PAN

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any “person” who applies for it or to whom the department allots the number without an application.

TAN

Tax Deduction Account Number or Tax Collection Account Number is a 10 -digit alpha-numeric number issued by the Income-tax Department. TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).

GST

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.

In other words, Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.

Documents Required for GST Registration

• PAN of the Applicant
• Aadhaar card
• Proof of business registration or Incorporation certificate
• Identity and Address proof of Promoters/Director with Photographs
• Address proof of the place of business
• Bank Account statement/Cancelled cheque
• Digital Signature

Letter of Authorization/Board Resolution for Authorized Signatory

MSME

An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely: —

• (i) a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
• (ii) a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
• (iii) a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

Registration Process

• To do the registration the small and medium scale industry owner has to fill a single form which he can do online as well as offline.
• If a person wants to do registration for more than one industry then also he/she can do individual registration.
• To do the registration he/she has to fill a single form which is available at the website which is listed below.
• The document required for the registration is Personal Aadhar number, Industry name, Address, bank account details and some common information.
• In this, the person can provide self-certified certificates.
• There are no registration fees required for this process.
• Once the detail-filled and upload you would be getting the registration number.

Benefits of MSME Registration

• Due to the MSME registration, the bank loans become cheaper as the interest rate is very low around ~ 1 to 1.5%. Much lower than interest on regular loans.
• There are various tax rebates offered to MSME.
• It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
• There are many government tenders which are only open to the MSME Industries.
• They get easy access to credit.
• Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.
• Business registered under MSME are given higher preference for government license and certification.

There is a One Time Settlement Fee for non-paid amounts of MSME.

IEC

IEC (Import Export Code) is required by anyone who is looking to kick-start his/her import/export business in the country. It is issued by the DGFT (Director General of Foreign Trade). IEC is a 10-digit code which has a lifetime validity. Predominantly importers merchant cannot import goods without the Import Export Code and similarly, the exporter merchant cannot avail benefits from DGFT for the export scheme, etc. without IEC.

Documents required for IEC (Import Export Code) Registration

For IEC Code Registration following documents are required:

• Individual’s or Firm’s or Company’s copy of PAN Card
• Individual’s voter id or Aadhar card or passport copy
• Individual’s or company’s or firm’s cancel cheque copy of current bank account
• Copy of Rent Agreement or Electricity Bill Copy of the premise

Professional Tax

As per the Karnataka Professional Tax Slab Rates, all individuals earning a monthly gross income of more than Rs. 15,000 are subject to a professional tax of Rs. 200.

The state government collects professional tax on the gross income from individuals working as government employees or in private and non-government organizations (NGOs).

Karnataka Professional Tax Slab Rates:

As the professional tax levied by each state differs, the maximum amount that Karnataka state can charge is Rs. 2,400/- as Professional Tax. Moreover, the state may change the tax rates every year.

The professional tax slab rates for the Financial Year 2020-21 are:

Monthly Salary (Gross)	Amount to be Paid as Professional Tax Per Month
Up to Rs 15,000	Nil
Rs 15,001 and or above	Rs. 200

Shops Establishment Act

The Shops and Establishment Act has been enacted by various State Governments to regulate the conditions of work of employees in shops, commercial undertakings, restaurants, etc.,

SHOPS AND ESTABLISHMENT ACT REGISTRATION:

Karnataka Shops and Establishment Act registration is mandatory for all shops and commercial establishments in Karnataka, except those exempted.

New shops or commercial establishments in Bangalore or Karnataka are required to apply for Karnataka Shops and Establishment Act Registration within 30 days of commencing operations. The Shops and Establishment Act Registration must be submitted in the prescribed format to the Labour Inspector of the area concerned.

The following information must be provided as a part of the Shop and Establishment Act Registration application:

• The name of the employer and manager, if any
• The postal address of the establishment;
• The name, if any, of the establishment; and
• Such other particulars as may be prescribed.

On submission of the application, the Inspect would verify and provide the Shops and Establishment Act Registration. All Karnataka Shops and Establishment Act registrations are valid for a period of 5 years and can be renewed.

ESI

ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.

This scheme is started for Indian workers. The workers are provided with a huge variety of medical, monetary and other benefits from the employer.

Any Company having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 21000/- has to mandatorily register itself with the ESIC.

What are the benefits of ESIC registration?

The benefits of registering under this scheme are varied. Some of them are:

• 1. Sickness benefits at the rate of 70% (in the form of salary), in case of any certified illness certified and which lasts for a maximum of 91 days in any year
• 2. Medical Benefits to an employee and his family members
• 3. Maternity Benefit to the women who are pregnant (paid leaves)
• 4. If the death of the employee happens while on work – 90% of the salary is given to his dependents every month after the death of the employee
• 5. Same as above in case of disability of the employee
• 6. Funeral expenses
• 7. Old age care medical expenses

The list of documents required for ESI registration is given below:

• Name of the company.
• Date of the setup of the organization.
• Scanned copy of the company’s PAN (Proprietor’s, in case of proprietorship concern).
• Scanned copy of the licenses available in the name of the company. (like GST).
• Scanned copy of the cheque of the company’s bank account.
• Address of the company with address proof.
• List of Directors / Partners.
• Address proof of Proprietor / Director / Partner of the company.
• Email address, Mobile Number of Proprietor / Director / Partner of the company.
• Copy of First sale bill / Job work bill and First purchase bill.
• The monthly strength of employees from the date of setup.
• The current list of employees with their details:
  • Name
  • Father’s Name
  • Date of joining
  • Date of birth
  • Mobile number
  • Postal address
  • Name of nominee
  • Grade
  • Salary
  • Designation
  • ID proof (Aadhaar and PAN)
  • Bank A/c number with IFSC code
• Digital Signature of the Proprietor / Director / Partner

EPF

Applicability of EPF Registration for Employers:

EPF registration is mandatory for all establishments-

• which is a factory engaged in any industry having 20 or more persons, and
• to any other establishment employing 20 or more persons or class of such establishments which the Central Government may, by notification specify on this behalf.

The employer must obtain the registration within 1 month of attaining the strength, failing which penalties will be applicable .A registered establishment continues to be under the purview of the Act even if the employee strength falls below the required minimum.

The list of documents required for PF Registration is given below:

• Name of the company.
• Date of the setup of the organization.
• Scanned copy of the company’s PAN (Proprietor’s, in case of proprietorship concern).
• Scanned copy of the licenses available in the name of the company. (like GST).
• Scanned copy of the cheque of the company’s bank account.
• Address of the company with address proof.
• List of Directors / Partners.
• Address proof of Proprietor / Director / Partner of the company.
• Email address, Mobile Number of Proprietor / Director / Partner of the company.
• Copy of First sale bill / Job work bill and First purchase bill.
• The monthly strength of employees from the date of setup.
• The current list of employees with their details:
  • Name
  • Father’s Name
  • Date of joining
  • Date of birth
  • Mobile number
  • Postal address
  • Name of nominee
  • Grade
  • Salary
  • Designation
  • ID proof (Aadhaar and PAN)
  • Bank A/c number with IFSC code
• Digital Signature of the Proprietor / Director / Partner

Short Tax Deduction Certificates

Where a taxpayer believes that its total income justifies withholding of tax at a lower rate, it can apply to the assessing officer for a certificate of withholding tax at a lower rate. The application by the taxpayer to the AO for a certificate of withholding tax at a lower rate is governed by Rule 28AA of theIncome-tax Rules, 1962 (the Rules).

Therefore, with an objective to remove this undue hardship on such taxpayers, income tax law provides for an option to obtain a certificate from the Assessing officer confirming either a lower rate of TDS compared to the rate specified under the law or a NIL rate of TDS, depending on facts and circumstances of each case based on the application made. Section 197 governs these provisions. In this article we will discuss provisions on applying for a certificate for lower deduction of TDS.