How to convert an idea into a success: 5 steps
Shaifaly Girdharwal
We all humans are full of creativity. If you will give me a day I can tell you a thousand ideas and if worked well all of them can be successful. In my group I have seen so many people who have an idea …they start working on it and fail down….so badly. Don't let the same thing happen with your idea….read these 5 steps to know whether you should work on your idea and will it have a survival….if it will survive…it will get success for sure.1) Share and discuss it with as many people as you can: Don't hide it
Recently in a meet up of aspiring entrepreneurs I met a guy who had recently left his job to start work on an idea. We all were strugglers there filled with some idea in mind . We all shared and discussed ours. When we asked about his idea he keeps silent and said it is a secret. We all laughed because any successful idea was not a secret. Facebook was not a secret or new idea neither flip kart. No one can steal and grow your idea and if they did it means they were better in creativity and execution. Everyday same idea came into mind of lacs of people. Trust me best way to nurture your idea is to discuss it with as many people as you can…they will tell you the hurdles, note down and search solutions for them.
2) First of all list out your sources for revenue:
Unless you can list out some fix and realistic revenue sources your idea will tend to fail. You may give your services free initially but your revenue sources should be there from day one. Even better give all of your revenue sources a name, a product name, call them a,b,c or anything and then make an estimate that in one year what that a,b,c can fetch you after launch and there costing respectively.
3) Calculate breakeven point in terms of turnover and duration:
No idea will fetch you revenue without some fixed expenses. If you planning to spend nothing and earn a billion. You are sure to fail so make a fair estimate of your fixed cost and then your break even, means when and where you will cross your expanses.
4) Start your first target at break-even:
To cross break even should be your first target for any idea. Only after that you will be able to approach investors and seek funding for your idea. Secondly you will be able to negotiate because your business is not dependent on funding, you can wait for the best proposal.
5) Build your core team:
No matter how much hard working and smart working you are. We all have 24 hrs a day only. For a long term huge success a strong and well composed team is very important. An ideal team for a start should have one each from finance, marketing , HR and admin.
Will tell you another 10 steps in second part of this article…
(Author Shaifaly Girdharwal is a Cross border business set up and process outsourcing Consultant)
M/s Surya Constructions Vs. Commercial Tax Officer (WC & LT) – Kerala High Court
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Date: 10th NOVEMBER 2014
WP(C).No. 11716 of 2010 (L)
M/s SURYA CONSTRUCTIONS
By Advs.Sri.Harisankar V. Menon Smt. Meera V.Menon
Vs
1. COMMERCIAL TAX OFFICER (WC & LT)
2. STATE OF KERALA
[By Government Pleader Smt. Lilly K.T.]
PRESENT
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
A.K.JAYASANKARAN NAMBIAR, J.
J U D G M E N T
The petitioner is a works contractor who was awarded a contract by BPCL. The gross amount of the contract was Rs.6,17,70,494.90. The petitioner got the said work executed through a sub contractor on the basis of Ext.P2 agreement. The amount paid to the sub contractor as per the said agreement was Rs.5,71,77,732/-. By virtue of Ext.P2 agreement, the entire work that had to be executed as part of the works contract was sub contracted to the sub-contractor and, therefore, no portion of the work was executed by the petitioner. By Ext.P3 letter, the petitioner approached the 1st respondent for the issuance of a liability certificate in Form 20B of the Kerala Value Added Tax Rules. This certificate was required to enable the petitioner to get release of an amount of Rs.45,92,762.90 from the awarder. The amount represented the profit of the petitioner from the transaction and the certificate was required to show that the petitioner has discharged his tax liability, if any, to the Department in respect of the said sum. Although it was the case of the petitioner that he was not liable to pay any tax in respect of this amount of Rs.45,92,762.90 since the said amount represented only his profit from the transaction, the petitioner paid tax on the said amount so that he could get the Form 20B certificate from the department, as a prerequisite for obtaining a release of the principal amount of Rs.45,92,762.90 from the awarder of the contract. The request of the petitioner was initially turned down by the 1st respondent on the ground that the petitioner had to pay the tax amount on the profit retained by him. Although the petitioner had preferred Ext.P4 objection before the 1st respondent, the 1st respondent did not accept the contention of the petitioner and proceeded to issue Ext.P5 demand for tax on the said amount of Rs.45,92,762.90. Thereafter the petitioner submitted Ext.P6 objection to the demand but then effected a payment of the tax amount under protest through Ext.P7 communication to the 1st respondent. It was thus that he got Ext.P8 liability certificate in Form 20B which he submitted before the awarder of the contract and obtained release of the principal amount of Rs.45,92,762.90. In the writ petition, the petitioner impugns Exts.P5 and P8 to the extent it demands tax from the petitioner, on the sum of Rs.45,92,762.90 that was received by him in connection with the transaction with BPCL, the awarder of the work. The petitioner also seeks a direction to the 1st respondent to refund the amount of Rs.5,79,836/- that was collected from him by way of tax on the profit amount that was derived by him.
2. A counter affidavit has been filed on behalf of the 1strespondent wherein it is stated that the petitioner had obtained a Form 20B certificate from the respondent in respect of the amount of Rs.45,92,762.90. It is pointed out that while seeking a Form 20B certificate, the petitioner had indicated that the amount of Rs.45,92,762.90 represented the cost of establishment charges and profit for supplying labour and services. This, according to the respondent, was not a permissible deduction under Rule 10(2)(a) of the Kerala Value Added Tax Act, 2005. It is also submitted that on account of Circular No.5/2006 dated 11.1.2006, the petitioner would be liable to pay tax even on the profit made out of a contract.
- I have heard Sri. Harisankar V. Menon, the learned counsel appearing on behalf of the petitioner as also Smt.Lilly.K.T., the learned Government Pleader appearing on behalf of the respondents.
- On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I note that in a case where there is an agreement between an awarder and a contractor and the entire work under the contract is sub contracted to a sub contractor by the main contractor, the execution of the work then involves a transfer of material, in the course of execution of the works contract, directly from the sub contractor to the awarder of the contract. The decision of the Honourable Supreme Court in State ofAndhra Pradesh and Others v. Larsen & Tourbo Ltd. and Others[(2008) 17 VST 1(SC)] is an authority for this proposition. At paragraph 19 of the said decision, it is stated as follows:
"19. If one keeps in mind the above quoted observation of this court in the case of Builders Association of India [1989] 73 STC 370 the position becomes clear, namely, that even if there is no privity of contract between the contractee and the sub-contractor, that would not do away the principle of transfer of property by the sub-contractor by employing the same on the property belonging to the contractee. This reasons is based on the principle of accretion of property in goods. It is subject to the contract to the contrary. Thus, in our view, in such a case the work executed by a sub-contractor, results in a single transaction and not multiple transactions. This reasoning is also borne out by section 4(7) which refers to value of goods at the time of incorporation in the works executed. In our view, if the argument of the Department is to be accepted it would result in plurality of deemed sales which would be contrary to article 366(29A)(b) of the Constitution as held by the impugned judgment of the High Court. Moreover, it may result in double taxation which may make the said 2005 Act vulnerable to challenge as violative of articles 14, 19(1)(g) and 265 of the Constitution of India as held by the High Court in its impugned judgment."
Thus, on the facts of the instant case, it would be clear that, when the petitioner had sub contracted the entire work and also obtained the Form 20H certificate from the sub contractor who undertook to discharge the tax liability in respect of the entire work that was sub contracted, the amounts retained by the petitioner, from out of payments made by the awarder of the contract, represented only the profit element that accrued to the petitioner in his capacity as the main contractor. It is not in dispute in the instant case that the tax liability in respect of the work that was sub contracted was not due from the petitioner in his capacity as the main contractor. In fact the very demand against the petitioner is only on the amount of Rs.45,92,762.90 that was retained by him towards profit under the transaction with the awarder of the contract. In that view of the matter, there was no liability on the petitioner in terms of the Kerala Value Added Tax Act since there was no sale of material in the course of execution of works contract that emanated from the petitioner to the awarder of the contract. In the absence of any taxable event under the Kerala Value Added Tax Act, the respondent could not have demanded tax on the amounts retained by the petitioner as profits arising out of the transaction in question. The demand of tax on the amount of Rs.45,92,762.90 from the petitioner is thus illegal and liable to be set aside, based on the judgment of the Supreme Court referred to above. Resultantly, I quash Exts.P5 and P8 to the extent they demand tax on the amount of Rs.45,92,762.90 from the petitioner. The respondents are directed to refund the tax amount to the petitioner or, in the alternative, give credit to the said amount in the return submitted by the petitioner for future periods.
The writ petition is accordingly disposed.
Read Analysis of above Judgment – Sub-contract of Work awarded – No VAT liability on Main contractor
Determining How Costs Behave
From the very beginning (especially from the academic point of view) we have been studying that the cost functions approximately shows linear relationship.
Is it really simple to predict the costs? In fact costs are not easy to predict, since they behave differently under different circumstances. In this article we will be observing how the cost will change with the change in level of production/other factors.
The determination of how cost will response with output level (production level) or other measurable factors of activity could be an important matter for decision-making, planning and control. The preparation of budgets, the production of performance reports, the calculation of standard costs and the provision of relevant costs for pricing and other decisions all depend on reliable estimates of costs.
I don't think that the management (or accountants) whosoever may be would easily predict the costs of any product/segment without the basic knowledge of this portion.
Now let's continue the discussion,
Cost function is a mathematical relation that describes cost pattern regarding how cost changes with
cost driver. Simply, cost driver can be defined as any factor whose change will cause a change in the total cost of an activity. Cost functions are normally estimated from past cost data and activity levels. Cost estimation begins with measuring past relationships between total costs and the potential drivers of those costs. The objective is to use past cost behavior patterns as an aid to predicting future costs. Any expected changes of circumstances in the future will require past data to be adjusted in line with future expectations.
E.g.: Direct labor, hours, machine hours, units of output and number of production run set-ups…
Broadly, cost driver may be divided into 2 categories:
Resource Cost Driver:
It is a measure of the quantity of resources consumed by an activity. It is used to assign the cost of a resource to an activity or cost pool.
Activity Cost Driver:
It is a measure of the frequency and intensity of demand placed on activities by cost objects. It is used to assign activity costs to cost objects.
A cost object is any item for which cost measurement is required, for example, a product or a customer Service, Project, Brand category, Department, Programme etc.
Basic assumptions that we take for estimation cost functions.
1) Variations in the total costs of a cost-object are explained by variations in a single cost driver.
2) Cost behavior is adequately approximated by a linear cost function of the cost driver within the relevant range. [However in practical life we may rarely this assumption applied due to the economies of scale, but it's a popular assumption for academic purpose]
The above article is contributed by Niraj Thapa (ICAI Reg. No. : FRO0004147), a CA Final Student currently doing Article ship in a Delhi based Firm. For any queries and suggestions you may reach him at: tniraj20@hotmail.com, (Mob. No: +91-7503500777).
Exemption of excise duty on tow arising during course of manufacture of polyester staple fibre (PSF) or polyester filament yarn (PFY) – CBEC Clarifies
F.No. 345/2/2013-TRU
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
TAX RESEARCH UNIT
ROOM NO. 1461, NORTH BLOCK
NEW DELHI
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
TAX RESEARCH UNIT
ROOM NO. 1461, NORTH BLOCK
NEW DELHI
Dated: September 22, 2014
To
Chief Commissioners of Central Excise (All)
Chief Commissioners of Central Excise, Customs & Service Tax (All)
Director General, Directorate General of Central Excise Intelligence
Director General, Directorate General of Revenue Intelligence
Chief Commissioners of Central Excise, Customs & Service Tax (All)
Director General, Directorate General of Central Excise Intelligence
Director General, Directorate General of Revenue Intelligence
Subject : Exemption of excise duty on tow arising during the course of manufacture of Polyester staple fibre (PSF) or polyester filament yarn (PFY), manufactured from plastic scrap or plastic waste including waste polyethylene terephthalate bottles – Regarding.
Your attention is invited to letter of even number dated 14 th March, 2014 (copy enclosed) on the above mentioned subject. It was then requested to keep the show-Cause Notices issued to raise demand in this regard in Call Book until further instructions from the Board.
2. In the Budget 2014-15, excise duty on Polyester Staple Fibre (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which was already exempt w.e.f. 08.05.2012) has been exempted retrospectively w.e.f. 29.06.2010 to 07.05.2012 [section 110 of the Finance (No. 2) Act, 2014 refer]. Intermediate product, "Tow" arising during the course of manufacture of such PSF/PFY has also been exempted retrospectively w.e.f. 29.06.2010 to 10.07.2014 so as to provide relief to the manufacture of such PSF/PFY [section 110 and 111 of the Finance Act (No.2) Act, 2014 refer].
3. It is requested that Show Cause Notices may be disposed off in accordance with the provisions mentioned in paragraph 2 above.
(Alok Shukla)
Joint Secretary (TRU)
Joint Secretary (TRU)
THE new section 35F of the CEA, 1944 as substituted by the Finance Act, 2014 has had its fair share of its interpretational controversies. Some seem to have been extinguished while others have been swept under the carpet to be taken care of, as the English proverb goes - Don't cross the bridge until you come to it!
The apprehensions emanating from the TRU letter D.O.F.No.334/15/2014-TRU dated 10th July,2014 covered exhaustively in this column & by various writers on our portal were assuaged to an extent by the Board Circular 984/08/2014-CX dated 16.09.2014 and later when the CESTAT came out with its own Circulars dated 28th August, 2014 and 14th October, 2014.
Few issues still remain and would continue to. One such issue came to notice recently.
In this case the appellant deposited the mandatory amount as prescribed under the new section 35F of the CEA, 1944. But the appellant had a few doubts -
+ What about the dues adjudged in excess of that paid in terms of section 35F?+ Whether the recovery of the said balance amount should also be got stayed by the CESTAT or is it deemed to be stayed?
Knowing that clarifications would be hard to come, the assessee filed Miscellaneous applications before the CESTAT seeking stay of the balance amount of impugned demand confirmed against them by the CCE.
The matter was heard recently.
The Bench observed - "… The appellants state that they have deposited the mandatory amount as required under section 35F of the Central Excise Act, 1944. In this view of the matter, no separate order of stay is required under the mandatory statute. Thus, the miscellaneous applications filed for withdrawing the stay applications are allowed and the same are dismissed as withdrawn."
Please See 2014-TIOL-2345-CESTAT-MUM
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