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POEM Guidance For Companies Not Engaged in Active Business Outside India

by Sanjeev Archak Sanjeev Archak No Comments

Previously we discussed the parameters of determining a company to be considered as engaged in “active business outside India” and the POEM guidance associated with it. Today we talk about the guidelines for those companies that are not engaged in active business outside India.

POEM Guidance for companies not engaged in active business outside India

For companies not engaged in active business outside India, a two-stage process for the determination of Place of Effective Management is provided as follows:

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POEM Guidance For Companies Engaged in Active Business Outside India

by Sanjeev Archak Sanjeev Archak No Comments

In our previous post, we discussed the idea of Place of Effective Management and how it came into existence. Today we will be focusing on the POEM guidance for companies that are engaged in active business outside India.

Determination of “active business outside India”

A company shall be considered as engaged in “active business outside India” if the passive income is not more than 50% of its total income; and if the following conditions are met –

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Place of Effective Management Rules

by Sanjeev Archak Sanjeev Archak No Comments

The idea of Place of Effective Management or POEM was first introduced in the Finance Act 2015 for the purpose of determining the residential status of foreign businesses. As per the act, any business having its place of effective management in India will be considered as an Indian resident and accordingly, it’s global income will be taxable in India.17

But the Finance Act was missing the entire criteria and process for determining the place of effective management. For this purpose, the Central Board of Direct Taxes (CBDT) introduced the Guiding Principles for determination of Place of Effective Management (POEM) of a Company.

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Concept of Casual Taxable Person under GST

by Sanjeev Archak Sanjeev Archak No Comments

In previous posts, we have discussed who is liable to get registered under GST. In this post, we shall examine the concept of ‘Casual Taxable Person under GST’.

Who is a Casual Taxable Person under GST?

Casual taxable person means a person who occasionally undertakes transactions involving the supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.

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Want to Register Under GST? Here are 6 Things To Know

by Sanjeev Archak Sanjeev Archak No Comments

Every person shall be liable to register under GST in the State or Union territory from where he makes a taxable supply of goods or services or both if his aggregate turnover in a financial year exceeds Rs 20 lakhs. This limit of Rs 20 lakhs is reduced to Rs 10 lakhs if the person is located in the North Eastern states of India.

‘Person’ here includes individuals, HUF, company, firm, LLP, an AOP/BOI, any corporation or Government company, a corporate body incorporated under laws of the foreign country, co-operative society, local authority, government, trust, artificial juridical person.

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Labour Law Compliances Made Easy

by Sanjeev Archak Sanjeev Archak No Comments

In their continuous efforts of improving the business environment of the country, the government of India has taken necessary steps to ease the nature of doing business. The Government has been keenly observing the initiatives and benchmarks set by the ‘Doing Business Project of the World Bank.’

Launched in 2002, the Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level.It looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.

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What is Better for a Startup – LLP or Pvt Ltd

by Sanjeev Archak Sanjeev Archak No Comments

The first legal step towards starting a new startup venture is choosing the right entity for registering their business. Be it a Private Limited Company or a Limited Liability Partnership (LLP). Founders often find themselves stuck at making this kind of decisions as the right choice would determine the nature of the ownership and the management process. It would further set the tone of the various compliances that needs to be followed, be it LLP or Pvt Ltd.

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What is the Startup India Project and How To Be a Part of It

by Sanjeev Archak Sanjeev Archak No Comments

The Startup India Project is an ambitious flagship initiative of the Government of India under our Prime Minister, Shri Narendra Modi. The whole purpose of this initiative is to empower startups and build a robust ecosystem by nurturing them to grow through innovation and design. This will, in turn, drive sustainable economic growth and bring in large-scale employment opportunities within the country.

“I see startups, technology, and innovation as exciting and effective instruments for India’s transformation.”
– Shri Narendra Modi, Prime Minister Of India

The project was first introduced by the prime minister on the 15th August 2015 while he was addressing the nation through his speech on the occasion of India’s 69th Independence Day. Read more