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Trademark

Trademark is essentially another word for brand or brand name. A trademark can be any name, word, symbol, slogan, or device that serves to both identify and distinguish a business or product from others in the market. It has a significant value and trust associated with the trademark which compels people to purchase a product without thinking about it twice. This blog aims to clear your doubts on ‘How to transfer Trademark to a 3rd Party?’.

The Trademark Act, 1999 provides the procedure for the transfer of trademarks. The proprietor of the trademark has the power to assign his trademark to another in exchange for some consideration. Such assignment can be made with or without the element of goodwill of the trademark.

Trademarks like any asset can be transferred from one owner to another. The transfer could be temporary through licensing or permanent through an assignment. Assignment of trademarks is a process in which the owner of the trademark transfers the ownership of the mark either with or without the goodwill of the business. In other words, it is transferring of proprietary rights in the property of the proprietor.

A request has to be made on Form TM-16 for an unregistered trademark to be assigned or transferred with or without the goodwill of the business concerned. A registered trade mark shall be assignable and transmissible, whether with or without the goodwill of the business concerned and in respect either of all the goods or services in respect of which the trade mark is registered or of some only of those goods or services. 

The assignment of trademark is mainly based upon the contract entered into by the assignee and the owner of the trademark by developing any terms and conditions as they like. Section 40 of the Trademark Act, 1999 provides certain limitations to avoid two assignees from clashing with each other by selling under the same mark. The Act limits the use of the trademark by multiple people in the same area.

As per Section 40 of The Trademark Act, 1999, a trade mark shall not be assignable or transmissible in a case in which as a result of the assignment or transmission there would in the circumstances subsist, whether under this Act or any other law, exclusive rights in more than one of the persons concerned to the use, in relation to-

(a)     Same goods or services;

(b)     Same description of goods or services;

(c)     Goods or services or description of goods or services which are associated with each other.

of trademarks nearly resembling each other or of identical trade mark, if having regard to the similarity of the goods and services and to the similarity of the trade marks, the use of the trade marks in exercise of those rights would be likely to deceive or cause confusion.

Following shall be kept in mind while drafting contract for transfer/assignment of trademark:

  • It is important to assign the territorial extent of the assignment clearly;
  • The consideration should be clearly mentioned in the agreement. The stamp duty has to be calculated on the basis of the consideration;
  • The effective date of the assignment must be clearly mentioned;
  • It is important to mention if the assignment is along with the goodwill or not;
  • Any restrictions, if any must be clearly stated in the agreement.

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GST, GST, TAXATION

The fact is, yes, when dealing with a vendor who is not GST registered, you need to pay GST for unregistered dealer on supply under Reverse Charge Mechanism. Reverse charge means the liability to pay tax is by the recipient of goods/ services instead of the supplier. Reverse charge may be applicable for both services as well as goods. if Unregistered dealer selling goods/services to a Registered dealer then reverse charge will apply and registered dealer will be liable to pay GST on supply. Good part is the registered dealer is eligible to claim credits later.

As a rule, any supplier is liable to pay GST under the GST Act. However, there are certain instances where a recipient of goods or services is liable to pay GST on reverse charge basis. There are two scenarios under which GST is payable on reverse charge basis:

1.     Reverse charge mechanism applicable to supply of certain specified goods or services

2.     Reverse charge mechanism applicable in case of purchases made from unregistered supplier


Section 9 (4) of the CGST/SGST(UTGST) Act and section 5 (4) of the IGST Act cover the cases of reverse charge in case of taxable supplies by any unregistered person to a registered person. These sections provide that the tax in respect of the supply of taxable goods and/or services by an unregistered supplier to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Accordingly, whenever a registered person procures supplies from an unregistered supplier, he needs to pay GST on reverse charge basis. However, supplies where the aggregate value of such supplies of goods or services or both received by a registered person from any or all the unregistered suppliers is less than five thousand rupees in a day are exempted.

Any amount payable under reverse charge shall be paid by debiting the electronic cash ledger. In other words, reverse charge liability cannot be discharged by using input tax credit. However, after discharging reverse charge liability, credit of the same can be taken by the recipient, if he is otherwise eligible.

Non-GST registered vendor in normal circumstances, the supplier for goods is required to pay the GST. However, to prevent the tax evasion by the vendor who are unregistered, the government has burdened the Recipient (GST Registered) of goods to add GST in their purchase from Non- GST registered vendor. Exemption-  The government has provided an exemption of Rs. 5000. It means if the value of supply from unregistered user does not exceed Rs. 5000/-, it is not required to pay GST for such unregistered vendor. Reverse Charge- The GST paid by the Recipient on its purchase from non-registered can be claimed under reverse charge mechanism as input credit if such good/services are being used by them for business purpose. If you are claiming credit under reverse charge, you are required to register under GST, irrespective of the fact, whether you reach the threshold limit for GST registration (which is Rs. 20 Lakhs).

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GST

Introducing you to Ravi, whose main stream businesses was to sell designer dress materials at a local community. Ravi, seeing the positive response from the current customers, decided to scale the business, the famous “want to sell on Amazon and Flipkart” stuff. Ravi, little did he know that GST registration is a must have to sell on Amazon, which was taken by surprise. Being a micro business man, neither did he have any other registrations in place nor had an office, he was perplexed.

When Ravi reached out to us, on counsel application, he was clear that he wanted to scale up his business by selling online on Amazon, he already had a chat with seller support team from Amazon that GST registration would be a must, only question that he had was ‘’how to register and what is required’.

We helped Ravi in getting registration done seamlessly in a day. Ravi was happy to have the major hurdle removed. During the course of our discussion with Ravi, he had some good questions on GST, and this blog will help online sellers to get some clarity.

 “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network and an “electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce like Amazon.

 Amazon, does not have any threshold exemption under GST and is liable to be registered irrespective of the value of supply made by them. Amazon is required to collect an amount at the rate of one percent (0.5% CGST + 0.5% SGST) of the net value of taxable supplies made through it. The amount so collected is called as Tax Collection at Source (TCS).

Amazon would  make the collection during the month in which the consideration amount is collected from the recipient. The amount collected by Amazon is to be paid to the government within 10 days after the end of the month in which amount was so collected.

This amount of TCS paid by the Amazon to the government will be reflected in the GSTR-2 of the actual registered supplier (on whose account such collection has been made) on the basis of the statement filed by Amazon. The same can be used at the time of discharge of tax liability in respect of the supplies made by the actual supplier.

Ecommerce Operators who should collect TCS:

  • A supplier selling his products through a web site hosted by him
  • A Platform that purchases goods from different vendors and sells them under their own billing.
  • A Platform that acts as an online marketplace and enables E- commerce activities

 




Major Changes in the Taxation system regarding online marketplaces post GST Implementation:

  • Post GST, there will be standard tax rates for each product and tax arbitrage will not be possible, thus bringing e-retailers and offline sellers at par in terms of costing and pricing. 
  • While GST registration in normal circumstances is mandatory where turnover is INR20 Lakh or more, if a trader wishes to sell through online portals he needs to get registered irrespective of turnover.
  • Majority of the products sold online carry a return date of up to 30 days which translates into about 15 – 20 million transactions per month and the returns and refunds for these have to be done with utmost care. The returns are required to be filed monthly now by both parties and refund adjustment will need special attention impacting tax liability.
  • The output rate of tax could be higher for the company compared to the current service tax rate. However, the companies should have a higher credit pool than they do in the current regime, which could reduce the prices of their services.
  • Currently, e-commerce companies discharge their output service tax liability through centralised registration. But under GST, e-commerce companies would have to obtain registration in each state where they have their place of business, resulting in increased compliances.

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GST

Since GST got rolling, we have been facing interesting questions on GST, in fact, some of them where hilarious, (comment below if you want me to share them on the next blog), well, on a serious note, 76% of the queries that we received was ‘How is filing of GST Returns actually done?’ This article is for you guys who want this answer real bad, someone who thinks time for googling and going through long PDFs is not his thing.


Under GST, a regular taxpayer needs to furnish monthly returns and one annual return. There are separate returns for a taxpayer registered under the composition scheme, non-resident taxpayer, taxpayer registered as an Input Service Distributor, a person liable to deduct or collect the tax (TDS/ TCS) and a person granted Unique Identification Number. It is important to note that a taxpayer is NOT required to file all types of returns. In fact, taxpayers are required to file returns depending on the activities they undertake.


All the returns are to be filed online. Returns can be filed using any of the following methods:

  1. GSTN portal (www.gst.gov.in )
  2. Offline utilities provided by GSTN (GST Network)
  3. GST Suvidha Providers (GSPs) – If you are already using the services of ERP providers such as Tally, SAP, Oracle etc., there is a high likelihood that these ERP providers would provide inbuilt solutions in the existing ERP systems

Mandatory Documents that you will need to file is Goods and Services Tax Identification Number (GSTIN)


Monthly Returns:

GSTR-1

What: Monthly outward supplies of Goods or Services are to be filed. Required information:
  • Aggregate turnover of the taxpayer for the immediate preceding financial year and first quarter of the current financial year
  • Invoice-level information pertaining to the tax period should be reported for all supplies
  • Information related to exports out of India (optional)
  • Information related to Supplies to SEZ unit/ and SEZ developer (optional)
  • Information about shipping bill (optional)
  • Information relating to advances would be submitted only if the invoice has not been issued.
  • Summary of supplies effected against a particular HSN code
Who: All GST registered individuals and businesses
When: 10th of the month succeeding the relevant tax period
How: GSTR -1 form


GSTR-2

What: Monthly Statement of Inward supplies of Goods or Services. Required Information:
  • Invoice-level inward supply information, rate-wise, pertaining to the tax period reported by supplier in GSTR-1 (w.r.t autogenerated on GSTR-2A)
  • Inward supplies other than those attracting reverse charge
  • Inward supplies other those attracting reverse charge
  • Invoices added by recipient tax payer
  • Import of Goods/Capital Goods from outside India as well as supplied by an SEZ Unit
  • Bill of Entry information including six digits port code and seven digits bill of entry number of the recipient
  • TDS and TCS credit would be auto-populated if not raise an inquiry.
  • Information of advance paid pertaining to reverse charge supplies and the tax paid on it
  • Summary of supplies effected against a particular HSN code
Who: All GST registered individuals and businesse
When: 15th of the month succeeding the relevant tax period
How: GSTR -2 Form


GSTR-3

What: Monthly Return for a normal taxpayer is to be filed. GSTR 3 can be generated only when GSTR-1 and GSTR- 2 of the tax period have been filed. Required information:
  • Electronic liability register
  • Electronic cash ledger
  • Electronic credit ledger of taxpayer
  • Invoices, debit/credit notes, advances paid and adjustments made out of tax paid on advances earlier.
Who: All GST registered individuals and businesse
When: 20th of the month succeeding the relevant tax period
How: GSTR -3 Form


GSTR – 5

What: Monthly Return for a non-resident taxpayer. Required Information:
  • Details of import of goods, bill of entry wise and taxpayer has to specify the amount of ITC eligible on such import of goods.
  • Bill of Entry information including six digits port code and seven digits bill of entry number of recipient
  • Invoice-level information, rate-wise, pertaining to the tax period separately for goods and services.
Who: All Non Resident Tax Payer
When: 20th of the month succeeding the relevant tax period or within 7 days from the last date of the registration
How: GSTR -5 Form


GSTR – 6

What: Monthly Return for an Input Service Distributor (ISD) Required information:
  • Information will flow from GSTR- 2A
  • Mismatch liability between GSTR-1 and GSTR-6 will be added to ISD and further ISD taxpayer has to issue ISD credit note
Who: Input Service Distributor
When: 10th of the month and before 13th of the month succeeding the tax period.
How: GSTR – 6 Form


GSTR -7

What: Monthly Return for authorities deducting tax at source Required Information:
  • TDS
  • Liabilities
Who: Tax Deductor
When: 10th of the month succeeding the relevant tax period
How: GSTR -7 Form


GSTR -8

What: Monthly Statement for E-Commerce Operator depicting supplies effecting through it. An e-commerce operator can file GSTR- 8 only when full TCS liability has been discharged.

  • Tax Collected at source
  • Electronic cash ledger
  • Details with supplier’s GSTR-1 (which will be generally done automatically)
Who: E-Commerce Operato
When: 10th of the month succeeding the relevant tax period
How: GSTR -8 Form

 

Quarterly Filing:

GSTR – 4

What: Quarterly Return
Who: Taxable Person opting for Composition Levy
When: Composition Levy 18th of the month succeeding the quarter
How: GSTR -4

 

Annual Filing:

GSTR – 9

What: Annual return. Required Information:
  • Electronic liability register
  • Electronic cash ledger
  • Electronic credit ledger of taxpayer
Who: Registered Person other than an ISD, TDS/TCS Taxpayer, Casual Taxable Person and Non-resident Taxpayer
When: 31st December of succeeding year
How: GSTR -9 Form

GSTR -10

What: Final Return
Who: Taxable Person whose registration has been surrendered or cancelled
When: Within three months of the date of cancellation or date of order of cancellation, whichever is later.
How: GSTR -10 Form

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Restoration of Company, Secretarial Compliance

The news of over 2 lakh directors being barred from the board and suspension of directorship for 5 years has created a turmoil in the Startup and SMEs segment. Yesterday we at Wazzeer had covered an exclusive blog on what really happened. We received requests from 20+ founders asking ‘How to restore companies that have been stricken off?’. This blog is for you guys, talks about the procedure for restoration of companies’ name dissolved under section 248 of the Companies Act, 2013.

1. Which is the concerned authority for restoration of companies dissolved under section 248 of the Act?

A company dissolved under section 248 can be restored on the Register of Companies by National Company Law Tribunal (“Tribunal”) order.



2.Who can apply?

The Company, Member or Creditor, Workmen.



3. Is there any time limit for making an application for restoration?

Such an application must be made before the expiry of 20 years from the publication in the Official Gazette of the notice of the striking-off.



4. What is the procedure for making application to the Tribunal under section 252 of the Act?

S. No.

Steps

Remarks, if any

1.


Application to the Tribunal under Section 252 (3) of the Act


Form No. NCLT-9


2.


Filing of application to the concerned Registrar of Companies
(“ROC”)



Not less than 14 days before the date fixed for the hearing of the application.

3.

Documents required to be attached with NCLT-9:

  1. Affidavit verifying application;

  2. Payment receipt of Rs. 2,500

  3. Memorandum of Appearance with copy of Board resolution;

  4. Any other documents in support of the case.

 


Form NCLT-6

 

Form NCLT-12


4.

Hearing at the Tribunal and Tribunal may pass order for restoring the name of the company in the Register of Companies


 

5.



A copy of the order passed by the Tribunal shall be filed by the company with the Registrar


File Form INC-28 within 30 days from the date of order.

6.

Publication of order in official Gazette by ROC.


 



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RoC Filing

This news has been a buzz in the market and has put entrepreneurs and business owners in a tensed situation. Over 2 lakh directors to be barred from board posts for not complying in RoC filing. With reference to this article covered on Economic Times, we will be covering exclusively all the facts that you as a business owner and a director should know


Why were these directors name stricken off?

  • For not filing returns and
  • For not completing other formalities related to compliance after show-cause notice was served.

 

The Directors whose names have been barred:

  • Cannot hold any board position in new ventures
  • They will not have to step down from the board of other companies on which they are currently directors. 
  • The law allows the government to bar these directors from taking up any board position for five years 
  • In addition, their directorship on other boards is not being disturbed 

 

What founders should learn from this incident?

  • If you think the company is not moving towards a positive growth, change the company status either to Dormant Status or Close.
  • Be compliant with RoC filing.
  • Send well-thought response (after taking required advice from a Lawyer) to MCA notice before the deadline.


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Business Formation, Partnership Firm

This article will talk about the Top 10 Features that Partners of Partnership Firm should know:

  1. Two or more Members – At least two members are required to start a partnership business. But the number of members should not exceed 10 in case of banking business and 20 in case of other business. If the number of members exceeds this maximum limit then that business cannot be termed as partnership business.

 

  1. Agreement: Partnership Agreement is what that will constitute each partner’s role towards running the partnership firm. This agreement contains:

 

  • the amount of capital contributed by each partner;
  • profit or loss sharing ratio; o salary or commission payable to the partner, if any; o duration of business, if any ; o name and address of the partners and the firm; o duties and powers of each partner; o nature and place of business; and o any other terms and conditions to run the business.

 

  1. Competence of Partners – Since individuals join hands to become the partners, it is necessary that they must be competent to enter into a partnership contract. Thus, minors, lunatics, and insolvent persons are not eligible to become the partners. However, a minor can be admitted to the benefits of partnership i.e., he can have a share in the profits only.

 

  1. Sharing of Profit – The main objective of every partnership firm is sharing of profits of the business amongst the partners in the agreed proportion. In the absence of any agreement for the profit sharing, it should be shared equally among the partners. Suppose, there are two partners in the business and they earn a profit of Rs. 20,000. They may share the profits equally i.e., Rs. 10,000 each or in any other agreed proportion, say one forth and three fourth i.e. Rs 5,000/- and Rs. 15000/-.

 

 

  1. Unlimited Liability – Just like the sole proprietor the liability of partners is also unlimited. That means if the assets of the firm are insufficient to meet the liabilities, the personal properties of the partners, if any, can also be utilized to meet the business liabilities. Suppose, the firm has to make payment of Rs. 25,000/- to the suppliers of goods. The partners are able to arrange only Rs. 19,000/- from the business. The balance amount of Rs. 6,000/- will have to be arranged from the personal properties of the partners.

 

  1. Voluntary Registration – It is not compulsory that you register your partnership firm. However, if you don’t get your firm registered, you will be deprived of certain benefits, therefore it is desirable. The effects of non-registration are:

 

  • Your firm cannot take any action in a court of law against any other parties for settlement of claims.
  • In case there is any dispute among partners, it is not possible to settle the disputes through a court of law.
  • Your firm cannot claim adjustments for the amount payable to or receivable from any other parties.

 

  1. No Separate Legal Existence – Just like a sole proprietorship, partnership firm also has no separate legal existence from that of it owners. Partnership firm is just a name for the business as a whole. The firm means the partners and the partners collectively mean the firm.

 

  1. Principal Agent Relationship – All the partners of the firm are the joint owners of the business. They all have an equal right to actively participate in its management. Every partner has a right to act on behalf of the firm. When a partner deals with other parties in business transactions, he/she acts as an agent of the others and at the same time the others become the principal. So there always exists a principal agent relationship in every partnership firm.

 

  1. Restriction on Transfer of Interest – No partner can sell or transfer his interest to anyone without the consent of other partners. For example – A, B, and C are three partners. A wants to sell his share to D as his health does not permit him to work any more. He can not do so until B and C both agree.

 

  1. Continuity of Business – A partnership firm comes to an end in the event of death, lunacy or bankruptcy of any partner. Even otherwise, it can discontinue its business at the will of the partners. At any time, they may take a decision to end their relationship.

 

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E-commerce Taxation, Legal, TAXATION

Running a business through e-commerce may seem uncomplicated and economical, there are a variety of legal factors that an e-commerce business must seriously consider and keep in mind before commencing and while carrying out its activities. In this article, we will discuss some of the important legal and Tax compliance for an E-commerce in India.

Legal Compliance:

  • Business Registration: E-commerce businesses, 99% register their business before starting operations mainly because these are tech start-ups that plan to raise funding in near future.
  • Contracts: E-commerce businesses operations are regulated by the contracts that are on the website. Whether it’s a vendor or a customer the user journey is protected by these contracts. Hence contracts are mandatory.
    • Some of the most common forms of e-contracts are clicked wrap, browse wrap and shrink-wrap contracts.
    • The existence of a valid contract forms the crux of any transaction including an e-commerce transaction. Contracts governed by Indian Contract Act, 1872
  • Security Issues: Transactions on the internet, particularly consumer related transactions, often occur between parties who have no pre-existing relationship. This may raise concerns of the person’s identity and authenticity with respect to issues of the person’s capacity, authority, and legitimacy to enter the contract. Hence, Businesses should look after:
    • Authentication and Identification
    • Identity Theft and Impersonation
    • Privacy
    • Data Protection
    • Security of Systems
  • Payment Mechanisms: Electronic payment systems are often more complex than traditional payment methods, as they typically involve many users. It is important that these start-ups or businesses abide by Payment Guidelines.
  • Intellectual Property: E-commerce platforms should use either proprietary technology or validly licensed technology. Please consult your professional or our Wazzeer Professional network for doubts.
  • Content Regulation: For the e-commerce ventures that distribute content or acts as a platform for distribution or exchange of third party information/ content, compliance with content regulations assumes paramount importance. Issues like obscenity and defamation should be avoided.
  • Jurisdiction Issues: In e-commerce transactions, if a business derives customers from a particular country as a result of their website, it may be required to defend any litigation that may result in that country.

 

Taxation Compliance:

  • Direct Taxation: In India, the High-Powered Committee (“HPC”) constituted by the Central Board of Direct Taxes, submitted its report in September 2001. The report considered and contemplated upon the need for introducing a separate tax regime for e-commerce transactions.
    • Tax on turnover generated
    • Tax on Income earned from Licensing Technology
    • Tax on income earned from leasing equipments.
    • Transfer pricing
  • Indirect Taxation:
    • GST: GST will be applicable to businesses based on two factors: a. Annual revenue b. Type of business.

GST eligibility critera

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