29 Feb The Significance of a Physical Address for Business Registration
In compliance with the Indian Company Law, businesses are mandated to provide a physical address for registration. Section 12 of the Indian Companies Act, 2013, unequivocally outlines this requirement:
According to Section 12 (1), within thirty days of incorporation, a company must establish a registered office capable of receiving and acknowledging all communications and notices. Furthermore, the company is obligated to furnish verification of its registered office to the Registrar within thirty days of incorporation, as specified in Section 12 (2). Additionally, every company is required to display its name and registered office address conspicuously on its premises, adhere to seal engraving regulations, and include company details on all official documents as per Section 12 (3).
Essentially, a registered office serves as a legal necessity for companies seeking registration. Its primary function is to serve as a designated location for official communications from governmental entities, facilitating the receipt of legal notices and statutory mail. This registered address must be a complete, physical postal address within the same state of the company’s registration.
While both residential and non-residential addresses are permissible, commercial addresses are predominantly utilized for registration purposes. It is important to note that the registered office need not be situated in the same locality where the company conducts its primary business activities; rather, it serves the purpose of receiving official correspondence and storing statutory records for inspection.
Understanding Virtual Office Addresses:
In contemporary business landscapes, the traditional notion of physical offices is evolving, with an increasing number of companies embracing remote working models. For such entities, whose operations necessitate minimal physical presence, virtual office addresses offer a practical solution. Contrary to its name, a virtual office address does not denote an online space but rather refers to a professional address utilized for business correspondence and mail handling.
Virtual office service providers manage business communications efficiently, maintaining mailing records and forwarding essential correspondence to business owners. This service eliminates the need for leasing office space or bearing utility expenses associated with physical premises. In addition to virtual addresses and phone numbers, providers may offer personalized reception services, virtual fax, and mail handling services.
Given their flexibility and cost-effectiveness, virtual offices are experiencing rapid adoption, particularly among small businesses seeking to expand their geographical reach across multiple states.
Services Provided by Virtual Offices:
Virtual offices offer a range of services tailored to meet diverse business needs. Basic services typically include:
- Administrative Assistance: Dedicated professionals assist with various operational tasks and can represent the company in meetings if required.
- Answering Services: Executive personnel handle incoming calls on behalf of the organization.
- Office Space: Access to prestigious addresses in different cities, facilitating business expansion at a relatively low cost.
- Mailing Address: Provision of a PO box number for mail acceptance, sending, and forwarding.
- Meeting Room Facilities: Rental of meeting spaces for short-term use.
Applicability and Benefits:
Virtual office services are available to individuals and registered businesses alike, requiring only KYC documents for registration. Operating from a virtual office confers several advantages, including cost savings in the early stages of business, efficient management of communication, and access to physical meeting spaces for customer interactions and investor meetings. Additionally, it enhances the professional image of the business and allows entrepreneurs to focus on core business activities rather than administrative tasks, ultimately contributing to profitability.
- Taxpayers opting for the composition scheme (Required to file GSTR-9A)
- Taxable Persons
- Input service distributors
- Non-resident taxpayers
- Persons subject to TDS under section 51 of the CGST Act.
What details were required to complete GSTR-9?
The GSTR-9 form was divided into 6 parts and 19 sections. Each section requested information readily available on pre-installed returns and account books.
- Generally, the form requested disclosure of annual sales, differentiating between tax-free and non-tax-free debts.
- On the purchase side, it presented the annual value of internal assets and the available Input Tax Credit (ITC).
- These purchases needed to be categorized as inputs, input services, and capital goods. Details of ITCs to be deferred due to non-compliance were included.
Annual Return under GST Law if filed late:
Return filing was mandatory under GST. Even if no transactions were conducted, the return had to be filed. It was noted that:
- Refunds couldn't be claimed if previous/quarterly returns were not filed.
- Consequently, late filing of GST refunds would result in severe fines and penalties.
- The late payment fee for GSTR-1 was included in the GSTR-3B and had to be completed as soon as possible after such a delay.
Interest and Penalties as late fees:
Interest was charged at 18% per annum, calculated by the taxpayer on the remaining tax due. Late payment penalties were Rs. 100 per day per Act under CGST and SGST, totaling Rs. 200/day, with a maximum cap of Rs. 5,000. No separate late payments were specified under the IGST Act. However, for GSTR-1 and GSTR-3B, the late payment amount was reduced to Rs. 50/day (Rs. 20/day for Nil filing).
Types of Annual Return under GST Law:
Filing the annual GST return was categorized into three types based on the form to be filed:
- GSTR 9 Form: Mandatory for businesses with profits exceeding Rs. 2 crore annually.
- GSTR-9A Form: Required for registered taxpayers opting for the GST Composition scheme.
- GSTR-9C Form: Meant for filing a taxpayer reconciliation statement for a specific financial year. This form reconciled the Annual Returns on GSTR-9 with the figures in the audited financial statements of taxpayers.
What was the deadline for filing GSTR9?
According to the 37th GST Council Meeting, GSTR-9 for the 2018-2019 financial year had to be filed by November 30, 2019. The deadline for submission was no later than December 31 of the following year. For instance, if filing GSTR-9 for 2019, it had to be filed by December 31, 2020.
Legal provisions for filing GST Annual Return:
Legal provisions concerning filing the annual return, known as GSTR-9, were governed by section 35 (5) and section 44 (1) of the CGST Act. It was required that:
- Every registered person file the annual return for each financial year electronically through Form GSTR9 by the 31st of December after the end of that financial year.
- Those with turnover beyond the prescribed limit (Rs. 2 crore) were required to have their accounts audited by a chartered or cost accountant and submit a reconciliation statement (GSTR-9C) along with other documents.
Conclusion:
In conclusion, GSTR-9C applied to taxpayers necessitating an annual GST audit of their accounts, to be prepared and confirmed by a Chartered or Cost Accountant. Taxpayers with profits exceeding ₹ 5 crores had to submit a reconciliation statement in the form of GSTR-9C. However, a notice from the Central Board of Indirect Taxes and Customs (CBIC) amended the rules, allowing taxpayers with profits exceeding ₹ 5 crores to provide a self-certified reconciliation statement and annual return, instead of a certified statement from a CA.
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