Category: Tax Registration

Karnataka Shops and Establishments Registration in Bangalore

Shop Establishment
Business Profession Tax Registration PATSON LEGAL

If you are looking for information on how to get shops or establishments certificate, you need to know that you would have to do it as per the Karnataka Shops and Establishment Act. It is supposed to regulate the commercial establishments and shops in the state.

It was introduced with the precise intention of regulating various aspects of commercial shops and establishments such as the hours of work, compensation and wages, annual leave with wages, and employment of children and women in these establishments.

It basically safeguards the employees and workers of an organization even as it lays down the working conditions. It does so by determining the following:

  • Working hours
  • Opening and closing hours
  • Wage rate
  • Weekly, monthly and annual holidays

It provides special attention to the children employed in such establishments as well as the women who work over there.

The Labour Department of Karnataka plays an important role in the context of shops and establishment. As per the rule the businesses have to be acquired this labour registration license from the definite local authority for their smooth operations.

Who is liable to get shop & establishment registration?

Every establishment and shop that is doing any kind of trade, services, or business within the boundaries of the state itself has to get this registration.

This has to be done within a period of 30 days of having started business operations as per the rules and regulations of the Act. It is important that you know how to apply for shop & establishment registration in Bangalore Karnataka.

The following businesses need shop & establishment license:

  • Shops (any type of shops selling items to consumers)
  • Offices
  • Canteens
  • Small food vendors
  • Business entities
  • Consultancy establishments
  • Legal service provider organizations
  • Personal training establishments
  • Financial institutions
  • Coffee bars
  • Theater
  • Cyber cafés and etc.

Why a business needs shop & establishment license?

Look at the benefits of this license for that reasons the businesses must need it:

  1. To get permission to run a business legally on a certain place
  2. Helps to demonstrate your shop or establishment certificate as proof while the concerned officer is asking or visiting to your business premises
  3. Helps you to get loan easily from banks or financial institutions
  4. Helps you to think on expansion and growth of your business
  5. Helps you to enjoy the tax benefits and exemptions from State Government
  6. Helps you to open a current account easily

To get the right to do all-purpose business legally in a certain place of your locality and recognize you as an officially authorized entity to carry out the business, it is must required. And you’ll be ensuring that you are in safe zone from the eyes of local legal department.

Difference between trade license and shop & establishment

A question might be arising to your mind why some businesses are acquiring shop license and some others are trade license. Yes, some specific reasons are there that’s why the particular type of business organizations are taking these licenses. So we stated a few distinctions between them in below next paragraph.

We share a little information about trade license in this article, because most of the business organizations are asking about who has to take permission for trading business and who has to take license for shops and establishment.

Hence, trade license is needed for traders or manufacturers those who are doing any kind of commercial activity in certain place.

The following entities mainly need trade licenses:

  • Traders
  • Manufacturing industries (producing items for commercial purposes)
  • Hotels
  • Restaurants and etc.

But, for shop and establishment license, we’ve mentioned it in the above paragraph for which it required. Please refer it from top.

See the 6 major points how shop & establishment and trade license are different

Shop License Trade License
For small & unorganized sectors Especially for traders & manufacturing sectors
For Common type of business For Particular kind of business
Required permission from local labour department for doing general trade Required permission from local government for a particular business purpose
Follow rules & unethical business practices Follow safety guideline & rules of government
Can obtain license on residential site Obtain license on commercial site
This license is mandatory This license also mandatory
Examples: Shop, Offices, Restaurants, etc. Examples: Traders, Manufacturers, Hotels

The biggest difference between a trade license and shop & establishment registration is that you need a trade license in order to start a particular kind of business and you need the latter in order to start your business in general.

With the former you are taking the permission to start a certain type of business while concerning the latter you are registering your business with the local governmental authority.

You can obtain shop & establishment registration on your residential premises as well. On the other hand you can get trade license only on commercial premises.

As per laws, getting a trade license is mandatory. This is simply to make sure that you are not indulging in unethical business practices and following the safety guidelines and rules that are issued by the government on a regular basis.

The trade license is a state government of Karnataka policy which applicable to only trading, manufacturing industries, factories, hotels, restaurants and etc.

On the other hand, shop and establishment registration is necessary for all such entities that may be providing any service or doing any business as such.

Consider an example, if you wish to be involved in a legal service or business activity as such you need to have a trade license. On the other hand, which is primarily a small and unorganized sector that uses the shop and establishment registration.

Documents needed for shops and establishment registration in Karnataka

Following are the documents that are needed in order to register your shop and establishment in Karnataka:

  • Photo of the authorized signatory – proprietor/ managing partner / director – 2 photos are needed in this case
  • Statutory document – partnership deed / incorporation certificate
  • Identity proof of the authorized signatory – copy of PAN (Permanent Account Number) card / driving license / voter ID
  • Authorization letter – this is to be signed by the authorized signatory in accordance with the format that has been prescribed in this case
  • Address proof of the entity- rental agreement or property tax receipt (this is applicable in cases where the applicant owns the premises)
  • Employees – information on the number of employees you have to provide

Shop and Establishment registration process

The following steps are required to get a license:

  1. Submit application online along with the Form A containing employer details
  2. Submit physical copy of online application in regional circle
  3. Verification is carried out by the local labour inspector
  4. Make necessary payment towards the registration fee
  5. Issue certificate by department

We are into the field of business consultation, providing intellectual property, company incorporation, and legal and accounting services in Bangalore. For any help regarding this matter, can contact us now we’ll be happy to serve you.

How long this certificate does valid for?

As per the rules, this registration certificate is valid for 5 years. By acquiring this license you have reserved the rights to run your business smoothly for this time period. Before it gets expire, you have to renew it on time.

How often do you have to renew this registration?

Before finishing its term period, the business should have to renew the license. Normally, you need to apply to the local municipal corporation with the necessary fees and relevant documents in order to get the registration renewed. And these days, every work related to this field can be accomplished through online also. So you can complete it with the help of the exact professional experts.

These days, there are several service providers that are ready to help you in this particular regard and take care of all the necessary work on behalf of you. If you need our assistance, we are ready to help you in this regards.

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How to Get GST Registration Online in Bangalore Karnataka?

GST Registration
Business GST Tax Registration PATSON LEGAL

An Overview on GST Registration

This is the day and age of the GST (goods and services tax) regime and as such any business that is earning in excess of INR 40 lakh in India has to register for GST. In case of the northeast and hill states this comes down to INR 20 lakh. The requirement here is the same as a normal person who is liable to pay taxes as well. The process for registering for this tax is also known as GST registration.

Under normal circumstances, GST registration takes around 2 to 6 working days. However, there are certain companies they are providing GST registration services in Bangalore and can make it happen in some simple and easy steps. If you need our help and support, we would always be happy to assist you.

It needs to be mentioned in this particular context that GST has overtaken all other kinds of business taxes such as sales tax, excise duty, and service tax, to name a few. It is always advisable to register for GST even if your income is lower than the prescribed threshold.

There are certain reasons for such a suggestion as well. Without GST registration you would not get any tax refund, which can be quite a useful amount at times for your business. Without GST you would also be unable to sell the products or goods outside your state.

Who has to Obtain GST Registration?

The following entities need to register for GST:

  • Individuals who had registered under the laws that were applicable before GST such as excise, service tax, and VAT
  • Businesses that are earning more than INR 40 lakh a year – in case of businesses in the northeastern states, Jammu and Kashmir, Himachal Pradesh, and Uttarakhand this limit is at INR 20 lakh
  • Casual taxable individuals and nonresident taxable individuals
  • Agents of suppliers and input service distributors
  • People paying tax as per the reverse charge mechanism
  • People who supply through ecommerce aggregators
  • All ecommerce aggregators – this includes the likes of Flipkart, Amazon, and Ola
  • Individuals who are supplying online database access or retrieval services and information from outside India to people in India with the exception of a registered taxable individual
  • Businesses that have many branches across India or operate in various different verticals in one state
  • Businesses that supply to other states
  • Businesses that have to deduct taxes at source

It needs to be kept in mind that the process of GST registration is state specific and based on PAN. In case you are a supplier you would have to register in each state and union territory where you are operating.

What are the Benefits of GST Registration?

If you register for GST you would be eligible to receive a number of benefits.

See, the following advantages you can get under GST:

  1. You will legally certified to do business as a supplier of goods and/or services.
  2. You could do proper accounting of received and paid taxes which can be used GST payment.
  3. You would have the right to collect taxes from your buyers and clients, and then pass on the credit of the taxes that they have paid to them.
  4. With GST registration you would have the right to claim input tax credit of the taxes that you have paid to your suppliers. You can also make use of this particular facility for taxes that are yet to be paid.
  5. With GST registration you would also be able to allow for input tax credit to flow smoothly from the suppliers to the recipients, and that too at the national level.

What are the Documents Needed for GST Registration?

The following documents are needed in order to register GST:

  • PAN (permanent account number) of applicants such as business owners, partners, or directors
  • Address proof for the place of business – this includes the likes of electricity bill, telephone bills, rent agreement, and letter of consent
  • Aadhaar card of owners, directors, or partners
  • Bank account statement or cancelled cheque – this also includes the Indian Financial System Code details and a valid bank account number in India
  • Proof of business registration such as incorporation certificate, memorandum of association, and article of association
  • Digital signature
  • Identity and address proof of promoters or directors along with photographs
  • Letter of authorization or board resolution for authorized signatory, who should at least be an Indian resident – this person should have valid details including PAN
  • Valid Indian mobile number
  • Valid email address
  • Jurisdiction details

GST Registration Process

The application form of GST registration is covered by 2 parts as Part-A and Part-B. Part A registration belongs to getting up to Temporary Reference Number (TRN) and Part B belongs to the afterward work of Part A.

To get the registration under GST, the applicant has to follow the 7 steps procedure:

  1. Go to Government’s GST Portal site and look for New Registration under the Registration tab of Service menu (Service > Registration > New Registration).
  2. Select the type of taxpayer is to be registered, enter details like State / UT, District, Business Name, PAN, Email and Mobile Number in Part-A, then click on PROCEED button, you will receive OTP for both Mobile and Email for verification purpose. After verification, you will get a TRN acknowledgement information on your mobile and email.
  3. Then you have to fill the Part-B Form of GST registration by selecting the Temporary Reference Number (TRN) option, enter TRN and captch then proceeding with Mobile and Email OTP verification.
  4. In fourth step, it will direct you to the next page where it holds 10 menus regarding to your business information. This is the major step, here you have to click on one by one menu and fill the business details regarding to them for each and attach all the required documents. Verify all the particulars and submit the application.

Remember that you have to finish Part-B registration within 15 days, after getting your TRN number. It will be shown to you in yellow background message on top of the window, you could be noticed it.

  1. In verification step, you have to verify with DSC only for company/ LLP. For other organization Electronic Verification Code (EVC) is required; if you have DSC, could go for that and code will come to your mobile and email ID, just you need to verify it.
  2. After verification, you will be getting an ARN (Application Reference Number) to your mobile and email id in 15 minutes. So you can check latter your application status through ARN.
  3. To track application status, go to Service tab, then Registration then click on Track Application Status of GST Portal and enter your ARN, you will find your progress (Service > Registration > Track Application Status).

Procedure to Register GST Through Government Portal

To register for GST in Bangalore or any other cities in India; you have to know, understand and follow the above process. So we have summarized the steps here below:

The first thing is that you need to do in this case is to visit the official portal for this purpose and check out the registration tab, which we’ve mentioned in above (GST Registration Process) paragraph; refer that. Over there you would have to fill out the details such as the following:

  • Type of taxpayer
  • State / UT
  • District
  • Business name
  • PAN
  • Email ID
  • Mobile number

This needs to be done in Part A of form GST REG-01. You would get this on your email and mobile following an OTP (one time password) verification. Once you have done this you would be provided a reference number on a temporary basis i.e. Temporary Reference Number (TRN).

After this you would need to fill up Part B of the same form by selecting the Temporary Reference Number (TRN) option. It needs to be signed either by EVC or DSC. In this case you would also need to upload certain documents along with the signed and filled up form. The type of documents would be specified to you on the basis of the kind of business that you are in.

After this you would GST REG-02, which is basically an acknowledgement.

If you get GST REG-03, where the authorities want more information from you, you would have to visit the department physically and provide clarifications. You may also have to produce certain documents in this case as well. All this needs to be done in the shape of GST REG-04. In case there are any errors it is possible that your application may be rejected by the office as well. You will come to know this in the shape of GST REG-05.

As and when your application is properly approved you would be provided a certificate of registration in the shape of GST REG-06. However, the department will only issue it following verification. As you can see, the process is a quite time consuming one and there are a lot of details to be taken care of as well. This is where the private service providers can be of great help for you.

What is GSTIN?

GSTIN can be called as the GST Identification Number, from this number one business or organization can be recognized as a GST holder. It is a 15 digits number. In this case the first couple of numbers represent the code of state. Normally, 01 represents Jammu and Kashmir, 03 represents Punjab, and 02 represents Himachal Pradesh. The next 10 digits normally represent the PAN of the GSTIN owner.

What are the Penalties for not Registering under GST?

In case of certain businesses it is absolutely mandatory to register for GST. In case if such a business carries on doing business without registering for GST it would be regarded as a contravention of said laws. In such cases the guilty party would be levied with heavy fines.

In case you are not paying the requisite tax or have made inadequate payments you would have to pay 10 per cent of your tax amount as fine. However, this amount cannot be lower than INR 10,000. However, if you have deliberately avoided paying taxes this amount could go up to 100 per cent of your tax amount.

Professional Tax (PT) Registration in Bangalore Karnataka

Professional Tax Registration
Business Profession Tax Registration PATSON LEGAL

Know Everything About Profession Tax in Karnataka

If you have ever noticed your pay slip each month you would have seen a minor deduction along with the likes of HRA (housing rent allowance), the basic salary related breakups, and conveyance, to name a few. This deduction is normally in the region of INR 200 and is referred to as professional tax.

As far as India is concerned, this tax rate happens to be different for each state. In fact, in certain states you may also see that there is no deduction being made under this particular heading.

What is professional tax and who levies it?

Professional tax can be described as a tax that is charged by the state government. It is normally imposed on all people who are earning a living some way or the other in the state. In this case the term professional should not be confused with the definition of professionals that would include people such as doctors.

This is basically a tax that you have to pay if you are an individual who earns and meets the particular limit. This figure normally differs between states.

However, it does not get above INR 2500 on a yearly basis no matter which state you may be in.

It also needs to be stated in this context that this rate is different for different individuals as well.

Who is liable to pay professional tax in Bangalore?

In Karnataka Tax on Profession, Trades, & Calling, both salaried as well as self-employed earners and the business entities have to pay this tax to the state government of Karnataka. As far as salaried people are concerned it is the responsibility of the employers to collect the tax.

The following categories are required to pay professional tax in Karnataka:

  • Companies
  • Corporations
  • Other corporate bodies
  • Firms
  • Hindu undivided family (HUF)
  • Any club or association
  • Any society

With regards to the self employed people they need to pay it to the people who have been appointed by the state government for such purposes. Professionals such as doctors, chartered accountants, and lawyers have to pay this particular tax over here in Karnataka.

See, these professionals are required to pay the profession tax:

Professional Tax
Tax on Profession

Professional tax rate in Karnataka

In Karnataka professional taxes are levied as per the Karnataka Tax on Professions, Trades, Callings and Employment Act 1976.

As far as salary and wage earners in the state are concerned professional tax does not apply if you earn less than INR 15000 a month.

If you are earning more than INR 15000 a month for the year 2019-20; you would need to pay INR 200 for each month.

However, it also needs to be stated in this particular context that there are other categories of professional tax payers in the state as well and the rates for them are different.

Professional tax slab rate in Karnataka for salaried person

Salary/Wage Range For Employee Tax Amount
Less than Rs. 15,000/- Per Month 1 Employee Nil
Not less than and above Rs. 15,000/- Per Month 1 Employee Rs. 200

Who are exempted from paying professional tax in Karnataka?

There are certain classes that do not need to pay professional tax in the state. These are –

  1. All the philanthropic and charitable hospitals and nursing homes that are located at places that are lower than the taluk level in each and every district of the state would not need to pay this tax. This however does not include Bangalore and the Bangalore Rural District.
  2. Directors of companies that are registered in the state and have been nominated by financing agencies that are controlled or owned by the state government, or any other statutory body, are exempt from this tax.
  3. Technicians from other countries working in the state under appointment from the national government are exempted from paying this tax as well. However, this exemption would be applicable only for a period of 2 years from the date when the concerned professional joined his work.
  4. The employee who has attained 65 years of age, tax is not deducted from him/her.
  5. The employee who has employed but not worked more than 120 days in respective year, tax shall not be deducted from him.
  6. Physically handicapped and blind persons are exempted from Karnataka professional tax.
  7. The persons running educational institutions and teaching classes up to 12th standard or pre-University are exempted.

Documents required for professional tax registration in Karnataka

Following are the documents needed for registering for professional tax in Karnataka:

  • Copy of PAN (permanent account number) Card for applicants – in case it is a company it is the directors’ PAN cards that would be needed
  • AOA (articles of association) and MOA (memorandum of association) if it is a company
  • Copy of ID (identification) proof of applicants and director in case it is a company –it is preferable to provide the Aadhaar Card in these cases
  • Declaration, if it is a company
  • Passport size photo of applicant or director in case it is a company
  • Sale deed if the property is owned
  • Mobile number and email ID of applicants and directors if it is a company
  • Rent agreement if the property has been rented
  • Residence proof of registered office – it is better to provide copies of mobile bill, telephone bill, electricity bill, or gas bill
  • PT authorization letter

You need to provide scanned copies of these documents when you make the application.

How to enroll for professional tax (PT) registration?

We want to clear you one thing regarding on enrollment and registration. Because these two things are little bit different; so who shall have to acquire PT enrollment certificate and who needs this registration?

So, you have to understand and aware about the simple difference on them.

Case of Enrollment

As it is stated in Karnataka Act 35 of 1976; In Schedule for Class of persons from Sl. No. 2 to 74 shall have to obtain a Certificate of Enrollment from the Profession Tax Officer of the jurisdiction.

The companies or businesses owners have the responsibilities to enroll for PT (professional tax) for doing business in Karnataka State and shall have to pay certain annual tax before 30th April of every year.

Case of Registration

The employees of Sole Proprietorship/ Partnership/ LLP/ OPC/ Pvt Ltd/ Public companies or any other business organization are getting salary above and not less than Rs. 15,000 monthly have to pay tax on profession.

And it is the responsible of employer to deduct the tax from employees account and pay to State Government and it can be done through filing of monthly PT return. For this, the organization has to obtain PT registration from department.

Therefore, a company having employees has to do both registration and enrollment.

If you wish to be registered for professional taxes in Karnataka; you can get help and support from us. We’ll help you complete your PT application process & obtain enrollment and registration certificate for your business.

PT registration process

You need to visit the official personal tax website. The process is rather simple. By visiting the website you can apply online for registration. Go to https://pt.kar.nic.in/ link for personal tax enrollment and then click on the same. After that you would need to follow the instructions as they appear on the website.

4 simple steps to get PT enrollment & registration certificate:

  1. Prepared documentation for PT registration
  2. Visit to e-PRERANA website
  3. For Enrollment Certificate (EC), click on “Enrollment Application” from left panel of e-Services and fill the details. Then make payment online, then take a print of enrollment application and after that you will get enrollment certificate.
  4. For New Registration Certificate (RC), click on “New RC Request”, fill the entire mandatory field, Sent OTP to Mobile and Verify the number, then you will receive a Acknowledgement No; Through this you can get a RC certificate.

How long does it take to register professional tax?

It takes at least 5 days of working time in Karnataka to get PT enrollment and registration number.

We can apply it in 1 day; however to get the User ID and Password, we’ve to visit the PT office and submit the application with all documents in physical data format, and then the concerned PT officer will verify it.  After verification, they issue a User ID & Password for your organization and we receive it. Then we can proceed for PT filing.

Note: The important thing is that the person who is going to collect the login details from PT office has to take an authorization letter from organization head with seal and signature. So that he/she can be treated as the concerned person for receiving details.

Due date for payment of professional tax in Karnataka

As per Karnataka profession tax, every employer or other taxable person has to make the payment of professional tax on or before 20th of every subsequent month.

And 30th May of every year is the last date for filing of annual statements and it is to be filed with Form-5A.

Professional tax registration fees

Consultants or tax professionals charge fees for doing your PT registration and filing returns on time and it varies from one consultancy to other. So before going with them, ask how much they are charging, what services they’ll offer, for how many employees they’ll do filing or anything it is coming to your mind can ask and judge them with their work capability, service and its output.

Penalties for not paying the professional tax

If as an employer you do not register for professional tax in Karnataka you would be charged a fine of INR 1000. In case, you are not a business owner this fine would come down to INR 500.

If as an employer you do not file returns for your employees you would have to pay a fine of INR 250.

If you have registered for the tax and are not paying it then a fine of 1.25 per cent of the outstanding amount would be levied at you on a monthly basis. However, this can go up to a maximum of 50 per cent of the outstanding amount.

How to file PT return online in Karnataka?

Nowadays, the state government of Karnataka has come up with a website named e-Prerana (web link – https://pt.kar.nic.in/(S(pvyjes1a4nocykl51dyfdnae))/Main.aspx). Here professional tax payers can come and enter their returns, and then submit it online as well. This website also enables them to make the payments online.

If they wish they can also generate professional tax certificates online and the best part of this is that they do not also need to go to the professional tax office for the purpose.