In India, from 1st few years with the onset of Modi’s government, a lot of thurst is put on start-ups in India. To sync with Startup pad in India, Indian government has planned and executed a number of processing, registrations and approvals which are made easy. Every second business related registrations, approvals and intimation is made online with very few compliances. For example GST, registration, ESI, FSSAI and many other which are already on the way to online process. This all in totality is done for giving a boost and ease of doing business in India.
The main motive of ease of doing business is to make India $5 trillion economy. With every new day, a new policy, scheme or an initiative is taking place so achieve that. Now lets us take quick view on compilation of major schemes and initiatives, and how it can help a business for doing in number of ways.
STARTING A BUSINESS
- Permanent Account Number (PAN), Tax Deduction & Collection Account Number (TAN), Director Identification Number (DIN) have now been merged into a single form (SPICe) for company incorporation.
- Five-page form and other attachments for reserving the name of the Company with the Ministry of Corporate Affairs has been simplified into a simple web service with only three fields to be filled.
- Registration under Employee State Insurance Corporation (ESIC) and Employee Provident Fund Organisation (EPFO) are available at Shram Suvidha portal as a common online service with no physical touch point.
- No requirement of inspection for before registration under Shops & Establishment Act in Mumbai and Delhi.
- Companies Act was amended to eliminate the requirement of a common company seal.
DEALING WITH CONSTRUCTION PERMITS
Municipal Corporations Of Delhi, As Well As Municipal Corporation Of Greater Mumbai, Have Introduced Fast Track Approval System For Issuing Building Permits With Features Such As Common Application Form (CAF), Provision Of Using Digital Signature And Online Scrutiny Of Building Plans.
- Delhi has uniform building by-laws which allow for risk-based classification regimes for different building types. It has a provision of deemed approval of sanctioning building plans within 30 days.
- For construction permits, the time reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi between Doing Business 2018 and 2019 reports.
- Total number of procedures reduced to 20 in Mumbai and 16 in Delhi.
- Cost of obtaining construction permits reduced from 23.2% to 5.4% of the economy’s per capita income.
TRADING ACROSS BORDERS
- The Central Board of Excise and Customs (CBEC) has implemented ‘Indian Customs Single Window Project’ to facilitate trade. Importers and exporters can electronically lodge their customs clearance documents at a single point.
- The number of mandatory documents required for customs purposes, for both import and export of goods, has been reduced to three.
- E-Sanchit, an online application system, allows traders to file all documents electronically.
- The electronic self-sealing of the container at the factory has reduced time and cost for exporting firms.
- A computerized risk management system has brought transparency and reduced frequency of custom inspections significantly.
- Central Board of Indirect Taxes and Customs has provided a facility for Advance Bill of Entry (Advance Import Declaration).
- The Commercial Courts and Appellate Division of High Courts have been established in Mumbai and Delhi.
- National Judicial Data Grid(NJDG), provides case data including case registration, cause list, case status and orders/ judgements of courts district-wise across the country. NJDG is open for public since 2015.
- New cases in district courts are assigned to Judges randomly through an automated system in Delhi and Mumbai.
- e-filing of cases has been introduced in district courts of Delhi and Mumbai. A case management tool has been developed with functionality of sending a notification to lawyers, viewing court orders/ judgements, tracking the status of cases, to semi-automatically generate court orders etc.
- Insolvency and bankruptcy board of India for fast execution of legal cases. The code aims to protect the interests of small investors and make the process of doing business less cumbersome
- Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) is a geographically unified electronic registry that provides for registration by asset type. Since 2017, CERSAI also provides search through debtor’s name.
- Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) (Central Registry) Rules, 2011 was amended to include additional types of charges, including a security interest in – immovable property by the mortgage, hypothecation of plant and machinery, stocks, debt including book debt or receivables, intangible assets, patent, copyright, trademark, under-construction building.
- The definition of property, which now includes immovable as well as intangible, allows CERSAI to register these additional charges.
- Electricity connection is provided within 7 days if no Right of Way (RoW) is required and within 15 days where RoW is required.
- Service line cum Development charges is now capped at US$ 357.6 in Delhi
- Number of documents required for getting electricity connection has been reduced to two and no physical documents are accepted.
- Total number of procedures reduced to 3 in Delhi and 4 in Mumbai.
- Reduction of corporate tax from 30% to 25% for mid-sized companies.
- Domestic companies can opt for concessional tax regime @ 22% (effective tax rate: 25.17% inclusive of surcharge and cess). Such company cannot claim any income tax incentive or exemption. Such companies are not be liable to pay the Minimum Alternate Tax (MAT).
- The tax rate for new domestic manufacturing companies is now 15% (17.01% inclusive of surcharge and cess). Companies that have been incorporated on or after 1st October 2019, making fresh investment manufacturing and commencing production on or before 31 March 2023, may opt for such concessional tax regime. Such companies cannot avail any other income tax exemption/ incentive under the Income-tax Act.
- A company that does not opt for the above concessional tax regime and avails any tax exemption/ incentive, shall continue to pay tax at pre-amended rates. However, the option of availing the lower tax regime of 22% can be opted for after the expiry of tax the holiday/ exemption period. Once the same is opted for it cannot be subsequently withdrawn by the taxpayer. MAT rate for companies availing exemptions/ incentives reduced from 18.5% to 15%.
- Robust IT infrastructure of online return filing for Indian taxpayers.
- The Goods and Service Tax came into effect from 01 July 2017. It subsumes eight taxes at the Central and nine taxes at the State level.
- The Employee State Insurance Corporation (ESIC) has developed a fully online module for electronic return filing with online payment. This has substantially reduced the time to prepare and file returns.
- With the introduction of the e-verification system, there remains no physical touch point for document submission to income tax authorities.
Disclaimer:– The above article inclusive list and short brief of Ease of doing business in India . There are many other important aspects also, which are cannot be covered in this article but at the same time they have major impact on that particular business or start-ups. The author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.
(The Author is Corporate Consultant and provides varied array of services including Start-ups, Secretarial, Legal, Trademark, taxation, Audit, GST, Book keeping and other ancillary advisory service in Delhi, Chandigarh as well as The National Capital Region (NCR) and can be contacted through email id:- [email protected] and Contact Number: 91-8178515005)