Procedures Of Audit under GST

An Audit ? Audit under GST is a verification process of records maintained by a registered dealer. The aim is to verify the correctness of information declared, taxes paid and to assess the compliance with GST. Usually, audits are carried out to check the accuracy of GST turnover declarations, tax payments, and refunds claimed. Audits validate compliance ratings of businesses by assessing the degree of compliance of their activities. The meaning of audit is given under section 2(13) of Central Goods and Services Tax Act, 2017.

CONTENTS: Audit by Registered Dealer: Audit by GST Tax Authorities: General Audit: Ordered by commissioner Special Audit: Nominated by commissioner Audit Threshold and Rectifications: Obligations of the Auditee: Finalisation of Audit: Consequences of Non-Compliance READ MORE... India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

                                                GST ANNUAL RETURN

A Return to be filed once in a year, by the registered taxpayers under GST. It is a consolidated information of all inward and outward supplies for tax administrator in the monthly or quarterly returns for a particular financial year. It consists of details regarding the supplies made and received during the year under different tax heads i.e. CGST, SGST and IGST.

CONTENTS:

Liability to file GST Annual return: Different types of GST Annual return: Due date of filling  GST Annual return: Details required in the GSTR 9 form: Preparation & discussion of form GSTR-9: Issues with GSTR 9 form and suggestions: Consequences of Non-Compliance READ MORE- India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

          Procedure for Private Placement of securities under Companies Act 2013

Section 42 of the Companies Act, 2013 defines ‘Private Placement': Any offer or invitation to subscribe securities to a select group of persons who have been identified by the Board of Directors of the company (other than by way of public offer) through issue of a private placement offer-cum-application, which satisfies the conditions specified in this section. Such number of persons must not exceed 50 at a time and not exceeding 200 in the aggregate (excluding QIBs and employees offered securities under ESOP), in a financial year.

Applicable Rule: Rule 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014. Contents: Conditions for Private Placement: Offer per Person of Investment: Allotment of Securities: Steps involved in Private Placement: (i).   Holding of Board Meeting. (ii).  Holding of General Meeting. (iii). Circulation of Offer Letter. (iv). Statutory Filing with ROC. (v).  Holding of Board Meeting (after receiving of allotment money). (vi). Issue share certificates and update minute book and register READ MORE- India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

                                             GST Registration Procedure

GST registration is mandatory for persons and entities supplying goods or services in India, when the aggregate value of supply is more than Rs.20 lakhs per annum. In special category state, the annual aggregate turnover threshold for GST registration is Rs.10 lakhs.

CONTENTS: 1. Eligibility Criteria’s of GST Registration: 2. Various Types of GST Registration: 3. Step by Step Procedure of GST Registration: 4. Required Documents for GST Registration:

1. Eligibility Criteria’s of GST Registration: Some of the major Eligibility Criteria’s of GST registration are as following:

• Turnover Criteria If a person or an entity has an aggregate turnover of more than Rs.20 lakhs & In special category state, exceeds Rs.10 lakhs then GST registration is mandatory. READ MORE- India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

        Compliances of a Foreign Company Carrying On Business in India

As per Section 2 (42) “foreign company” means any company or body corporate incorporated outside India which: (a) Has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (b) Conducts any business activity in India in any other manner.

CONTENTS: Regulatory provisions under Foreign Exchange Management Act, 1999. Regulatory provisions under Companies Act, 2013. Regulatory provisions under Income Tax Act, 1961. Other Compliances to be made by foreign Companies in India. Regulatory provisions under Foreign Exchange Management Act, 1999: Applicable Regulation:   Foreign Exchange Management (Establishment in India of Branch or Office or other place of business) Regulations, 2000 READ MORE- India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

                Formation of a Nidhi Company And Their Compliances

Section 406(1): “Nidhi” or “Mutual Benefit Society” means a company which the central government may, by notification in the official gazette, declare to be Nidhi” or “Mutual Benefit Society”, as the case may be.

Section 406(2): The central government may by notification in the official gazette, direct that any of the provisions of this act specified in the notification:

A) Shall not apply to any Nidhi or Mutual benefit society; or B) Shall apply to any Nidhi or Mutual benefit society with such exemptions, modifications and adaptations as may be specified in the notification. APPLICABLE RULE: NIDHI RULES, 2014 CONTENTS: 1. Incorporation And Incidental Matters. 2. Requirements For Minimum No. Of Members, Net Owned Fund Etc. 3. General Restrictions Or Prohibitions. 4. Membership & Allotment Of Shares. 5. Branches( Opening & Closing). 6. Deposits And Loans By Nidhis. 7. Rules Relating To Directors. 8. Penalty For Non-Compliance. 9. Exemptions To Nidhi Company. READ MORE- India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

          Procedure for Private Placement of securities under Companies

Section 42 of the Companies Act, 2013 defines ‘Private Placement': Any offer or invitation to subscribe securities to a select group of persons who have been identified by the Board of Directors of the company (other than by way of public offer) through issue of a private placement offer-cum-application, which satisfies the conditions specified in this section. Such number of persons must not exceed 50 at a time and not exceeding 200 in the aggregate (excluding QIBs and employees offered securities under ESOP), in a financial year. READ MORE- India;s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

                                             GST Registration Procedure

GST registration is mandatory for persons and entities supplying goods or services in India, when the aggregate value of supply is more than Rs.20 lakhs per annum. In special category state, the annual aggregate turnover threshold for GST registration is Rs.10 lakhs.

CONTENTS: 1. Eligibility Criteria’s of GST Registration: 2. Various Types of GST Registration: 3. Step by Step Procedure of GST Registration: 4. Required Documents for GST Registration:

1. Eligibility Criteria’s of GST Registration: Some of the major Eligibility Criteria’s of GST registration are as following:

• Turnover Criteria If a person or an entity has an aggregate turnover of more than Rs.20 lakhs & In special category state, exceeds Rs.10 lakhs then GST registration is mandatory.

• Inter-State Supply If a supplier of goods supplies goods from one state to another, liable for obtaining GST registration, even if the annual aggregate turnover criteria is not satisfied. READ MORE-India s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

Compliances of a Foreign Company Carrying On Business in India

As per Section 2 (42) “foreign company” means any company or body corporate incorporated outside India which: (a) Has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (b) Conducts any business activity in India in any other manner.

CONTENTS: Regulatory provisions under Foreign Exchange Management Act, 1999. Regulatory provisions under Companies Act, 2013. Regulatory provisions under Income Tax Act, 1961. Other Compliances to be made by foreign Companies in India

READ MORE- India s Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

                            Formation of a Nidhi Company And Their Compliances

Section 406(1): “Nidhi” or “Mutual Benefit Society” means a company which the central government may, by notification in the official gazette, declare to be Nidhi” or “Mutual Benefit Society”, as the case may be.

Section 406(2): The central government may by notification in the official gazette, direct that any of the provisions of this act specified in the notification:

A) Shall not apply to any Nidhi or Mutual benefit society; or B) Shall apply to any Nidhi or Mutual benefit society with such exemptions, modifications and adaptations as may be specified in the notification. READ MORE- Top Accounts Outsourcing & Tax Consultancy Firm in Delhi, Noida, Gurgaon - Especia Associates LLP

               Procedure for Obtaining Status of Dormant Company

DORMANT COMPANY: The companies act, 2013 has recognized a new set of companies called dormant companies. As per section 455(1) where a company is formed and registered under this act for future projects or to hold an assets or intellectual property and has no significance accounting transactions, such a company or an Inactive company may make an application to the registrar in such manner as may be prescribed for obtaining status of dormant company. Explanation to section 455(1): i) Inactive company means a company which has not been carrying on business or operation or has not made any Significant Accounting Transactions during the last 2 preceding financial year, or has not filled financial statements and annual returns during the 2 two financial year. ii) “Significant Accounting Transactions’’ means transactions other than :- a) Payment of fees by the company to the registrar, b) Payment made by it to fulfil the requirement of the act or any other law, c) Allotment of shares to fulfil the requirements of this act, and d) Payments for maintenance of its office and records. Section 455(4): In case of a company which has not filled financial statements or annual returns for two financial years consecutively, the ROC may issue a notice to such company and enter the name of such company in the register maintained for dormant companies. APPLICABLE RULE: Companies (miscellaneous) Rules, 2014.

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                                    Methods of valuation of Companies

Valuation is an exercise or process to assess the worth of an enterprise or a property. Common valuation terms that relate to a company’s capital structure are equity value, enterprise value and invested capital value. Stated differently, enterprise value is equal to the company’s invested capital less its cash (i.e. Enterprise Value = Equity Value + Debt – Cash) Methods of Valuation: For Valuation of an enterprise or a property there are two types of Methods General Methods Methods which are prescribed under Law 1- General Methods Comparable Company Analysis (Public Company method):This method is generally applied for unlisted companies. This method estimates value by relating the same to underlying elements of similar companies for past years. For example- book value multiples (Valuation of Financial Institution or Banks). Discounted Cash Flow Analysis (DCF):This method is based on that value of business is a direct function of its cash generating ability. This method tells that the value of an asset is the present value of expected future cash flows on that asset (including the present value of its terminal value). SOTP Analysis: it is a range of values for a company’s equity by adding the values of its individual operating segments to arrive as the total firm value. It is generally used to relieve one or more business. Ability to Pay Analysis (LBO):This method is used to compare the ability to pay of several potential acquirers and establish which can pay the highest price. In this method valuation is done by assuming the acquisition via a leveraged buyout, which use a borrowed fund to fund the purchase and assuming a required rate of return for the purchasing entity. Precedent Transaction Analysis: This analysis include a control premium   paid by an acquirer to have control of the business and to complete M&A transactions it involves similar companies to get a range of valuation multiples. 2- Methods which are prescribed under Law: Pricing under IPO: It is used when company comes with IPO (Initial Public Offer). Company get list at this time. Valuation under Preferential Allotment: This method is used to identify the value of Preferential Allotment when company issue preference shares. Pricing of sweat equity shares under SEBI (Issue of sweat equity) regulations 2002: The value of sweat equity shares is determined as per the method prescribed under law at the time of issue sweat equity shares. Valuation of stock option: The law prescribed the specific method to determine the value of stock option. Determine the offer price under SEBI (Delisting of equity shares) Regulations 2009: At the time of delisting of equity shares, the value of offer price shall be determined as per the SEBI (delisting of equity shares) Regulations 2009 and as per method prescribed under other law. Value of shares under the sweat equity unlisted companies (issue of shares) rules, 2003: Valuation of sweat equity shares is required When unlisted company issue sweat equity shares and is done as per sweat equity unlisted companies (issue of shares) rules, 2003. Offer price under SEBI (SAST) Regulations regulation 8: Valuation of shares and company is required to determine at the time of Takeover and it is done as per regulation prescribed under SEBI SAST (Substantial Acquisition of Share and Takeover) Regulation 2011.   Conclusion: Valuing a privately-held company is much more involved than just applying an estimated multiple to the company’s EBITDA (i.e. comes down to the application of asset, income and market-based valuation approaches). if you are looking best Valuation firms in India then Especia Associates is Best Valuation firms in India.

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Due diligence Process & Checklist

Due diligence is an analysis and risk assessment of an impending business transaction. It is the careful and methodological investigation of a business or persons, of the performance of an act with a certain standard of care to ensure that information accurate, and to uncover information that may affect the outcome of the transaction. Due diligence is basically a background check to make sure that the parties to the transaction have the required information they need, to proceed with the transaction. Due diligence is used to investigate and evaluate a business opportunity. The term Due diligence describes a general duty to exercise care in any transaction. As such, it spans investigation into all relevant aspects of the past, present, and predictable future of the business. Types Of Due Diligence: In business transaction, the due diligence process varies for different types of companies. The relevant area of concern may include the financial, legal, labour, tax, environment and commercial situation of the company. Other areas include intellectual property, real and personal property, insurance and liability coverage etc. The most important types of Due Diligence are as follows: Business Due Diligence: It involves looking of Parties to a transaction, business prospects and quality of investment. i.e. Operational due diligence Strategic due diligence Technical due diligence Environmental due diligence Human resource due diligence Information security due diligence Ethical due diligence Legal Due diligence (Including Secretarial due diligence): It covers the legal aspects of a business transaction, potential legal pitfalls and other related issues. Legal due diligence covers intra-corporate and inter-corporate transactions. Financial Due Diligence (Including tax due diligence): It covers the analysing and validating all the financial, commercial, operational and strategic assumptions being made. Due Diligence Checklist: Due diligence checklists are usually arranged in a basic format. However, they can be changed to fit different industries. The following are the few types of information or documents to be checked, during the process of due diligence:

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                      Valuation of the Company for Acquisition Introduction: There are a number of situation in which a business or a share or any other property may be required to be valued, similarly while acquiring business it is important to do valuation. Valuation gives a theoretical value and it is essential to fix the value or consideration payable for an acquisition. It helps to conclude a transaction in a reasonable manner without any room for any doubt. Valuation Standards & Principles: The registered valuer shall, while conducting a valuation, comply with the following: valuation Standards: internationally accepted valuation standards; valuation standards adopted by any registered valuers organisation valuation Principles: Based on expectations Based on future cash flows Based on tangible capital assets Factor should be consider while doing valuation: Purpose of valuation. Stock exchange prices of the shares of the two companies. The dividend paid on the shares. Relevant growth aspects. Value of the net asset. Quality and integrity of the management. Present and Prospective competition. Market sentiments. Future earning potential. Analysis of business history. Goodwill/Brand name in the market. Identifying economic factors directly effecting business. Study of exchange risk involved.  

Issuance of Non Convertible Debentures (NCD’s)

NCD’s are the products offered by various private and public sector corporates through public issues or on private placement basis. Investors want investment options that manage liquidity and risks while offering substantial returns. Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor. Debentures are of two types, namely convertible debentures and non-convertible debentures (NCD). NCD investment can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs). Invest in secured NCD to get multiple investment benefits. Convertible Debenture Convertible debentures are unsecured bonds that can be converted to company equity or stock. Non-convertible Debentures (NCD) Nonconvertible debentures are unsecured bonds that cannot be converted to company equity or stock. Types Of NCDs NCDs are traded on Stock Exchanges 2. Issuance and Trading will be in Demat form only. 3. Interest will be paid through Direct Credit / ECS / RTGS / NEFT mode 4. A good credit rating is required for the company to issue a NCD. Features of NCDs

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                              RBI Norms on Listed entities

GUIDELINES ON CORPORATE GOVERNANCE: Corporate Governance is the key to protecting the interests of the stake-holders in the corporate sector. Its universal applicability has no exception to the Non-Banking Financial Companies (NBFCs) which too are essentially corporate entities. Listed NBFCs which are required to adhere to listing agreement and rules framed by SEBI on Corporate Governance are already required to comply with SEBI prescriptions on Corporate Governance.

In order to enable NBFCs to adopt best practices and greater transparency in their operations following guidelines are proposed for consideration of the Board of Directors of all Deposit taking NBFCs with deposit size of >= Rs 20 crore and all non-deposit taking NBFCs with asset size of >=Rs 100 crore (NBFC-ND-SI).

Constitution of Audit Committee In terms of extant instructions, an NBFC having assets of >= Rs. 50 crore as per its last audited balance sheet is already required to constitute an Audit Committee, consisting of not less than three members of its Board of Directors, the instructions shall remain valid.

In addition, NBFC-D with deposit size of Rs 20 crore may also consider constituting an Audit Committee on similar lines.

Constitution of Nomination Committee In terms of Section 45-IA (4) (c) of the RBI Act, 1934, while considering the application for grant of Certificate of Registration to undertake the business of non-banking financial institution it is necessary to ensure that the general character of the management or the proposed management of the non-banking financial company shall not be prejudicial to the interest of its present and future depositors. In view of the interest evinced by various entities in this segment, it would be desirable that NBFC-D with deposit size of >= Rs 20 crore and NBFC-ND-SI may form a Nomination Committee to ensure ‘fit and proper’ status of proposed/existing Directors.

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MISCELLANEOUS SERVICES

Besides serving the clients in main areas like taxation, auditing and consultancy, we also provide ancillary services which are as important and crucial as main services for the sustainability of the business.

Our expert team, driven by global methodology and leading practices, help the clients in achieving the desired objectives effectively and efficiently.

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