How to start a Bar in India?

HOW TO START A BAR IN INDIA?

Any business comes with its own set of problems and challenges, demanding a lot of thinking and planning in order make it sustainable. A person planning to start one should be prepared in advance for long working hours, monetary challenges and management issues. The list of constraints becomes manifold when one plans to start a Bar. Apart from the rules set in by the guide book to start a business, a person also has to handle the rules and regulations associated with drinking and the liability issues that come along with this business, especially in India. So, before you plan to pop that bottle of champagne, you need to follow some of the basic rules to set-up a bar business in the country.

ARE YOU PREPARED TO OWN A BAR?

The job description to manage a bar business demands your presence and visibility at all times.

Are you the kind of person who can socialise and spend long hours to check the sanity level in-house?

Do you have the skills to manage and check on your staff to ensure smooth running of the operations?

Even if you hire managers to do the job, you’re presence is still required,

Further, opening a bar requires a certain lifestyle pattern. If you are someone who loves to party hard, spend long hours away from home and your family or loved ones do not mind you being away from home- then you fit the bill well to start a bar business.

WHAT ARE THE DIFFERENT BUSINESS MODELS FOR A BAR?

Bars can be categorised into various types, each of them requiring a different setup, capital and management. A person can decide on what is suitable for him/her or what suits his/her style and skills. Some of them have been listed below:

  • Lounge Bar
  • Sports Bar
  • Concept Bar
  • Tapas Bar
  • Pub
  • Night Club etc.

HOW TO PICK A LOCATION?

The place where the Bar is located plays a very vital role in the success of this business. Choosing the right location can make your business either attract very many customers or can even put off many of them making the inflow limited.

It is also important to be aware of the existing State laws when choosing a location. Some State laws restrict or have specifics about the distance of the Bar from educational institutions, hospitals, religious places etc. while some of them make it mandatory for a Bar to be a part of a hotel with stated number of minimum rooms.

HOW TO APPLY FOR A BAR LICENSE?

Getting a Bar licensed approved is a must to start any bar. In order to get that, a company needs to be set-up and the license needs to be applied in the name of the same. This is to ensure that the Bar license is associated with a company and if required, can be transferred to another individual.

Furthermore, if a person plans to start a bar of his/her own or buys an existing bar, it should be made sure that an application for a liquor license is in place. This is one of the most uncertain tasks since; there is no surety that one will get a liquor license at the end. In this situation it is better to apply at least two to three months prior and simultaneously, incorporate a company or get a Limited Liability partnership (LLP) registration. When all this is in place, a bar can be started.

HOW TO HIRE OR TRAIN PEOPLE?

It is easier to hire employees because it can be done on a low-salaried basis but if you want to make a statement through your bar, it is very important that you train your staff about the requirements or how they deal with customers. If you are hiring freshers/people with no work experience, make sure they are guided by professionals and they are trained to handle things single-handedly as well. Good service in a Bar is one of the basic things to make it successful.

 

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How to start a Fashion business in India?

 

HOW TO START A FASHION BUSINESS IN INDIA?

The fashion industry in the country has been booming extensively, channelized from recently mushroomed boutiques to big malls and online portals, and supported by a potent consumer demand for haute couture. Earlier, these fashion or apparel stores used to be informal with small scattered businesses but now a days becoming more organised with the upcoming giant retail chains in business of fashion. Even then one can see a good demand for small apparel boutiques since they tend to offer a personalised or a different garment and fashion style. This article focuses on the process of a fashion start-up in India

WHAT IS THE BUSINESS PROFILE OF FASHION INDUSTRY IN INDIA?

Fashion industry in the country is one of the biggest in the world simply because it provides one of the three basic necessities of life i.e. clothing to a population of more than 1.2 billion people. The textile industry is presently valued at around 33 billion US$ while the sector of unstitched garments is estimated at around 8 billion US$. Clothing and textiles constitute for a whopping 14 % of the total industrial production.

WHICH FASHION BUSINESS MODEL TO GO FOR?

A fashion start-up can be organised under a variety of models depending on the ideas, skills, ambitions and aspirations of the entrepreneur or promoter. Some of the basic fashion related business models are described below:

  • A Fashion Boutique: These are usually small apparel stores which sell a specific clothing line designed by one or more fashion designers. They have targeted consumers catering a small section of people unlike, a large apparel chain that would target a wider section of people.
  • Fashion Designing: Clothes are specifically made by designers to please their client or an audience based on their demands. The designers are mostly hired to create dresses especially customised for a customer usually for special occasions. On the other hand, stylists are the ones who suggest or give tips about the recent trends or the kind of apparel that suits different occasions.
  • Online Fashion Retail:With the rise of e-commerce, consumers in the country are getting used to the idea of ‘click and get your stuff home-delivered’. Online portals such as YepMe, Jabong, Myntra and many others have been running successfully as online fashion retailers. Even though they have become some well-established online retail fashion portals, there is still a lot of scope for the growth of new online fashion retailing portals just like the concepts of fashion boutiques amongst these giant retailers. A person has an option to sell his/her line of clothing through existing online portals such as Flipkart, Snapdeal, Amazon, ebay etc. in addition to an individually owned business portal.

 

HOW TO START YOUR OWN FASHION BUSINESS?

The first step to start a fashion business is to setup a business entity and open a bank account in the name of the business (optional). The entity can either be created in the form of a Proprietorship or a Partnership Firm or a Company or as a Limited Liability Partnership (LLP).

Proprietorship works for those who want to start fashion designing or styling business as a part-time job in which the annual sales turnover is not expected to be greater than Rs. 10 lakhs per annum.

Private Limited Company or a LLP works for those who wish to start a full-blown fashion business or a boutique because it provides ways to scale-up, increase/decrease partners and capital intake in an easy way.

 

HOW MUCH CAPITAL DO YOU NEED?

Family, friends and promoters are some of the initial contributors/providers to the seed capital in a business. In a similar manner, if the seed capital required is large for setting up the business, a person can avail a loan from any bank. A bank loan can usually cover the interior work as a part of the term loan added to working capital finance to fund part of the stocks.

A person can also make use of Private equity or Angel funding if his/her fashion business can possibly show quick growth or the use of innovative technology as a catalyst. Some examples of such a model are YepMe, Jabong, Myntra,Zivame which are amongst some of the well-established ventures in the market.

 

TAX REGISTRATIONS

The ones in the fashion business who do not sell any clothing i.e. fashion designers or stylists do not need any VAT registration but the ones selling clothes in the country do need to obtain a VAT registration from the sales office in their local area. The unstitched garments are exempted from any such registration or tax. A service tax registration is required only for people who provide services of more than Rs. 9 lakhs per annum that are taxable in the country.

 

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How to start a Jewellery business in India?

HOW TO START A JEWELLERY BUSINESS IN INDIA?

The consumption of diamond and gold jewellery is immense in India making it one of the largest markets of jewellery in the world. India is one of the biggest importers of gold wherein the gems and jewellery sectors contribute around 6-7% of the country’s GDP. With the growth of its economy and an expanding middle class, the demand for gold is expected to rise in the coming years. Hence, the jewellery business becomes very promising for a business start-up. The article focuses on the jewellery business start-up in India.

WHAT ARE THE TYPES OF JEWELLERY BUSINESS?

The country’s domestic gems and jewellery business was valued at around Rs. 251,000 crores in the year 2013 and is expected to reach around Rs.500,000 crores by the year 2018. The sector is estimated to experience a Compounded Annual Growth (CAGR) of nearly 15.95% making it lucrative for investments.

The jewellery business in India can be categorised as follows:

  • Retail shops
  • Online retails
  • Gold importers
  • Gold trading
  • Gold manufacturers

WHY START A RETAIL JEWELLERY SHOP IN INDIA?

India has a market of over 2.5 million jewellery shops, 450,000 goldsmiths and over a lakh of gold jewellers. Due to the popularity of retail shops in the country, consumers are seen to prefer local jewellers over the branded within which almost 96% are owned by local families making it an ideal and attractive sector to start a small business.

HOW TO REGISTER YOUR BUSINESS?

Jewellery business usually has a big turnover i.e. more than a crore because of which it is recommended to register under a Private Limited Company in order to enjoy the advantages of limited liability protection, ease of transfer etc.  A major advantage of this is that it makes the fundraising easier in the form of either debt or equity.

 

TAX REGISTRATION

Trading in gems and jewellery is taxable under VAT and hence, any jewellery business ought to obtain a VAT registration from the local sales department which is to be followed by filing of monthly or quarterly returns in order to avoid any penalties.

 

IMPORT EXPORT CODE (IE Code)

An IE Code is mandatory for importing goods into the country and a jeweller is expected to be aware about all the rules and regulation before importing any gold in India.

 

SALE OF HALLMARK JEWELLERY UNDER BIS LECENSE

 

Accurate and official determination of the proportion of precious metal content in the product or jewellery is done through Hallmarking. It is thus a standard official mark or guarantee of the purity of the precious metal in products/jewellery in a lot of countries. The Hallmarking scheme is intended to protect the consumer from low-quality and adulterated products, and to compel the manufacturers to maintain the proclaimed purity standards of fineness.

A jeweller is required to obtain a license from the Bureau of Indian Standards (BIS) if he/she wishes to sell hallmarked jewellery at a particular retail outlet. Every BIS license is provided for a single retail outlet and if a company has multiple outlets then it has to obtain multiple licenses to sell hallmark jewellery through various outlets.

After the license is granted by the bureau, a jeweller has to adhere to the terms and conditions mentioned in the agreement. A deviation from the agreement or non-compliance with the stated requirements or adulteration in the purity of precious metals (silver and/or gold) may lead to the cancellation of license and further penalties.

 

 

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Revised Personal Tax Rates by Budget 2016-17

1. No change in Basic Exemption Limit for Individuals

There has been no change in personal tax rates. The basic exemption limit continues at Rs.2.50lacs. Tax Rebate of Rs. 2000 available to small tax payers under Section 87A has been increased from Rs. 2,000 to Rs. 5,000. This will benefit about around 2 crore marginal tax payers.

2. HNIs in Higher Tax Net

With a view to tax high income tax payers, the surcharge on income-tax is proposed to be increased from 12% to 15% wherein income exceeds Rs. 1 Crore. This will result in maximum marginal rate of 35.535% {(30%+15% surcharge thereon) +3% cess} for financial year 2016-17 as against 34.608% {(30%+12% surcharge thereon) x3% cess} at present.

It is also proposed to tax any income by way of dividend in excess of Rs. 10 lakh in the case of an individual, Hindu undivided family (HUF) or a firm who is resident in India @ 10% on gross basis. However, HNIs can have a sigh of relief that the much talked about long term capital gains tax exemption period for shares sold on the stock exchange continues at 1 year and has not been increased to 3 years.

3. No change in 80C Deduction Limit for Individuals

The limit for deduction under Section 80C of Rs. 1,50,000 remains unchanged. Section 80C provides for tax deduction in respect of investment in eligible savings such as Provident fund, ELSS, life insurance premium, housing loan repayment, 5 year bank deposits, NSC, ULIP to promote growth.

4. Withdrawals from Fresh Contributions to Recognize Provident Funds/ Pension Funds and National Pension Scheme Partially Taxable

Under the existing provisions of the Income-tax Act, tax treatment for the National Pension System (NPS) referred to in section 80CCD is Exempt, Exempt and Tax (EET). It is proposed that withdrawal up to 40% of the corpus at the time of retirement shall be tax exempt in the case of National Pension Scheme. In case of superannuation funds and recognized provident funds, including employees provident Fund, 40% of corpus created out of contributions made on or from 1.4.2016 shall be tax exempt upon withdrawal. It may be pointed out that presently withdrawals from recognized Provident Funds are generally exempt from tax altogether whereas withdrawals from NPs are taxable entirely.

5. Focus on Reducing Litigation and Increasing Compliance

The Budget contains The Income Declaration Scheme which will provide a window to the taxpayers who have not paid full taxes in the past to ensure compliance by paying 45% of declared income as tax and penalty. This will result in no further interest or penalty or prosecution. The scheme will be open from June 2016 to September 2016 and will be subject to specified conditions. There is also The Direct Tax Dispute Resolution Scheme 2016 which would permit the taxpayers whose appeals are pending before the first appellate authority to pay the tax and interest up to the date of assessment where disputed tax is up to Rs. 10 lacs. There will be no penalty or prosecution nor interest for the period after assessment. This is a golden opportunity for tax payers who have pending litigation to resolve the same without long drawn litigation, recovery and penalty proceedings and cost of litigation.

6. Additional Deduction of Interest on Housing Loan for first time home buyers

Deduction for additional interest of Rs. 50,000 per annum for loans up to Rs. 35 lakhs sanctioned in 2016-17 for first time home buyers, where the house cost does not exceed Rs. 50 lakhs. In overall context, first home buyer can get maximum deduction of interest on housing loan up to Rs. 250,000 in aggregate comprising of Rs.2 lakhs under Section 24(b) of the IT Act and Rs.50,000 under section 80EE of the IT Act.

7. Increase in time limit of completion of construction of a self-occupied house property

It is proposed that the interest paid on capital borrowed for acquisition or construction of a self-occupied house property shall be available if the acquisition or construction is completed within five years from the end of the financial year in which capital was borrowed. The earlier time limit was 3 years.

8. 80GG Deduction Limit for Individuals revised from Rs. 24,000 per annum to Rs. 60,000 per annum

The existing provisions of Section 80GG provide for a deduction of any expenditure incurred by an individual in excess of 10% of his total income towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence if he is not granted house rent allowance by his employer, to the extent such excess expenditure does not exceed Rs. 2000 per month or 25% of his total income for the year, whichever is less, subject to other conditions as prescribed therein. The limit for deduction for rent paid under Section 80GG has been increased from Rs. 2000 per month to Rs. 5000 per month, to provide relief to those who live in rented houses and do not get HRA from the employers.

Highlights of CSR Rules under Companies Bill 2014

The Ministry of Corporate Affairs has notified Section 135 and Schedule VII OF Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014.


ELIGIBILITY CRITERIA:-
With effect from April 1, 2014, every company, private limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility activities. The activities should not be undertaken in the normal course of business and must be with respect to any of the activities mentioned in Schedule VII of the 2013 Act. Contribution to any political party is not considered to be a CSR activity and only activities in India would be considered for computing CSR expenditure.

ACTIVITIES UNDER CSR:
The activities that can be undertaken by a company to fulfil its CSR obligations include eradicating hunger, poverty and malnutrition, promoting preventive healthcare, promoting education and promoting gender equality, setting up homes for women, orphans and the senior citizens, measures for reducing inequalities faced by socially and economically backward groups, ensuring environmental sustainability and ecological balance, animal welfare, protection of national heritage and art and culture, measures for the benefit of armed forces veterans, war widows and their dependents, training to promote rural, nationally recognized, Paralympic or Olympic sports, contribution to the prime minister’s national relief fund or any other fund set up by the Central Government  for socio economic development and relief and welfare of  SC, ST, OBCs, minorities and women, contributions or funds provided to technology incubators located within academic institutions approved by the Central Government and rural development projects.

COMMITTEE ON CSR:-
To formulate and monitor the CSR policy of a company, a CSR Committee of the Board needs to be constituted. Section 135 of the 2013 Act requires the CSR Committee to consist of at least three directors, including an independent director. However, CSR Rules exempts unlisted public companies and private companies that are not required to appoint an independent director from having an independent director as a part of their CSR Committee and stipulates that the Committee for a private company and a foreign company need have a minimum of only 2 members.

REPORT ON CSR:-
The report of the Board of Directors attached to the financial statements of the Company would also need to include an annual report on the CSR activities of the company in the format prescribed in the CSR Rules setting out inter alia a brief outline of the CSR policy, the composition of the CSR Committee, the average net profit for the last three financial years and the prescribed CSR expenditure. If the company has been unable to spend the minimum required on its CSR initiatives, the reasons for not doing so are to be specified in the Board Report.

Where a company has a website, the CSR policy of the company would need to be disclosed on such website.