S.R (None) 12 August 2014

Proprietorship for it software services

I would like to render software services(programming, analysis and maintenance) to an American manufacturing company. The American company is only present in the USA(no presence in India) and I had previously worked as an employee in this company. They would like to continue to have my services after I had permanently returned back to India and as an independent contractor. I will work from my home in India. I will be the only one working.

From what I read, I will have to

1. Form proprietorship

2. Register For Service Tax.

3. Open a current account to receive the foreign exchange money.

4. Get Importer Exporter Code.

5. I assume I have to pay professional tax too to the municipal corporation.

... Have I got the above steps correct?

... Is there anything else missing

... Are there any other legal/tax issues that I am unaware of?

Please advise. Thank You All For Your Time.

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2 Replies

yuva ram kumar (MANAGER) 18 August 2014

Mr S.R.

i am giving you the particulars below :

1. as you are dealing with overseas companies it is advisable to incorporate one person company(OPC) instead of going for proprietary concern, which is like as limited company.

2. as per given information your service is covered under the definition of INFORMATION TECHNOLOGY SOFTWARE SERVICES which is introduced on 16.05.2008 vide Notification No. 18/2008. however you are exporting the software. so no need to charge service tax.

3. as far as IMPORT & EXPORT CODE (IEC) concern, the person exporting/importing goods or services shall obtain IEC from Director General of Foreign Trade (DGFT). So you have to obtain IEC.

4. as far as professional tax concern you have to register with commercial taxes department for the payment of Professional tax.

5. opening of bank account is very minute thing. Approach to any banker who are dealing with foreign exchange, can easily get bank account.

further clarifications feel free to contact me.

Yuva Ram Kumar

95334 94102