Procedure and taxation for opening a domestic branch office

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Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2013 Dear Experts,
We are a Sole Proprietor company in Delhi. We are looking to open branches in multiple states doing same business as the parent.
Reading through two sites below,

https://business.gov.in/growing_business/opening_branch.php

https://www.lowtax.net/lowtax/html/asia_pacific/corpinv/india_corporate_taxation.html

We understood the following.

1. Domestic companies simply need to pass a Board resolution; foreign companies must undertake an approval process with the Reserve Bank of India.

2.
- The individual to be appointed manager of the branch; and giving
- Authorization to a parent company official to make provision for necessary support of the branch

3. Taxation:
If a branch office receives no income, then nominally it will not have to pay tax.

We sell electronics goods through a distributor network.

Some questions:
1. We would like to ask the experts if there is something major we are missing in our findings.
2. Do we need to get any new numbers, e.g., Sales tax # etc., per state branch office when we use the branch to store and forward goods to the distributors?
3. For simplicity, we would like to implement such that the branch does not receive any income. How does the invoicing work in this case? Would parent branch invoice with shipment-origin from the branch office?

Thanks for your expert opinions.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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29 July 2013 Syour business is under the proprietorship business you do not require any registration under any act. Hence, you open the office in any place as you may think fit and proper but you have to do the following registration
1) VAT
2) CST
3) Trade Licence
4) Shops and Establishment registration
5) Rent/ Lease/ Leave & Licence agreement

As regards filing of Income Tax return you have add the income and turnover of all the branches and file one single return in the nam,e of the proprietor.

As regards Sales Tax (VAT) & CST returns you have to file the same in each State separately.

I am unable to understand why you want to do the business in proprietorship is best knownto you.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2013 Dear Mr. Agrawal,
I appreciated a response.
We have all these registrations for Delhi.

We are looking to open an office in West Bengal.

Do we need separate CST, VAT and Trade License registrations for each state?

Thanks.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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29 July 2013 Yes as I have given in my reply that for each office you have get CST & VAT registration

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