Documents required for trading in domestic market

SESSION 10 LEGAL ENVIRONMENT OF BUSINESS

 Retail is one of India's fastest-growing economic sectors because the working population is increasing and the buying power of the people is also increasing.

Starting a retail business requires certain

documentation that needs to be in place

in order to adhere to national & local law.

Documents/laws/acts related to trading in domestic market

Register the companys name TIN/TAN PAN Registration Act Indian stamp act Easement act 1882
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Documents/laws/acts related to trading in domestic market

Shop and Establishment Act The Trade & Merchandise Marks Act, 1999 Laws relating to Employment Contract Labour (Regulation and Abolition) Act, 1970 Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

Minimum Wages Act, 1948

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Documents/laws/acts related to trading in domestic market

Payment of Bonus Act, 1965 Payment of Gratuity Act, 1972 Payment of Wages Act, 1936 Workmens Compensation Act, 1923 Industrial Dispute Act, 1947

Environment (Protection) Act, 1986

Register the Company's Name

Reserve the company's name with the Registrar of Companies. ID proof, PAN Card, Address Proof is needed along with the application form + registration fee to get the certificate of incorporation that

legally approves the name of your business.

TAN
TAN stands for Tax Deduction and Collection Account Number, issued by authorized agent of National Securities Depository Limited It is a 10 digit alpha numeric number Mandatory for all persons who deduct or collect tax taxes are deducted from various clients in the bills and this is mentioned in form 16 or form 16 a when issued to deductees.
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TIN
TIN stands for Taxpayer Identification Number

TIN relates to VAT

TIN is given by sales tax department

TIN is quoted on bills and other returns to show

the amount tax collected

Permanent Account Number

Application for PAN s.b. submitted to an

authorized franchise approved by the National

Securities Depository or the Unit Trust of India Investors Services PAN is essential for tax purposes Mandatory while opening a business account or while applying for a loan
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Registration Act
Objective : to ensure that all land related information are furnished and thereby correct land records can be maintained also used for recording of transactions relating to other

immovable property
provides for registration of supporting documents which give these documents more authenticity Registering authorities are present in all the districts
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Indian Stamp Act 1899

Original purpose was to raise revenue to Govt.
However, today stamped document is considered much more authentic and reliable than an un-stamped document

Instruments chargeable to duty under the Stamp Act which

are not duly stamped are excluded in a court of law and have no evidentiary value.

a penalty of up to 10 times the original stamp value has to

be paid to rectify them

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The Easement Act 1882

the right of easement is derived from the ownership of property It means a right which the owner or occupier of land possesses for the beneficial enjoyment of that land and which permits him to do or to prevent something from being done in respect of certain

other land not his own.

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The Easement Act 1882

an easement may be acquired by the owner of
immovable property Such a right may also arise out of necessity or by virtue of a local custom.

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Shops and Establishment Act

retail stores are governed by various Shops and Establishments Acts as applicable in the states These acts regulate the conditions of work and employment in shops and generally prescribe obligations in respect of inter alia

registration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measures wages for overtime work

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The Trade & Merchandise Marks Act, 1999

TRIPS defines Trademarks as any sign, or any combination of signs that can distinguish the goods and services of one organization from the other organization. TRIPS provides for initial registration and each renewal for a term of ten years

The Trade and Merchandise Act 1999 is compatible with

TRIPS and harmonizes it with international systems and practices
*Trade Related Intellectual Property Rights
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Laws relating to Employment

A retail organization is governed by the provisions of the Employees Provident Funds Act, 1952.

this act mandates periodic contributions to the

Employees Provident Fund Scheme and the

Employees Pension Scheme as applicable The firm also has to make contributions under the Employees State Insurance Act, 1948
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Employees Provident Funds Act, 1952

applicable to any estt. employing 20 or more persons
provides for compulsory Provident Fund for the benefit of employees in factories and other estts. Employers contribution to be deposited to the EPF is a specified %age of the employees salary

employees contribution = employers contribution

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Employees State Insurance Act, 1948

Provides for benefits to employees in case of sickness, maternity, employment injury, etc.

Every estt. must register within the specified time

and in the specified manner

All employees in the estt. to which this act applies

shall be insured

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Employees State Insurance Act, 1948

The contribution payable = employers +

employees @ decided by the Central Government

and payable to the ESIC

Contribution has to be made for all employees,

whether directly or indirectly employed by the firm

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Contract Labour (Regulation and Abolition) Act, 1970

This legislation applies to every estt./contractor in which 20 or more workmen are employed or were employed in the past 12 months as contract labour Registration of an estt. is mandatory through an application to the registering authority

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Contract Labour (Regulation and Abolition) Act, 1970

Employer/each contractor in relation to each
employer have to obtain a license from Govt. licensing officers to execute any work through

contract labour
The license may impose conditions as to work, fixation of wages and other essential amenities in respect of contract labour
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Contract Labour (Regulation and Abolition) Act, 1970

The Act provides for the welfare of the workers by imposing obligations on the employer to provide for canteens, rest rooms, washing facilities etc. Non-adherence to this act is punishable with imprisonment or with fine

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Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
regulates the employment of inter-state migrant
workmen and provides for their conditions of service

applicable to every estt./contractor employing 5 or

more inter-state migrant workmen currently or have employed in the past 12 months The estt. has to apply for the registration of the estt. in the prescribed manner and time
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Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

The contractor has to obtain the license from the

licensing officer appointed by the Central/State Govt. The license is valid only for a specified period and requires to be renewed at its expiry The Act levies some duties on the principal employer and the contractor
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Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 principal employer provides for the displacement allowance and journey allowance contractor provides for adequate wages, medical facilities and other benefits

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Minimum Wages Act, 1948

applicable to any person who employs 1 or more person in any scheduled employment

The employment can be direct or indirect

AIM of this act is to prevent exploitation of labour and to provide sustenance and maintenance of the worker and his family

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Payment of Bonus Act, 1965

Objective : distribution of profits earned by the estt. among the workmen

applicable to every estt. in which 20 or more

persons are employed on any day during an accounting year An employer is bound to pay every employee a minimum bonus of 8.33% of the salary or wage earned by the employee.
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Payment of Gratuity Act, 1972

applicable to any estt. in which 10 or more employees are employed or were employed on

any day in the preceding 12 months

An employee should be in uninterrupted service

(as per conditions laid down in the Act) in order to

be paid gratuity

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Payment of Gratuity Act, 1972

Gratuity shall be payable after the completion of 5 years of continuous service upon the termination

of

his

employment

on

superannuation

or

retirement or resignation in case of death of an employee it is payable to the nominee of the employee

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Payment of Wages Act, 1936

every employee has a right to receive remuneration for the services provided by him

applies to persons employed in any estt. either

directly or indirectly AIM : to ensure that the wages are paid by the employers within the prescribed time limit w/o any unauthorized deductions
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Workmens Compensation Act, 1923

Provides for protection from hardship faced by
workmen due to accidents, death or occupational diseases Provides for assistance to the family members of the workmen

An employer has to pay compensation for the

personal injury caused to a workman by accident, death, etc. arising out of and in the course of his employment
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Workmens Compensation Act, 1923

A contractor for construction of building is also made liable for the personal injuries of his

workmen
amount of compensation depends on the nature

and extent of the injury

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Industrial Dispute Act, 1947

Objective : to investigate and settle disputes between the employer and the workmen It is applicable to any industry wherein systematic activity is being carried on by cooperation between an employer and his workmen (direct/indirect) Arbiters Works Committee, Boards of Conciliation, Courts of Inquiry, Labour Courts and

National Tribunals
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Environment (Protection) Act, 1986

Provides for standards for emission or discharge of environmental pollutants from various sources

restricts areas in which operations or processes

cannot be carried out or shall be carried out

subject to certain safeguards

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Info gathered from a store owner

The documents required for trading in

domestic market:
1. CST 2. VAT 3. LABOUR CERTIFICATE

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STEP 1
Any shop has to apply for sales tax registration with that sales tax office in whose circle that shop falls in Patna has 6 circles implying 6 offices

Both CST and Bihar VAT registration(5%) is done at

the same Sales Tax Office

CST and LST has to be paid before 15th of next month

else there is a penalty of 1.5% per month on the unpaid amount of tax
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Returns..
Quarterly RETURNS have to be filed by 31st of next month. The return includes the details of the goods bought as well as goods sold during the quarter also includes the details of the CST and LST (Bihar

VAT) paid during the previous quarter

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Docs required while applying for sales tax no.

a) 2 Identity proof PAN Card, Drivers Licence, Voter ID, etc. b) Address proof of the commercial property from where store shall operate If property is self owned, attach the property papers If property is rented, attach the copy of rent agreement
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Docs required while applying for sales tax no.

c) Municipality receipt to be submitted whether the shop is self owned or rented d) Bank statement of the Current A/C held e) In case of CST, 2 such guarantors are required who belong to the same circle/city and who

have been paying their taxes since at least 6

months
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Road Permit & C Form

For inter-state purchase, CST licence is a must. If we buy from local distributor, then CST is not required. When we place an order to a brand AND its the case of

inter-state purchase, we send them the road permit (form

D-IX). (Separate road permit is required for each order)

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Road Permit & C Form

At the end of the quarter, we have to send the C form to the brand. (The C form is issued by the Sales
Tax Office upon verification of the CST and LST paid

during the previous quarter against the goods bought

and sold during the previous quarter)

Against the C form, a CST of 2% has to be paid. In absence of C form, a CST of 5% has to be paid.
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