supplier.

For crossing the bar of unjust enrichment, if the refund claim is less than Rs.2 Lakhs, then a self-declaration by the applicant to the effect that the incidence of tax has not been passed to any other person will suffice to process the refund claim. For refund claims exceeding Rs. 2 Lakhs, a certificate from a Chartered Accountant/Cost Accountant will have to be given. It is to be noted that such document need not be given if it is a claim arising on account of zero rated supplies or claim of accumulated ITC or payment of wrong tax (integrated tax instead of central tax and state tax and vice versa) or a claim where supply is not done or a refund voucher has been issued.

2. Compliance with Natural Justice

If there is any case arising where the applicant’s claim is to be rejected, he/she is given an online notice for the same stating the ground on which the refund is sought to be rejected. The applicant needs to respond online within 15 days from the receipt of such notice. Thus no claim can be rejected without putting the applicant to notice.

3. Payment to be credited online

Digital transfer of payment takes place for crediting the refund. The amount is directly transferred to the applicant’s bank account and he need not come to authorities to collect cheques or cash.

4. Power with the Commissioner to Withhold Refund in Certain Cases

In extreme cases such as the ones where further proceedings may be required or in default cases, Commissioner has the rights and power to withhold refund in such cases. He may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

To summarize, following figure is a step by step depiction to easily understand the process.

For step 5, In the case of non-qualification, the refund would be transferred to CWF (consumer welfare fund). The application for refund can be made after every quarter. An amount less than 1000 is not eligible for the refund.

Starters’ CFO has well – trained professionals for resolving your queries regarding refund mechanism under GST. Any other assistance in relation to compliance with GST and related procedures can also be provided here.

INSTRUMENTS THAT CAN BE OFFERED TO INVESTORS

Today, investments are something that everyone looks forward to in order to make good money. However, it becomes extremely crucial for a firm to choose the right kind of instruments that it can offer to its investors. For investments, there are many financial instruments that are available in India where the investor can invest to get the best returns. According to the definitions in Accounting Standard 31, ‘A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity’.

Different types of Financial Instruments available in India which a company can offer to the potential investors are depicted below:

For each of the above instrument, detailed analysis has been presented below. For any further queries, you can talk to the experts at Starters’ CFO.

Equity Investment Instrument

Companies can issue stock to raise capital for various needs. Stocks trade on regulated exchanges, such as the National Stock Exchange or Bombay Stock Exchange, or on over-the-counter markets. Investment portfolios can derive good benefits from rising stock prices but can also suffer during periods of market volatility. Even companies offering can pay dividends, which are cash distributions to shareholders from after-tax profits. The main risk of equity investments is that deteriorating business conditions can lead to falling profits and stock prices.

Equity instrument is defined as ‘An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities’. In order to get your company listed, you can contact Starters’ CFO.

Types of Equity Instruments

The three basic forms of equity instruments are described below:

  1. Common Stock: A share of common stock provides an ownership interest in the company, along with voting rights and possible dividends. Common stock may be divided into classes with different number of votes per share. These classes are designated as Class A, Class B, Class C, etc. on the stock market. Dividends are not guaranteed and may sometimes be suspended if the company struggles financially. Holders of common stock are the last to be paid if the company liquidates. To account for this risk, the dividend yield is at times higher than the rate paid on preferred shares. Common stockholders are on the bottom of the priority ladder for ownership structure; in the event of liquidation, common shareholders have rights to a company’s assets only after bondholders, preferred shareholders and other debt holders are paid fully.
  2. Preferred Stock: Preferred stock also gives ownership but does not include voting rights. Holders of preferred stock are the second to be paid in company liquidation; bond holders are first. If the stock is convertible, the shareholder has the option of converting his shares to common stock. This has been further dealt in a separate section on Convertible Preference Stock. Participating preferred stock pays an increased dividend when the company is profitable. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares.
  3. Warrants: They offer the right to purchase common stock at a certain price. They are valid only for a limited period of time. The warrant expires if you do not purchase the stock within the specified time frame. Warrants may be offered to existing shareholders or packaged with a new purchase of stock or bonds. Warrants give the holder the right but not the obligation to buy an underlying security at a certain price, quantity and future time.

Merits and Demerits

Convertible Preference Shares

Convertible preference shares are those shares which can be converted into equity shares within a certain period at some agreed terms and conditions. Most convertible preferred stock is exchanged at the request of the shareholder, but sometimes there is a provision that allows the company, or issuer, to force conversion. The value of convertible common stock is ultimately based on the performance, or lack thereof, of the common stock.

The primary difference between preferred stock and common stock relates to the order in which shareholders are paid in the event of bankruptcy or other corporate restructuring. If the issuing company seeks bankruptcy protection, then the owners of preferred shares take priority over common shareholders when it comes time to pay dividends and liquidate the company’s assets. These securities are a way to increase yields and lower risk. Ultimately, investors must consider whether the higher yield of convertible preferred compensates them for the higher risk of an equity security.

Convertible Debentures

Convertible debentures are hybrid securities which offer advantages of both bonds and equities. Like ordinary bonds – they offer regular interest income through coupon payments and a degree of downside protection not found in equity. Similar to equities, they also offer generally unlimited upside potential for capital appreciation in rising equity markets.

They are an attractive financing vehicle for an issuer as they provide a cheaper way to raise permanent capital. The benefit to selling convertible bonds is a reduced cash interest payment. A convertible bond’s issuer is effectively selling a call option on their common stock to allow for a cheaper cost of funding. The cost of having a lower interest expense is the potential dilution of shareholder’s equity caused by exercising the conversion feature. Therefore, investors must weigh the loss in yield against the opportunity to convert into equity and benefit from capital appreciation. They are an attractive financing vehicle for an issuer as they provide a cheaper way to raise permanent capital. The benefit to selling convertible bonds is a reduced cash interest payment. A convertible bond’s issuer is effectively selling a call option on their common stock to allow for a cheaper cost of funding. The cost of having a lower interest expense is the potential dilution of shareholder’s equity caused by exercising the conversion feature.

Therefore, investors must weigh the loss in yield against the opportunity to convert into equity and benefit from capital appreciation. Convertibles also offer tax advantages to the issuer as fixed interest payments are tax deductible.

Advantages

  1. Fixed income potential is provided by income from regular coupon payments and re-payment of principal at maturity. The equity component has historically provided a better total return potential than a plain nonconvertible bond.
  2. Convertible debentures offer diversification benefits as their performance does not directly correlate to either that of equities or bonds. Therefore, adding convertible bonds to a portfolio would reduce overall portfolio volatility. They are a better diversifier than a comparable equity and bond mix without any optional obligation. This diversification benefit is pronounced during periods of market turmoil.
  3. Convertible debentures also offer relatively cheap optionality and have had attractive risk/return characteristics in the past.

Futures and Options

Futures and Options form part of the derivatives market. The most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives. These instruments enhance the ability to differentiate risk and allocate it to those investors who are most able and willing to take it — a process that has undoubtedly improved national productivity, growth and standards of living.

Derivatives markets generally are an integral part of capital markets in developed as well as in emerging market economies. These instruments assist business growth by disseminating effective price signals concerning exchange rates, indices and reference rates or other assets and thereby render both cash and derivatives. Derivative products provide certain important economic benefits such as risk management or redistribution of risk away from risk-averse investors towards those more willing and able to bear the risk.

Hence, one should choose wisely among different instruments that it can offer to its investors because a wrong choice can affect your business badly. To assist you, we at Starters’ CFO aim to provide you the best quality services and proper guidance in all sorts. You can contact us for further details.

HOW IS GST ON EXPORT OF SERVICES LEVIED?

GST or Goods and Service Tax is the comprehensive tax that is brought into effect in order to replace all the other indirect taxes imposed by the state and central government. It is levied on manufacture, sale and use of the goods and services. The amount collected after levying GST will be used to propel the economic growth of the country. Through this article, we will discuss the levy of GST on Export of Services.

Exports are classified as zero-rated supply.

In layman terms, zero-rated supply refers to items that are:

  • Taxable, but the rate of tax is nil on their supplies and
  • Input tax relating to them can be availed

Meaning of Export of Services

 Section 2(6) of IGST Act defines Export of Services as ‘the supply of any service when –

  • the supplier of service is located in India;
  • the recipient of service is located outside India;
  • the place of supply of service is outside India;
  • the payment for such service has been received by the supplier of service in convertible foreign exchange; and
  • the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8

Mandatory Registration

 As per Section 7(5) of the IGST Act, in such a scenario, the supply is ‘inter-state’ supply and accordingly shall be classified as ‘inter-state’ sale. Section 24 of the CGST Act specifies that any person engaging in ‘inter-state’ sale is required to be registered under GST law irrespective of threshold.

Also, as per section 22 of the CGST act, every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided that where such person makes taxable supplies of goods or services or both from any of the special category states, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. However, the limit of 20 lakhs is not applicable where inter-state supplies are made. Since export has been deemed to be an inter-state supply, all exporters of services would mandatorily be required to take registration under GST.

Are Exports Taxable?

 Section 16 of IGST act defines zero rated supply as:

  • “zero rated supply” means any of the following supplies of goods or services or both, namely:–
    a.) export of goods or services or both; or
    b.) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit
  • Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies; notwithstanding that such supply may be an exempt supply.
  • A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:–
    a.)he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or
    b.) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.

How to Claim Refund?

 Section 54 of CGST Act deals with refund of tax

  • Section 54 (1): Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed
  • Section 54 (6): Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed,excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant

In the Conclusion

Though export of services continues to be exempt, as per GST experts, exporter will either have to take a bond for making exports or deposit GST on exports and then claim refund. This has lead to lot of hardship to service providers, Start ups and freelancers.

For any further enquiry regarding the export of services under GST, you can contact Starters’ CFO.

WHAT SHOULD YOU KNOW BEFORE OPENING A BAKERY BUSINESS IN INDIA?

Starting any business requires a set of procedures that need to be followed. Once you have decided to begin a bakery business, it is really essential to get to know certain essentials of the same. If you have decided on a name for your bakery and know the types of items you will sell, it is time to take the necessary steps to open your establishment. This is a process that requires careful planning, but when done correctly this can yield major returns along with personal fulfilment for you as a bakery owner. You also need to look at your niche product such as flavoured breads or some specific deserts which can add advantage to your business over the competitors.

Before you go for bakery business, you need to keep in mind the following few points:

The right type of Business Model

 Before starting a bakery or coffee shop, it is important to decide on a model for the business.

The first step in choosing the right kind of business model is looking for business insurance. Whether you choose to operate as a partnership, limited liability company or sole proprietorship, invest in business insurance to fully protect your bakery and your personal assets. Next you need to identify some high footfall areas where you could expect more customers liking your specialized product. Also if you are looking for opening a bakery cum Coffee shop, then you can go for Franchisee of a popular chain like Cafe Coffee Day or Starbucks, Dunkin Donuts etc.

Next necessary thing when deciding on a business model is the kind of delivery you would offer. If you are a custom/on-order baking bakery, then it is really essential to have good home delivery channels. Also you need to decide on special products which will be offered during festival season or for different age groups. Write out a thorough business plan that includes details on who will manage the business, how you plan to market your bakery, what your competitive edge will be and how you will finance your business, whether through loans, savings or outside investors. Also include projections of how much of each item you think you will sell on a monthly basis for the next three to five years.

Get the most suitable and a trustworthy team for carrying out further operations which will also form the building blocks of your new start-up.

While deciding on a business model you need to look at your planning which needs to be done in the most effective and efficient manner. Develop your standard bakery menu and determine how much of each food item, such as eggs, flour and vanilla, it will take to prepare a batch of everything on your menu. You also need to think over kitchen equipment you would require for making or baking purpose along with the right kind of furniture inside. How you choose your employees can also make a difference. Customers need to be treated with kindness and politeness to make their visit to our bakery more exciting and enthusiastic.

Where to start Operations?

 You need to look for the most ideal location for launching your business. For this visit your city’s official website for demographic data, which can help you to identify a location that has many potential customers. A market survey would also work towards resolving the query along with determining what potential clients desire in a bakery. You need to keep in mind your city may have specific zoning guidelines that prevent you from operating a food business at certain locations. Just look into your city’s small business department website such as Neisbud or MSME for more details. Choosing on a location is a crucial step in starting a new bakery or coffee shop business. Unless the business is a home based bakery, the location of the business can have tremendous impact on the success of the business.

Hence, it is important to look for a high-foot fall area with a floating population or a captive population. Home based bakeries can do well in areas with a captive population example an area near apartments, whereas a coffee stand or franchise chain would do well in an area like an airport with high floating population. Setting up the correct ambience plays another important role in the success of the business. Such as having proper locations for youngsters or children or elders whomever you wish to target. Hence, it is important to have a good atmosphere with facilities like clean washrooms and high-speed wifi to ensure the customers visit or stay in the premises of the organization for long-times.

Go for Registration

 Once you have decided on a business model and are keen on taking it forward with the selected location, you should now get your business registered with the correct and most suitable name for your business. Check with your state’s health services department to determine what requirements you must follow to operate a food business. Your city may have additional rules on bakery-specific food preparation and storage. Obtain all sorts of necessary licenses for opening a bakery business in your city.

Once, you have decided on the location, it is really necessary to look for registrations required for your kind of business. As per certain expert knowledge, it is advised that if your bakery has an annual sales turnover of less than 40 lakhs, then you should go for Limited Liability Partnerships. This kind of registration can be best suited for you because you can here avoid audit requirements. And if you want to go for any other form of registration, we at Starters’ CFO can assist you in choosing the right type among various alternatives available.

Now, you need to look for tax registrations. Earlier(upto 31st March, 2017), Service Tax and VAT were applicable for the bakeries or coffee shops equipped with central air heating or air conditioning facilities. And from 1st April, 2017(expected date), GST would be applicable. You can register for GST on GST India portal or can contact Starters’ CFO for any query on this matter.

Along with the business and tax registration, it is equally important to obtain FSSAI license to operate.

You can learn more about the registrations required in various forms of business by contacting Starters’ CFO.

HOW TO GET A LICENSE FOR NEWSPAPER/ MAGAZINE BUSINESS IN INDIA

India’s Newspaper Industry has been rising since so many years and this is why a lot of motivated individuals tend to indulge in these kind of businesses be it newspaper, magazine etc. In India, as per a report, there are more than 82,000 newspapers in publication. And now this number seems to grow year by year. Publishing Industry has always been a lucrative option for a number of aspiring beings across India.

Publication of Books, Newspapers and Magazines is regulated by the Press and Books Registration Act, 1867 in India. The Ministry of Information and Broadcasting controls the office of the Registrar of Newspapers for India and it is also responsible for framing rules under the Press and Registration of Books Act, 1867. So anybody willing to start a Newspaper or Magazine, Journals etc. will have to seek prior approval of RNI. There are a lot of other rules and regulations that need to be kept in mind while going for a newspaper business in India.

The image below depicts a series of steps you need to undergo before starting the print newspaper business in India.

Title Verification needs to be done by the publisher of that newspaper whereby the respective person has to make an application for title verification indicating the name, language, periodicity, owner name and place of publication of the newspaper proposed, and submit it to the District Magistrate concerned. From 1st March, 2015 the office of Registration of Newspapers in India has also provided the facility of filing online application for title verification.

Online Application for title verification is very simple, easy and hassle free process. In case of offline filing of application the District Magistrate after ensuring the credentials of the applicant, will forward the application to the RNI, who in turn checks the availability of the title and if found verifies it. RNI informs the DM and publisher, the availability of the title by issuing a letter of title verification. After this, the publisher has to file a declaration with the District Magistrate in the prescribed format available and can start publishing the newspaper.

The application for registration can be submitted to the RNI along with an attested copy of the declaration, copy of title verification, first issue of the newspaper and a ‘No Foreign Tie up’ affidavit duly attested by a Notary. The newspaper should contain volume number, issue number, title prominently displayed on the cover page and all pages, date line and page number on all pages and an imprint line containing the name of printer, publisher, owner and editor, address of the place of publication and name and address of the printing press.

List of Documents to be submitted to RN

In addition to the above said documents, following KYC documents are also required –

  • Certificate of Incorporation, Memorandum/Articles of the Company and in case of Proprietorship, registration certificate issued under Shops and Establishment Act and in case of Partnership, Partnership Deed.
  • PAN of the organization.
  • List of Promoters/Directors/Partners
  • Board resolution in case of Company.
  • ID and Address proof of Partners/Directors/Proprietor

If you need any clarification or further details on any of the above documents you can contact Starters’ CFO.

After Registration Requirements

A copy of the newspaper needs to be delivered to the RNI whenever it is printed. The first issue after the last day of February should contain the Form No. IV duly filled in (Statement regarding ownership and other particulars of the newspaper). It is also mandatory to submit an annual statement in form II, on or before the last day of May every year. In case of daily newspapers, an additional form AR-R may also be submitted.

How to obtain Magazine Registration

Before starting the business of publication of magazines, you are supposed to follow many norms and procedures as prescribed by the Government of India. Some of them are mentioned below.

  • Approach the Regional Magistrate court and prepare the application in the format as prescribed
  • Obtain R. Dis Number (Diary Number) allotted by the magistrate court
  • Apply to Registrar of Newspapers for India (RNI), Delhi office for name availability through the magistrate court. (It would take about 90 days of time for the RNI, Delhi office to approve the name as proposed.)
  • Once the name is approved by Delhi office, then approach the magistrate court to get a date allotted for hearing (date can be allotted anytime between 1 to 4 months from the date of request)
  • Printer, Publisher & Editor are required to appear before the magistrate for taking oath. Following Documents must be produced during the time of appearance; * Declaration copy which has to be filled by Printer, Publisher & Editor and to produce 3 copies each. * Address & Id proof of the Printer, Publisher & Editor. * Printing Press License copy of the Printer.
  • After this is done, there will be an approval to this effect from the Magistrate court. Then, the magazine can be published. The copies of the magazines have to be submitted to the RNI, Regional office for the final approval. They will then evaluate whether the magazine meets the criteria specified in the declaration.
  • After this, RNI Certificate will be issued.
  • Both the R. Dis Number (Diary Number) and RNI Number have to be mentioned on each copy of the magazine.

If you need any further information regarding starting a newspaper/ magazine business in India, you are free to contact Starters’ CFO.

WHAT ALL YOU NEED TO CONSIDER BEFORE GOING FOR A LOGISTICS BUSINESS?

Logistics is all about planning, execution, and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project, or strategy. When you plan to put up your own logistics business, there are certain rules and procedures that you need to know before starting the same. Also starting a logistics business can be a great idea especially if you love working on different kinds of people.

This type of business is seen as a quite lucrative business if you know how to start and run it and thereby grab the opportunities on it. Many industrialized nations today demand instruments and machinery that can be used in sorting, transporting, building, and for many other purposes. By following some suggestions and procedures on how you can successfully run your logistics company, your business will definitely grow. With our Support, you can easily start a business along with following all the compliances attached with it.

As it can be clearly observed the Indian economy has grown tremendously in the past few years resulting in a huge market for logistics services. Today, over 50 million people in India are being employed by the logistics industry. Operations of any business can also be improved significantly by cutting cost and delivery time because of an efficient logistics network. All these steps can lead to enormous profits for the firm along with a good market share.

What kind of Logistic Business can you do?

There are basically four types of logistic businesses that one can plan to do. We at Starters’ CFO can assist you in starting any of these logistic businesses.

Look out for Investors

 The primary step in any logistics company is the way you choose to seek investment. Although the amount of investment in logistics business will depend upon the type of business that you wish to start but you can simply consult your financial assistant to help you know more about the amount required to set up your business. For Example a simple freight management organization will require less capital compared to a 3PL service. It is really important to identify the niche services that you wish to target and thereby prepare an investment plan based on it. It is also believed that finding investment in logistics is relatively simpler in India because of liberal FDI norms and active interest shown by large private equity players. Also our government is taking certain big steps towards making the process of funding easier.

Follow the Compliances

 There are certain compliances that like every other business, Logistics businesses are also required to follow them. Certain registrations and Government compliances are crucial that need to be complied with by all (or selected) business entities. In India, registration with International Air Transport Association (IATA), Air Cargo Agent Association of India (ACAAI) is very useful for freight forwarders.). It is also necessary to be a part of industry forums such as the Institute of Logistics or CII Institute of Logistics so that issues rose to logistics industry may be raised further. Other important registrations in India include DGFT registration, Income Tax Department Registrations, Registrar of Companies and with other related Government Departments.

When we talk about the Income Tax Department Registrations, some of them include:

  • Private limited company registration
  • Import export code (IEC Registration)
  • VAT Registration
  • ESI or PF Registration
  • Trademark registration (in case of unique brand name)

Examine the Risk in your Business

 Whenever one thinks of starting a business, risk factor becomes the unavoidable characteristic of his/her business. In a developing economy like India, risk management therefore plays a crucial role, more importantly for logistics business. As we all know that logistics business is very dynamic along with multiple partners/vendors being involved in the entire operation, there is very high risk of a claim. Hence it is really important to cover liability by taking sufficient amount of business insurance. There are many large insurance companies in India which offer such insurance plans.

With proper analysis of your plans and taking all sorts of assistance available to cover your risk in case it occurs, can help you to a great extent. But still some serious liability issues can arise from cargo damage, theft, injury, environmental damage etc. While business insurances can help you in your business by addressing some of the liability concerns, they are not always very effective. For example, if we talk about most Cargo and Property insurance in India, it will not cover inventory shortages as this is considered normal risk while running a 3PL business. Hence it is very important that before you go for any contract or plan to launch your business, you should be very much aware of the risks that can cause hindrance to your path.

How important are your Clients?

For any business to reach heights in the future, it is very compelling the way it engages its clients. With a thorough study of various industries or products and understanding logistics behind them thereby analysing logistic needs in such studies is essential if the entrepreneur wishes to start a third party logistics company. There are many sectors booming currently such as infrastructure, auto, services and manufacturing as India is primarily an export economy.

All the sectors above require logistics services. Providing operationally efficient solutions and identifying weak areas is the key to winning new customer in third party logistics services. Once a regular clientele is established, infrastructure investment can be focused upon as well as creation of solutions to cater to the outside market. Hence your clients are a very crucial aspect of your Logistics Business.

Know your Competitors

 In this highly competitive world, it is extremely important to be well aware of your competition. Before even entering into any business line, competition is something that must be properly analysed to get into a level-playing-field. As it has been mentioned above, liberalisation of FDI (Foreign Direct Investment) norms have made it easier for multinationals to enter the Indian logistics sector, it is imperative to understand the competition that this business faces because these capital heavy players are ready invest heavily in marketing and infrastructure. Hence it is important to do a complete research on the competition and to focus on the company’s positioning in the market. When the competition can be analysed properly, we are able to judge our capabilities in a better way and therefore can develop certain core competencies to overcome the competition.

Hence, while talking about starting a logistics business the above mentioned essentials need to be kept in mind. Starters’ CFO can serve as your financial advisor and can help you in solving queries on all sorts of matters.

WHAT SHOULD YOU KNOW BEFORE LISTING YOUR START-UP ON STOCK EXCHANGE?

With the growing start-up culture in India, government is also coming up with innovative ways to boost the entrepreneurs. Providing an efficient framework to bring together Start-Ups and SMEs seeking capital and investors capable of assuming the risks and challenges of investing in an early stage company can help hasten the growth of these enterprises and help them contribute towards the national economy. If the securities of a company were listed, it would give it better visibility and thereby wider reach to investors. With a structured market for investors, existing investors in an SME or a Start-Up are more likely to find an alternate buyer than if they search for a buyer using their own network of contacts in the investment community.

In response to above “Small and Medium Enterprises (SMEs), including start-up companies, are permitted by SEBI to list on the SME exchange without being required to make an initial public offer (IPO), but the participation is restricted to informed investors. This is in addition to the existing SME platform in which listing can be done through an IPO and with wider investor participation”.

Eligibility

The possible eligibility routes include a minimum investment in the equity of the company by registered:

Receiving project financing or working capital financing from scheduled banks during the last 3 years is be considered as one of the eligibility routes. Apart from qualifying any of these, the company should additionally meet other conditions including, itself, its promoters and directors group companies etc. not being named in the wilful defaulters list on CIBIL, the company, its group companies and subsidiaries not having been referred to BIFR in the past 5 years, or any regulatory actions against the company, promoters or its directors in the past 5 years etc. Further to ensure that this platform is restricted only to start-ups and SMEs, it may be required that companies seeking to list on this platform are not older than 10 years or having revenues more than ­ 100 crores or paid up capital more than ­ 25 crores. Stock Exchanges would examine the compliance with the eligibility norms before permitting listing in this platform.

Corporate Governance and Continuous Disclosures

For the Maintenance of high standards of corporate practices, it is proposed that corporate governance norms as it applies to earlier SME exchange and main board will apply to companies listed on this proposed platform. As in the case of main board and SME exchange, such corporate governance norms would apply to a company with a paid up capital of ­ 3 crore or above. It is proposed that the following areas may be kept as continuous disclosure requirements:

What is NSE EMERGE?

 EMERGE is a credible and efficient market place to bring about convergence of sophisticated investors and emerging corporates in the country. It offers opportunities to informed investors to invest in emerging businesses with exciting growth plans, innovative business models and commitment towards good governance and investor interest. It is a platform for the best of emerging corporate to raise capital from institutional investors and HNIs.

Features

What can SMEs get from EMERGE?

To resolve your further queries regarding NSE EMERGE platform, you are free to contact Starters’ CFO. We can assist you in getting further information and available benefits of the listing platform.

For getting your listing done, the following steps need to be kept in mind.

  • Develop an understanding of the capital markets and the various processes involved in raising funds through an IPO
  • Weigh the IPO option vis-à-vis other options of raising funds
  • Once you choose to opt for the IPO route make a realistic assessment of your readiness for listing
  • Start upgrading and strengthening your internal; processes and systems to meet the requirements of a publicly listed company
  • Crystallise your project and capital raising plans
  • Engage a merchant banker to assist you in the IPO process

What is BSE SME Platform?

 The listed SMEs will step into the threshold of BSE SME Platform and foray in to the world of finance for further growth and development. BSE SME will assist these SMEs to raise equity capital for their growth and expansion and thus help them blossom into full fledged companies. In due time enable them to migrate into the Main Board of BSE as per the existing rules and regulations.

BSE Ltd has set up the BSE SME Platform as per the rules and regulations laid down by SEBI. BSE SME Platform offers an entrepreneur and investor friendly environment, which enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organized sector.

This platform gives a boost to SMEs in the country, through which government plans to enhance the economy of the nation. If you still have any unresolved query regarding this platform or its benefits, we at Starters’ CFO can provide you best assistance in all these matters.

Requisites for listing on the platform

The following requirements need to be kept in mind:

  • Selection of Merchant Banker
  • Restructuring of capital and valuation
  • Offer Document as part of IPO
  • Due Diligence as part of IPO
  • Marketing Strategy
  • Effective Communication of the corporate and its equity strength

Efforts taken by SEBI

The Securities and Exchange Board of India has also taken a number of efforta to allow start-ups and SMEs to get listed on the platforms available

Hence, with such big platforms being launched, we are sure that the emerging businesses will get a lot of benefits through them. The motive is to boost the economy and with such movements by NSE, BSE or SEBI, we can definitely expect better economic conditions for the country in future.

INDUSTRIAL CORRIDORS IN INDIA

Industrial Corridor refers to a set of infrastructural spending allocated to a specific geographical area, with the aim of stimulating industrial development. An industrial corridor aims to crease an area with a cluster of manufacturing or other industry.

The major Indian Industrial Corridors are –

  • Delhi-Mumbai Industrial Corridor (DMIC);
  • Bengaluru- Mumbai Economic Corridor (BMEC);
  • Chennai-Bengaluru Industrial Corridor (CBIC);
  • Vizag-Chennai Industrial Corridor (VCIC) and
  • Amritsar-Kolkata Industrial Corridor (AKIC)

Government of India has identified, planned and launched five industrial corridor projects under Make in India Campaign in the Union Budget of 2014-2015, to provide an impetus to industrialisation and planned urbanisation. In each of these corridors, manufacturing is key economic driver and these projects are seen as critical in raising the share of manufacturing in India’s Gross Domestic Product from the current levels of to to by 2022. A National Industrial Corridor Development Authority (NICDA) is being established to converge and integrate the development of all industrial corridors.

Delhi-Mumbai Industrial Corridor (DMIC)

The DMIC project was launched in pursuance of an MOU signed between the Government of India and the Government of Japan in December 2006. DMIC Development Corporation (DMICDC) incorporated in 2008, and it is the implementing agency for the project. DMICDC has been registered as a company with 49% equity of Government of India, 26% equity of the JBIC and the remaining held by government financial institutions. The Japanese Government had also announced financial support for DMIC project to an extent of USD 4.5 Billion in the first phase for the projects with Japanese participation involving cutting-edge technology.

States Covered by DMIC

Initially, eight nodes/cities in the six DMIC states (expanding to 24 later) were taken up for development. The master plans for all the nodes except Dadri-Noida-Ghaziabad Investment Region in Uttar Pradesh were claimed to be completed and accepted by the State Government(s).

Objectives of DMIC

DMIC: A boon

There are various ways in which by utilizing the above benefits Starters’ CFO can assist you in starting a business in Delhi and other areas along with providing proper maintenance services with it.

DMIC: A List of Projects

There are a number of projects covered by DMICDC:

Some of the other Indian Industrial Corridors for which the plan is yet to be worked out or is in process include:

Bengaluru- Mumbai Economic Corridor (BMEC)

The Bengaluru-Mumbai Economic Corridor (BMEC) spreaded across the states of Maharashtra and Karnataka is a proposed economic corridor in India between Mumbai and Bangalore. The Indian government aims to generate an investment over ₹3 lakh crore (US$45 billion) from this corridor and expects it to create 2.5 million jobs.

States Covered by BMEC

This project is currently under planning stage.

Chennai-Bengaluru Industrial Corridor(CBIC)

The mega infrastructural plan of Chennai – Bengaluru Industrial Corridor aims to come up along Chennai, Sriperumbudur, Ponnapanthangal, Ranipet, Chittoor, Bangarupalem, Palamaner, Bangarpet, Hoskote and Bangalore. It is expected to boost commerce between south India and East Asia by enabling quicker movement of goods from these places to the Chennai and Ennore ports.

States covered by CBIC

Vizag-Chennai Industrial Corridor (VCIC)

With Vizag-Chennai Industrial Corridor, four nodes namely Vishakhapatnam, Kakinada, Gannavaram-Kankipadu and Srikalahasti-Yerpedu of Andhra Pradesh have been identified for development. This new industrial corridor is expected to spur growth by augmenting existing investment in world-class transport networks, infrastructure, and industrial and urban clusters.

Greater connectivity and economic integration between South Asia and the rest of Asia is likely to contribute significantly to development and foster regional cooperation as well. VCIC will create employment opportunities that alleviate poverty and reduce inequality.

States covered by VCIC

Amritsar-Kolkata Industrial Corridor (AKIC)

Amritsar Kolkata Industrial Corridor (AKIC) project is structured around the Eastern Dedicated Freight Corridor (EDFC) and also the highway systems that exist on this route. The Project intends to facilitate development of a well-planned and resource efficient industrial base served by world class sustainable infrastructure, bringing significant benefits in terms of innovation, manufacturing, job creation and resource security to states coming within its Influence Region.

States Covered By AKIC

Hence, Industrial Corridors in India can serve as a very effective way to boost economic growth in the nation.