Doing Business in India - RSM Austria

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2.2 Language India is a land of many languages and dialects. Hindi is the official language of the Indian federation or union, while English is commonly used business language. English language is acceptable for all the legal, commercial and business documentation and communications. 2.3 Religion More than 80% of India’s population is Hindus and around 13% are Muslims. The other major religious communities are Christian, Sikh, Buddhist and Jain. 2.4 Education Data published for 2001 census revealed that 64.80% of the total population are literate and consisted of 75.30% men and 53.70% women. Amongst the youth the literacy rate is 82%. 3.0 GOVERNMENT AND POLITICAL SYSTEM 3.1 Government Structure The Indian federation or union is organized into 28 states and 7 union territories with a single and uniform citizenship and a single judiciary. The capital of the Indian government is the state of Delhi. India is a sovereign, socialist, democratic and secular republic with a parliamentary system of government, which is based on the U.K. parliamentary system. The parliament is headed by the President and consists of two houses - the Lok Sabha (the house of the people) and the Rajya Sabha (the council of states). Although the President is the constitutional head of the government, the real executive power resides with the Council of Ministers, with the Prime Minister as its head. The Council of Ministers is collectively responsible to the Lok Sabha. The Indian Constitution provides for the independence of other government bodies for certain key areas like the judiciary, the Comptroller and Auditor General, the Public Service Commissions and the Election Commission. 4.0 LEGISLATIVE AND LEGAL ENVIRONMENT 4.1 Legislation Indian Constitution divides the various responsibilities into three categories: the Union list, the State list and the Concurrent list. Parliament can make laws on subjects in the Union list and the state legislature on subjects in the State list. Both, the parliament and the state legislature can make laws on the subjects included in the Concurrent list. This division helps in regulating the relations between the Union and the States. 2 DOING BUSINESS IN INDIA
4.2 Legal Environment The main sources of law in India are the Constitution statutes, customary laws and case laws. The country’s constitution provides for a single integrated system of courts to administer both Union and state laws. The judiciary in India is separated from the executives. At the apex of the entire judicial system is the Supreme Court of India, which consists of the Chief Justice and other judges. The Supreme Court has original, appellate and advisory jurisdiction and its decisions are binding on all courts within the territory of India. Each state (or two or more states together) has a High Court, a Chief Justice of the High Court and other judges who are appointed by the President in consultation with the Governor of the state. There is a hierarchy of subordinate courts under the various High Courts, which extend to the local courts, which decide civil and criminal disputes of petty and local nature. 5.0 INFRASTRUCTURE 5.1 Transport Internal public transportation in India is fairly well developed. The country is extensively covered by rail and road networks. This surface transport network is fairly supplemented by airline routes connecting the major cities. The Indian Railways, which is the largest public sector undertaking in India, is the backbone of the Indian Economy. It caters to both freight and passenger traffics and has a vast network of 6,867 stations spread over route length of about 62,900 kms. It is Asia’s largest and the world’s second largest railway system under a single management. India has the second largest road network in the world with total road length of 3.3 million kms. In 2009, freight traffic on the road is also fairly high and remains almost exclusively in the private sector. Inland water transport has not grown appreciably in the country because of poor port or landing infrastructure. However, the industry is now growing and the government is ambitiously developing coastal shipping. India has bilateral air services agreements with over 100 countries. Air India is India’s official national carrier operating across both domestic and international routes. In 2007, Indian Airlines the domestic national carrier was merged with Air India. Indian Airlines also operates on some international routes. Upon the liberalization of the economy, an open sky policy was announced which has resulted in a number of private air taxi companies operating on some of the major trunk routes. Some of the major private air transport companies, operating on domestic and international routes are Jet Airways, Kingfisher Airlines, Indigo, Spice jet etc. DOING BUSINESS IN INDIA 3
Page 1: International global excellence in
Page 4 and 5: Doing business in India
Page 6 and 7: Marine Drive, Mumbai
Page 8 and 9: Contents Hawa Mahal, Jaipur
Page 10 and 11: Education .........................
Page 12 and 13: SIGNIFICANT COMPANY LAW REGULATIONS
Page 14 and 15: ANNEXURE 1 Sectors Prohibited for F
Page 16 and 17: Chapter 1 India - A Profile Golden
Page 20 and 21: 5.2 Communication The Indian teleph
Page 22 and 23: 7.5 Public Holidays The statutory p
Page 24 and 25: CHAPTER 2 INDIAN BUSINESS AND INVES
Page 26 and 27: This resulted in a fall in the Bomb
Page 28 and 29: 4.3.3 Designs After expiry of three
Page 30 and 31: non-banking finance activities viz.
Page 32 and 33: trading in derivative based on BSE
Page 34 and 35: same as those where concessional fi
Page 36 and 37: 10.3 Low Research and Development C
Page 38 and 39: CHAPTER 3 BUSINESS ENTITIES 1.0 FOR
Page 40 and 41: Sr. No. Criteria Requirements 1 Tra
Page 42 and 43: The project is funded by inward rem
Page 44 and 45: cause the disassociation of the par
Page 46 and 47: 2.1.2 MOA 2.1.3 AOA Companies for r
Page 48 and 49: paid up equity capital can be less
Page 50 and 51: The requirements for public and pri
Page 52 and 53: 3.0. STATUTORY REQUIREMENTS FOR COM
Page 54 and 55: 3.4 Online Filing System Ministry o
Page 56 and 57: Section Nature of default 168 Defau
Page 58 and 59: 4.0 SIGNIFICANT COMPANY LAW REGULAT
Page 60 and 61: 4.7 Audit Committees For better cor
Page 62 and 63: The meetings of the board are requi
Page 64 and 65: Chapter 4 Human Resources Kathakali
Page 66 and 67: 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
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issued by Reserve Bank from time to
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Sr. No. Sector/Activity FDI Cap / E
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Sr. No. II C POWER Sector/Activity
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Sr. No. 29. Sector/Activity Telecom
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Chapter 6 Taxation System India Gat
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Entity Domestic Company Financial y
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**** Mutual funds, other than equit
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interest deductible is restricted t
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2.4 Tax Relief In order to encourag
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Section Details of Exemption / Dedu
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Section 35 DDA 54G 54GA 54EC 10(34)
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Sr. No. Nature of activity and loca
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Sr. No. xviii Nature of activity an
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No deduction under 80IA, 80IB, 80IA
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Tax is payable in advance on income
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3.1.2 Other Non-corporate Entities
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the Finance Act 2010, 'bullion' is
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Rs. 40,00,000. The scheme is applic
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4.5 Income of Offshore Funds Income
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7.3 Advance Rulings The Indian gove
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9.0 INDIRECT TAXES 9.1 Goods and Se
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on goods manufactured and vice vers
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Annexure I Double Taxation Avoidanc
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Sr. No. Country Dividend [Note 1] T
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ANNEXURE II: TAX DEDUCTION AT SOURC
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NOTES 142 DOING BUSINESS IN INDIA
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RSM International Executive Office,
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