Frequently Asked Questions
What is SPICE?
SPICE refers to “Simplified Proforma for Incorporating Company Electronically”. It is a simplified integrated process for incorporating a company in Form No. INC-32 along with e-Memorandum of Association in Form No. INC-33 and e-Articles of Association in Form No. INC-34. It has been introduced by the MCA and is effective from 1 October 2016
What are the different types of Corporate Entities in India?
A1: Types of Companies based on Number of Members:
- Private Company:
- One Person Company:
- Public Company:
Types of Companies based on Liability:
- Company Limited by Shares:
- Company Limited by Guarantee:
- Unlimited Company:
Other Types of Companies:
- Foreign Company:
- Section 8 Company:
- Producer Company:
- Small Company:
- Subsidiary Company:
- Holding Company:
Can a company apply for name availability certificate by filing Form INC-1 prior to filing of SPICE form?
A company can apply for name availability by filing for RUN prior to filing of SPICE Form. An
approved name is valid for a period of(i) 20 days from the date of approval (in case name is being
reserved for a new company) or (ii) 60 days from the date of approval (in case of change of name
of an existing company).
What is DIN?
DIN is a unique identification number issued to an intending director by the DIN cell of Ministry
of Corporate Affairs (“MCA”). An individual should hold a DIN before being appointed as a director
in any Company.
What are the general permissions available to persons (individual) resident in India for purchase / acquisition of securities abroad?
General permission has been granted to persons (individual) resident in India for purchase /acquisition of securities as under:
a) Out of funds held in the RFC account;
b) As bonus shares on existing holding of foreign currency shares;
c) When not permanently resident in India, from the foreign currency resources outside India.
General permission is also available to sell the shares so purchased or acquired.
A resident Indian can remit, up to the limit prescribed by the Reserve Bank from time to time, per
financial year under the Liberalised Remittance Scheme (LRS), for permitted current and capital
account transactions including purchase of securities and also setting up/acquisition of JV/WOS
overseas with effect from August 5, 2013 (vide Notification No. 263).
What is Automatic Route and Approval Route?
Under the Automatic Route, an Indian Party does not require any prior approval from the
Reserve Bank for making overseas direct investments in a JV/WOS abroad. The Indian Party
should approach an Authorized Dealer Category – I bank with an application in Form ODI and the
prescribed enclosures / documents for effecting the remittances towards such investments.
However, in case of investment in the financial services sector, prior approval is required from the
regulatory authority concerned, both in India and abroad.
Form ODI is available as an Annex to the Master Direction titled ‘Master Direction on Reporting
under Foreign Exchange Management Act’.
Proposals not covered by the conditions under the automatic route require prior approval of the
Reserve Bank for which a specific application in Form ODI with the documents prescribed therein is
required to be made through the Authorized Dealer Category – I banks.
Who are eligible to make overseas direct investment under the Automatic Route? Who is an “Indian Party”?
An Indian Party is eligible to make overseas direct investment under the Automatic Route. An
Indian Party is a company incorporated in India or a body created under an Act of Parliament or a
partnership firm registered under the Indian Partnership Act 1932 or a Limited Liability Partnership
(LLP) incorporated under the LLP Act, 2008 and any other entity in India as may be notified by the
Reserve Bank. When more than one such company, body or entity makes investment in the
foreign JV / WOS, such combination will also form an “Indian Party”.
When do I have to pay the taxes on my income?
Generally, the tax on income crystallizes only on completion of the financial year. However, for
ease of collection and regularity of flow of funds to the Government for its various activities, the
Income-tax Act has laid down the provisions for payment of taxes in advance during the year of
earning itself. It is called as ‘pay as you earn’ concept. Taxes may also be collected on your behalf
during the previous year itself through TDS and TCS mode. If at the time of filing of return you
find that you have some balance tax to be paid after taking into account the credit of your
advance tax, TDS & TCS, the shortfall is to be deposited as Self-Assessment Tax.
Is my responsibility under the Income-tax Act over once taxes are paid?
No, you are thereafter responsible for ensuring that the full particulars of income and tax
payment are submitted to the Income-tax Department in the form of Return of Income which is to
be filed before the due date prescribed in this regard.
Do I need to maintain any records or proof of earnings?
For every source of income you have to maintain proof of earning and the records specified
under the Income-tax Act. In case no such records are prescribed, you should maintain reasonable
records with which you can support the claim of income.
Who is liable to get registered under GST?
Any business involved in the supply of goods whose turnover in a financial year exceeds Rs 40
lakhs for Normal Category states (Rs 20 lakhs for Special Category states). Any business involved
in the supply of services whose turnover in a financial year exceeds Rs 20 lakhs for Normal
Category states (Rs 10 lakhs for Special Category states)
I am an exporter of service and the service is fully exempt from tax but I am paying GST on input service. Can I claim refund of input tax credit?
In case of export, tax paid on the input service can be claimed as refund under GST.
Can a person operating two different companies with different names but with same PAN get two GST registrations?
One PAN holder gets one registration in every state, but he has the option of getting different
registrations for different business verticals.
What duties will be levied on import of goods?
Customs duty and cess as applicable + IGST+ GST compensation cess. IGST and GST
compensation cess shall be paid after adding all customs duty and customs cess to the value of
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