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India’s FM Assigns Rs. 900 Cr Debt-Funding for MSMEs

February 13, 2020

India’s Finance Minister Nirmala Sitharaman presented the Union Budget 2020 and announced an array of schemes and steps for micro, small, and medium enterprises (MSMEs) and for small businesses. Budget 2020 proposes to give a push to the manufacturing of electronic equipment, mobile phones, and semiconductor packaging. The FM also said that this could also be utilized for uplifting the manufacturing of medical devices.

In Jan this year, the Union MSME minister Nitin Gadkari had mentioned that his department had a plan to establish five parks for manufacturing low-cost medical devices in India. A National Technical Textiles Mission has also been announced in the Budget 2020, which would have a four-year execution period with an outlay of Rs 1,480 crore. The FM said that a National Logistics Policy would also be soon released to form a single window e-logistics market and ensure that the MSMEs become competent. In addition, for achieving a higher export credit, soon a new scheme would be launched to offer higher insurance cover and lessen the premium particularly for small exporters. It would also ease the process of claim settlements.

The FM also stressed on the goal to make every district as an export hub. For this, she announced the launch of the Nirvik scheme to enable export tax disbursement, which has an objective of making loans simpler to access for exporters and also ease the lending procedure. The Commerce Minister Piyush Goyal announced Nirvik in September 2019, which is a New Export Credit Insurance Scheme (ECIS) by Export Credit Guarantee Corporation of India (ECGC). The ECGC offers credit guarantee of almost up to 60 percent loss, however, under Nirvik scheme, the insurance cover which is guaranteed would cover almost up to 90 percent of the principal, including the interest of loans, and would also include pre and post-shipment credit. Another announcement was that a unified procurement system will be created on public procurement portal Government e-Marketplace.

This declaration is not completely new as the Commerce Ministry earlier launched GeM in August 2016 with the aim of developing an open and transparent platform of procurement for the government. In September 2019, it was said that GeM is working towards a series of steps like creating a mechanism to ensure timely payment to all the registered small businesses and MSMEs, and a process for rating buyers and sellers for promoting its growth. Now in the Budget 2020, the FM said that a digital platform would be established for seamless process of application and capturing of Intellectual Property Rights (IPR). But, it was not clear if she was talking about the website and mobile application Learn to Protect, Secure and Maximise Your Innovation on Intellectual Property Rights (IPRs) that was launched in October 2019.

The website and app was developed by Cell for IPR Promotion and Management (CIPAM)-DPIIT in partnership with Qualcomm and National Law University (NLU), Delhi.

GST and Debt Funding

The FM also announced a scheme for subordinating the debt to MSMEs. She advised the banks to extend restructuring MSME NPAs for an additional year, which earlier had a timeline of March 2020.

She also said that an app-based product which will invoice financing loans would be launched to improve the challenge of delayed payments and also cash flow disparities for MSMEs. She assured that some amendments would be made to facilitate the NBFCs to offer invoice financing to MSMEs. In January 2019, the RBI had permitted the recasting of loans to MSMEs only under the pre-requisite that the total fund and the non-fund based exposure to the MSME borrowers is not exceeding the limit of Rs. 25 crore.

The FM also mentioned that the implementation of GST had helped MSMEs in a big way. However, leading up to Budget 2020, various MSMEs weren’t too happy with GST and voiced their expectations regarding GST. The streamlining of GST was one of the top challenges for the MSME sector, a section that is the backbone of the Indian economy as it contributes almost 29 percent of the nation’s GDP. MSMEs had anticipated the Union Budget 2020 to tackle the rationalising of GST slabs, enhancing the GST refunds system, and dealing with export issues caused due to GST. In Budget 2020, the FM allocated Rs 2.83 lakh crores particularly for agro and allied sectors comprising rural development, irrigation, and Panchayati Raj. The Agri credit target was proposed at Rs. 15 lakh crore.

The budget also recommended comprehensive action-plan and steps for water-stressed districts. Approximately 35 lakh farmers would be helped to set up their stand-alone solar pumps so that they can make a living even in their barren lands. The budget also concentrated on offering 152 million metric tonnes of warehousing facilities.

Article, India

IT Department Recommends Guidelines for Verifying any Suspicious Bank Accounts

February 7, 2020

After demonetisation, the banks have been told to levy charges on any cash transactions going over a specific limit. Additionally, RBI has made it compulsory to scrutinise cash transactions which are unusual as several malpractices were observed when people did cash deposits of Rs.500 and Rs.1,000 notes during demonetisation.

Recently, the Finance Ministry passed a circular explaining the standard operating procedure (SOP) for evaluation of officers, while handling such cases. There are specific scenarios in which a verification warrant could be released for your transaction:

1. Who can be scrutinised?

A scrutiny can happen in many scenarios. Some of them are mentioned below:

Cash deposited from previous income or savings

People who deposit cash over Rs.2.5 lakh or senior citizens depositing cash over Rs.5 lakh could come under a scrutiny. Any amount that is within the stated limit would not be scrutinised as long as that the money is from cash withdrawals, household savings, previous income, etc.
In case of individuals who do not have business income or deposits over the specified limits would be authenticated by the assessing officers (AO). Enterprises whose books of accounts reflect total savings that are above the closing cash balance as of 31 March 2016 (AY 2016-17) would surely be scrutinised.
Bank accounts that are doubted of being exploited for money laundering or evading tax or entry operations in shell companies would have to go through a complete investigation.

Cash out of tax-exempt receipts

Any additional cash from tax-exempt receipts should be matching with the IT returns filed previously by the same individual. If otherwise, then the AO could call for applicable information.

Cash withdrawn from any bank account

Cash deposits which are not matching the person’s bank statements become suspicious even if he or she says that the money has been withdrawn from the bank account. The AO might ask for the bank statement copy to justify the cash deposits done and withdrawals taken from the bank account.

Cash taken from identifiable persons

When cash is received from recognizable individuals (with PAN card), the AO would not call for any further information. Rather, the AO would ask for information from the AO of such recognizable individual. In the scenario of a gift, the AO usually verifies if the same is taxable by the recipient as per section 56(2) of the IT law.

Cash received from unidentifiable individuals

In scenario of receipts from unidentified individuals (without PAN card), the AO would do a verification to find if the cash receipts are in compliance with the usual practices of the taxpayer’s business. In case the cash transactions are not in compliance with the usual practices of business, the AO may ask you to give documents like monthly sales summary, stock registers, etc. for verification. But for unidentifiable individuals, the AO would surely verify if the cash transactions are in compliance with the usual business practices as per the previous return of income.

The AO might even ask for information like monthly sales summary, applicable stock register entries, some bank statements etc. to identify examples of backdating of sales or any fabricated sales. To find any such examples, an AO may scrutinise:

Any abnormal rise in the cash sales in the period of November-December 2016 or previous periods.
Multiple deposits made in demonetised currency in end of December 2016.
Non-availability of their stocks or efforts to inflate stocks.
Transfer of any bank accounts that were not used earlier.
The same process would be carried out for verifying donations and any such cash receipts.

Cash disclosed under PMGKY

If the taxpayer makes some cash known under Pradhan Mantri Garib Kalyan Yojana (PMGKY), the alleged cash transactions could be confirmed with disclosures made under PMGKY.

2. The e-verification process

The online verification is available on the e-filing portal which is usually matched with the internal verification portal of the IT department. Following are the portal’s features:

Individuals under scrutiny don’t need to visit the IT office and are allowed to submit explanations online using their login on the e-filing portal. PAN-card holders can easily view this information by going on the ‘Cash Transactions 2016’ in the ‘Compliances’ section.
An SMS and email is sent to all individuals under scrutiny guiding them to fill in their online responses on the e-filing portal. If anyone is not registered, then they must register immediately using the ‘Register yourself’ link. However, the registered taxpayers needs to update their mobile number and e-mail address on the portal to get communication from the department.
People can refer to the guides and FAQs on the IT department’s website for submitting their responses.
Low-risk cases could be closed centrally, but other cases are assigned to AOs for confirmation.
AOs view all submissions and then ask to submit verification proofs online.
In case the documents submitted are okay, then the AO closes the verification online.

3. What to do if you have any queries in the process?

If you have any sort of queries or challenge during the process, you can look for guidance in the ‘Help’ section of the portal. You could also refer to the FAQs and seek solutions for your questions. You could also read ‘Cash Transactions 2016 User Guide’ or ‘User Guide on Verification of Cash Transactions on ITBA-AIMS module’, which is a guidelines document that AOs refer to during verification.

4. Closure and approval process

AOs can close an individual’s records after verifying and getting due permission from the relevant authorities.

5. Non-compliance and penalty

If there is non-compliance, then the AO checks the ITS profile of the PAN-card holders and uses powers as per Section 133(6) with the approval of the relevant authority, survey action as per Section 133A, and more. However, the AO can also initiate penal process as per section 269SS or 269T of the Act.

Article, India

How to Handle Finance if you have Dependents

January 20, 2020

Though having a big family has its own benefits, managing parents and your children can make your expenses go out of hands. However, by following some simple tips and rules, you can make sure that your finances are in control while making everyone happy.

Create a budget

The first step if you think you have crunched finances is to create a budget. This depends on your income, expenses, and your lifestyle; however, the steps to do so remain the same. So here we go…

The mode of your budget– First decide how you are going to make your budget. You could create one with a paper and pen but the disadvantage here is that you have to calculate everything manually here. The other better method is doing it on a spreadsheet. Here, you could segregate your income and expenses and also make charts for all categories of your expenses. There are also sophisticated online software, and some free ones too for this. In these software, you can use various charts for keeping a track of your expenses and seeing where most of money is going. There are also some money apps that could be used for this but online software are better as they show you a visual depiction of your charts on the screen.

Making an actual budget – Before starting to chalk a budget, you must finalise your financial goals. Without defining your specific goals like your child’s studies, how you can save for it. Consider segregating your financial goals into two categories – short and long-term as per your priority. For example, your main goal could be to change your car before spending on an exotic vacation. Then, you should list all your income sources and expenses and make various categories. Like for expenses, make categories like grocery, utilities, investments, loans, and luxuries. Now, assign a budget for all these categories. This way, you can avoid any impulsive buys and stay inside the boundaries that you have set.

Being inside the budget – Though this isn’t easy, after you have created your budget, you must stick to it in all circumstances. Don’t redirect your income to other categories without a need. For instance, don’t skip any investment just because your entertainment expense went overboard for a month. This should be a complete no. Keep cross-checking your bank statement along with your budget to see if all you have noted down all your expenses and not missed anything. Also, minimise the cash transactions and use your debit card more often. This way, you can track what you have spent. It’s wise to have the ‘Savings First’ approach and not spend without thinking twice.

Use various tax breaks

Are you aware that you could claim your child’s school or tuition fee as a tax deduction? This is also true for any education loan. There is also an option for getting a tax break if you invest for your parents. For example, a tax deduction can be claimed for any health insurance that you buy for your parents under Section 80D of the IT Act. Besides the tax deduction, you can also save yourself from spending for any unforeseen medical expenses as you get a health cover for them. In case you stay in your ancestral or parent’s house, you can pay them the rent and then claim a House Rent Allowance or HRA. In addition, if you spend on any medical treatment of your parents, then you could claim a deduction under Section 80DDB especially for ailments like dementia.

Discuss your finances

It’s always a good idea to do a ‘money talk’ with all the family members at least once in a month. You must share that your financial situation is on the right path with your children and parents and also tell them is something is amiss. Lead by example and teach your children how important it is to save. This way, any unwanted expenses could be avoided.

Create an emergency fund

It could be scary to lose one’s job and income; especially when you have a big family with dependants or if there is just one working person or income. Hence, it’s essential to create an emergency fund, which can take care of 6-12 months of your basic expenses, in case you change your job or God forbid, lose it. Such kind of an emergency fund acts like a safety net or cushion to take care of your family. The amount to be maintained in this fund should be calculated depending on the needs of your family.

If you follow these tips, then your finances would largely remain on track. Always give priority to save and never neglect your investments. How about beginning with opening a Fixed Deposit for your children or all of your family members?

India, Newsletter

Cabinet Approved a Plan for Review of Foreign Direct Investment (FDI) Policy on Single Brand Retail Trading, Digital Media, Contract Manufacturing, and Coal Mining

January 13, 2020

In 2019-20 Union Budget, the Finance Minister has recommended to further consolidate all the gains under FDI so as to make India a more appealing FDI destination. Going steady with its reform policy, the Union Cabinet has recently approved the plan for review of FDI Policy on various sectors on 28 August 2019.

The major highlights of the FDI Policy reform are as follows:

Single Brand Retail Trading (SBRT)

For offering enhanced flexibility and ease of operations in the SBRT sector, the below listed norms have been eased:

In case of SBRT firms with over 51% FDI, all procurements done from India by such SBRT firms for that single brand are going to be counted in the local sourcing of 30% bracket, regardless of whether the products obtained are sold in India or are exported outside. In addition, to give an push to exports, current limit of considering exports for five years only has been eliminated;
‘Sourcing of goods from India for global operations’ could be done directly now by the firm conducting SBRT or its resident/non-resident group companies, or can be done indirectly by them via a third party with a legally-tenable agreement;
Additionally, complete sourcing from India for all the global operations would be considered for local sourcing requirement (with no incremental value);
Retail trading done through online trade could be undertaken before opening of brick and mortar stores, but this has a condition that the entity should open brick and mortar stores within two years beginning from the date of starting their online retail.

Contract Manufacturing

As of now, 100% FDI is allowed under automatic route in the manufacturing sector. There is no particular provision for contract manufacturing mentioned in the FDI Policy. To give more clarity on contract manufacturing, a decision has been taken to allow 100% FDI under automatic route in contract manufacturing. Now, manufacturing activities could be performed either by the investee firm or via contract manufacturing in India with a legally-tenable contract, whether on Principal to Principal basis or Principal to Agent basis.

Digital Media

Extant FDI policy offers for 49% FDI under the approval route in Up-linking of various ‘News &Current Affairs’ TV Channels. Currently, up to 26% FDI under government route is allowed for uploading and streaming of various News and Current Affairs using Digital Media, on similar lines of print media.

Coal Mining

Currently, 100% FDI under automatic route is permitted for coal mining, especially for captive consumption by several power projects, cement, and iron and steel units and also for coal processing plants with the pre-requisite that the processing units would not do coal mining or selling in open markets. It has now been decided to allow 100% FDI under automatic route especially for selling coal, performing coal mining activities, which might also include associated processing infrastructure. Associated Processing Infrastructure includes activities like coal washery, coal handling, crushing, and separation (magnetic and non-magnetic).

Article, India

Is Holding Vendor Payments is a Good Enough Reason for not Filing GST Returns

January 7, 2020

The newly-launched GST return system has brought about some major amendments in the method of reporting of supplies; however, it has its own advantages and disadvantages. One such challenge is the declaration process of the input tax credit (ITC), which would now be based on the fact that the relevant suppliers report their invoices on the GST portal. Listed below are some of the challenges related to vendor compliance that the new return system entails.

1. The CGST Amendment Act, 2018 introduced Section 43A for easing out the return filing process under GST. Following are its highlights and the subsequent changes in the return filing system:

The supplier has access to a mechanism where he could declare the details of outward supplies made by him on the common portal and then on the basis of that, a recipient could claim ITC.
The recipient of supplies also has an option to verify and avail ITC.
The accessibility of provisional ITC (that is, the credit related to the undeclared supplies by the supplier in his returns) is limited to 20% of the total available ITC (the guidelines governing this provision are still to be notified).
Additionally, there would be a procedure for the recovery of any tax amount, which is yet to be recommended.

2. Is it justifiable to stop vendor payments if you are not filing GST returns?

While analysing the new return system, it is seen that the ITC claim by a supply’s recipient majorly relies on whether the supplier has declared the same and has filed his return within time limit. If the supplier delays this, then it could end up in an extra output tax liability though it’s
not the recipient’s fault.

The natural reaction of an entrepreneur in such a scenario would be to stop vendor payments till he files his return and he can see the credit reflecting on the common portal. But, this is not the ideal thing, as some suppliers might be going through a genuine working capital problem, and he might want his recipient to pay for the supplies so that he could pay the relevant taxes to the government. Stopping payments could also result in lawsuits as payments have to be made depending on goods or services received, and not as per the tax compliances done.

For small and med-sized supplier businesses, stopping vendor payments would be an expensive alternative as the Micro, Small and Medium Enterprises Development Act (MSMED), 2006 mandates the debtors of these MSMEs to clear payments within 45 days, post which these payments made would invite a very high cost of interest. Then only the large suppliers are left against whom these kind of actions can be taken. Unless the amount involved is quite big, stopping such payments would not put adequate pressure on large suppliers for filing their returns.

Thus, considering the above-mentioned points, stopping vendor payments is not a viable option if a supplier has not filed his returns.

3. Which alternate measures can taxpayers take to make sure that their suppliers are filing returns on time?

Though there is no clear solution for claiming ITC right now, but if a vendor has not filed his returns, here are some measures that can be taken:

Indemnification clause: As part of the supply agreement, before making a supply, a clause can be added where the supplier has to indemnify the recipient in case the supplier fails to fulfil the required compliance needs, thus causing a loss of credit to the recipient. Though this may secure the company on paper, enforcing such a method practically involves a lot of time and legal costs, which decreases the effectiveness of this particular method. Also, many small businesses such as proprietorships and HUFs still conduct their business through verbal or implied contracts and might not see the advantage in employing professional services for drafting such an agreement.

Boycotting such defaulting suppliers: The suppliers who do such compliance defaults frequently can be boycotted – either by limiting their trade or by declining to collaborate with them altogether. But, this could spoil business relationships. Mostly, small businesses are very dependent on long-existent business relations and looking for a new supplier for an important product may not be very practical. However, large suppliers mostly have a structured system for settling past dues and making payments for the required taxes on time. But, small businesses might not want to deal with them because of high costs involved.

Compliance software: An application or software can be put in place, comprising applicable details for each vendor, which assists with compliance as it keeps track of the invoices, shows return-filing status, sends due-date reminders, etc. This makes it substantially easier for a vendor to maintain compliance.

Incentive system: An incentive system especially meant for vendors can be developed where they are encouraged to file timely returns and pass on the necessary credit. But, this could mean an increased cost for the recipient. Therefore, care should be taken to make sure that the cost of execution this system doesn’t exceed its advantages.

Article, India

Signs to Shut Your Business and Start a New One

December 30, 2019

Running a business is not a cakewalk. There would be many challenges at every step. As an individual, it becomes very important to have clear thoughts and make the right business decisions at the right time. One of the toughest decisions that an entrepreneur has to take is whether or not he should shut his business. When the circumstances of the business are not favourable, it the right time to shut the business and venture into a new one. In this article, you will learn about the signs to shut your current business and start another one.

Signs to Shut Your Business

No Business Growth

Even after trying hard and giving a steady push, there is no significant growth in the business then this is not a good sign. There is something wrong with the business and it’s time to pause and look at the processes again. Even after that if things are not working well then it is the right time to close your business.

No Profits

The aim of starting any business is to make good profits. When your business is working at full capacity and still you are not making enough profits then it is the time to implement new systems. If the new systems and processes are not giving an improvement in operations and profitability then it’s the right time to stop your business and venture into something which is more fruitful.

Article, India

How are Old and New GST Return Systems Different?

December 19, 2019

The new GST return filing system is now revamped in many ways. In this article, we will discuss about the amendments which might not attract our attention immediately such as HSN summary, advances received, non-GST supply details, details relating to e-commerce supplies, TDS, TCS, and more.

The table below shows a comparison between the newly-launched return system and the old or current return system:

Particulars	Old/Current Return Filing System	New Return Filing System
HSN Reporting	Till now, HSN-level data was not needed to be disclosed for every invoice. But, Central Tax notification number 12/2017 dated 28-06-2017 needed disclosure of HSN data as follows: – Annual turnover in previous FY up to Rs 1 crore: No HSN needed – Annual turnover in previous FY which is between Rs 1 crore and Rs 5 crore: HSN of 2 digits – Annual turnover in previous FY over Rs 5 crore: HSN of 4 digits. The Annual Return (Form GSTR 9) also has a section in Table 17, which gives an HSN-wise summary of outward supplies. Likewise, a summary of inward supplies is also to be reported in Table 18, only when turnover under a specific HSN code goes over by 10%.	Suppliers having annual aggregate turnover over Rs. 5 crore relative to exports, imports and SEZ supplies have to upload HSN-level data of 6 digits. All other suppliers can declare HSN optionally. Nevertheless, notification number 12/2017-Central Tax dated 28-06-2017 remains effective till cancelled by CBIC. The reporting as per GSTR-9 would continue till further changes are notified.
Exempt, Nil-rated and Non-GST Supplies	The reporting of the Nil-rated supplies, which are exempted and non-GST outward supplies were earlier done in Table 8A, 8B, 8C and 8D of GSTR-1 and also in Table 3.1(b),(c) and (d) of GSTR-3B.	Table 3D(1) and (2) of RET-1 enables reporting of particular supplies which are exempted from tax payment or are nil-rated, and supplies are made, but which are not encompassed under GST law (non-GST supplies) respectively. The form ANX-1 would not have any provision for reporting of this. In addition, Table 3D (2) of RET-1 includes supplies made which come under Schedule III -activities which are neither supply of goods or services.
Advances Received	1. Table 11A(1) & Table 11A(2) of Form GSTR-1 was earlier utilised for reporting of details such as intrastate and interstate transactions which involved tax liability at the time of receipt, respectively. Thus, advances that were received were stated in this table. 2. Table 11B(1) & 11B(2) of Form GSTR-1 was utilised for adding details like advance received in a previous period and then adjusting them against supplies stated in the current period.	1. Table 3C(3) of RET-1 enables for reporting of advances received that were taxable when they are received. The same should be net of the issued refund vouchers. Additionally, the table can be utilised to make the adjustments regarding any wrong reporting of advances in a previous period. 2. Table 3C(4) of RET-1 enables for recording of invoices issued in the current period especially showing the advances received in a previous period on which tax was paid by a declaration in Table 3C(3) of that particular period.
E-commerce supplies/TDS/TCS	1. While specifying details of large invoices (over Rs. 2.5 lakhs) regarding taxable inter-state supplies, Table 5 of Form GSTR-1 is utilised. In case the supplies were made using E-Commerce Operators (ECO) in this table, then the checkbox regarding the same has to be selected and the GSTIN of the E-Commerce Operator (ECO) has to be entered after that.	1. Table 3 (3A to 3L) of ANX-1 needs a declaration of several types of outward and inward supplies which are liable to reverse charge, any imports and any missing documents based on which some credit is claimed. Out of the supplies that have been declared in Table 3, the particulars of those supplies which were made using E-Commerce operators (who are needed to collect tax at source). There are some details that need to be given in Table 4, like GSTIN of ECO, the price of the supplies made, the price of supplies sent back, the net value of supplies and the total tax amount.

Article, India

Fund Raising of Start-Ups Through Patents

December 12, 2019

Start-ups often run out of the fuel due to shortage of funds. Their future prospects go in the dark when they lack finances. Therefore, most start-ups are advised to begin the business only when they are sure that there would not be any financial crunch because the functionality of the business majorly depends upon capital. The s tart-ups can source their financing from friends or family, angel investors, crowdfunding, business network, etc. Another source of finance that is getting very popular these days is raising funds through patents. In this article, you will learn how patents are an important source of finance.

Let us first learn about the meaning of patents.

Meaning of Patents

A patent is an intellectual property. The owner i.e. the inventor of the patent has the right to restrict the marketing, sale or use of the product or service. Therefore, the inventor of the patent has a monopoly over the operation of the product for a specific period of time. The main advantages of patent are as follows:

Patent keeps competition away as others cannot use your invention.
Patent acts as a source of finance. The inventor can sell the license of the patent to others or sell the patent in exchange for another asset.

Let us now learn how a patent can help in fundraising.|

Fundraising Through Patent

The inventor has to patent his invention so that it becomes a source of revenue and help him in developing new inventions for the market without worrying about infringement. Patents are important source of finance for the start-ups because of the following reasons:

Patent ensures that the competitors cannot infringe your product.
Patent ensures higher profits and a regular flow of revenue.
If the patented invention has a promising future then it will attract a large number of investors who can acquire your patent.
If the invention gets a good public response abroad, patent opens a potential market in foreign countries.
Patent secures the position of your invention in the global markets.
To increase investors to file for patents, the government provides many tax rebates and enables faster processing of documents.

There is a provision even to get the incomplete invention patented through a provisional application. The provisional application defines the field of the invention and its scope. This gives protection to the inventor against unlawful use of his idea.

The validity of the provisional application is for 12 months. After the period of 12 months is over, the inventor has to file a complete specification, otherwise the provisional patent application will then be considered as abandoned. After the filling for a full patent, the provisional specification given in the provisional application shall not be removed. The inventor must take care while writing a provisional application. It should be to the point and in context of the business objectives.

The provisional patent application can play a big role in the success of the business. The start-ups must file for provisional application before they proceed with a full patent. There are many advantages of filing a provisional patent application, they are as follows:

Provisional application can be filed at a very low cost.
It prevents competitors from filing patents related to that particular field.
Before applying for the full patent, the inventor can conduct trials of the product.
It gives protection of 12 months to the inventor of the patent.

One thing that is clear from the above is that a start-up can raise funds through patent only after securing it. A patent has the potential to generate huge profits in the long run.

If you are a start-ups looking for company registration in India or need help with patent registration, you can contact IMC Group. We understand the importance of patent registration for start-ups and therefore, we provide the service of patent, copyright and trademark registration in India. To know our quotation or if you have any query that you want us to answer, just drop us an email.

Article, India

Steps to take in case your income tax refund is delayed

December 4, 2019

Delaying the filing process of one’s income tax returns is not advisable. The earlier one files their returns, the sooner they get their refund, if there’s any. In case of a delay, there is already a pile of returns to be processed by the income tax (IT) department and that causes a further delay in your refund. However, there could be several reasons for not getting your refund on time or as expected. Please read on to find what you do can in each scenario.

1. What to do in case you have not got your refund yet?

Step 1: Log in to the IT e-filing portal with your user ID, password, and your date of birth/ or your date of incorporation.

Step 2: Click the ‘My Account’ tab and then select the ‘Refund/Demand Status’ option.

Step 3: Your status of returns would be displayed detailing information like the assessment year, what was the mode of payment, and why the refund did not get processed.

2. What are the various refund statuses possible?

You could have one of the following refund statuses:

E-Filing not done for the current assessment year
Not determined
Refund has been paid
No demand no refund
Refund unpaid
ITR processed, refund determined and sent to Refund Banker
Demand determined
Contact Jurisdictional Assessing Officer (AO)

3. Various reasons of delayed refund and how to handle it

If it’s been over a month and your refund hasn’t been processed, then you should check the status on the e-filing portal. As the procedure is streamlined now, the ITR is usually processed within a maximum of two months and you get the refund after a successful processing of your ITR. You must check your registered e-mail ID and e-filing account to see if you have got any communication about the processing of ITR from the IT department, pro, which may be a proposed adjustment u/s 143(1)(a), or a defective return, or failure of refund process and transfer of the specific case to jurisdictional AO etc.

But, if you have not received any status update, you might have to wait for at least for a couple of months before you can take any action. In such a case of a delay in getting your refund, you could submit a grievance using the e-Nivaran Form under your e-filing account and ask for a resolution from CPC-ITR in the grievance section ‘Processing’.

Having said that, it is important to understand that there could be various reasons for a delay in refund process. Below is a table of such reasons and the actions you can take in each of those cases.

Reasons of delay or refund not being processed	Actions that can be taken (prepaid in four instalments)
IT department requires some additional documentation for processing your refund request.	Get in touch with the AO immediately through telephone or mail and submit the required documentation. Remember to take an acknowledgement of the same from the AO.
Your refund request is rejected. According to the IT department, you rather owe them taxes.	You may get a notice from the IT department telling you the outstanding tax amount. Then, you would need to check all your documents and get the tax liability and refund receivable re-calculated. But if the numbers you have filed in the ITR is correct, then file a rectification backing your claim. In case the returns filed is established to be incorrect, then you have to pay the outstanding tax as per the IT department in the time limit specified in the notice.
Refund request is incorrect according to the IT department. Thus, your refund is rejected.(VAT)	If as per the IT department, your refund request is incorrect, then you will get a notice explaining why it’s incorrect. If you receive such a notice, then you could file a rectification to back your claim.
Forgot to include some deduction that you are eligible for.	In case the IT department hasn’t begun processing your return, then you could revise your return and add the missed deduction for which you are eligible
Bank account details given to the IT department have changed	If your bank account details have changed, then you must communicate the new account number and MICR code to the AO. The AO would convey this information to your bank and request to update the money transfer process
Refund request is under process. The delay could at two levels:	Ensure that you send the ITR-V within 120 days starting from the date you did the e-filing
1. The IT department is taking more time in processing than usual. 2. The IT department has done the processing but the bank is delaying the return.	If not, then you will have to revise the returns and send a new acknowledgement to CPC in Bengaluru.
Returns filed in a physical form and not online.	Processing physical filing forms is time-taking. You would need to wait for the IT department for reconciling your paperwork

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GST and Debt Funding

1. Who can be scrutinised?

Cash deposited from previous income or savings

Cash out of tax-exempt receipts

Cash withdrawn from any bank account

Cash taken from identifiable persons

Cash received from unidentifiable individuals

Cash disclosed under PMGKY

2. The e-verification process

3. What to do if you have any queries in the process?

4. Closure and approval process

5. Non-compliance and penalty

Create a budget

Use various tax breaks

Discuss your finances

Create an emergency fund

Single Brand Retail Trading (SBRT)

Contract Manufacturing

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Coal Mining

1. The CGST Amendment Act, 2018 introduced Section 43A for easing out the return filing process under GST. Following are its highlights and the subsequent changes in the return filing system:

2. Is it justifiable to stop vendor payments if you are not filing GST returns?

3. Which alternate measures can taxpayers take to make sure that their suppliers are filing returns on time?

Signs to Shut Your Business

No Business Growth

No Profits

Meaning of Patents

Fundraising Through Patent

1. What to do in case you have not got your refund yet?

2. What are the various refund statuses possible?

3. Various reasons of delayed refund and how to handle it

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