Compliances for new company pvt ltd

For your company’s compliance questions regarding cash sales and employee-related filings (PF/ESIC), here is a summary of the regulations:

1. Cash Sales and GST/Income Tax Compliance

• GST Returns: There is no restriction on cash sales under the GST law. You are required to file your GSTR-1 (sales) and GSTR-3B (summary) returns regardless of whether your sales were in cash or digital. You must issue a valid tax invoice for every sale, even if it is a cash transaction.

• Income Tax Restrictions (Section 269ST): While GST allows cash, the Income Tax Act prohibits receiving ₹2 lakh or more in cash from a single person in a single day, in respect of a single transaction, or for transactions relating to one event. Violating this can lead to a penalty equal to 100% of the amount received.

• Reporting: All cash sales must be properly accounted for in your books of accounts and reported in your tax returns.

2. PF and ESIC Compliance

• Applicability Thresholds:

  • PF (Provident Fund): Generally becomes mandatory once you employ 20 or more persons.

  • ESIC (Employees' State Insurance): Generally becomes mandatory once you employ 10 or more persons.

• New Incorporation Status: Although companies are often assigned PF/ESIC registration numbers automatically during incorporation, you are not required to file returns if you do not meet the minimum employee threshold.

• Action for No Employees: Since your company currently has no salaried staff, you do not have to file monthly PF or ESIC returns. If you ever receive a notice from these departments, you can simply respond by stating that you have not yet reached the statutory employee threshold for coverage.

Summary:

You must report all cash sales in your GST returns (GSTR-1/3B) and adhere to the ₹2 lakh daily cash receipt limit under Section 269ST of the Income Tax Act. For PF/ESIC, no filing is required until you reach the threshold of 20 employees (for PF) or 10 employees (for ESIC).