FAQ ON IMPORTER EXPORTER CODE (IEC)

What is IEC?

IMPORTER EXPORTER CODE ( in short IEC ) is a ten digit number granted by Directorate General of Foreign Trade under Ministry of Commerce and Industry, to any bonafideperson/ company for carrying out import/export.

Why IEC is required?

As per Foreign Trade (Development and Regulation) Act 1992
No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officer authorized by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General.

IEC forms the primary document for recognition by Government of India as an Exporter/Importer. On the basis of IEC, companies can obtain various benefits on their exports/imports from DGFT, Customs, Export Promotion Council etc. SSI Registration Services

Validity of IEC No

Only one IEC would be issued against a single PAN number. Any proprietor/company/firm can have only one IEC number and in case there are more than one IEC's allotted to a proprietor, the same may be surrendered to the Regional Office for cancellation. An IEC number allotted to an applicant shall be valid for all its branches /divisions /units /factories.

Status of IEC & details of IEC holder

The applicant can know the status of the IEC application using option "Status of IEC Application" on the website of DGFT (http://dgft.gov.in/). Also we can see the details of the IEC holder by using the tab "View your IEC" on the website and we need to enter IEC number and first 3 letters of the holder's name.

Duplicate Copy of IEC Number

Where an IEC Number is lost or misplaced, the issuing authority may consider requests for grant of a duplicate copy of IEC number, if accompanied by an affidavit.

Surrender of IEC Number

If an IEC holder does not wish to operate the allotted IEC number, he may surrender the same by informing the issuing authority. On receipt of such intimation, the issuing authority shall immediately cancel the same and electronically transmit it to DGFT for onward transmission to the Customs and Regional Authorities.

Modification in IEC:

If there are any changes in the details of the applicant like change of name, change of address, additional business places, change of directors the same should be intimated to DGFT (Director General of Foreign Trade) using the same form 'AayaatNiryaat Form - 2A (ANF 2A)'.

IEC No: Exempted Categories

The following categories of importers or exporters are exempted from obtaining Importer -
Exporter Code (IEC) number:

1. Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters
covered by clause 3(2) [except sub-clauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.
2. Ministries/Departments of the Central or State Government.
3. Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.
4. Persons importing/exporting goods from/to Nepal provided the CIF value of a single consignment does not exceed Indian Rs.25,000.
5. Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

However, the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of the ITC (HS) except in the case of exports by category (ii) above.

APPLICATION FOR IEC
An application for grant of IEC number shall be made by the Registered Office of the company to the nearest Regional Authority of Directorate General Foreign Trade in the 'AayaatNiryaat Form - 2A (ANF 2A)' and shall be accompanied by the following documents in case of company:

1.    Demand Draft of Rs.250 evidencing payment of application fee in favour of the concerned regional office of DGFT. Money can also be paid through Electronic Fund Transfer (EFT).
2.    Certificate from the Banker of the applicant firm in the specified format
3.    Photograph on the banker's certificate should be attested by the banker of the applicant
4.    Copy of Permanent Account Number (PAN) duly signed by authorized director.
5.    Certificate of Incorporation, MOA, AOA duly signed by the authorized director of the company.
6.    Rental agreement duly signed by the authorized Director. List of present directors. Copy of board resolution.
7.    Identity & address proofs of all the directors.
8.    In case of foreign investment in the company, Copy of RBI approval letter has to be submitted.
9.    Two copies of passport size photographs of the authorized director. Self addressed stamped envelope.
10.    Each individual page of the application has to be signed by the applicant. These documents have to be submitted in a flat file

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CAPITAL GAINS ON SHARE TRANSFER FROM NON-RESIDENT TO RESIDENT. - AO ON VIOLATION OF RBI'S NORMS ON VALUATION OF SHARES

CASE:-ZEPPELIN MOBILE SYSTEM GMBH VS ADIT

M/s Zeppelin Mobile Systems India Ltd an unlisted Indian subsidiary of M/s Zeppelin Mobile

Systems GmbH (herein after referred to as assessee) a Germany based company. The Indian company is engaged in the business of designing, manufacturing and assembling of Polyurethanes Foam based Prefab Structures, Telecom Shelters and derivatives.

During the year, the assessee had sold part of the shares held by it in its Indian subsidiary

to M/s Sintex Industries Ltd and returned capital gains from such sale on basis of sale price of Rs. 390 per share.

The A.O. made additions in the total income of the assessee by taking the sale consideration

of the shares @ 400/- per share, as against the actual sale consideration of Rs. 390/- per share as taken by the assessee in accordance with pricing guidelines of RBI. income tax consultant in delhi

DRP confirmed the assessment order passed by AO. While doing so, it was observed that,

the RBI Guidelines in respect of pricing of shares would be binding on the assessee since shares are being sold by a non-resident to a resident, and that the case of the assessee fell squarely under Clause 2.3 read with sub-clause (b) (ii) and Option (C) of the RBI Guidelines; that these clauses and sub-clauses in the RBI Guidelines were binding in nature, as they employed the expression 'shall be'. The RBI Guidelines strictly direct the assessee to adopt the lower of the two valuations required to be done and the assessee has no choice to negotiate the price; that therefore, the assessee was wrong in contending that the Assessing Officer had wrongly observed that the RBI Guidelines should be adopted; and that therefore, the Assessing Officer was correct in adopting the valuation of the shares@Rs. 400 per share as against the negotiated priceof Rs. 390 per share disclosed by the assessee.

Whether DRP has illegally confirmed the action of the AO for taking the value of sale consideration @ Rs.400 per share instead of actual sale consideration received @ Rs.390/-

per share a Capital Gain is liable to be computed at Rs.9,55,73,488/-?

It was held that RBI Guidelines are Guidelines for the banks, issued for FEMA purposes. The

very opening paragraph of these Guidelines shows that they are addressed to 'Authorised Dealer (AD) Banks'. Thus the duty to examine the compliance or otherwise of these Guidelines lies squarely within the purview of the 'Authorised Dealer Banks' and not the

Income-tax Authorities

If the assessee, in the view of the Income-tax Authorities, had committed any violation of

these Guidelines, the appropriate course open to them was to bring it to the notice of the banks. Since the Guidelines have been issued for FEMA purposes, it is the FEMA Authorities who are competent to take appropriate action against the assessee on breach of the Guidelines. Rather, it is seen that no objection whatsoever has been raised by the RBI. Had the alleged difference between the rates existed, thereby constituting a violation of the RBI Guidelines by the assessee, such violation would obviously have been taken care of and the approval would not have been accorded. On merits also, Sintex Industries Ltd., to whom the shares were sold by the assessee, has not denied such rate of Rs. 390/-per share. Rather, such rate stands admitted in the Memorandum of Understanding between the assessee and Sintex Industries Ltd. In view of the above, finding the grievance of the assessee to be justified, we accept it assuch. Appeal allowed.Know more about information: Service tax registration and New company registration India

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OVERCHARGES CHARGES & TAXES IN RESTAURANTS

It is Sunday evening. You are in a restaurant. You had nice full course dinner with soup, main course, followed by dessert. You checked the prices before and ordered. However, when the bill came, you were little shocked. The numbers did not match till you came across few items called service tax and service charge which inflated the bill by about 15% to 20%. Since this is Sunday evening and you have been waiting for this for the whole week, you don’t question it and pay. We have all faced this situation in fine dining and not so fine dining restaurant. Almost all of us agree that the extra cost is high but none of us know the charges and taxes included in bill.
 

A simple thing made complicated
 

We have an uncanny ability to screw simple things and make it complex. Taxes and charges on seemingly simple stuffs like food and drinks are one such thing where customers are taken for granted. Let’s understand few terms that we see on our food bill often but do not understand.

Service charge
 

This is charged by the restaurant for the services rendered to you. This money goes to the restaurant. The establishments are free to charge any amount as service charges as there are no guidelines provided by the tax authority. The charge varies from 5% to 10%. Few restaurants don’t charge it. This is equivalent to the tips people usually give to waiters. If you are charged service charge in the bill, don’t pay tips as this charge is supposed to be shared among the staff.
 

Most of us don’t bother about it even when we feel the charges are higher. One reason is that we don’t think anything can be done about it. Secondly, we don’t want to spoil our evening because of this and argue with restaurant manager. However, the ground rule is that if the menu mentions service charges, you have to pay. If it doesn’t, you can question it.
 

Service tax
 

Many people confuse service tax with service charges. Service tax is the tax levied by the Government on the services rendered by restaurants. Service tax is same in all states. It is 12.36% on the 40% of the bill. The bill includes your food and drink and the service charge. The restaurant must be air-conditioned for the service tax. The problem here is that most of the customers are taxed at the full bill and not on the 40% of the bill as directed.
 

To make things simple, service tax should be 40% * 12.36% = 4.94% on the total bill. Hence whenever you see service tax on the total bill exceeding about 5%, you can question it.

VAT (Value Added Tax)
 

There is another tax called VAT (value added tax) that is state specific. The rates can be as low as 5% and as high as 20% depending upon the states. Moreover, VAT for food items and drink are different. Many restaurants might club food items and drink and charge a flat rate on the total bill. In such cases, it is good to ask for separate bills for food and drinks. This should clearly show the different VAT for both the items.
Example
 

Let’s see how service charge, tax and VAT work with an example. Suppose you have dined in an AC restaurant and the price of food items is summed to Rs 900. You will be asked to pay service charges (goes to the restaurant) and VAT and service tax (goes to Government)

Items    Amount
Bill of food item    9000
Service charge (assuming 6%)    540
Sun Total    9540
Service tax to be levied on (40% of sub-total)    3816.0
Service tax (at the rate of 12.36%)    471.6576
VAT @ 12.5% of the sub-total    1192.5
Total amount to be paid    11204.16

Many times, restaurants charge the highest rate on the total bill. This is general complaint by almost all the customers. Many of the times, we cannot do anything about overcharging. The reasons are not only our unwillingness but also the ignorance of restaurant managers. In many cases though, you can question these items and get your bill corrected. Please remember that this will not be easy. However, you can always question and explain this to the restaurant manager and get your bill corrected. There have been cases where customers were able to reduce their bill.

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COMPLETE PROCEDURE OF REVISE E TDS RETURN

If an assessee has filed his income tax return and subsequently found any omission or wrong statement therein, he can re-file/revise the return with necessary modification. This re-filing of the income tax return is referred to as Revised Return. The process for revising the return is very simple. Please remember that the process outlined below is applicable if you had filed the original return online.

RULES RELATED TO REVISED RETURN
•    Revised return can be filed for any previous year at any time before the expiry of 1 year from the end of the relevant assessment year or before completion of the assessment whichever is earlier. For this financial year 2013-14), you can file the revised return till March 31st, 2014
•    However, if the income tax department completes the assessment of your return earlier, then a revised return cannot be filed.
•    Revised return can be filed only if the original return was filed before due date. Thus if a return is filed after a due date then it cannot be revised
•    A loss return filed within time can also be revised and in such case loss as per the revised is carried forward
•    One should have acknowledgement number and date of filing the original return in order to file a revised return
•    Return filed in response to the notice u/s 148 can also be revised. It should be noted that notice u/s 148 is issued in respect of the escaped income in the respective assessment year
•    In case of concealment of income and furnishing of inaccurate information in income tax return an individual will be penalized
HOW TO FILE A REVISED RETURN
•    Check for the discrepancy in ITR-V form received from the original return e-filing.
•    Log on to h t t p s: // i n c o m e t a x i n d i a e f i l i n g . g o v .i n /
•    In the home page, Login through link of Registered Users.
•    Prepare & Submit online Return under e-file & complete below detail as required.
•    Enter the E-filing acknowledgement receipt number from the ITR-V (Which you got after the original return)
•    Select the appropriate “return filed under section”. You will find options for 17-Revised 139(5).
•    Press Save as Draft and continue and go ahead make changes and enter correct details
•    Press Submit button on completion of data . You will get a new ITR-V marked as revised return.
•    Once you receive the ITR-V form, you are supposed to send across both original and revised return ITR-V forms to IT department Bangalore within 120 days.

Know more about information: TDS Return and Service tax registration

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SERVICES TAX APPLICABILITY ON CONSULTING ENGINEER SERVICES

Meaning of   “Consulting Engineer”?

Date of effective: Notification No.23/97-ST, dated 02.07.1997. 

Consulting Engineer is any professionally qualified engineer or engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering. tax consulting company

ISSUE: Whether a self-employed professionally qualified engineer can be considered as ‘consulting engineer’ [section 65(31)] and service provided by such self-employed professionally qualified engineer to a client in relation to one or more discipline of engineering is liable to service tax under consulting engineer service [section 65(105)(g)]?

CLARIFICATION ISSUED BY BOARD VIDE CIRCULAR NO.96/7/2007-ST DATED 23.08.2007)

Yes Consulting engineers include self-employed professionally qualified engineer, whether or not employing others for assistance.

Services provided by such self-employed professionally qualified engineer to a client in relation to one or more discipline of engineering is liable to service tax under consulting engineer service [section 65(105)(g)].   

TYPE OF SERVICE

The taxable service rendered by a consulting engineer means any service provided to a client, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering.

The services which attract the levy include all the services which are rendered in the capacity of a professional person and specifically include the services pertaining to structural engineering works, civil/mechanical/electrical engineering work or relating to construction management. All services rendered within the scope of the term engineering attract Service Tax provided they are rendered in the capacity of a consulting engineer. The scope of the services of a consultant may include any one or more of the following categories: -

         i.            Feasibility study;

        ii.            Pre-design services/project report;

      iii.             Basic design engineering;

      iv.             Detailed design engineering;

       v.             Procurement;

      vi.             Construction supervision and project management;

    vii.              Supervision of commissioning and initial operation;

   viii.              Manpower planning and training;

      ix.             Post-operation and management;

       x.        Trouble shooting and technical services, including establishing systems and procedures for an existing plant. Know more about information: service tax registration

The list is only illustrative

Public Limited Company Registration India

new company registration India

Company is said to be form when it is being got listed under the company act 1956 of India. Amongst of various forms of corporate in India; public company is one of the reputed and highly esteem corporate that can issue securities in respect of raising funds. chartered accountant in India

There are various advantages of public limited company registration or registering a public company like

·         Ease to issue share to public

·         Reliability in the worth of shares

·         Able to implement the policy of distribution of workload

·         Centralization system will help in building a team work

·         Able to raise large capital

·         Easy to have business growth while using funds

Besides these there are many more benefits that one can reap while registering the company as public limited. Capital raised from the initial public is a kind of safe source of capital which is permanent and no need to pay interest or repayable like debt. It will be easy for the company to grow its business while using the same raised funds where the roles and obligations of management if defined and liability is limited. Thus, there are some regulations and guidelines that need to follow for public limited company registration in India. Know more about: Book keeping services

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