Sting operation conducted by Cobra Post Reporter

 Brief Facts of the Case

 

During March to May 2013, there was widespread reporting in the media about sting operations carried out by the website Cobra Post that allegedly exposed deficiencies in the anti-money laundering preventive measures applied by the Banks including Canara Bank. The sting operation involved the Cobra Post reporter visiting the branches of the financial institutions with a story; that he wanted to invest/safe-keep substantial amounts of illicit or unaccounted cash. The website had videotaped the conversations with the officials/employees of the Banks that were played out in the media suggesting widespread violations of statutory obligations under the PMLA.

 

In the Appeal Canara Bank objected the impugned order inter alia on the grounds as follows:

 

I.        the Learned Director, Financial Intelligence Unit-India has failed to appreciate that considering the facts and circumstances of the present case, mere enquiries from the unknown person without any intention to act will not come within the purview of “attempted transaction” as mentioned in the definition of suspicious transactions under Rule 2 of PMLA Rules, 2005, therefore, the same may not require reporting under section 12 of the PMLA, 2002,

 

II.        the Learned Director, Financial Intelligence Unit-India has failed to appreciate that the Appellant had a mechanism in place for reporting off-line (non-transaction based) alerts by branches/offices, which it had implemented by issuing guidelines duly communicating 27 IBA recommended off-line alert scenarios along with reporting format for escalating the same to the controlling office, vide circular no.357/2011 dated 05.12.2011. Further, the Learned Director, Financial Intelligence Unit-India failed to appreciate that the Appellate had enabled reporting/escalation of off-line alerts in AML package and guidelines were reiterated vide circular no. 180/2012 dated 22.06.2012 and 147/2013 dated 31.03.2013;

 

III.        the Learned Director, Financial Intelligence Unit-India has issued the Impugned Order without applying its mind and mechanically acted on the sting operations conducted by the Cobrapost (a media portal) without verifying the authenticity of such reports of violation of PMLA, 2002 and PMLA Rules by the Appellant.

 

C.    FIU was duly represented by Senior Advocate Neeraj Krishan Kaul Additional Solicitor General (ASG) instructed by Mr. Satish Aggarwal, similar Appeals were also filed by various Banks such as Yes Bank, ICICI Bank, HDFC, State Bank of India etc.

 

D.   The Hon’ble Tribunal in its order dated 28.06.2017 set aside order 29.10.2015 inter alia on the ground that the FIU has failed to establish evidence its case on electronic evidence and further observed that the FIU even failed to investigate beyond the edited tapes  and transcripts.

 

E.    The Hon’ble Tribunal further observed that FIU has not produced the original recorded tapes and has sought to reply upon the incomplete version as broadcasted by the Cobra Post. Therefore the transcript uploaded online is not admissible and authorized under the law in the absence of proving this case as alleged by FIU.

 

 

Sting operation conducted by COBRA POST REPORTER. In this matter, Financial Intelligence Unit-India (FIU) imposed a fine vide its order dated 29.10.2015 on exercising its power under section 12 of the PMLA Act, 2002. This Impugned Order was passed by the FIU after solely relying upon the report of the sting operation conducted by Cobra Post without even verifying the authenticity of such report. Aggrieved by the said order Canara Bank filed an Appeal under section 26 of the PMLA Act, 2002. Canara Bank was represented by JURIXIN, Advocates & Solicitors led by Mr. Premtosh Mishra.

Don’t politicise Triple Talaq: PM

Prime Minister Narendra Modi today urged the Muslim community to ensure that the triple talaq issue was not “politicised”, and hoped that intellectuals from the community would come forward to fight the practice.

Addressing an event marking the birth anniversary of Kannada philosopher Basaveshwar here, Modi voiced the hope that Muslims in India would “show the path of modernity” to their counterparts across the world.

“There is so much debate on the triple talaq these days.

Looking at the great tradition of India, my mind is filled with the hope that powerful people will emerge from the community in this country (to) eradicate outdated practices, evolve modern systems,” he said.

In his 40-minute speech, the prime minister spoke about women’s empowerment, equality and good governance.

“It is the strength of our country’s soil that people from the (Muslim) community will emerge to save our mothers and sisters from this trouble,” he said, referring to the practice of triple talaq.

“I will urge people from the community to not allow the issue to get politicised,” Modi told the gathering at the event, which was also attended by Union Parliamentary Affairs Minister Ananth Kumar.

Source : PTI

Constitutionalism and Identity

Talk by Professor Upendra Baxi

February 17, 2017

Press Release

NALSAR Lecture Series on Constitutionalism hosted its seventh speaker, Professor Upendra Baxi, who is also an Adjunct Professor at NALSAR, on the 17th of February, 2017 at the M.K. Nambyar SAARC Law Centre at NALSAR University of Law, Hyderabad. He spoke on the topic ‘Constitutionalism and Identity’. Professor Baxi recollected his previous visits to NALSAR, and termed ‘Justice City’ as his ‘home away from home.’

Professor Baxi started with talking about the divergence between virtual and physical spaces, the two planes where identities are constructed. The identities are given unique and peculiar shapes on the online sphere of the internet. He said that we live in an era of finished products. The present generation does not take much pleasure in learning, understanding and working with unfinished fragments of things. He said that while a fragment is something less than the whole, a finished product, on the other hand, is complete. He remarked that what fragments offer is at times, more than what finished products can provide us with. He said that fragments offer a better guidance in the form of clues to understand identities. He lamented that in our obsession with finality, we somehow have lost the art of thinking and writing in fragments.

He paralleled this conception with the working of a Constitution. He said that a Constitution is never a final document. It is a work in progress, constituted itself by a multitude of fragments. The study of a constitution therefore, must piece together all these fragments and make sense of them.

He then alluded to the lyrics of the song Zamane ka dastoor hai ye purana from the Hindi film Lajawab (1951):

“Zamane ka dastoor hai ye purana (It is an old custom of the world)

Zamane ka dastoor hai ye purana (It is an old custom of the world)

Mita kar banana bana kar mitana (To recreate what it annihilates, and to annihilate what it created)

Mita kar banana bana kar mitana”(To recreate what it annihilates, and to annihilate what it created)

He said that what we study in a Constitution are the elements of annihilation, and elements of development. He noted that the Constitution is but a collection of fragments that must be pieced together through the act of interpretation. The act of interpretation, he said, is as much about creative destruction as it is about creative (or uncreative) construction. He stressed on the need to read the Constitution not just as a text, but as a document of human suffering.

Then he came to the song Mera Jeevan Saathi Bichad Gaya from the film Babul (1950):

“Khushi ke sath duniya mein, Hazaron gam bhi hote hain (Along with happiness in this world, there are a thousand sorrows)

Jahan bajati hain shahanai, Vahan matam bhi hote nain (Where the shehnai (wedding flute) plays, there is also a dirge)”

The lyrics loosely translate into the message that happiness and sorrows often coexist in this world, a message that is beautifully captured in the metaphor that places where trumpets are heard, are not unknown to wailings and calamities. In Prof. Baxi’s view then, it is imperative to recognize where we see the shehnais and where we see the maatam in our own Constitution.

Prof. Baxi then implored the audience to ask what in the Constitution is the trumpet of power and authority, and where in the Constitution do we find the elements of severe grief and calamity. He told the students that they would not have read the Constitution unless they would have asked this question off the text/fragments. He thus remarked that a Constitution has to be read as a social text, i.e., a text of human and social suffering. He left it to the audience to search for themselves the elements of shehnai and the maatam in the Constitution.

Prof. Baxi therefore remarked that we must identify the elements of creation and of destruction in the constitutional text. This enquiry lays the groundwork for us to ponder into the questions of constitutionalism and identity.

The lecture then delved into the meaning of ‘constitutionalism’ itself, which Prof. Baxi described as majorly, a story of power, governance and resistance to power. He noted that constitutionalism encapsulates the elements of resistance, liberation, degradation and emancipation; and is a moving horizon. He, as an aside, expressed his discomfiture of viewing the world through ‘isms’ (and therefore a concomitant discomfiture with the term ‘constitutionalism’ itself), since ‘isms’ tend to restrict meanings by implying dogma, doctrines or even a way of life, so to speak. A second problem he found with ‘isms’ was that of periodising history, or “putting history into slots”.

Drawing inspiration from the works of Karl Marx, who tirelessly brought out the exploitations widespread in capitalist societies, Prof. Baxi asked the students of law to explore how much does the constitutional text tolerates, supports, and reinforces exploitation in Indian society.

He said that he has learnt the idea of thinking about the ‘other’ from Marx and avoiding the “tyranny of the singular” and thinking plural, and in that vein, would like to ponder as to what is the other of constitutionalism, wondering whether the antonym of “constitutionalism” is authoritarianism, since authoritarianism itself could also be constitutional. After all, there are constitutional provisions which allow for the imposition of a state of Emergency. He noted that constitutional dictatorships are also possible, although he opined that phrase is an oxymoron. He continued to ask the audience whether the ‘other’ of constitutionalism is dictatorship? or an absence of all restraints on power? In fact, it was noted that this question begs all the more seriousness when one studies the judicial process of the Supreme Court or the High Courts, because there the learned judges are routinely “imposing constraints and purposes on power”, be it through ideas of a ‘public trust’, administrative law, estoppels, and alike ‘normative disciplines on power” to prevent its arbitrary exercise. He however left the understanding of the ‘other’ of constitutionalism (whether Emergency, authoritarianism, dictatorship etc) to the audience.

Drawing a historical perspective, Prof. Baxi highlighted that the Athenian Constitutionalism  drew a distinction between citizens (those with rights) and slaves (those without rights). According to him, the transition to modern constitution happened when everyone became citizens. He said that in post-modern constitutions, the distinction between slaves and citizens was abolished, and everybody was given equal rights.  However, he highlighted the limits of constitutionalism especially in the backdrop of modern-day slavery in the form of human trafficking and farmer suicides, existing simultaneously with the Indian Constitution. This, in his personal view, is a marker of our transition from colonialism to a neo-colonial world (typically characterized by ‘exploitation without redress’ and ‘power without accountability’). He acknowledged that post-modern constitutions like India’s, East Timor’s, South Africa’s and other new-nations’ constitutions, abolished the distinction between slaves and citizens and gave everybody equal rights, but called this promise a ‘fairy tale’ (bringing to light the ongoing slavery, trafficking in human beings, women being bought and sold, child trafficking, farmer suicides; in India in particular, as in other parts of the world).

In light of the above neo-colonial realities, Prof. Baxi highlighted that what is normative in the constitutional promise, is not real. We have a reality of slavery, and a normative reality of constitutionalism. An acknowledgment of this dual reality helps us identify the maatam in the constitution. We might therefore be able to draw a neat distinction between modern and pre-modern slavery, but what we would be studying is slavery, not constitutionalism.

Prof. Baxi then emphasized the difference between pre-modern and post modern issues in constitutionalism. He referred to his article titled ‘Constitutionalism as a Site of State Formative Practice’ which appeared in the 21st Volume (2000) of the Cardozo Law Review. In this article, he had noted that there is no such thing as constitutionalism, so-called, but there are three ‘C’s. In the points below, we highlight how he developed the ideas in the original article in a further manner at his lecture at NALSAR:

1.      C1 as constitutional text (which is actually a series of “fragments”);

2.      C2 as constitutional interpretations and

3.      C3 as the ideology and theory of a constitution, or a philosophy of the constitution. This is where what we loosely refer to as ‘constitutionalism; can fit.

He went on to explain that every constitution is as much written as it is unwritten, and the written text (C1) is often at play and at war with what is unwritten. There persists a dilemma between that which is said and that which is left unsaid. The very act of saying something entails the exclusion of what you choose not to say; and thus the unsaid exclusions are the spheres where great battles are fought in the working of the Constitution (and in fact, what is unsaid is often much more than what is said).

On C2, he mentioned that while certainly it forms our constitutional law, it is more than that.  He propounded the idea that interpretation of the Constitution (C2) must also include ‘citizen interpretation’. It is this part of C2 that sees some citizens activating the judicial process and bringing to us new laws like the RTI, or new laws emerging out of women’s movements, etc. These citizen movements create new norms that are legislated by courts or parliaments. To bring home his point further, he asked the audience to wonder what the American Constitution would be without Martin Luther King Jr., and his ‘I have a Dream’ speech. In a similar analysis for India, he remarked that every activist judge in India is a linear descendant of Jaiprakash Narayan, whether he knows it or not, since he had shaken up the lethargy of the so called Indian democracy (where, according to Prof. Baxi, the term democracy is a misnomer, since what we have is a mere ‘electocracy’). Similarly, it is next to impossible to understand the Indian Constitution without Amnedkar, Gandhi, or Lohia.

Other than ‘citizen interpretation’, C2 would also include the interpretation of the Constitution by the legislature and the executive, which is not judicial (proclamations of President’s Rule in Uttarakhand and Arunachal Pradesh being examples on the point).

He thus surmised as to how judicial interpretation of the constitutional text is not the only form of interpretation. There are more than mere judicial actors who go on and interpret the constitution, and thus shape and influence its working. They are legislators, executive officers, citizens, civil society and the media. Each one of them gives their due to the constitutional working and thus occupies a significant place in the process. Therefore there are various interpretations of the Constitution and one cannot understand the judicial interpretation without looking at citizen interpretation in its various categories.

Now, after setting the ground for his concluding analysis, Prof Baxi referred to Gary Jacobson who expounded upon the concept of a ‘constitutional identity’. Constitutional identity, according to Prof. Baxi, is always in a flux, and cannot be ascertained or ascribed to one ideal. Constitutional identity is not robust, but rather permeable. In this context, he remarked that the Constitution is often what the judges make of it. Judges try to make sense of the text, and thus Charles Hughes’s adage that a “constitution is what the judges say it is”, is nothing but true, at least in the domain of identities shaping constitutional functioning, Further, since this determination (of the what the constitution is) is only possible when the judges declare what the constitution is; we don’t know what it is till the judges tell us so; thus making the meaning of the constitution always operate in a limbo, or in air, and therefore it is up for grabs by the judges, or even the legislature for that matter. He emphasized that it is this nature of determination of what the constitutions says, that makes it stranded up in the air, and up for grabs. Thus, Prof. Baxi expressed his view that the constitutional identity is not rigid, or set in stone; but contingent, subtle and dependent on the political, social, and economic atmosphere that prevails at a particular time. Referring to Karl Llewellyn, Prof. Baxi reproduced his statement. that “do not look at what the judges say, but look at what they do with what they say”. And since the opinions of our judges are not known until the judgment is pronounced (and it is only then that we get to know what the Constitution says), constitutional identity will always be in a  in flux. Professor Baxi thus concluded that there is no identity, but processes and practices of identification (operating in the realm of ‘social identities’) on our own part. It is these practices of identification that the Constitution provides for; and the principle of ‘unity in diversity’ (say, the Uniform Civil Code and other directive principles) as well as ‘unity in perversity’, are ways in which the Constitution provides for the practices of identification. Further he noted that when we talk about the practices of identification, we place a desirable premium on agency of individuals, within structures.

Lastly, Professor Baxi addressed another angle to the question of ‘identity’ and observed that identities could either be ascribed or achieved. In the context of affirmative action, he noted that there is a constant need to evaluate which sections of society are identified as ‘weak’ (or the determination of ‘progressively weaker’ sections, which is the term he would prefer), and raised important questions of whether there is a human right to identity, and if yes, whether there is a human right to change that identity, in which context he brought up the Shah Bano decision as an example.

Professor Baxi’s concluding remarks at the 7th lecture in NALSAR’s Lecture Series on Constitutionalism very aptly sum up his central thesis:

“Constitution is what Parliament says it is, what the Supreme Court and other High Courts say it is…it is true. But I think the Constitution is also what you and I wish to say it is. And that’s where constitutional identity resides – in what you wish to say, in full responsibility, as to the essence of the constitution…and that is the practice of identification.”

NALSAR Lecture Series on Constitutionalism

Judicial Review in Europe: Insights from Germany

PRESS RELEASE

Guest Talk with Prof (Dr) M.P. Singh

03rd February, 2017
NALSAR Lecture Series on Constitutionalis m hosted Professor MP Singh, who is best known as the revising author of V.N. Shukla’s textbook on Constitutional Law. He has worked extensively on German Administrative Law. The talk was held on the 3rd of February, 2017 at the R.N. Jhunjhunwala Conference Hall at NALSAR University of Law, Hyderabad.
Professor Singh laid the history wide open, and made interesting connections between the present and the past. The Anglo Saxon notion of ‘King’s Peace’, which emerged post the Norman Conquest of England in the 11th century, saw its refined elocution on the public-private divide which was to emerge in the field of law, and capture most legal developments occurring in the nineteenth and twentieth centuries. Two difference courts were set up to adjudicate two different kinds of matters; the Court of Common Pleas was to adjudicate disputes of private nature, whereas the King’s Court was to rule upon any turbulences in the King’s Peace. Professor Singh then went on to explain the development of the doctrine of precedent, which accompanied the transition of privately held local customary beliefs of the land, into the state made law, which was quintessentially public in its pedigree. This was the process through which a “common” law emerged; which was to transcend its territorial limits of the midlands into colonies far and wide.
Professor Singh then went to the Eastern Roman Empire, to talk of the “corpus juris civilis,” which was an outcome of codification undertaken by Justinian I, the Emperor. This consolidation gave rise to the concept of “book law,” which was to be administered by the church, until replaced by the modern Westphalian state. It was this Roman Law, later commonly known by the name, Civil Law, which was to become the foundation stone of the German legal system. The emergence of the state as for other reasons, holds much significance for the legal system, the laws, and jurisprudence. It did not take much time for legal philosophers and thinkers to reach the conclusion that the role and functions of the state ought to be governed by some well defined norms and rules. This was achieved by France in its 1789-1799 Revolution, which through its call for Liberty, Equality and Fraternity for all, more or less laid the ground firm for the birth of the Rule of Law. It was in this context, that the idea of State’s responsibility emerged; where not moods, whims or fancies of the rulers governed, but the law. It was this understanding, Professor Singh asserted that tasked the civil law countries to develop common-law like institutions such as the King’s Court, which were to supervise and review the functioning of the executive. It was paradoxical in a sense that geographically proximate nations such as France and Germany did not adopt English common law structures, which found easy fitment in the distant and far-off colonies such as the United States.
This brought Professor to the sometimes loose distinction between public law, and private law. The differences are better captured in the dualist tradition which is more pronounced in the continental Europe than the monist traditions prevailing the day in common law countries. In the latter, there is a single set of courts which administer both, public and private law. Public law, is distinguished on the basis of the involvement of the state as one of the parties in the dispute, which is not the case in disputes involving private law. The idea that the state (without the judiciary) could be reviewed by constitutional courts emerged naturally in course of time.
What made the entire process of judicial review more complex and layered was the question whether the courts could also review legislative enactments, as against executive acts. The US Supreme Court in the case of Marbury v. Madison (1803) ruled that legislature in exercise of its powers and performance of its functions was not exempt from judicial review. This expansion was not visible in the motherland of common law, in England. Professor Singh asserted that judicial review is applicable both to executive, and to the legislature; since it sources itself to the constitution, the highest law of the land. This, he said, was not a process ordained under administrative law; but in a constitutionally crafted scheme of affairs. However, the concept did not percolate so easily and so early in Europe. In their 1949 constitution, the Germans for the first time ever introduced the concept of judicial review; relying partly on the background provided by Hans Kelsen’s work with respect to the Austrian Constitution, which provided for a constitutional court. This architecture was not the same as in the States, where there was no such distinction between courts and their jurisdiction. In India, like in the US, there is no separate court per se to review exercise of executive and legislative powers. India did not adopt the German model of having a separate court, for two basic problems. The first was, that in India, most judges are drawn from a pool of advocates, who have a background in litigation. In Europe, judges were career judges who joined at the lowest level, only to reach the highest levels; and thus could not be assumed to have been properly trained and equipped to administer public law. In India, private counsels had a history of putting the State in the dock in writ petitions, and thus had developed an adept sense of public functions. Thus, they were proper to preside over constitutional questions involving state powers. The second was that India, unlike continental Europe (of which Germany is a part) has a well inherited doctrine of precedent. In Germany, thus it was desirable to provide for a special court to administer questions of state policy and power, to avoid confusion and chaos where perhaps, if multiple courts ruled over similar questions, might have produced a terrible terrain of law.
Coming to the German model, Professor Singh emphatically remarked that Germany’s Constitutional Court, which is the custodian of the rule of law, and performs judicial review, is the most powerful court in the entire length and breadth of Europe, if not in the world. New countries like South Africa have learnt and adopted from its practices to a great extent. The Constitutional Court of Germany is a twin court, divided into two distinct seats, called senates. Each senate has eight judges, taking the total strength of the court to sixteen. While the first Senate decided on public law matters (which involve the State), the second Senate decides on individual oriented rights. Both the senates are separate and distinct. The judges constituting the senate hold the office for a non-extendable tenure of twelve years and are not transferable. The half of the strength is constituted by university professors and academics. The cases admitted need not be in the traditional form where there must be a plaintiff and a respondent, as is the case with Public Interest Litigation (PIL) petitions in India. However, the court has evolved a practice to assure itself through the government’s representative of compliance before deciding to proceed with a matter.
In France, there is a Constitutional Council composed of a total of nine judges where three are nominated by the President, while the rest six are appointed in equal measure by the Upper House and the Lower House of the National Assembly. Most nominations and appointments are of senior, non-controversia l respectable politicians and public servants. The jurisdiction is exercised by the government’s reference with no amenability to private citizens. However, a serious limitation on the court’s exercise of jurisdiction is that it may only adjudicate upon the constitutionalit y of a proposed law, and not of a passed/enacted law.
Professor Singh, travelling across continents and traversing across a vibrant diversity and plurality of legal systems, concluded his lecture by refuting the presumption that judges ought to, and do act independently, while reviewing the constitutionalit y of state actions. He referred to studies which have pointed out, that in the US and in continental Europe have revealed that the exercise of judicial review is preceded by a consideration as to whether the government of the day will actually abide by their ruling, and enforce the same. Public opinion, thus does shapes the exercise of powers by the judiciary. With this, Professor Singh, refuted the claims of those who assert that judicial review is an undemocratic measure of impeding popularly packed legislatures and executives. Thus, the paradox, which Jurgen Habermas saw in the expression “constitutional democracy” is now only in theory, and not in practice, as the analysis of judicial review powers has revealed.
The talk concluded with a noteworthy question put forth by NALSAR’s Prof (Dr) Amita Dhanda, who enquired as to the whether Indian law and legal system was truly “common law” in its nature. Professor Singh aptly took recourse to historical considerations and ruled in the negative. He said that the law in England emerged through a process where customary law was recast into the law made by the state through the courts. This process, as Professor Dhanda agreed, never happened in the Indian context. Further, it was also pointed out, as to how India is distinguishable as a case from countries such as Canada and Australia, which were colonies of the British people; whereas India was a huge country of non-British people. Thus, the absorption of local practices into the legal system (which, quintessentially , was the process behind the emergence of a “common” law), never happened in the true sense of the term in India.

Office Setup and Staff Recruitment for Startups

Office Setup and Staff Recruitment for Startups
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Registering your company or business entities with different Tax Authorities like Income Tax, PAN, TAN, Service Tax, Sales Tax, VAT

Registering your company or business entities with different Tax Authorities like Income Tax, PAN, TAN, Service Tax, Sales Tax, VAT
Registering your company or business entities with different Tax Authorities like Income Tax, PAN, TAN, Service Tax, Sales Tax, VAT

Taxation authority is a government agency responsible for the intake of government revenue, including taxes and sometimes non-tax revenue. Depending on the jurisdiction, revenue services may be charged with tax collection, investigation of tax evasion, or carrying out audits.So If you are registering your company or business entities then take permission from tax authorities for following procedures –

Income Tax – An income tax is a tax imposed on individuals or entities. Income tax generally is computed as the product of a tax rate times taxable income. The tax rate may increase as taxable income increases (referred to as graduated rates). Taxation rates may vary by type or characteristics of the taxpayer. Capital gains may be taxed at different rates than other income. Credits of various sorts may be allowed that reduce tax. Some jurisdictions impose the higher of an income tax or a tax on an alternative base or measure of income.

PAN – Bermanent account number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes. It also serves as an identity proof. PAN is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more. The primary objective of PAN is to use a universal identification key to track financial transactions that might have a taxable component to prevent tax evasion. The PAN number remains unaffected by change of address throughout India.

TAN – Tax Deduction and Collection Account Number is a ten digit alphanumeric number that’s allotted to those who are supposed to deduct tax at source or TDS. TAN number or TAN registration is very important for businesses deducting tax at source and is required to be quoted in TDS or TCS return.

Service Tax – Service tax is applicable for taxable service provider. It’s levied by Central Government of India on services provided or to be provided excluding services covered under negative list and considering the Place of Provision of Services Rules, 2012 and collected as per Point of Taxation Rules, 2011 from the person liable to pay service tax.

Sales Tax – A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow (or require) the seller to collect funds for the tax from the consumer at the point of purchase.

VAT – A value-added tax is a type of general consumption tax that is collected incrementally, based on the value added, at each stage of production and is usually implemented as a destination-based tax, where the tax rate is based on the location of the customer.

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How to form a One Person Company (OPC)

One Person CompanyThe concept of One Person Company [OPC] is a new form of business in India, introduced by The Companies Act, 2013 [No.18 of 2013], thereby enabling Entrepreneur(s) carrying on the business in the Sole-Proprietor form of business to enter into a Corporate Framework.

One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act.

Features of One Person Company (OPC)

 

1. Only One Shareholder:
Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company. Explanation: The term “Resident in India” means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.

2. Nominee for the Shareholder:
The Shareholder shall nominate another person who shall become the shareholders in case of death/incapacity of the original shareholder. Such nominee shall give his/her consent and such consent for being appointed as the Nominee for the sole Shareholder. Only a natural person, who is an Indian citizen and resident in India shall be a nominee for the sole member of a One Person Company.

3. Director:
Must have a minimum of One Director, the Sole Shareholder can himself be the Sole Director. The Company may have a maximum number of 15 directors.

 

Terms and Restrictions of OPC

  • A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
  • Minor cannot shall become member or nominee of the One Person Company or can hold share with beneficial interest.
  • An OPC cannot be incorporated or converted into a company under Section 8 of the Act. [Company not for Profit].
  • An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
  • An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores i.e., if the Paid-up capital of the Company crosses Rs.50 Lakhs or the average annual turnover during the relevant period exceeds Rs.2 Crores, then the OPC has to invariably file forms with the ROC for conversion in to a Private or Public Company, with in a period of Six Months on breaching the above threshold limits.Obtain Digital Signature Certificate [DSC] for the proposed Director(s).

 

Steps to Incorporate One Person Company (OPC)

  • Obtain Director Identification Number [DIN] for the proposed director(s).
  • Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name.
  • Draft Memorandum of Association and Articles of Association [MOA & AOA].
  • Sign and file various documents including MOA & AOA with the Registrar of Companies electronically.
  • Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
  • Scrutiny of documents at Registrar of Companies [ROC].
  • Receipt of Certificate of Registration/Incorporation from ROC.

 

To start One Person Company (OPC) in India just fill this form: