This case involves a company dealing which is an E-Commerce operator. The company has foreign promoters and is an aggregator of specific services. In this case there was a lot of information that the company required to interpret into meaningful business insights which was unclear to them previously. There were a lot of confusion regarding compliance and filing of documents that was discovered while looking into the case
While in discussions with the client, we found that there wasn’t any kind of setup to track the sales, GST implication and reconciliation process with all the API providers and payment gateways. They have received capital from foreign countries but were unaware about the FEMA provisions applicable in India. The promoters were very keen to comply with all the applicable compliance’s and don’t want to be unaware of any compliance activity. The problems that were then presented were as follows-
- The GST impact on aggregators
- The Reconciliation process with API providers and payment gateways
- The Non-identification of funds coming into India and any other compliance activities that the promoters were not aware of
- We reviewed the business model of the organization and have identified all the points of taxation, the place and time of supply to understand the impact of GST on the company and have designed the procedure for invoicing and data points to be captured to account properly.
- We analyzed all the reports given by various API providers who are the intermediaries in the process of booking various tickets. We did a thorough study and investigation to understand the reports and interacted with payment gateways and API providers and came up with a suitable solution. After careful assessment we have suggested a timeline and process of reconciliation which in turn has helped the client to get the reconciliations in a timely manner.
- In the process of our GST impact analysis we found that the company is in receipt of FDI from various investors from foreign countries. Due to some gap in the information they were unaware of the fact that the receipt of funds is supposed to be reported to the Reserve Bank of India and should be disclosed appropriately in the books of account of the company. We have helped the client in identifying all the transactions to be reported, liaised with the banks and have prepared the required documentation and have filed the compliances with Reserve Bank of India.
- After our involvement in this case we helped the company to claim the input taxes properly and pay the GST without any issue of non-compliance.
- Our suggestion about having timeline of reconciliation worked well and clients received reconciliations on time and without any delay.
- The company reported with RBI about the capital induced and have complied with all the FEMA provisions which made the company compliant in every respect.