Category: Corporate

Categories
Corporate

India’s GST: A Game Changer for Business Taxation and Compliance

gst

GST-known as Goods & Services tax came into effect on 1st July 2017 in India. If you are new to GST or maybe this whole system then this article is for you. We’ll go section wise starting with the basics and then diving in deeper to the vast level. We may even discuss some practical part so make sure to stick till the end.



So let’s start with a very basic question. What are taxes? What’s the purpose for it? 

Taxes are basically mandatory contributions levied on to individuals or corporations by the government. Tax revenues are used by the government to finance activities including as public work and services such as Medicare, infrastructure, social welfare etc.



To help fund these public work and services and to build and maintain infrastructure government impose taxes on individuals and corporate residents. It is a destination-based tax, which means that it is collected at the point of consumption rather than at the point of origin.



GST subsumed various indirect taxes like excise duty, service tax, value-added tax (VAT), central sales tax, and octroi, among others, into a single tax regime. This simplification of the tax structure aimed to eliminate tax cascading and promote a more efficient tax system.

Below are the GST Rates being imposed on several different commodities-



GST is structured into four broad tax slabs: 5%, 12%, 18%, and 28%. Additionally, certain essential items are taxed at 0%, and there is a Cess on items like tobacco and luxury cars. The rates may be revised by the GST Council to accommodate economic changes and revenue requirements.

A few fundamentals of GST- 

  • CGST (Central Goods and Services Tax): Collected by the Central Government on intra-state supplies (transactions within a state).
  • SGST (State Goods and Services Tax): Collected by the State Government on intra-state supplies.
  • IGST (Integrated Goods and Services Tax): Applicable on inter-state supplies (transactions between different states).
  • UTGST (Union Territory Goods and Services Tax): Levied on intra-Union Territory supplies.
  • GST Compensation Cess: Imposed on certain goods to compensate states for any revenue loss due to the GST implementation.



Who should register for a GST Number?

Check your eligibility for GST registration based on your annual turnover.. The threshold for GST registration was Rs. 20 lakhs (Rs. 10 lakhs for special category states) for most states in India. However, these thresholds may have changed, so do verify the current limits with the GST authorities. 



Lets now explore how India’s GST has become a game changer for businesses and compliance:

The GST system eliminates the cascading effect by allowing businesses to claim input tax credit (ITC) on taxes paid on their inputs. This means that the tax paid at each stage of the supply chain is offset against the tax collected at the next stage. This eliminates the cascading effect of taxes, resulting in cost savings for businesses.

The above tax  also improvises compliance through a robust technology infrastructure, including the GSTN (Goods and Services Tax Network). This facilitates seamless tax filing and compliance. Their concerned portal enables businesses to file returns online, making the process more efficient and less prone to errors.



Moreover it has provided a significant boost to the e-commerce sector. It has simplified tax collection for online marketplaces and helped small sellers become GST-compliant, thereby expanding the digital economy.

GST has incentivized businesses to operate within the formal economy thereby encouraging formalization. Many previously unregistered businesses have opted for GST registration to avail of input tax credit benefits, leading to greater tax compliance.

GST has removed entry taxes and checkpoints, facilitating smoother movement of goods across the country. This has resulted in significant savings & streamlining of  logistics and distribution costs for businesses.



Further, it has particularly been beneficial for SMEs. It has simplified their tax compliance process and reduced the burden of multiple tax filings, allowing them to focus on their core business operations.

Lastly , the framework relies on digital platforms for filing returns and making payments. This shift towards technology has reduced manual intervention, minimized the scope for evasion, and enhanced transparency in the tax system.

Overall, GST has created a more conducive environment for businesses to thrive in India. Embracing and mastering the nuances of GST has transitioned from being a choice to a necessity for businesses aiming to succeed in the Indian market. As India continues to refine and adapt its GST framework, businesses can anticipate further improvements in tax administration, compliance, and overall economic growth. In this ever-evolving landscape, GST remains a powerful tool for businesses to navigate the complexities of taxation while fostering growth and compliance in the Indian business ecosystem.




Do share your thoughts on this in the comment section below. Refer to the links attached for more such interesting articles.

https://thecoffeefolks.in/index.php/2022/09/20/before-investing-in-ipos-initial-public-offering/

https://thecoffeefolks.in/index.php/2021/05/10/complete-guide-to-investment-in-bonds/

Categories
Corporate

Before Investing in IPOs -Initial Public Offering

IPO

IPO is a very big and crucial step for any company. Not only in terms of growth and expansion but also the credibility and share listing affects the company directly or indirectly. But before digging in deeper let us recall some basic terminologies.




What is an IPO?

IPO stands for Initial Public Offering. It’s a process where in a company offers shares to the public to raise capital. An IPO is a big step for a company as it provides the company with access to raising a lot of money. So the company is considered private before listing its shares. However the company can raise funding’s through angel investors, bank loans or friends/family support.




Thus company’s can raise equity capital with the help of IPO’s by issuing shares to the public. The company which offers its shares is known as an ‘issuer’. And the general public who buy the shares are known to be the shareholders of the company.

After IPO, the company’s shares are traded in an open market. Those shares can be further sold by investors through secondary market trading. You need not worry, we’ll discuss financial markets too! In other words, IPO is the selling of securities to the public in the primary market.




A primary market deals with new securities being issued for the first time.  After listing on the stock exchange, the company becomes a publicly-traded company and the shares of the firm can be traded freely in the open market.

Some Important Key Terminologies

    1. Price Band: It is the price range  within which investors can bid for IPO shares.
    2. Lot Size: It means the minimum number of shares that one can bid for an IPO.
    3. Offer Date: It is the starting date on which the investors can start bidding for the shares.
    4. Floor Price: It is the lowest price per share that one can bid one applying for an IPO.
    5. Issue Price: It is the price at which the shares are allotted to the investors when it gets listed on the exchange.
    6. Over Subscription: It is the additional subscription sum that is obtained by the company in the situation of an over subscribed IPO.




    1. Listing Date: It is the day on which IPO shares start trading on the stock exchange.
    2. ASBA- It means ” Application supported by blocked account” . It is an application containing an authorization to block the application money in the bank account, for subscribing to an IPO issue. You cannot use the blocked amount for any purpose. However, you can continue to earn interest in the blocked amount. As an investor, if you apply through ASBA, your money gets debited from your bank account only if your application is selected for allotment. It is refunded to your bank account if you do not get the IPO issue or the issue has been withdrawn. From 2016 onwards, the SEBI has directed that it is mandatory to fill an ASBA form if you wish to invest in IPO.

 

Factors to consider before investing in IPO’s 

    • Company Evaluation – Start with knowing the company, it’s history and present operations.  Basically you need to keep up with the company , don’t worry you need not dig deeper with past numbers. Just analyze and review the entire business and it’s operations . The idea behind it is to assess the effectiveness of the company.
    • Risk Factors –  The financial performance indicates how well a company is performing in terms of revenue , economic strategies , managing debt, liabilities, investment decisions, current profitability and risk.
    • Business Model– It is the type of market company is targeting at the moment. The various types of business models are :




    • Financial Performance & Future Prospect– Try checking out the background of the company  and answers to common questions like – why did the company came out with the idea of IPO, how will the funds be utilized . Moreover you can always analyze the current financial position of the company and their future course of action. Company’s Website is the best source to find out such information.




  • Financial Ratios– strategically you can use ratios to analyze the value of IPO. That will help you in figuring out if the coming IPO is overvalued , undervalued or fairly valued. Formulas like price to earning ratio, debt to equity return, return on equity ratios can be used for the same.

 

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Checkout some previous posts- 

Complete Guide to Investment in Bonds




Money saving habits budgeting & Investing right

 

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Categories
Corporate

Complete guide to investment in Bonds

bonds

It’s rightly said one of the basic principles of investing is that risk and opportunity go hand in hand. Investments that carry high potential of profit carries the corresponding level of risk too. Heard about bonds? Confused? Want to know more!? Yeahhh!! I can understand your curiosity over this. No worries I will try to answer all of your questions related to bonds. Make sure to subscribe to my newsletter so that you get notified whenever I publish a new post.

So let’s start from the very beginning.



What are bonds?

Bond is basically a fixed income instrument which an investor grants to the borrower. Borrower in this case may be a company or government. Otherwise bonds are used by companies, municipalities, states and sovereign governments to finance projects. Payment to bond investor is made periodically on the interest rate at which it was sold. There are a variety of options available to you if you want to invest in bonds. Some of them are fixed rate bond, perpetual bond, bearer bond, war bond etc. Don’t worry you need not rush, be patient we’ll discuss everything here in detail.



You need to know!

Bond Market is much more wider than stock market but unfortunately has not gained much vital importance or popularity in the Financial Market. According to some sources trading in global bond market is much more than stock market volume. An average figure of about $650 billion in bonds is traded on daily basis.



In general Stocks are much more riskier than bonds. Reason behind that is you can expect no guarantee returns with stocks which is merely opposite in case of bond. You will receive fixed payment of returns from the company in case of bond. Keep in mind, if in any case company goes bankrupt you will stop receiving your interest payments. Also the risk lies with the principal amount too. That’s the only risk with bond.



Merely Bond is just a kind of loan from you to company or government in return for fixed amount of interest. 

Another important thing you need to know is that bonds do have yield curves. Let’s go into more detail. Yield Curve is basically a line that shows interest rate changes and economical activity. Yield here is interest on bonds. You can expect 3 kinds of shapes in this representation. These are normal (upward sloping curve), downward sloping curve which is inverted and the last one is flat .



Kinds of Bonds

As we discusses earlier bonds are of different kinds. Let me give you a brief tour.

    • Bonds in which the interest rates remain same despite of price fluctuations are known as fixed rate bond.
    • Those in which interest rate changes as per market references is known as Fluctuating Bond.
    • Bonds with no maturity dates is called as perpetual bond. Holders of perpetual bond enjoy interest throughout.



    • Subordinate Bonds are those which are given less priority than others. Like in the case of liquidation other bonds will be paid first rather than subordinate.
    • Zero coupon bond also known as accrual bond is issued at discount to par value and it is purchased at a discounted price and is redeemed at full par value. Also please note that it does carry interests.
    • Corporate Bond is issued by companies, just like companies issue stocks in the same manner they issue bonds . Since companies have a high chance of defaulting than government therefore it is important to analyze company credit quality.



    • Municipal Bond is a bond which is issued by cities, states to finance projects and expenditures like construction of highways, bridges etc.
    • Another interesting one is sovereign gold bond. This is slightly different from others. The only difference is that it is issued against the grams of gold. Gold prices are usually less fluctuating which acts as a secure investment for individuals. Gold bonds are for fixed tenure. One of the major advantage of gold bond is that it appreciates that prices of gold tend to increase. So there are high chances of price increase at maturity.
    • Foreign bond is another kind. This is issued in Indian market by foreign companies against currency. There main aim is to raise capital for their business.



Stocks vs Bonds

A major difference between Stocks and Bond is the kind and amount of profit they generate. Bond gives you a fixed amount of interest while return on stocks vary.

Also stocks need to be sold off in stock market whenever it appreciates in value.

Buying stock means buying a small tiny share of company. On the other hand investing in bond means a loan from you to company or government.



As I highlighted earlier different kinds of bond are: Corporate bond, Municipal bond, Perpetual bond, fixed bond etc. There are a variety of stocks too. These are Equity shares, Preference shares, common stock, Corporate shares.

Stocks are much more riskier than bonds. This is because you get a fixed amount of interest in case of bonds. This makes you secure as an individual. Stocks on the other hand are so unpredictable about the change in price. Imagine how one could lose all money overnight invested on short term stocks. That’s what the risk is!!



Some of the prominent stock exchanges in U.S are, American stock exchange, New York stock exchange, Nasdaq.

According to some sources there is an inverse relation between stocks and bond price. Whenever price of stock increases, the price of bond decreases and vice-versa.



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I hope you found what you were looking for! Let me know in the comments section below what you think about this post. Will love to hear from you all!

You can post your questions about this in the comment section below, I would love to answer them.

Also don’t forget to follow us on Instagram: @thecoffeefolks_



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Checkout our previous posts here:

https://thecoffeefolks.in/index.php/2020/10/16/15-productive-things-to-do-in-quarantine/

https://thecoffeefolks.in/index.php/2020/09/07/sunday-brunch-outfit-ideas-ultimate-guide/



Categories
Corporate

Interview Basics || Tips to crack an interview

interview

Have an interview scheduled? Tensed? Nervous? Lacking confidence? Don’t worry at all, it happens! At that point of time  when you are the next one to go and your hearbeart suddenly peaks up, remember everyone goes through it! But besides this you must know how to handle this situation well so that it doesn’t affect your interaction with your interviewee. Here are some of the basics you must remember for an interview, I’ll add some of the tips as well so make sure to read till the end. So let’s get started..



 

 

1. Confidence will win 50% of the battle😎

It’s very difficult to be confident at this moment of time but trust me, confidence will let you win 50% of the battle. Your interview will be more interactive since you will be speaking confidently. Most of the people loose even if they have all the required skills. But question arises how ? Let me answer you, this is all self explanatory, may be you can do whatever boosts your morale. It can be watching motivational video, speaking to parents or may be listening to your favorite music. Remember it must help you and not have a reverse effect!



2. Be prepared with your homework📑

By homework, I mean you must have a good info about the company you are about to enter into. You must have a complete knowledge of the company before hand. Knowledge of it’s  product range, target audience and other services  will give you a better idea about the company. Also you will be able to clearly realize yourself whether you are suitable for the job profile or not.



3. Be organised📁

Now, to be very honest being organised with all your documents like resume, certificates, ID’s, business cards etc will help you to be in a good impression. I always keeps a ready file with me! Let us just avoid clumsiness. Also don’t forget to keep a pen and notepad with you. These are some of the basics you must remember.

4. Be punctual⌚



Who doesn’t want his employee to be on time?! Always be punctual, arrive  10 to 15 mins before the interview begins. May be you can utilize this extra time in different ways. It gives a good impression about you. Follow this not only at the time of the interview but during your whole job time.

5. Dress Accordingly👩‍🎤

This one of the most important things you need to look into. Your outfit gives a lot of info about you! You must have heard “First Impression is the last Impression” , so just keep that in mind. Business formals are the best for interviews. Also do keep in mind, you need not to be overdressed! A formal suit dress is what you can consider wearing.

6. Questioning😶

This is most important of all! This is holding most of your interaction, so read this one carefully. By questioning I mean to say, common questions asked by the companies. Here are some of the questions:

  • Tell me a little about yourself
  • What are your biggest weaknesses?
  • What are your biggest strengths?
  • Where do you see yourself in coming years?
  • Why should we hire you?
  •  Why did you left your previous job?
  • How do you deal with stress?
  • What are your pay requirements?



Now after this, your interviewee will may be ask you for the questions! I strongly think you must not leave that as easy. You must ask relevant questions about the company. It will highlight your willingness and enthusiasm in and for the company. It can increase your one point. Rest it’s completely your decision on it!

7. Be thankful🤝

Always be thankful, don’t show up much attitude there. Say thanks wherever needed! You need to understand these small things will keep you up to the mark.



8. Be ready with expected questions😏😏

This one is similar to 6th point but ya you must be ready with expected questions. You must answer them without being hesitated and remember with confidence. Here is the list of some questions:

  • Why have you switched jobs so many times?
  • Why did you change your career path? (If you changed)
  • Why did you decide to leave your previous  job?
  • Tell us about your work experience.
  • Your interest/hobby besides this job?

9. Be attentive🤓

You must be attentive during your interaction! Some people get bored, but please listen carefully. Let the other person speak then you can continue, don’t interrupt in between. Most people do this, it can irritate the other person easily! Be polite always even if you don’t want to.

10. Happy Ending😊



Now this means that you must end up on a good note. There should be positive vibes coming up! Don’t be arguing , try to agree on terms put up by your interviewee. In case you don’t then in a very polite manner state your opinion upon it. What actually I am trying to say is never hold your opinions in fear of the job, instead speak up politely!

 

 

Make sure to remember these points for your interview, it will surely help! 😃😃

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Checkout my previous posts here:

https://thecoffeefolks.in/index.php/2020/02/08/market/

https://thecoffeefolks.in/index.php/2020/03/19/20-self-care-tips-while-being-on-a-hard-working-day/

https://thecoffeefolks.in/index.php/2020/04/09/coffee-drinks/

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