After discussing all types of business in India in our last blog, today we are discussing on all taxes in India.
In Indian tax structure there are lot of taxes like Excise, Service tax, VAT, CST, Octroi, Income tax, Companies Act.
Whenever you think to start a new business in India, It will be very confusing situation for all of us how many taxes are applicable to us what are the registration to be taken what are the formalities and Time Limit for the Registration.
(I) SERVICE TAX –
Service tax is a Indirect tax introduced in India in 1994 by Chapter V of the Finance Act, 1994.Service tax is levied by the Central Government of India. Service tax is levied on service provider when you are providing services.
Service tax is also levied on service receiver if it’s taking some specified service on reverse charge mechanism.
Click here for Service tax registration.
(II) EXCISE ACT
Central excise is an Indirect tax introduced in India under central excise act; 1944. Excise duty is levied by the Central Government of India .Excise duty is levied on manufacturer if you are manufacturing any excisable goods in India. Excise duty will be paid by the manufacturer at the time of removal of goods.
Central excise is also applicable in case of First and second stage dealers.
Click here for Excise Registration
(III) VALUE ADDED TAX(VAT) ACT
Vat is an indirect tax; VAT is tax on sale of goods with in a state levied by the State government of India under Entry 54 of the State List.
VAT is levied on movement of goods from one trader/manufacturer to other trader/manufacturer/consumer in the same state.
As the name suggest Value added tax, it is payable on value like profit and services added by the trader in sailing the goods. It is levied by the dealer on the sale of goods after collecting the vat on sales at specified rate dealer will deduct the input credit on material received and pay the difference to the government.
Click here for VAT REGISTRATION.
(IV) CENTRAL SALES TAX (CST) Registration
Central Sales Tax (CST) is an Indirect Tax; CST is a tax on sales of goods outside the state levied by the Central Government of India. It is payable by the dealer who makes the sale in the course of interstate trade or commerce.
Central Sales Tax (CST) is levied on movement of goods from one trader/manufacturer to other trader/manufacturer/consumer outside the state.
CST is paid on a state in which dealer has a respective place of business from where he has transferred the goods.
Click here for CST REGISTRATION
(V) INCOME TAX
Income tax is a direct tax levied by the government of India Under income tax act, 1961.
Income tax to be paid by all form of business (Proprietorship, Firm, Company, Trust, Society, HUF) as per their taxation provision defined in income tax act,1961.
Income tax is paid on Net Income, after deducting all the allowable expenses from the revenue earned by the assessee in a financial year.
There is no registration for Income tax after taking the PAN CARD you will be the income tax assessee.
(VI) TDS (Tax deduction at source)
TDS is a means of collecting income tax in India. TDS is levied by the central government of India under income tax act 1961.
TDS to be deducted by all the form of business (Company, Partnership Firm, Limited Liability Partnership) Except in Proprietorship firm TDS to be deducted if his account has been audited under income tax act, 1961 in previous year.
TDS to be deducted at the time of making payment to the vendor, There are certain expenses defined by the income tax act 1961 on which TDS to be deducted.
At the time of filing the income tax return assessee has to pay income tax on his income after deducting the TDS.
(VII) PROFESSIONAL TAX
Professional tax is levied by the state Government; there are two type of professional tax Professional tax enrolment certificate and Professional tax registration certificate.
Professional tax enrollment certificate (PTEC) is for the Director, Company, LLP, Partner, dealer).
Professional tax registration certificate (PTRC) is applicable on employing employee)
State on which Professional tax is applicable is –
Andhra Pradesh, Gujarat, Karnataka, Orissa, West Bengal, Madhya Pradesh, Kerala, Pondicherry, Maharashtra, Tamil Nadu, Assam.
(VIII) PROVIDENT FUND
Provident Fund is covered by the employee provident fund act, 1952. Provident fund is applicable if you are employing 20 or more employee who Wages is more than 6,600.
For more details on Provident fund Act Click on PROVIDENT FUNDS
IX) EMPLOYEE STATE INSURANCE ACT (ESIC)
ESIC is covered under Employees’ State Insurance Act, 1948(ESI Act), ESIC is for the welfare of the worker working in industry.
Trade mark is covered under trademarks act 1999. Trademark is not necessary to register, trademark will protect the business name and its goodwill, if you have registered your name and symbol other person will not be able to use the similar trademarks. A trade mark is a word, a device, a label or numeral etc. or a combination thereof used in the course of trade.