RCM on Commercial Rent - Key ImpactsRCM on Commercial Rent refers to the Reverse Charge Mechanism, where the recipient (tenant) is liable to pay GST on commercial rent.Here is a comprehensive analysis of how RCM impacts commercial rent for discharging GST liabilities, taking case by case.A: For Registered Landlords:-If the landlord is registered under GST, they charge GST on the rent to the tenant and the tenant pays the GST to the landlord along with the rent, while the registered landlord discharges the GST liability. B: For Unregistered Landlords:-If the landlord is not registered under GST, the RCM applies, and the tenant (if registered) is responsible for paying the GST directly to the government.C: Tenent Composition Optee:-If the tenant is a GST composition taxpayer, the RCM will apply on the registered tenant liability becomes an extra cost because they cannot claim Input Tax Credit (ITC).If the tenant is a GST regular taxpayer, they can claim the RCM liability as ITC reducing their tax burden.RCM liability must be paid in cash only.  ITC adjustment is not permissible.D: Small Landlords:-The RCM does not apply to small landlords whose aggregate turnover is below the GST registration threshold (₹20 lakhs for most states, ₹10 lakhs for some special category states).Additionally, if the tenant is unregistered under GST, RCM does not apply, and no GST is payable on the rent.E: ITC (Input Tax Credit) for Tenants:-Tenants paying GST under RCM can avail of Input Tax Credit (ITC) on the GST paid under RCM, provided they are using the property in the course or furtherance of business purposes.F:- Rate of CGST:-Tax Rate on Commercial RentGST on commercial rent is currently taxed at 18% on the rent amount under the services category. This applies in all cases whether GST is paid by the landlord or under RCM by the tenant under direct charge.G:- SAC code:-The SAC code for renting of immovable property is 997212. This SAC code also applies to all forms of rental agreements such as long-term leases and short-term rentals.The application of RCM on commercial rent has broad implications for tenants, landlords, and the overall  real estate sector. While it shifts the tax burden from landlords to tenants, it ensures that GST is collected on rental transactions, even when landlords are unregistered.For tenants, especially businesses, RCM means added responsibilities in terms of compliance and cash flow management, but the availability of ITC can help offset the GST paid under RCM.  Prepared by:Safneed MIndirect TaxationPicco Advisory 

IntroductionA company is a legal entity which is formed by different individuals to generate profits through their commercial activities. All Companies come under the jurisdiction of concerned Registrar of Companies. The Registrar of Companies (ROC) is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act, 2013, The Limited Liability Partnership Act, 2008. There are currently 22 Registrars of Companies (ROC) operating from offices in all major states of India. Some states, such as Maharashtra and Tamil Nadu, have two ROCs each. Types of business structures in India coming under the purview of RoC's·        One Person Company (OPC)·        Limited Liability Partnership (LLP) ·        Private Limited Company ·        Public Limited Company ·        Producer Company ·        Section 8 Companies·        Nidhi Companies  Choose a business structure which suits your requirement·        How many owners/partners will your business have?·        Should your initial investment determine your choice of business structure?·        Willingness to bear the entire liability of the business·        Income Tax Rates Applicable to businesses·        Plans of getting money from investors Minimum Requirements Of Company Registration Minimum Shareholders·        Private Company – 2·        Public Company – 7·        OPC - 1Minimum Directors·        Private Company – 2·        Public Company – 3·        OPC - 1·        One of the Directors must be Indian Resident·        DSC (Digital Signature Certificate) for all shareholders·        Share Capital ·        Authorized Share Capital·        Paid up Share Capital·        DIN (Director Identification Number) for all Directors·        The directors and shareholders can be same person Company Registration Process·        RUN·        DSC·        DIN·        Registered Office ·        MOA·        AOA·        Certificate of Incorporation·        PAN & TAN·        Certificate of Commencement·        Commercial Operations RUN (Reserve your Name) ·        Details to be furnished in this stage:·        Type of Company ·        Class of Company·        Category of Company ·        Sub-Category of Company ·        Main division of industrial activity of the Company·        Significance of Name·        Main Object·        Name 1 (First Preference)·        Name 2 (Second Preference)  Obtain Digital Signature (DSC)·        Class III Digital Signature should be obtained from any of these Ministry authorised partners.  MOA, AOA, Registered office & DIN·        Once the Digital Signature is ready we have to file our application under the SPICe incorporation process and Company Incorporation Process consists of preparation and filing of the flowing E-Forms:·        e-Form INC-32 - Simplified Proforma for Incorporating Company Electronically (SPICe)·        e-Form INC-33: e-Memorandum of Association (SPICe MoA)·        e-Form INC-34: e-Articles of Association (SPICe AoA) Processing of e-Forms by the office of Central Registrar of Companies·        The Central Registration Centre (CRC) processes the application and “if found the details / documents are in order”.·        Certificate of Incorporation·        DIN for Directors·        Permanent Account Number (PAN)·        Tax Collection and Deduction Number (TAN) to the New Company.·        Now your Company details will be published in MCA portal   Certificate of CommencementWithin 180 days of obtaining Certificate of Incorporation, you have to open bank account and deposit the Subscribed Capital in Company bank account and file the proof in INC 20A with the RoC. Once this form is filed, you can start commercial operations. ConclusionMCA & RoC, besides, it also exercises supervision over the three professional bodies, namely, Institute of Chartered Accountants of India(ICAI), Institute of Company Secretaries of India(ICSI) and the Institute of Cost Accountants of India (ICAI) which are constituted under three separate Acts of the Parliament for proper and orderly growth of the professions concerned. Prepared By:Naufal NazarSecretarial & AuditPicco Advisory   

Provident Fund (PF) registration in India is governed by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. This act mandates certain businesses to register with the Employees' Provident Fund Organisation (EPFO) and contribute towards the provident fund for employees. Below are the key requirements:1. ApplicabilityPF registration is mandatory for: Establishments with 20 or more employees: Any business employing 20 or more people must register under EPFO. Voluntary registration: Establishments with fewer than 20 employees can voluntarily register after mutual consent between the employer and employees. Specific industries: Some industries, like factories, are mandatorily covered irrespective of the number of employees. 2. Eligibility of Employees Salary Threshold: Employees earning up to ₹15,000 per month (basic + dearness allowance) must be enrolled. Employees earning above ₹15,000 may enroll voluntarily. Exemptions: Apprentices under the Apprentices Act or other trainees are exempted. 3. Employer RequirementsEmployers are required to: Register within one month from reaching the 20-employee threshold. Deduct the PF contributions from employees’ salaries and make matching contributions. 4. Contributions Employee Contribution: 12% of the basic salary. Employer Contribution: 12% of the basic salary, divided as follows: 8.33% towards Employee Pension Scheme (EPS). 3.67% towards Employee Provident Fund (EPF). 5. Documents Required for Registration Employer Details: PAN card of the business. Certificate of incorporation or partnership deed. GST registration certificate. Address proof of the business (rent agreement, electricity bill, etc.). Employee Details: Name, address, and contact information. Date of joining. Basic salary details. Aadhaar and PAN cards. Bank Details: Bank account details of the employer. Cancelled cheque. 6. Registration Process Visit the Unified Shram Suvidha Portal (https://www.shramsuvidha.gov.in). Register as an employer and obtain an Establishment ID. Submit the required documents and details of employees. Generate and link the Universal Account Number (UAN) for employees. 7. Compliance Requirements Monthly Filing: Employers must file EPF returns through the EPFO portal by the 15th of every month. Annual Returns: Employers must file an annual return detailing all PF contributions made during the financial year. 8. Penalties for Non-ComplianceNon-compliance with PF registration and contributions may lead to: Fines. Interest on late payments. Prosecution under the EPF Act.Prepared by:Naufal NazarAuditor & SecretarialPicco Advisory

Employees' State Insurance Corporation (ESIC) registration is governed by the Employees' State Insurance Act, 1948. It provides medical, cash, maternity, and other benefits to employees covered under the scheme. Below are the key requirements for ESIC registration in India:1. ApplicabilityESIC registration is mandatory for: Establishments with 10 or more employees: This includes factories, shops, and other establishments. (In some states, the threshold may be 20 employees.) Wage Limit for Employees: Employees earning a gross salary of ₹21,000 or less per month (₹25,000 for employees with disabilities) are covered under ESIC. 2. Employer Responsibilities Employers are required to register their establishment within 15 days of becoming eligible. Deduct employee contributions and deposit both employer and employee contributions. 3. Contributions Employee Contribution: 0.75% of gross salary. Employer Contribution: 3.25% of gross salary. Total contribution: 4% of the employee’s gross salary. Contributions must be deposited on a monthly basis through the ESIC portal. 4. Benefits of ESIC Medical Care: Comprehensive medical treatment for employees and their dependents. Sickness Benefit: Cash compensation during certified medical leave (up to 70% of wages). Maternity Benefit: Paid leave for female employees during pregnancy or childbirth. Disability Benefit: Compensation for temporary or permanent disability due to work-related injuries. Dependent Benefit: Pension to family members in case of death due to employment injury. Other Benefits: Funeral expenses, rehabilitation, etc. 5. Documents Required for Registration Employer Details: Certificate of incorporation or registration of the establishment. PAN of the business. GST certificate (if applicable). Address proof of the establishment. Employee Details: Name, date of birth, and gender. Monthly gross salary. Aadhaar and PAN numbers. Bank Details: Bank account details of the employer. Cancelled cheque. Other Details: Number of employees. Business activity details. 6. Registration Process Application Form Submission: Fill out the Employer Registration Form and submit required documents. Employee Registration: Register eligible employees and generate their Employee Insurance Number (EIN). Code Generation: Upon successful registration, the employer will receive a 17-digit ESIC Code Number. 7. Compliance Requirements Monthly Filing: Contributions must be deposited by the 15th of every month. Maintenance of Records: Employers must maintain employee attendance, wages, and contribution details. Inspection: Records are subject to periodic inspection by ESIC authorities. 8. Penalties for Non-ComplianceFailure to register or deposit contributions can lead to: Fines. Interest on late payments. Legal action, including prosecution under the ESIC Act.Prepared by:Naufal NazarAuditor & SecretarialPicco Advisory

Choosing between a Private Limited Company (Pvt Ltd) and a Limited Liability Partnership (LLP) in India depends on your business objectives, scale, and compliance preferences. Below is a comparison of the two structures to help determine which is best for your business:1. Legal Identity Private Limited Company: A separate legal entity governed by the Companies Act, 2013. Recognized as a corporate structure with higher credibility. LLP: A separate legal entity governed by the LLP Act, 2008. Combines the benefits of a partnership with limited liability. Best for: Pvt Ltd companies are preferred if you aim for higher recognition and credibility in corporate environments.2. Ownership and Management Private Limited Company: Requires a minimum of 2 directors and 2 shareholders (can be the same individuals). Ownership is determined by shareholding, making it easier to transfer shares or attract investors. LLP: Requires a minimum of 2 partners, with at least one designated partner being a resident of India. Ownership is based on the partnership agreement and is less flexible for transfers. Best for: Pvt Ltd companies are ideal for businesses looking to scale with external funding and investors.3. Compliance Requirements Private Limited Company: Higher compliance, including mandatory annual filings with the Registrar of Companies (RoC). Must conduct annual general meetings, maintain statutory registers, and file financial statements. LLP: Lower compliance compared to Pvt Ltd companies. Requires annual filing of Form 8 (Statement of Accounts and Solvency) and Form 11 (Annual Return). Best for: LLPs suit small and medium enterprises (SMEs) with limited compliance capacity.4. Funding and Investment Private Limited Company: Easier to raise funds through equity shares, venture capital, or angel investors. Eligible for Foreign Direct Investment (FDI) under the automatic route. LLP: Limited avenues for raising funds; cannot issue shares. FDI is permitted but subject to certain restrictions. Best for: Pvt Ltd companies are better for businesses with plans to attract significant funding or external investors.5. Taxation Private Limited Company: Corporate tax rate: 25% (for turnover up to ₹400 crore) or 30% (above ₹400 crore). Dividend Distribution Tax (DDT) was abolished in 2020, but dividends are taxed in the hands of shareholders. LLP: Taxed at a flat rate of 30% on income. Exempt from dividend tax and Minimum Alternate Tax (MAT), making it more tax-efficient. Best for: LLPs are more tax-efficient for smaller businesses without complex profit distribution.6. Ease of Setup Private Limited Company: Registration is slightly complex, with higher costs and documentation (e.g., MOA, AOA). Requires Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs). LLP: Easier and less expensive to set up. Requires LLP Agreement and fewer compliance documents. Best for: LLPs are easier to establish for small businesses and startups with limited capital.7. Scalability and Credibility Private Limited Company: Suitable for businesses planning to scale or expand rapidly. Better suited for IPOs, acquisitions, and formal funding rounds. LLP: Suitable for businesses with steady growth and no immediate expansion plans. Limited scalability due to funding restrictions. Best for: Pvt Ltd companies are preferred for businesses with ambitious growth plans.8. Conversion An LLP can be converted into a Pvt Ltd company, but the reverse process is more complex. Choose LLP for flexibility, and Pvt Ltd for long-term scalability. Which is Best? Choose Pvt Ltd Company if: You plan to scale the business significantly. External funding is a priority. You need high corporate credibility. Choose LLP if: You want lower compliance and operational costs. Your business will remain small to medium-sized. Tax efficiency and ease of management are priorities. Prepared by:Naufal NazarAuditor & SecretarialPicco Advisory

The Regular Scheme and Composition Scheme under the Goods and Services Tax (GST) in India cater to different types of businesses based on turnover and compliance preferences. Here’s a detailed comparison to help you understand the differences:1. Applicability Regular Scheme: Applicable to all taxable persons under GST, with no turnover limit restrictions. Mandatory for businesses exceeding the threshold turnover for GST registration. Composition Scheme: Applicable to small businesses with an aggregate turnover of up to ₹1.5 crore (₹75 lakh for special category states). Not available for certain businesses, such as e-commerce operators and service providers (except specified ones). 2. Tax Rate Regular Scheme: Tax rates vary based on goods or services supplied (e.g., 5%, 12%, 18%, 28%). Composition Scheme: Fixed lower tax rates: Manufacturers and traders: 1% of turnover. Restaurants: 5% of turnover. Service providers (specific cases): 6% of turnover. 3. Input Tax Credit (ITC) Regular Scheme: Eligible to claim Input Tax Credit (ITC) on GST paid on purchases. Composition Scheme: Not eligible to claim ITC. 4. Filing of Returns Regular Scheme: Monthly returns: GSTR-1 and GSTR-3B. Annual return: GSTR-9 (optional for small taxpayers). Composition Scheme: Quarterly return: CMP-08 (self-assessed tax). Annual return: GSTR-4. 5. Billing Regular Scheme: Issues a Tax Invoice with GST charged separately. GST collected is shown explicitly. Composition Scheme: Issues a Bill of Supply (no GST charged on the invoice). Cannot collect GST from customers. 6. Compliance Regular Scheme: Higher compliance requirements (monthly returns, ITC reconciliation). Suitable for businesses that deal with large clients or are in the supply chain. Composition Scheme: Simplified compliance with fewer returns. Best for small businesses with local operations. 7. Eligibility Regular Scheme: No restrictions based on turnover or type of business. Composition Scheme: Turnover limit: ₹1.5 crore (₹75 lakh for some states). Ineligible for businesses dealing in interstate supplies, e-commerce, or non-taxable goods/services. 8. Restrictions Regular Scheme: No major restrictions, but requires detailed compliance. Composition Scheme: Cannot engage in interstate supply. Cannot supply exempt goods or services. Cannot claim ITC. Cannot collect GST from customers. 9. Suitable For Regular Scheme: Businesses involved in interstate trade. Businesses dealing with B2B customers who prefer GST input credit. Businesses with high turnover and complex supply chains. Composition Scheme: Small businesses with low turnover. Local retailers, traders, or service providers catering to end consumers. Businesses seeking ease of compliance. Which is Best for You? Choose Regular Scheme if: You have a higher turnover or interstate business. You want to claim ITC or deal with B2B clients. Choose Composition Scheme if: You are a small business focused on local sales. You want simplified compliance and are not concerned about ITC. Prepared by:Naufal NazarAuditor & SecretarialPicco Advisory

Making a Foreign Direct Investment (FDI) in Indian companies involves several steps and compliance with the regulatory framework governed by the Foreign Exchange Management Act (FEMA) and policies set by the Reserve Bank of India (RBI). Here's a detailed guide: 1. Understand the FDI Policy India's FDI policy categorizes sectors into two routes: Automatic Route: No prior approval required from the government. Investments can be made directly, subject to sectoral caps and conditions. Government Approval Route: Requires prior approval from the Indian government through the Foreign Investment Facilitation Portal (FIFP). Check Sectoral Limits: Some sectors have FDI caps (e.g., insurance, defense) and restrictions (e.g., multi-brand retail, agriculture). 2. Choose the Type of FDI FDI can be made in different forms: Equity Investments: Purchasing shares or equity instruments of an Indian company. Reinvestment: Profits earned from Indian operations are reinvested in India. Joint Ventures or Partnerships: Collaborating with an Indian partner. 3. Know the Eligible Instruments Foreign investors can invest in: Equity shares. Fully and compulsorily convertible preference shares (FCCPS). Fully and compulsorily convertible debentures (FCCD). Capital instruments issued by startups (e.g., convertible notes). 4. Register the Entity Foreign investors or their entities may need to register with the following: Director Identification Number (DIN): For foreign directors in the Indian company. Digital Signature Certificate (DSC): For electronic filings. 5. Open a Bank Account The Indian company must open a foreign currency account with an authorized dealer bank in India to receive FDI funds. 6. Execute the Investment The investment process includes: Transferring funds from the foreign investor's bank account to the Indian company’s account. Following pricing guidelines set by RBI to ensure fairness in the transaction. 7. File Compliance Reports Post-investment, the Indian company must comply with the following: FC-GPR (Foreign Currency-Gross Provisional Return): Filed within 30 days of allotment of shares to the foreign investor. Annual Return on Foreign Liabilities and Assets (FLA): Submitted annually to RBI by July 15. Government Route Approval (if applicable): File through FIFP and provide necessary documentation. 8. Tax Implications Foreign investors must consider: Tax on capital gains from FDI. Dividend Distribution Tax (now abolished; dividends are taxed in the hands of the recipient). Double Taxation Avoidance Agreements (DTAA) benefits. 9. Monitor Sector-Specific Restrictions Certain sectors have specific rules or restrictions, such as: Real estate, gambling, and atomic energy are prohibited for FDI. Defense, media, and insurance have caps and conditional requirements. 10. Repatriation and Exit Foreign investors can repatriate profits, dividends, or disinvestments after meeting tax and compliance obligations. Steps for Investment via Automatic Route Identify the Indian company for investment. Verify sectoral caps and compliance requirements. Transfer funds through proper banking channels. Ensure compliance filings (e.g., FC-GPR). Steps for Investment via Approval Route Submit an application through the Foreign Investment Facilitation Portal (FIFP) with the required documents. Wait for approval from the concerned ministry/department. Post-approval, execute the investment and comply with RBI guidelines. Documents Required For Approval: Board resolution of the Indian company. Foreign investor’s KYC details. Sector-specific details (if applicable). For Compliance: Share subscription agreement. Chartered Accountant’s certificate for valuation. Proof of fund remittance. Conclusion Investing in Indian companies through FDI is streamlined under the Automatic Route for most sectors, but attention must be given to compliance with FEMA and RBI norms. For sensitive sectors, approval is mandatory.