Tuesday 28 October 2014

OVERVIEW OF PLACE OF PROVISION ON LOGISTICS INDUSTRY



Generally, an “intermediary” is a person who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time:
i) The supply between the principal and the third party; and
ii) The supply of his own service (agency service) to his principal, for which a fee or commission is usually charged.
For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent or a stockbroker) is excluded by definition. Also excluded from this sub-rule is a person who arranges or facilitates a provision of a Service (referred to in the rules as “the main service”), but provides the main service on his own account.
In order to determine whether a person is acting as an intermediary or not, the following factors need to be considered:-

  • Nature and value: An intermediary cannot alter the nature or value of the service, the supply of which he facilitates on behalf of his principal, although the principal may authorize the intermediary to negotiate a different price. Also, the principal must know the exact value at which the service is supplied (or obtained) on his behalf, and any discounts that the intermediary obtains must be passed back to the principal. 
  • Separation of value: The value of an intermediary’s service is invariably identifiable from the main supply of service that he is arranging. It can be based on an agreed percentage of the sale or purchase price. Generally, the amount charged by an agent from his principal is referred to as “commission”. 
  • Identity and title: The service provided by the intermediary on behalf of the principal is clearly identifiable.


In accordance with the above guiding principles, services provided by the following persons will qualify as ‘intermediary services’:-

i.         Travel Agent (any mode of travel)
ii.        Tour Operator
iii.      Commission agent for a service [an agent for buying or selling of goods is excluded]
iv.      Recovery Agent
Even in other cases, wherever a provider of any service acts as an intermediary for another person, as identified by the guiding principles outlined above, this rule will apply. Normally, it is expected that the intermediary or agent would have documentary evidence authorizing him. To act on behalf of the provider of the ‘main service

ILLUSTRATION

A freight forwarder arranges for export and import shipments. There could be two possible situations here-one when he acts on his own account, and the other, when he acts as an intermediary:

When the freight forwarder acts on his own account (say, for an export shipment) A freight forwarder provides domestic transportation within taxable territory (say, from the Exporter’s factory located in Pune to Mumbai port) as well as international freight service (say, from Mumbai port to the international destination), under a single contract, on his own account (i.e. he buys-in and sells fright transport as a principal), and charges a consolidated amount to the exporter. This is a service of transportation of goods for which the place of supply is the destination of goods. Since the destination of goods is outside taxable territory, this service will not attract service tax due to export of goods. Here, it is presumed that ancillary freight services (i.e. Services ancillary to transportation- loading, unloading, handling etc.) are “bundled” with the principal Service owing to a single contract or a single price (consideration).On an import shipment with similar conditions, the place of supply will be in the taxable territory, and so the service tax will be attracted. For more information : new company registration India

When the freight forwarder acts as an intermediary:

Where the freight forwarder acts as an intermediary, the place of provision will be his location. Service tax will be payable on the services provided by him. However, when he provides a Service to an exporter of goods, the exporter can claim refund of service tax paid under notification for this purpose.

Particular
Prepaid Shipment
Collect Shipment




In case of Import

Service performed outside India by foreign agent
Service performed in  India by Indian logistic company
Non taxable

Taxable

Service performed outside India by foreign agent
Service performed in  India by Indian logistic company
Service given to foreign agent related to collection of revenue
Non taxable

Taxable
Taxable





In case of Export
Service performed outside India by foreign agent
Service performed in  India by Indian logistic company
Non taxable

Taxable
Service performed outside India by foreign agent i.e. destination
Service performed in  India by Indian logistic company i.e. origin
Service provided by foreign agent related to collection of revenue
Non taxable

Taxable
Taxable



·         Service –Clearing and Forwarding
·         Service Provider –Freight Forwarder
·         Place of Provision-Location of service provider (as intermediary)
·         Value of taxableService –As per valuation Rule 6(8) of service tax rules ,1994 read with sec 67 of Finance Act,1994,Gross amount  of remuneration or commission i.e. reimbursements  expenses on actual basis not liable to service tax (As decided case of Sangamitra services agency June 27,2013, H.C.)

Tuesday 14 October 2014

STRATEGIES OF MULTI LEVEL NETWORK MARKETING IN INDIA

 What kind of marketing plan we choose starting a MLM Company?

This is very vital question the marketing system adoption while setup a MLM Company now first we understand what kind of Marketing System we have in MLM:
GENERATION PERCENTAGE PLAN 
The oldest and the most successful method of MLM Commission Distribution System which is being adopted by most of the consumable product selling mlm companies like Amway, Oriflamme, Avon, Herbalife etc. in which company fix some target selling to achieve some fix percentage of commission. It’s an open width program in which a customer can open as many legs as he wants and achieve more and more percentage fix up by company till he achieve last level of promotion.



PARTY PLAN
The most successful and the only legal system in most of the European countries and adopted by Tupperware in which a customer organize a kitty party at home and call his/her friends and relatives in which he/she showcase the products and try to sell products to them and to turn into distributor of the company via Kitty party. In this modal company offer Discounts and Free Gifts to party organizer as well in party.




BINARY MLM PLAN
The New age MLM System is being offered by an online computer education system selling American company Skybiz in year 2000 is now the best adopted modal for new age one time product and services selling companies, before Skybiz no one has ever thought that Internet and MLM the combination of both can the idea of this century to sell service through Internet via MLM Route. Skybiz was the fastest MLM Company in the world to sell more than 10 million Computer Education Packages online in just 8 months of the launch of the product and become multibillion dollar company in just 1 year with the use of Internet and Power of MLM. It started from United States and reached more than 180 countries and become worldwide phenomena in just 6 months of time. In this System a person can only open 2 legs and other people will spill over to those two people under them and has fix payment system on matching of the new product sold under his/her 2 legs.  

AUSTRALIAN BINARY PLAN
In 2001 one 3 mobile an Australian Telecom Giant offered a new marketing system in Australia now called Australian Binary in which a customer can open 3 legs and first two legs will give profit to his/her up line member and the third one will give profit to the sponsored member. In the initial period it shoot up like rocket and bust all previous records and added new people to MLM as this system offer more commissions to new member and lesser for the old ones but the earlier system were offering the reverse of the Australian Binary. This system was adopted by one product selling small MLM Companies to become competitive to earlier setup MLM Giants.



BOARD SYSTEM
In year 2005 few American companies started this System in USA this is get rich quick system where a person earn big commission over his/her team when he/she qualify or break a board of 8 -16-32 members generally he gets the commission of all the 8-16-32 members himself on their work.

In the whole of the this marketing system we prefer Binary System is the most compatible system for one time product selling companies as it is easy to understand and easy to explain and customer may earn commission at minimal effort.


Top MLM Companies of Multi level Network Marketing in India
Now more than 10000 Companies of direct selling operating in India whose business turnover is more than 3500 Crores fiscal year 2009-2010, according to the Indian Direct Selling Association, IDSA. IDSA is an association developed by some of the direct selling MLM companies in India for the core issues related to this business and future prospects of the trade.
IDSA Members companies list: Indian Direct Selling Association –IDSA
·         Tupperware
·         Tines
·         Oriflame
·         Modicare
·         Max Newyork Life Insurance
·         Mary Kay
·         Klink
·         Jafra
·         Hindustan Unilever
·         Herbalife
·         DXN
·         CNI India
·         Avon
·         Amway
·         Elken
·         AMC Cookware
·         Altos
·         4life India

There are hundreds of other MLM companies also operating in India who are not a part of any association or IDSA but they have gained immense popularity in Multi Level Sales Business in India.


Know more about information: Service Tax and Tax consultants in Delhi
 
Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 011-43520194