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Sole proprietorship firm

30 July 2012

Hello,

I would appreciatde if someone could resolve my simple query. need to know if as a sole proprietor, would I be able to manufacture machines- like generators, power invertors, water pumps?

1. As a sole proprietor, can I get into manufacturing?

2. What are the taxes that I would be liable to pay?

Thanks,

Saief Akil Diwan

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2 Replies

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 30 July 2012

Mr diwan, you can definitely get into manufacturing even if yours is a proprietory concern. However for a manufacturer there are lots of things that are need to be adhered by law:

1] You will be reqruied to get yourself registered under the Factory Act, 1948 & get the liscense.

2]. You would be requried to get yourself registered under the Central Excise Act as you would be liable to collect & pay escise duty being a manufacturer.

3]. You would be requried to get yourself registered under the VAT & pay VAT.

4]. If your turnover crosses the 1cr limit during the financial eyar, then you would be liable for tax audit u/s 44AB of the Income-Tax Act & get your books of accounts audited from a chartered accountant & file your retunr of income. You would also be requried to pay advance tax on or beofre 15th Sep, 15Dec & 15th Mar each eyar.

5]. If you are liable for tax audit during the current year, then from the subsequent year you would be requried to deduct tax at source on certain payments exceeding the prescribed limits. For this you will be needed to obtain a Tax Deduction Account number from the I-T dept.

6]. Under the factories Act you would be liable to deduct ESI from teh workers wages cotribute to ESI & pay to the Govt before the due dates.

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