A startup during its nascent stages needs certain documents and has to ensure various compliances before things start falling in order and the processes become more standard. To name a few, Permanent Account Number (PAN), Tax Collection Account Number (TAN), if the start-up sells or buys cross-border then Import Export Code (IEC), if it’s a food startup, then FSSAI license. Similarly, shops like brick and mortar stores/mom and pop stores also need a Shop Act license.
Getting all these documents and compliances sorted can be a challenging task and you might lose precious business bandwidth only trying to get your head around all the formalities involved and the understanding jargon. Thus, it’s better to hire experienced professionals who understand these formalities inside out and have a way of dealing with the concerned authorities.
Why is PAN Important for your Company?
- Even if your organisation is not required to pay taxes, PAN is mandatory to do business.
- You are required to mention your PAN on all your pecuniary transactions, invoices and income tax documents. Further, it is a reference number for the Income Tax Department to route your financial activities.
- Irrespective of the fact that whether your company is registered in India or abroad, it has to pay tax for businesses conducted in India and without a PAN, you will be taxed at the highest possible rate by the government.
- PAN certainly comes handy to get invoices paid, remittances, and in income tax filings.
- It is a prerequisite for the company to get a Tax Registration Number (TRN).
- For foreign companies, it is mandatory to have a PAN in order to transact with their Indian counterparts.
- Without a PAN, you become subject to withholding tax which can be 30% or more on the total invoiced payment.
Why is TAN Important for your Company?
TAN is mandatory for your company because without it Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) returns are not accepted by Tax Information Network (TIN) centres. Further, banks don’t accept the challans for TDS/TCS payments if TAN is not mentioned.
Please take note that under 272BB not mentioning TAN on specified documents like TDS/TCS returns (including their e-versions), TDS/TCS certificates, and TDS/TCS payment challans can attract a penalty of INR 10,000.
Documents Required for PAN & TAN
For Indian Companies
- Company’s Incorporation Certificate.
For Foreign Companies
- Registration Certificate in the home country attested by Apostille or by the Indian Embassy or High Commission or Consulate.
- Registration Certificate of its Indian Office issued by Indian authorities.
Please take note that once you are done with filing your PAN and TAN application on National Securities Depository Limited (NSDL) website, you have to mail a duly signed acknowledgement of it to NSDL with a copy of Registration Certificate and the demand draft (if any). Also, only the Director or the CEO of the company can sign the application form.
IEC is mandatory for any sort of import or export in/from India. Though, for exports, IEC is not compulsory unless the service provider is taking benefits under the Foreign Trade Policy. After GST, IEC being issued is the same as the PAN of the firm as well as separately by the Director General Foreign Trade. Any organisation including sole proprietorship, partnership, Limited Liability Company, Private Limited Company, Trust, Joint Hindu Family and Society can apply for IEC. We at USAIndiaCFO can help you procure the IEC Certificate within two days.
All the food business operators in India are required to have FSSAI license under section 31(1) & 31(2) of the FSS Act, 2006. The procedure for it is regulated by Food Safety & Standards (Licensing and Registration of food Business) Regulations, 2011. All the petty food manufacturers including the petty retailers, hawkers, itinerant vendors or temporary stall holders or small or cottage scale industries having a yearly turnover of 12 lakhs or above are required to get themselves licensed.
Did you know, as per the law, anyone and everyone who deals with food items – be it directly or indirectly needs to have a valid food licence, without which your business can be shut by the Authorities till the time you get the FSSAI certificate / licence. Be informed that even if you are a marketer of a food product, you need a FSSAI licence of Marketer, and likewise for any trade description.
There are basically three types of Food Licences issued in India:
- Basic Registration – it is usually a certificate issued by the Food Safety and Standards Authority of India for petty food business organisations (FBO) who has turnover of less than INR 12 Lakhs or a mobile vendor or food van owner.
- State Licence – it is a licence required by food business organisations having turnover over and above INR 12 Lakhs annually. Except for a few exempted FBOs, yearly annual returns are to be filed.
- Central Licence – if the FBO is into import or export of food items, or the turnover of business exceeds INR 20 Crores (30 Crores for few concerns), Central FSSAI Licence is to be procured. All central licence holders need to file quarterly and annual returns.
FSSAI License can be applied for a period between 1 year to 5 years. It is due for renewal 60 days prior to the expiry.
Shop Act License
This license is compulsory if one has a physical shop or an office where the business is undertaken. It gives you a proof of what kind of business is undertaken at that place. The statute governing it, the Shop and Establishment Act slightly varies across states.
Shop Act Registration lays down minimum required standards to ensure the safety and avoid exploitation of workers, which includes the following:
Hours of work, rest and meals intervals, employing young people/women, opening and closing timings, time and conditions of payment of wages, maintaining records, etc.
General Documentation for the above:
- PAN Card Copy of the Company / LLP / Firm / Proprietor
- Photo of all the Directors / Partners / Proprietor
- Self attested copy of Pan and Aadhar of all the Directors / Partners of the Organisation
- Name of Authorised Person
- Cancelled cheque of the current account
- Certificate Of Incorporation of the company
- Email id and contact number of all the Directors / Partners of the Organisation
- Latest Electricity Bill with Rent Agreement
- Description of trade – Importer / Exporter / Merchant Exporter
- Description of products / services dealt with
- Additional information as required for specific licences
USAIndiaCFO incorporates at least 30 to 40 companies MONTHLY and assists them with their PAN and Tax Deduction Account Number (TAN) which not only makes our services impeccable and fast but also more reliable.
On top of that, we are a confluence of CAs and CSs which enables us to avail our clients one-stop for all the services pertaining to regulatory compliance/taxation/finance/accounting saving them on the cost and efforts of outsourcing and changing firms for business expansion.
To know how we can provide the services that your business well deserves and take your organisation to a whole new league, give us a ring at 7727887799 or drop us an email at email@example.com, we will reach out to you within 2 hours.
We get these registrations done, along with a range of other services to take full accountability as the virtual CFO to your business.
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