Doing Business in India - RSM Austria

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on goods manufactured and vice versa. Further, education cess (including secondary and higher education cess) paid on input services is available as credit for payment of education cess (including secondary and higher education cess) on output services. Credit in respect of capital goods is allowed at the rate of 50% in the financial year of receipt of capital goods in premises of output service provider and 50% in the subsequent financial year. Credit is not allowed on input services used in providing exempted services. 9.4.5 Rebate/Refund for input services and inputs used in providing taxable services The Export of Services Rules, 2005 provides for rebate of service tax paid on taxable service or service tax or duty paid on input services or inputs, as the case may be, used in providing taxable service, subject to specified conditions or limitations. Further, the Cenvat Credit Rules 2004, also provide for claiming refund of unutilized Cenvat Credit used for providing output services, which are exported as per the Export of Services Rules, 2005. 9.4.6 Threshold Limits Small service providers whose aggregate value of taxable services provided during the preceding financial year does not exceed Rs. 10,00,000 have been given an option to claim exemption from service tax up to an aggregate value of taxable services of Rs. 10,00,000 in a financial year, subject to certain conditions as prescribed. Benefit of this exemption scheme is not available wherever service tax is payable by a person other than the service provider or the taxable services are provided by a person under a brand name or trade name, whether registered or not, of another person. Threshold limit for obtaining service tax registration is Rs. 9,00,000. 10.0 DIRECT TAX CODE ('DTC') The Finance Minister of India presented the Direct Taxes Code Bill 2010, in Lok Sabha on 30 August 2010. The purpose of introducing DTC Bill, which is proposed to be effective from 1 April 2012, is to completely overhaul the existing complexities of the Income Tax Act, 1961. DTC would eventually replace the present Income-tax Act, 1961 (“IT Act”) and the Wealth-tax Act, 1957 (“WT Act”) and would consolidate both the Acts. The present IT Act, is about 50 years old and it was high time to replace it in view of innumerable amendments to it over a period of time. The primary thrust of DTC is on certainty and continuity and DTC in its present structure has chosen the path of stable reforms rather than indulging in path breaking radical reforms. Initially, the Draft DTC along with the Discussion Paper was released by Ministry of Finance on 12 August, 2009 for public comments. In response to the same, a number of valuable inputs on the proposals outlined in the draft DTC were received from a large number of various organizations and individuals. The Ministry of Finance 130 DOING BUSINESS IN INDIA
examined and identified the major issues in response to the comments received from the Public and most of the concerns were addressed in the Revised Discussion Paper on the DTC issued on 15 June 2010 for the purpose of final discussion. Based on the additional suggestions and responses from the general public, the final DTC Bill was framed and placed before the Parliament. 11.0 I N T E R N AT I O N A L F I N A N C I A L R E P O RT I N G STANDARD ('IFRS') India has set a roadmap for convergence with International Financial Reporting Standards (IFRS) commencing from 1 April, 2011. The convergence with IFRS standards is set to change the landscape for financial reporting in India. With the growth of Indian Economy and increasing integration with the global economies, Indian corporates are raising capital globally. Under the circumstances, it would be imperative for Indian corporates to adopt IFRS for their financial reporting. The Core Group of Ministry of Corporate Affairs (MCA) has recommended convergence to IFRS in a phased manner from 1 April, 2011, the roadmap of which is as below: - Phase I (opening balance sheet as at 1 April 2011)* 1. Companies which are part of BSE Sensex 30 and NSE Nifty 50; 2. Companies whose shares or other securities are listed outside India; 3. Companies whether listed or not, having net worth of more than Rs. 1,000 crores. - Phase II (opening balance sheet as at 1 April 2013)* Companies not covered in Phase 1 and having net worth exceeding Rs. 500 crores. - Phase III (opening balance sheet as at 1 April 2014)* Listed companies not covered in earlier phases. *If the financial year of a company commences at a date other than 1 April, then it shall prepare its opening balance sheet at the commencement of immediately following financial year. The above would not be applicable in case of banking and insurance companies and separate road map would be prepared for them. DOING BUSINESS IN INDIA 131
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International global excellence in
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Doing business in India
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Marine Drive, Mumbai
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Contents Hawa Mahal, Jaipur
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Education .........................
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SIGNIFICANT COMPANY LAW REGULATIONS
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ANNEXURE 1 Sectors Prohibited for F
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Chapter 1 India - A Profile Golden
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2.2 Language India is a land of man
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5.2 Communication The Indian teleph
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7.5 Public Holidays The statutory p
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CHAPTER 2 INDIAN BUSINESS AND INVES
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This resulted in a fall in the Bomb
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4.3.3 Designs After expiry of three
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non-banking finance activities viz.
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trading in derivative based on BSE
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same as those where concessional fi
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10.3 Low Research and Development C
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CHAPTER 3 BUSINESS ENTITIES 1.0 FOR
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Sr. No. Criteria Requirements 1 Tra
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The project is funded by inward rem
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cause the disassociation of the par
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2.1.2 MOA 2.1.3 AOA Companies for r
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paid up equity capital can be less
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The requirements for public and pri
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3.0. STATUTORY REQUIREMENTS FOR COM
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3.4 Online Filing System Ministry o
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Section Nature of default 168 Defau
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4.0 SIGNIFICANT COMPANY LAW REGULAT
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4.7 Audit Committees For better cor
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The meetings of the board are requi
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Chapter 4 Human Resources Kathakali
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Employee benefit What is it? Applic
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Employee benefit D e p o s i t L i
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2.5 The Equal Remuneration Act, 197
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The Factories Act safeguards agains
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CHAPTER 5 FOREIGN INVESTMENT IN IND
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2.3 Prohibition on investments 2.3.
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ii. Subject to compliance with the
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ii. iii. iv. The NRI investor has t
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ii. On repatriation basis An NRI ca
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Indian company can issue ESOPs to e
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ii. iii. iv. The foreign equity aft
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vi. Branch Offices have to submit A
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ii. ECB up to US$ 20 million or equ
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3.2 Approval Route 3.2.1 Eligible B
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3.2.6 End Use not permitted i. Util
Page 96 and 97: issued by Reserve Bank from time to
Page 98 and 99: Sr. No. Sector/Activity FDI Cap / E
Page 100 and 101: Sr. No. II C POWER Sector/Activity
Page 106 and 107: Sr. No. 29. Sector/Activity Telecom
Page 108 and 109: Chapter 6 Taxation System India Gat
Page 110 and 111: Entity Domestic Company Financial y
Page 112 and 113: **** Mutual funds, other than equit
Page 114 and 115: interest deductible is restricted t
Page 116 and 117: 2.4 Tax Relief In order to encourag
Page 118 and 119: Section Details of Exemption / Dedu
Page 120 and 121: Section 35 DDA 54G 54GA 54EC 10(34)
Page 122 and 123: Sr. No. Nature of activity and loca
Page 128 and 129: Sr. No. xviii Nature of activity an
Page 130 and 131: No deduction under 80IA, 80IB, 80IA
Page 132 and 133: Tax is payable in advance on income
Page 134 and 135: 3.1.2 Other Non-corporate Entities
Page 136 and 137: the Finance Act 2010, 'bullion' is
Page 138 and 139: Rs. 40,00,000. The scheme is applic
Page 140 and 141: 4.5 Income of Offshore Funds Income
Page 142 and 143: 7.3 Advance Rulings The Indian gove
Page 144 and 145: 9.0 INDIRECT TAXES 9.1 Goods and Se
Page 148 and 149: Annexure I Double Taxation Avoidanc
Page 150 and 151: Sr. No. Country Dividend [Note 1] T
Page 156 and 157: ANNEXURE II: TAX DEDUCTION AT SOURC
Page 158 and 159: NOTES 142 DOING BUSINESS IN INDIA
Page 164: RSM International Executive Office,
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