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How India & Afghanistan can grow together

India remains an integral part of Afghanistan’s steady progress in institutionalizing peace, pluralism, and prosperity. Ties between Afghanistan and India go beyond the traditionally strong relations at the government level. Since time immemorial, the peoples of Afghanistan and India have interacted with each other through trade and commerce, peacefully coexisting on the basis of their shared cultural values and commonalities.

This history has become the foundation of deep mutual trust. Public opinion polls in Afghanistan confirm this, as well as the sentiment Afghans share about feeling at home whenever they visit India.

 

Growing Asia

  • Fastest growing continent in the world with 60% of world’s
    population (4.2 billion)
  •  Two-third of global growth would come from Asia in next few
    years
  •  In 1990, the top five economies were not among Asia. Today,
    Japan, China and India are top 3 economies in the world
  •  Asia’s share is expected to touch 50% of world’s GDP by 2050

 

Why Afghanistan

  • A population of 34 million and increasing
  •  Five year compound annual growth (CAGR) is 5.4%
  •  GNI per capita is US$630
  •  FDI has increased from US$ 230k in 1970 to US$ 169mn in 2015
  •  Exports and imports taken together equals 53% of GDP
  •  Infusion of billions of dollars in international assistance and investments as well as
    remittances from Afghan expats
  •  World Bank expects to provide US$250-300 mn in grants annually to Afghanistan
    through the World Bank Group
  •  One of the mineral-rich countries of the world
    (the country holds US$ 3 trillion in untapped mineral deposits without Uranium )
  •  Low tax rates in Afghanistan
    (Corporate tax rates are 20% with an overall tax burden of 6.5% only of total domestic income)
  •  Improved agricultural production
  •  Formation of democratic government & improved regulatory environment

 

India- Afghanistan relations

  • Bilateral relations between the two countries have always been strong and
    friendly
  •  India’s financial assistance to Afghanistan was 880 crore in 2015-16
  •  In 2016, India has also extended an aid of over UD$2 billion to Afghanistan
    for one of India’s most expensive projects in Afghanistan (Salma dam)
  •  India-Afghanistan bilateral trade stood at US$643 million in 2015-16
  •  Afghanistan sets a target of US$10 billion for bilateral trade and
    investment with India in five years
  •  In February 2017, Indian visa regime has been further liberalised to make
    it even more convenient for Afghan nationals to visit India

 

Our support to Afghanistan

  • Needs in Afghanistan
    • Skilled manpower
    • Professional services for businesses
  •  Strengths to work with India
    • Convenience of working in the same time zone
    • Connectivity time is less than two hours
    • Similar cultural backgrounds

 

Why India can be a strong partner to Afghanistan

  • World’s third largest economy (Would double in size to US$ 4–5 trillion in a decade)
  •  Fastest growing economy in the world (Current: 7% , by 2018: 7.8%)
  •  By 2020, retail market is expected to grow to US$ 1.1 trillion (growing at a high rate of 20%-25% p.a.)
  •  IT-business process management (BPM) sector in India is estimated to expand at a CAGR of 9.5% to US$ 300 billion by 2020
  •  Indian construction equipment industry’s revenues are estimated to reach US$ 22.7 billion by 2020
  •  Total FDI equity inflows touched US$ 35.84 billion (till December 2016)
  •  Under FDI, all sectors other than sectors which are specifically prohibited or under approval route
  •  Taxes on companies has been reduced to 25% (For companies with annual turnover less than 50 Crores)
  •  Low labor costs (Total labor force of nearly 530 million)
  •  Working age group will be more than 64% by 2021 (15-59 years)
  •  Skill set of India has improved over the years with 40% employable candidates. We have 1.5mn engineering pass outs in India every year

 

Related : Doing Business in India

Tax-Return

Efiling of Income Tax Return

What is a income tax return ?

It is a prescribed form through which the particulars of income earned by a person through various sources(like salary, business, professional fees, interest, capital gains, etc.) in a financial year and taxes paid on such income is communicated to the Income tax department after the end of the Financial year, called as income tax return or ITR. It is like your report card in school but instead of  marks you have income and taxes.  It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly. Different forms are prescribed for filing of returns for different Status and Nature of income .

 

What is efiling ?

Efiling or electronic filing is submitting your income tax returns online. There are two ways to file your income tax returns. The traditional way is the offline way where you go the Income Tax Department’s office to physically file your returns. The other way is when you efile through the internet. Over the past few years, efiling has become popular because it is easier, doesn’t require prints of documents and can be done for free.

 

What are advantages of e-Filing?

  • Anywhere, Anytime files, 24 x7 x 365 service.
  • Easy, fast,free and secure
  • Faster processing and quicker refunds.
  • Value added services like viewing Form 26AS,  tracking of refunds,email, SMS alerts regarding status of processing and refunds.
  • And now it is also compulsory for most.

 

Is E-filing of Income tax Return compulsory?

  • E-Filing Returns is  compulsory for:
    Individuals earning over Rs 5 lakh a year. They are required to file their tax returns in the electronic format from AY 2013-14 (FY 2012-13) and subsequent assessment years.
  • Individual/HUF, having total Income of Rupees 10 lakhs. It was made mandatory from AY 2012-2013((FY 2011-12) and subsequent assessment years.
  • Individual/HUF /Firm auditable under section 44B of the IT Act, 1961. It was made mandatory for AY 2012-2013 and subsequent assessment years.
  • All Companies

 

Difference between AY and FY

Financial Year is period between 1st April to 31st March. Assessment Year is the next year in which the income is liable to tax.

For example, if your financial year is from 1 April 2017 to 31 March 2018, then it is known as FY 2017-18. The assessment year for income earned during this period would begin after the financial year ends–that is on 1 April 2018 till 31 March 2019.

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AJSH affiliating ACCI Business Conference on Afghanistan in Australia

AJSH & Co LLP affiliating the Australian Afghan Business Council’s 3rd Business Conference on Afghanistan in Australia 2017 co-organized by Afghan Chamber of Commerce & Industries (ACCI) on 26-27 April 2017.

 

Mr. Ankit Jain, the managing partner of AJSH & Co LLP will be sharing his thoughts on how Indo-Afghan can grow together. He will be presenting the facts about how India can support Afghanistan in growing their businesses by analyzing each other’s strengths and weaknesses.

 

The conference will be attended by official delegates and business leaders from Afghanistan and Australia includingMinister of Finance, Australia, Minister of Finance, Afghanistan, Ambassador of Afghanistan to Australia, Ambassador of Australia to Afghanistan, CEO, ACCI, President Afghan Dubai Business Council, CEO Afghan Logistics and Tours, Chairman Afghanistan Affairs (AABC), people from President’s office and economic advisers.

 

For more details, please visit: http://www.australianafghanbc.com.au/

Goods-And-Service-Tax-GST

Basics That Everyone Should Know About GST

With the passage of the GST bill in both the houses of Parliament, its implementation from 1 July 2017 is nearly certain.

India currently has a dual system of taxation of goods and services, which is quite different from dual GST. Taxes on goods are described as “VAT” at both Central and State level. It has adopted value added tax principle with input tax credit mechanism for taxation of goods and services, respectively, with limited cross-levy set-off.

 

GST (Goods and Service Tax)

GST means Goods and Service Tax. It is an indirect tax levied on sale of goods and services. The reformists believe that GST is one of the most awaited law which upon introduced will boost the economic growth in the country. This law if passed by the parliament may come into force from April 2016. As everyone is talking about it now, let’s get into the basics of the proposed law in this article.

 

Does GST apply to you?

Being an indirect tax, it is applicable to businesses, professionals, freelancers and service providers. It does not apply to salaried individuals.

 

Is it easy to implement in India?

Not really. Today states have autonomy in collecting state taxes. They have the feeling of losing their rights! They want liquor, fuel to be out of GST tax system. They are also worried about Central government sharing GST revenue with the states. If India becomes one common market, then the states will have to share their powers of taxing with the union government. (Which means states can’t increase the taxes as and when, as much as they want)

 

What is a “casual taxable person?”

A person who occasionally supplies goods and/or services in a territory where GST is applicable but does not have a fixed place of business in the said state is treated as a casual taxable person. For example, a person who has a place of business in Bangalore gives consulting services in Pune (where he has no place of business), then he would be treated as a casual taxable person in Pune.

 

What are the differences between the UPA’s GST and the NDA’s GST?
Below are the primary differences:

  • Petroleum sector has been kept out of the ambit of GST
  • Liquor for human consumption is exempt however tobacco and tobacco products will fall under GST.
  • There is a 1% tax on top of the GST for inter-state movement of goods and services.

 

What will be the short-term impact of GST?

The GST will fuel inflation for the short term. The GST rate starts at 5% and 18% taxation services such as restaurants, movies etc. are bound to increase prices. Another problem with the GST that many pundits feel is not including liquor and petroleum under GST’s ambit. These are major revenue sources for the government and experts feel this is being done due to a few crony capitalists who need some time to funnel away their black money as the GST promises to widen the tax paying population.

Related : How GST Works in India

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AJSH hosted Adam Global Asia Pacific Regional Conference

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AJSH & Co LLP hosted the Adam Global Asia Pacific Regional Conference in New Delhi, India from March 24-25, 2017. Each year, ADAM Global Regional member firms assemble in a different global metropolis for 2 days to share ideas, identify areas of collaboration and build relationships with fellow member firms.

Adam Global is multidisciplinary network of independent Legal, Accounting and Consulting firms. It is the fastest growing network with more than 130 member firms across the Americas, Europe, Asia Pacific, Africa and the Middle East.

Networking is all about planting relationships. At the recent Adam Global Regional Conference, Mr. Ankit Jain, the managing partner of AJSH & Co LLP took a step forward in leveraging the knowledge to multiply gains and losses. The conference was organized in order to provide with numerous opportunities to build new relationships and strengthen existing ones. The conference started with introduction on “Doing business in India” presented by Mr. Ankit Jain, being the Asia Pacific’s president of Adam Global. He shared the facts that India‘s economy is the emerging one that might prove as the “game changer”. Thereafter, Mr. Sumant Batra shared his thoughts on India Law and Insolvency Code. Later, Alternate Investment Fund, NRI Investments in India, Realty were shared in the presentations by the other members.

The member firms are benefited from such alliances that always provide cross marketing strategies, promotes greater collaboration, cross business opportunities.


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Doing Business in India

Doing business in India offers enormous opportunities for Foreign companies. However, India is a large and complex market. It should not be seen as one market, but a series of interconnected regional markets where the legislative and investment climate may change from one state to another.

It is wiser to be in India now…

  • Fastest growing economy in the world
    (Current: 7% , by 2018: 7.8%)
  • World’s third largest economy
    (Would double in size to US$ 4–5 trillion in a decade)
  • Taxes on companies has been reduced to 25%
    (For companies with annual turnover less than 50 Crores)
  • World’s second-largest telecommunication market
    (1058.86 million subscribers)
  • By 2020, retail market is expected to grow to US$ 1.1 trillion
    (growing at a high rate of 20%-25% p.a.)
  • World’s sixth largest pharmaceutical market by 2020
  • By 2050, India will have added 300 million people
  • Working age group will be more than 64% by 2021
    (15-59 years)
  • Growing urban markets
    (23.1 Million people shifting from rural to urban areas in two decades)
  • Low labour costs
    (Total labour force of nearly 530 million)
  • Purchasing power parity, India’s economy is third largest in the world
    (Current-$ 8.7 trillion, by 2025-$ 20 trillion )

 

Foreign Direct Investment into India

 

Automatic Route

  • All sectors other than sectors which are specifically prohibited or under approval route
  • Should comply with sector based investment and other conditions (i.e. sectoral caps)

 

Approval Route

 

100% FDI through Government approval route

  • Extraction of titanium
  • Publishing of scientific & technical magazines/specialty journals/ facsimile
  • Edition of foreign newspapers
  • Satellites (establishment & operation)
  • Pharmaceuticals (Brownfield)

100% FDI: Government approval required beyond 49%

  • Telecom Services
  • Broadcasting Carriage Services
  • Single Brand product retail trading

100% FDI: Government approval required beyond 74%

  • Existing projects of Airport

49% FDI : No Government approval required

  • Infrastructure Company in the Securities Market
  • Insurance
  • Pension Sector
  • Power Exchanges
  • Defense
  • Air Transport Services (Scheduled): 100% for NRI

49% FDI through Government approval route

  •  Broadcasting Content Services (except Up-linking & Down-linking
    of Non-‘News & Current Affairs’ TV Channels)
  •  Private Security Agencies

FDI limits less than 100%

  •  Banking (Private Sector): 74% FDI is allowed. However,
    Government approval is required beyond 49%
  •  Banking (Public Sector): 20% FDI is allowed with Government
    approval
  •  Multi Brand product retail trading: 51% FDI is allowed with
    Government approval
  •  Print Media: 26% FDI is allowed with Government approval

 

 

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Reasons to set up a limited company

Setting up a limited company will mean more administration and more paperwork than if you are a sole trader but there are many advantages to being a limited company, not least eliminating and personal financial liability.

When a sole trading business fails then the owner is personally responsible for any debt, which can have a negative effect on your credit rating and ability to obtain personal loans in the future. You could risk becoming personally bankrupt if the debts are too high for your to pay off.

If you set your business up as a limited company you are protected from this risk.

 

What are the Benefits :

Whilst running a limited company does have its fair share of responsibility, and the administrative responsibilities are certainly greater than other ways of working, there are many advantages too.

    • Limited liability – In simple terms, if you run a Limited Company you are protected should things go wrong. Assuming all rules have been followed, as a director you will not be personally liable for any financial losses made by the company.

 

    • Separate entity – A Limited Company is a legal entity in its own right. This means that everything from the company bank account, to the ownership of assets relates to the business. They are totally separate from the interest of the directors and shareholders.

 

    • Tax – As a director and shareholder of a limited company you could elect to take the majority of your income in the form of dividends, which enables you to manage your own tax liability and potentially save on National Insurance costs.

 

    • Perception – If you plan to do business with larger companies, it can help if you are working via a Limited Company as it gives off a more professional image. In some industries, it may even be a mandatory requirement as they will not deal with sole traders or partnerships.

 

    • Protection – As well as the limited liability protection mentioned above, once you have successfully registered your company, your company name is protected by law. Companies House has very stringent rules for the naming of companies so no one else can use the same name as you, or anything deemed too similar.

 

    • Ownership and succession – As the sole shareholder in your business, you own the business. However, a Limited Company can easily transfer ownership of shares, or existing shareholders can sell a stake in the company to other parties at any time. If for example a shareholder wishes to retire, or bring a new director on board, it is far easier to transfer ownership, or part ownership, of a Limited Company than it is with a less formal business structure.

 

    • Take home pay – It’s safe to say that this is the area where you can really reap the rewards of running your own Limited Company. The only person you need to pay as a Limited Company is yourself – combined with the tax efficiencies on offer, this means you can keep anything from 81 to 86 percent.

 

Accounts

Accounts must be prepared each year but most small companies are not required to have them audited so the process is relatively simple, especially now that the process can be done online.

 

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Audits Under PCAOB Standards

A yearly audit is a key safeguard for your money and a planning tool for the year ahead. Think of it as a “year in review” for your finances.

The primary benefit of an annual audit under PCAOB standards  is the confidence it gives you and your members that the PTO’s financial house is in order. Basically, the audit verifies the numbers, ensures accuracy, and assesses procedures. A comprehensive audit also identifies internal controls that should be implemented to improve the integrity of your financial systems. Furthermore, the audit gives closure to the treasurer and sets a starting point for the new year’s activity. An audit is also the primary tool for uncovering financial mismanagement. Hopefully you won’t need to conduct an audit for this reason, but an annual audit can uncover problems before they become significantly more serious. Your PTO might also choose to include in your audit a review of how closely your group’s income and expenditures matched the year’s budget. This type of review can be a strong planning tool.

 

The audit is not within the jurisdiction of the PCAOB. This seems like a strange request.  Perhaps the client is a clearing agency or futures commission merchant registered with the Commodity Futures Trading Commission, which requires that entities registered with it have an audit performed in accordance with PCAOB standards. Maybe the client has entered into a contractual agreement that requires an audit conducted under PCAOB standards. Or maybe, for whatever reason, the client just wants an audit conducted under PCAOB standards.

 

The PCAOB determines which audits are within its jurisdiction, including audits of the financial statements of issuers and nonissuer brokers and dealers registered with the SEC. A regulator (other than the PCAOB) requiring that the audit be conducted in accordance with PCAOB standards does not make the audit fall within the jurisdiction of the PCAOB. Therefore, even though the regulator— for example, the CFTC— requires an audit to be conducted in accordance with PCAOB standards, that audit is required to also be conducted in accordance with GAAS.

 

The Auditor’s Report

The report from the auditor will mark the completion of the review. If you are using volunteers, you should clearly itemize what you expect back, so your auditors know when they have completed their job.

Ensure that your auditor has returned the files you provided, and file the original report in the PTOs permanent archives. At the first meeting of the new school year, you should present the auditors report and move that it be adopted. According to Robert’s Rules of Order, once the annual report of the auditor is adopted, it is no longer necessary to move to adopt each month’s treasurer’s report. The reports are presented and then simply filed for next year’s audit.

Related Things you should Know before Registering a Company in India

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What is Subsidiary Company in India

Subsidiary company is any company whose interests are held and controlled or held by another company. Paid up equity share capital and preference share capital of the subsidiary company can be used to determine the holding company, subsidiary company relationship between two companies.

 

What is a Subsidiary Company?

There’s often a lot of confusion regarding the position of the subsidiary company and what it does. A subsidiary company is a company that is either owned or owned in part by another company. The company that owns the subsidiary is known as a parent company or a holding company. It should be noted that a holding company does slightly differ from a parent company, though.

 

What is WOS (Wholly Owned Subsidiary)

When one company is 100% owned by another company, it is called Wholly Owned Subsidiary of the company who had made 100% investment in it.

 

How To Set Up a Subsidiary

To setup one of these companies, you only need a sole director. The requirement for a company secretary was waived some years ago. The only restriction is that the sole director cannot then act as the company secretary. When you register as a sole director, you will enter both your residential address and a service address. Only the service address will appear in the public records.

The key here is that in the various documentation you submit regarding shareholders you will have both an individual director and another company as a shareholder. You are prohibited from having an entire company owned by another company.

Once you submit the documents, you will have a decision within 24 hours from Companies House.

 

Conclusion

Opening up a subsidiary isn’t a decision that you should take lightly. It isn’t always necessary and it may be better to simply open a different company from scratch. You have to make this decision by yourself. And it may be better to employ a professional agent to help with the opening of your subsidiary.

 

Know more about how to register company in India

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How GST Works in India

GST is a type of value added tax and a proposed comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian central and state governments. Further, the Goods and Service Tax (GST) is considered to be one of the biggest reforms in India’s indirect tax structure.

 

THE NEED FOR GST

Suppose Mr. A sells goods to Mr. B and charges sales tax; then Mr. B re-sells those goods to Mr. C after charging sales tax. While Mr. B was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.

 

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This was the case with the sales tax few years ago. At that time, VAT was introduced whereby every next stage person gets credit of the tax paid at earlier stage. This means that when Mr. B pays tax of Rs. 11, he deducts Rs. 10 paid earlier.

Similar concept came in Excise Duty and Service Tax also, which is called Cenvat credit scheme. To a huge extent, the problem of cascading effect of taxes is resolved by these measures.However, there are still problems with the system that have not been solved till date.

 

GST will solve this problem. Let us see how.

 

  • Sale in one state, resale in the same state

In the example illustrated below, goods are moving from Mumbai to Pune. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Then the goods are resold from Pune to Nagpur. This is again a sale within a state, so CGST and SGST will be levied. Sale price is increased so tax liability will also increase. In the case of resale, the credit of input CGST and input SGST (Rs. 8) is claimed as shown; and the remaining taxes go to the respective governments.

     

  •  Sale in one state, resale in another state

In this case, goods are moving from Indore to Bhopal. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Later the goods are resold from Bhopal to Lucknow (outside the state). Therefore, IGST will be levied. Whole IGST goes to the central government.

 

  • Sale outside the state, resale in that state

In this case, goods are moving from Delhi to Jaipur. Since it is an interstate sale, IGST will be levied. The collection goes to the Central Government. Later the goods are resold from Jaipur to Jodhpur (within the state). Therefore, CGST and SGST will be levied.