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Ecc/tin registration for a start-up

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Shakti

Founder

21 Points Posted on 16 April 2012

I plan to start up a company 'XYZ' (Sole Proprietorship Firm) which would be in manufacturing and wholesale (only) of ready made garments (shirts and denims). The business model is as follows :

1. Purchase of cloth and other accessories through local suppliers. (Registered as well as unregistered).

2. Free issue of these materials to local craftsmen/tailors (all in the unorganized sector) and payment of a suitable amount as stitching charges. (All machinery/workshop premises owned/leased by them).

3. Wholesaling of the finished goods (shirts/denims) through distributors or directly to retailers.

My queries are as follows :

1. Which indirect taxes/duties will I be liable to pay. Accordingly do I need to register for ECC/TIN Number? Note that my co. does not own any factories.

2. Will I be given the ECC/TIN nos when I register under The Companys Act?

3. On what basis will I have to pay the direct taxes?

Thanks a lot in advance.

Regards,

Replies (1)

Sunil Kumar G

AGM Taxation

446 Points Posted on 18 April 2012

Your applicable indirect Taxes: (1)Central Excise Registration is required becuase you are manufacture/ deemed manufaturer (get it done through others). You are not eligible for SSI exemption becuase you are dealing with textile articles. So that you should obtain ECC number from your range office.

(2) You have to obtain VAT Registration from the Concerned state government Commercial Tax Department. If you are indend to make interstate sales, you should obtian CST Registration also.

Direct Tax: You income for the year ( propritorship) 2012-13 exceeds Rs. 2 lacs, you have to pay income Tax as per slab. The Slab rate is 0 to 2 lacs Nil, above 2 lacs to 5 lacs 10% and above 5 lacs to 10 lacs 20% and above 10 lacs it is 30%. Surcharge 3% on tax.

You should not apply under Companies Act, becuase yours is a propritorship Firm.

More clarity visit www.finact.in & For VAT/CST www.cstonline.in