What legal formalities to start a trading & supply business in india?

Question

we are doing garments manufacturing business on very small scale. i want to know what are legal formalities for starting to manufacturing garments , taking order and supply to other states on a large scale , investing money cross the 10 lac. then what requirement needed , for example, cst no. etc. etc.

Answer 1

you need a VAT registration for trading in your state and for trading in other states u may need a CST registration.  Further if U use electricity for your manufacturing activity, you may need clearance from the EB dept.  Further, if U register your business name with SSI Dept it will be useful for getting some benefits under govt schemes, tenders, bank interest rate concession, Electricity rate cincession etc.

Answer 2

Consult an advocate, refer this site http://www.advocatekhoj.com/

Answer 3

Your existing garment business needs to be registered as a proprietorship concern or a partnership or a pvt. ltd co.

Pvt ltd co. will be too cumbersome for you at this stage.

First obtain PAN from income tax depatment.

Than VAT = for local sales from Sales Tax Dept.

Than CST for sales outside the state where you conduct your business.

You have to get registered with Profession Tax Authority and pay profession tax as per rules.

Profession tax will have to be deducted from the salary of staff when the payment exceeds certain  slabs, as laid now in the act.

Service Tax registration will be compulsory.

Shop & Establishment licence will also be applicable to you.

The place from which you operate should be classified as a business premises. If classifed as a factroy you have to follow all the rules and regulations under factory act. Govt. publications are available for the purpose.

More than 20 persons employed will attract ESIS scheme.

Statuory books of accounts and registers will have to be maintained for inspection of Vat, CST, Profession Tax, Payment of wages & salaries, Notice of weekly off to be exhibited, No child labour be organised, Women labour not to be retained after 7 pm.

All these aspects will be step by step, one after the other, without any neglect or presumptions.

Use the services of experienced CA who will guide you into all the formalities, will assist you to file regular tax and data returns at periodic intervals.

Trust you will ensure abiding into all the formalities to avoid tensions as this will able you to concentrate more on business expansions rather than visit govt.authorities for rectifications which at times are with penalties.