Session 10 leb


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  • Currently Bihar VAT stands at 5% for all products since April’2011
  • Session 10 leb

    1. 1. Documents required for trading in domestic market SESSION 10 LEGAL ENVIRONMENT OF BUSINESS 1
    2. 2.  Retail is one of Indias fastest-growing economic sectors because the working population is increasing and the buying power of the people is also increasing. Starting a retail business requires certain documentation that needs to be in place in order to adhere to the national and local law. 2
    3. 3. Documents/laws/acts related to trading in domestic marketRegister the company’s nameTax account no. (TAX)PANRegistration ActIndian stamp actEasement act 1882 3
    4. 4. Documents/laws/acts related to trading in domestic marketShop and establishment actThe Trade & Merchandise Marks Act, 1999Laws relating to EmploymentContract Labour (Regulation and Abolition) Act, 1970Inter-State Migrant Workmen (Regulation ofEmployment and Conditions of Service) Act, 1979Minimum Wages Act, 1948 4
    5. 5. Documents/laws/acts related to trading in domestic marketPayment of Bonus Act, 1965Payment of Gratuity Act, 1972Payment of Wages Act, 1936Workmen’s Compensation Act, 1923Industrial Dispute Act, 1947Environment (Protection) Act, 1986 5
    6. 6. Register the Companys Name Reserve the companys name with the Registrar of Companies. ID proof, PAN Card, Address Proof is needed along with the application form + registration fee to get the certificate of incorporation that legally approves the name of your business. 6
    7. 7. Tax Account Number(TAN) Obtain a TAN from an authorized agent approved by the National Securities Depository Limited. TAN is required of anyone responsible for collecting tax. The application form is available at and 7
    8. 8. Permanent Account Number Application for PAN s.b. submitted to an authorized franchise approved by the National Securities Depository or the Unit Trust of India Investors Services PAN is essential for tax purposes Mandatory while opening a business account or while applying for a loan 8
    9. 9. Registration Act Objective : to ensure information about all land related so that correct land records could be maintained. Also used for recording of transactions relating to other immovable property provides for registration of supporting documents which give these documents more authenticity Registering authorities are present in all the districts 9
    10. 10. Indian Stamp Act 1899 Original purpose was to raise revenue to Govt. However, today stamped document is considered much more authentic and reliable than an un-stamped document Instruments chargeable to duty under the Stamp Act which are not duly stamped are inadmissible in a court of law and have no evidentiary value. a penalty of up to 10 times the original stamp value has to be paid to rectify them 10
    11. 11. The Easement Act 1882 governed by the Easements Act, 1882 the right of easement is derived from the ownership of property It means a right which the owner or occupier of land possesses for the beneficial enjoyment of that land and which permits him to do or to prevent something from being done in respect of certain other land not his own. 11
    12. 12. The Easement Act 1882 an easement may be acquired by the owner of immovable property, i.e. the “dominant owner”, or on his behalf by the person in possession of the property. Such a right may also arise out of necessity or by virtue of a local custom. 12
    13. 13. Shops and Establishment Act retail stores are governed by various Shops and Establishments Acts as applicable in the states These acts regulate the conditions of work and employment in shops and generally prescribe obligations in respect of inter alia registration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measures wages for overtime work 13
    14. 14. The Trade & Merchandise Marks Act, 1999  TRIPS defines Trademarks as any sign, or any combination of signs that can distinguish the goods and services of one organization from the other organization.  TRIPS provides for initial registration and each renewal for a term of ten years  The Trade and Merchandise Act 1999 is compatible with TRIPS and harmonizes it with international systems and practices 14*Trade Related Intellectual Property Rights
    15. 15. Laws relating to Employment A retail organization is governed by the provisions of the Employees’ Provident Funds Act, 1952. this act mandates periodic contributions to the Employees’ Provident Fund Scheme and the Employees’ Pension Scheme as applicable The firm also has to make contributions under the Employees’ State Insurance Act, 1948 15
    16. 16. Employees Provident Funds Act, 1952 applicable to any estt. employing 20 or more persons provides for compulsory Provident Fund for the benefit of employees in factories and other estts. Employer’s contribution to be deposited to the EPF is a specified %age of the employee’s salary employee’s contribution = employer’s contribution 16
    17. 17. Employees State Insurance Act, 1948 Provides for benefits to employees in case of sickness, maternity, employment injury, etc. Every estt. must register within the specified time and in the specified manner All employees in the estt. to which this act applies shall be insured 17
    18. 18. Employees State Insurance Act, 1948 The contribution payable = employer’s + employee’s @ decided by the Central Government and payable to the ESIC Contribution has to be made for all employees, whether directly or indirectly employed by the firm 18
    19. 19. Contract Labour (Regulation and Abolition) Act, 1970 This legislation applies to every estt./contractor in which 20 or more workmen are employed or were employed in the past 12 months as contract labour Registration of an estt. is mandatory through an application to the registering authority 19
    20. 20. Contract Labour (Regulation and Abolition) Act, 1970 Employer/each contractor in relation to each employer have to obtain a license from Govt. licensing officers to execute any work through contract labour The license may impose conditions as to work, fixation of wages and other essential amenities in respect of contract labour 20
    21. 21. Contract Labour (Regulation and Abolition) Act, 1970 The Act provides for the welfare of the workers by imposing obligations on the employer to provide for canteens, rest rooms, washing facilities etc. Non-adherence to this this act is punishable with imprisonment or with fine 21
    22. 22. Inter-State Migrant Workmen (Regulation ofEmployment and Conditions of Service) Act, 1979 regulates the employment of inter-state migrant workmen and provides for their conditions of service applicable to every estt./contractor employing 5 or more inter-state migrant workmen currently or have employed in the past 12 months The estt. has to apply for the registration of the estt. in the prescribed manner and time 22
    23. 23. Inter-State Migrant Workmen (Regulation ofEmployment and Conditions of Service) Act, 1979 The contractor has to obtain the license from the licensing officer appointed by the Central/State Govt. The license is valid only for a specified period and requires to be renewed at its expiry The Act levies some duties on the principal employer and the contractor 23
    24. 24. Inter-State Migrant Workmen (Regulation ofEmployment and Conditions of Service) Act, 1979 principal employer provides for the displacement allowance and journey allowance contractor provides for adequate wages, medical facilities and other benefits 24
    25. 25. Minimum Wages Act, 1948 applicable to any person who employs 1 or more person in any scheduled employment The employment can be direct or indirect AIM of this act is to prevent exploitation of labour and to provide sustenance and maintenance of the worker and his family 25
    26. 26. Payment of Bonus Act, 1965 Objective : distribution of profits earned by the estt. among the workmen applicable to every estt. in which 20 or more persons are employed on any day during an accounting year An employer is bound to pay every employee a minimum bonus of 8.33% of the salary or wage earned by the employee. 26
    27. 27. Payment of Gratuity Act, 1972 applicable to any estt. in which 10 or more employees are employed or were employed on any day in the preceding 12 months An employee should be in uninterrupted service (as per conditions laid down in the Act) in order to be paid gratuity 27
    28. 28. Payment of Gratuity Act, 1972 Gratuity shall be payable after the completion of 5 years of continuous service upon the termination of his employment on superannuation or retirement or resignation in case of death of an employee it is payable to the nominee of the employee 28
    29. 29. Payment of Wages Act, 1936 “every employee has a right to receive remuneration for the services provided by him applies to persons employed in any estt. either directly or indirectly AIM : to ensure that the wages are paid by the employers within the prescribed time limit w/o any unauthorized deductions 29
    30. 30. Workmen’s Compensation Act, 1923 Provides for protection from hardship faced by workmen due to accidents, death or occupational diseases Provides for assistance to the family members of the workmen An employer has to pay compensation for the personal injury caused to a workman by accident, death, etc. arising out of and in the course of his employment 30
    31. 31. Workmen’s Compensation Act, 1923 A contractor for construction of building is also made liable for the personal injuries of his workmen amount of compensation depends on the nature and extent of the injury 31
    32. 32. Industrial Dispute Act, 1947 Objective : to investigate and settle disputes between the employer and the workmen It is applicable to any industry wherein systematic activity is being carried on by cooperation between an employer and his workmen (direct/indirect) Arbiters  Works Committee, Boards of Conciliation, Courts of Inquiry, Labour Courts and National Tribunals 32
    33. 33. Environment (Protection) Act, 1986 Provides for standards for emission or discharge of environmental pollutants from various sources restricts areas in which operations or processes cannot be carried out or shall be carried out subject to certain safeguards 33
    34. 34. Info gathered from a store owner in Patna, BiharThe documents required for trading indomestic market:1.CST2.BIHAR VAT3.LABOUR CERTIFICATE 34
    35. 35. STEP 1 Any shop has to apply for sales tax registration with that sales tax office in whose circle that shop falls in Patna has 6 circles implying 6 offices Both CST and Bihar VAT registration(5%) is done at the same Sales Tax Office CST and LST has to be paid before 15th of next month else there is a penalty of 1.5% per month on the unpaid amount of tax 35
    36. 36. Returns….. Quarterly RETURNS have to be filed by 31st of next month. The return includes the details of the goods bought as well as goods sold during the quarter also includes the details of the CST and LST (Bihar VAT) paid during the previous quarter 36
    37. 37. Docs required while applying for sales tax no. a) 2 Identity proof  PAN Card, Driver’s Licence, Voter ID, etc. b) Address proof of the commercial property from where store shall operate  If property is self owned, attach the property papers  If property is rented, attach the copy of rent agreement 37
    38. 38. Docs required while applying for sales tax no. c) Municipality receipt to be submitted whether the shop is self owned or rented d) Bank statement of the Current A/C held e) In case of CST, 2 such guarantors are required who belong to the same circle/city and who have been paying their taxes since at least 6 months 38
    39. 39. Road Permit & ‘C’ Form For inter-state purchase, CST licence is a must. If we buy from local distributor, then CST is not required. When we place an order to a brand AND it’s the case of inter-state purchase, we send them the road permit (form D-IX). (Separate road permit is required for each order) 39
    40. 40. Road Permit & ‘C’ Form At the end of the quarter, we have to send the C form to the brand. (The C form is issued by the Sales Tax Office upon verification of the CST and LST paid during the previous quarter against the goods bought and sold during the previous quarter) Against the C form, a CST of 2% has to be paid. In absence of C form, a CST of 5% has to be paid. 40
    41. 41. 41