Courier/Angadia-Cash receipt/ Delivery

 

Re. Courier / Angadia business thru Banking channels Vis a Vis applicability of
attracting Banking & Financial Service, clause 65(105) (zm) of Service
Tax Act.
 
One of our clients wants to start courier business having the nature of sending/ receiving cash as per customer requirement having capital of Rs. 10/20/30 lac or as required. Is there any cap on capital employed as per Income Tax????
 
He will operate from 4/5 places, at the end of the day the cash balance of any branch will be deposited in Bank. The said cash will be withdrawn by another Branch from the bank where the cash is required to be delivered as per customers’ order.
 
In this process, he will earn average commission for delivery / receipt of cash @ 0.1 % average.
 
Now following the above modus operands, our questions are as follows for your kind advise, confirmation.
 
  1. The above activity will attract Service Tax registration in the category of courier service i.e. 65(105) (f) - Courier. ??. or which category if not courier other then Banking & Financial Service.
     The Registration of all branches can
     be applied for at one place, i.e. place
     of H.O. (Centralised Registration) for
    taking one common Service Tax no.?
  1. As we understand the basic exemption limit is Rs. 8 lac, pl. confirm? Service Tax will have to be paid @ 10.3 % on quarterly basis being Proprietorship Concern once the commission income exceeds Rs. 8 lac in any financial year or from initial stage itself .???
  2. Is there any need for submitting Service Tax Returns on quarterly basis to the office of Excise & Service Tax, where the branch is located???
  3. The foremost question is, in a day how much maximum cash can be deposited in a Bank to avoid attracting Banking & Financial Service, clause 65(105) (zm) of Service Tax Act. What is the safer limit for the quantum of doing business thru banking channels for not attracting above?
  4.  Proper records will be maintained for the cash receipt/ payment at any place having name, address. Is there any cap on making pucca/ accountable receipt/ payment under Income Tax Act / safer limit of quantum of each receipt for showing in the books so that the Income Tax enquiry is not faced in the case of cash receiver / depositor?
  5. Tax Audit under I.T. Act U/s 44AB will be applicable only if the commission receipt exceeds Rs. 40 lac in a financial year. ?????
 Request guiding immediately.
 
CA Laxmi Mittal
M.No. 038894
lnmittal @ dataone.in
Replies (1)

This is a Banking and Financial Service falling under Banking Regulations Act. You need a license from RBI and the same rules for remittances and money transfers that are applicable to Resident and Foreign Companies registered under Banking Regulation Act will apply. This is like collecting PAN number for cash transaction above Rs.10000. Also you are not allowed to do cash transaction of over Rs.50,000 per day even with a PAN number.

However, FIRST get the license from RBI similar to what Western Union has. Then follow the rules applicable to Banks and NBFCs that offer remittance facilities.

 

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