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GST-ROll-Out-COnfirmation

GST rollout: Retailers working overtime to be prepared, deny impact on sales

Organised retailers do not expect the Goods and Services Tax (GST) to impact their sales despite general fears that it could disrupt businesses, and hope to be fully ready for the uniform tax regime in the next few weeks. “As GST will be rolled out from July 1, we have to be prepared. It will lead to better compliance and an organised way of doing things,”

 

“We are not anticipating any sales disruptions. Nobody has expressed concerns on that…For retailers, benefits will come as and when manufacturer change the prices, which we, in turn, will pass it on to consumers,” he added. July onwards, large retail companies, including Reliance Retail, Future Group, Trent HyperCity and DMart, among others, are looking at aggressive price reductions.

 

The common objective of all retailers is also that margins should be protected, while ensuring that prices remain under check. “We will reduce prices by 2 to 20 per cent on various consumer products,”

 

GST will create a level-playing field for modern trade,” he added, explaining that the biggest challenge is to see that customers are not unhappy. “I believe tax rates should not be so complex as to create variations that adversely affect consumers,” he said.

 

Most retailers are awaiting more clarity on various issues, including input tax credit and e-way bills. Several retail stores have announced big discounts especially in the consumer electronics segment ahead of the GST rollout, in a bid to to clear inventories and to avoid implementation issues.

2017-02-04 12_32_32-Union Budget 2017

Union Budget 2017 highlights

Finance minister Arun Jaitley presented the Union Budget 2017 in Parliament on Wednesday. The biggest highlight in the 2017 budget was the slashing of income tax by half for individual tax payers, ban on cash transactions over Rs. 3 lakhs and reduction in holding period to 2 years for capital gains. In this article, we look at the highlights of the 2017 Budget with respect to an Entrepreneur or Business Owner in India.

 

Income Tax
Income tax rate has been slashed from 10% to 5% for individuals who earn between Rs.2.5 lakhs to Rs.5 lakhs. Now after rebates, even a person with a Rs.3 lakhs income could enjoy zero tax liability. Since, proprietorship firms are taxed similar to individuals, micro enterprises having income of less than Rs.5 lakh would enjoy the benefits in tax reduction.

 

Tax Break for Startups
Continuing to build on the 2016 Budget by extending special support for Startups, the Finance Minister has increased the period of profit-linked deductions available to Startups to 3 out of 7 years from the current 3 out of 5 years.

 

Budget 2016-17 kick-started the process. Several deductions were reduced and sunset dates put for others along with reductions in tax rates for some categories of businesses – new manufacturing companies set up after March 2016 were given the option of being taxed at 25 percent provided they did not claim any exemption and companies with turnover less than Rs 5 crore got a 1 percent reduction. However, some new exemptions were given to start-ups, with certain conditions.

This year, admittedly, Jaitley has not moved forward on withdrawing exemptions even as he reduced corporate tax rates.

But let’s look at who has got this benefit: the small and medium enterprises sector. Income tax for companies with an annual turnover of up to Rs 50 crore has been brought down to 25 percent. A big chunk of this lot was paying an effective tax rate of 30.26 percent, while the large companies (turnover above Rs 500 crore) paid an effective tax rate of 25.9 percent. So Jaitley has in a way done the tax equivalent of social levelling. Large companies have not got any tax relief this year.

 

Stimulating Bank Credit
To stimulate bank credit to businesses, various measures have been announced as follows in the 2017 Budget:

  • The allowable provision for Non-Performing Asset (NPA) of Banks has been increased from 7.5% to 8.5% to improve the risk appetite of Banks.
  • In line with the ‘Indradhanush’ mission, Rs. 10,000 crores has been allocated in the 2017 Budget for recapitalisation of Banks.
  • Lending target under Pradhan Mantri Mudra Yojana hase been increased to Rs. 2.44 lakh crores. Priority under the scheme will be given to borrowers from certain backgrounds like Dalits, Tribals, Backward Classes.
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Types of Cost Accounting

Cost accounting involves the techniques for:

1. determining the costs of products, processes, projects, etc. in order to report the correct amounts on the financial statements, and
2. assisting management in making decisions and in the planning and control of an organization.
For example, cost accounting is used to compute the unit cost of a manufacturer’s products in order to report the cost of inventory on its balance sheet and the cost of goods sold on its income statement. This is achieved with techniques such as the allocation of manufacturing overhead costs and through the use of process costing, operations costing, and job-order costing systems.
Cost accounting had its roots in manufacturing businesses, but today it extends to service businesses. For example, a bank will use cost accounting to determine the cost of processing a customer’s check and/or a deposit. This in turn may provide management with guidance in the pricing of these services.
While cost accounting is often used within a company to aid in decision making, financial accounting is what the outside investor community typically sees. Financial accounting is a different representation of costs and financial performance that includes a company’s assets and liabilities. Cost accounting can be most beneficial as a tool for management in budgeting and in setting up cost control programs, which can improve net margins for the company in the future.
One key difference between cost accounting and financial accounting is that while in financial accounting the cost is classified depending on the type of transaction, cost accounting classifies costs according to information needs of the management.
Types of Cost Accounting

 

  • Standard Cost Accounting

This type of cost accounting uses ratios to compare efficient uses of labor and materials to produce goods or services under standard conditions. Assessing these differences is called a variance analysis. Traditional cost accounting essentially allocates cost based on one measure, labor or machine hours. Due to the fact that overhead cost has risen proportionate to labor cost since the genesis of standard cost accounting, allocating overhead cost as an overall cost has ended up producing occasionally misleading insights.

 

  • Activity Based Costing

An approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs, resources assigned to activities, and activities to cost objects based on consumption estimates.
Activity based costing accumulates the overheads from each department and assigns them to specific cost objects like services, customers, or products. The way these costs are assigned to cost objects are first decided in an activity analysis, where appropriate output measures are cost drivers. As result, activity based costing tends to be much more accurate and helpful when it comes to helping managers understand the cost and profitability of their company’s specific services or products. Accountants using activity based costing will pass out a survey to employees who will then account for the amount of time they spend on different tasks. This gives management a better idea of where their time and money is being spent.

 

  • Lean Accounting

Most accounting practices for manufacturing work off the assumption that whatever is being produced is done in a large scale. Instead of using standard costing, activity based costing, cost-plus pricing, or other management accounting systems, when using lean accounting those methods are replaced by value-based pricing and lean-focused performance measurements

 

  • Marginal Costing

Considered a simplified model of cost accounting, marginal costing is an analysis of the relationship between a product or service’s sales price, the volume of sales, the amount produced, expenses, costs and profits. That specific relationship is called the contribution margin.This type of analysis can be used by management to gain insight on potential profits as impacted by changing costs, what types of sales prices to establish, and types of marketing campaigns.

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Financial Planning process

Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of a company.

Capital requirements  will depend upon factors like cost of current and fixed assets, promotional expenses and long- range planning. Capital requirements have to be looked with both aspects: short- term and long- term requirements. The capital structure is the composition of capital, i.e., the relative kind and proportion of capital required in the business. This includes decisions of debt- equity ratio- both short-term and long- term. Framing financial policies with regards to cash control, lending, borrowings, etc. A finance manager ensures that the scarce financial resources are maximally utilized in the best possible manner at least cost in order to get maximum returns on investment.

Financial planning is process of framing objectives, policies, procedures, programmes and budgets regarding the financial activities of a concern. This ensures effective and adequate financial and investment policies.

The importance of Financial planning

  • Adequate funds have to be ensured.
  • Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained.
  • Financial Planning ensures that the suppliers of funds are easily investing in companies which exercise financial planning.
  • Financial Planning helps in making growth and expansion programmes which helps in long-run survival of the company.
  • Financial Planning reduces uncertainties with regards to changing market trends which can be faced easily through enough funds.
  • Financial Planning helps in reducing the uncertainties which can be a hindrance to growth of the company. This helps in ensuring stability an d profitability in concern.

 

The financial planning professional informs the client about the financial planning process, the services the financial planning professional offers, and the financial planning professional’s competencies and experience. The financial planning professional and the client determine whether the services offered by the financial planning professional and his or her competencies meet the needs of the client. The financial planning professional considers his or her skills, knowledge and experience in providing the services requested or likely to be required by the client. The financial planning professional determines if he or she has, and discloses, any conflict of interest. The financial planning professional and the client agree on the services to be provided.

 

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How to Register a Trademark in India

When an outsider looks for startup business, the first thing they notice is the trademark. A trademark is  the identity of a business lies. It is the name and symbol under which a business undertakes its trade and commerce, which represents the company.

In India, trademarks are regulated by the Trade Marks Act of 1999. The Act aims to provide registration and better protection towards trademarks while preventing the use of fraudulent marks.

 

How to Choose a “Good” Trademark?

  • The mark(s) should be easy to remember.
  • It should be short and easy to spell and write.
  • It may be aesthetically appealing.
  • It should not ideally be descriptive in its nature.
  • It can be fanciful and coined, to avoid confusion.

 

APPLE/ASUS/DELL/HP/LENOVO” for computers are an example of a non-descriptive and arbitrary mark, which makes for good trademarks.

KODAK” for cameras is a coined term; that also makes a good trademark.

MICROSOFT” for software, “LAKME/AMWAY/AVON” for makeup, are all good examples.

 

How to Apply For a Trademark?

  • Conduct a trademark search that will let you know if there are similar trademarks that are already registered.
  • Apply for a trademark registration. You can do this by yourself through the Government website, or get a lawyer to do it for you. The procedure of application is laid down in the Trade Marks Act, 1999.
  • An application number is allotted for every pending registration, which can be tracked on the website.
  • If the application is accepted, it will be published in the Trademark Journal. If there are no oppositions, your trademark will be registered to you. However, if there are oppositions, there will be a hearing in the Trademark Hearing Office to decide on the final registration of the mark.

 

Benefits of Registering Your Trademark

  • A registered trademark identifies and advertises the good/service.
  • It protects the commercial goodwill of the trader/owner of the trademark.
  • It protects consumers from buying forged or inferior goods.
  • In the case of an infringement of a registered trademark, the owner has the option of civil and criminal remedies. In the case of an unregistered trademark, the only remedy available to the owner is the option of filing a suit of passing off.

 

In India, it is not compulsory to register a trademark. However, there are certain obvious benefits of registration of the same. The benefits are enumerated as above:

auditing

Government Sets Up Experts Groups to Look Into Auditing Industry.

Acting on a petition Indian audit firms sent to prime minister Narendra Modi recently the corporate affairs ministry  has constituted an expert group to delve into the issues related to the operations of audit firms In the country,

The elected expert group members former competition commission of India. (RBI) deputy governor NS Vishwanathan will study the operating structures of multinational audit firms implementation of audit rotation and use of restrictive covenants by global investors. They have two months to engage with relevant stakeholders and make suitable recommendations to the government. It’s a positive order for Indian audit firms.

The expert group has the right balance of experts to review the burning issues faced by Indian audit firms arising from monopoly of multinational audit firms in India. CEO at auditing firms KS Aiyar & Co. The principles of anti competitive measures as per law need to be considered in every service including right now, audit concentration in India is a grave systemic risk.

Though the Indian firms audit slightly more than 60% of ET 500 companies, there has been a perceptible shift towards the multinational firms, especially amongst larger Indian companies. But now the companies Act 2013 mandated audit rotation threatens to speed up Client exodus.

In July representatives of the top 20 Indian audit firms met in Mumbai to discuss ways to combat the increasing influence of multinational firms. Post that meeting Aiyar on behalf of the firms had drafted a petition to the prime minister pointing out hegemony of the big four auditing multinationals and alleging that they engaged In illegal actions.