India’s paper industry, comprising a large number of small players, is gearing towards the consolidation phase. For investors, this makes for interesting times to invest. However, it is important to understand what drives India’s paper industry before investing in it. Here is a low-down on India’s paper industry, which will help you understand their business model and the viability of investing in paper companies.

THE INDUSTRY

The first paper mill in India was set up in 1812 in Sreerampur, West Bengal. At present, there are over 850 paper mills manufacturing a wide variety of items required by consumers. Paper mills in India can be differentiated into two categories: large and small mills.

Large mills are the ones with an installed capacity of more than 100 tonnes per day. Small mills, on the other hand, are the ones with a capacity of less than 100 tonnes per day. Small units account for more than 50% production capacity, but they do not use energy efficiently.

Large mills used wood as raw material to produce paper. At present, about 60.8% of the total production is based on non-wood raw material and 39.2% on wood. Based on the usage of raw materials, the paper industry in India could be classified into three categories: wood-based, waste paper-based and agro-based.

In India, paper mills use a variety of raw materials viz. wood, bamboo, recycled fibre, bagasse, wheat straw, rice husk, etc; approximately 35% are based on chemical pulp, 44% on recycled fibre and 21% on agro-residues.

The Indian paper industry is about 1.6% of the world’s production of paper and paperboard. Globally, India stands 15th in the list of paper-producing countries with an annual production of 13.5 million tonnes and an estimated turnover of Rs. 35,000 crore (US$ 7 billion).

It is estimated that the aggregate paper demand in India is expected to grow at around 7% to 8%. Most experts point out that the industry’s turnover is expected to double and reach 20 million tonnes in the next seven years because of increasing demand for paper products. A major push for this demand will come from various government education programmes and a shift in demand from Europe and the US. The industry has been demonstrating strong growth in recent years.

Globally, pulp and paper prices have softened due to poor demand from Europe and the US. This has led to a shift in demand to Asia and South America. It is estimated that Asia now accounts for almost 40% of global consumption. India’s paper industry is highly fragmented with about 700 mills spread across the country with a capacity ranging from 5 tonnes per day to over 1,000 tonnes per day. The operating capacity of the paper industry currently stands at 12.75 million tonnes.

Capacity utilization of the industry is low at 60% since 194 paper mills, particularly small mills, are sick or shut. India’s per capita consumption of paper is about 9.21 kg as against the world average of 54.9 kg and the Asian average of 44.9 kg. The Indian paper industry uses multiple varieties of raw materials for making paper as the country does not have surplus fibre.

With changing times, raw material for the paper industry has undergone significant changes and over a period of time, besides wood and bamboo, other non-conventional raw materials have been used to produce paper. To promote the paper industry, the government has taken several initiatives, which have enhanced earnings prospects of the industry.

These include an excise rebate to small units, abolition of customs duty on the import of paper-grade pulp and wood chips, removal of statutory control over production, price and distribution of white printing paper and provision of infrastructural support by increased allocation of coal and wagons.

GOVERNMENT INITIATIVES

The government has taken further measures to improve the situation of the paper sector since 1992. While the import duty on paper in 1991-92 was as high as 140%, the government has since then gradually reduced it from 65% to 40% and further to 20% in May ’95. Import of wood pulp for the production of newsprint and newsprint products are allowed on a more flexible scale.

The government has not only relaxed the rules and regulations, but also delicensed the paper industry with effect from July ’97 to encourage investment in this sector. Foreign participation is now allowed. Some joint ventures have also been formed.

FDI up to 100% is allowed through the automatic route on all activities except those requiring industrial licenses where prior governmental approval is required. Additionally, the government has increased its focus on increasing manufacturing competitiveness in the paper industry. Apart from this, here are a few important measures taken by the government for providing a conducive business environment for the paper industry. Listed below are a few of them:

1) Light Weight Coated (LWC) Paper under zero duty.

2) The excise duty on supply of paper to Text Book Corporation/Printing Corporation has been increased from 1% to 2%.

3) The most significant change in the budget is a reduction in the import duty for import of waste paper. The duty has been reduced from 2.5% to nil. As a result, recycle-based paper industries would substantially benefit from this move.

4) The import duty is levied at 10% on printing and writing paper.

5) The excise duty has been increased from 5% to 6%.

6) The excise exemption allowed on the first 3500 MTs of printing and writing paper produced primarily out of non-conventional raw material has been removed.

Despite this, customs duties on inputs and intermediates of paper industry have not been brought down. This has increased challenges for the industry. This is despite the fact that the Indian paper industry has gone through significant changes in technological and environmental status including capacity expansion, and adoption of modern fiber line technologies. The industry continues to face import challenges particularly in coping with strong competition from imports while trying to improve profitability and productivity.

In the absence of similar enabling policies, paper mills in India have to necessarily depend upon small and scattered plantations or government-controlled forests. In the process, the cost of collection and transportation works out to be higher than the cost of the pulpwood itself. As a result, the cost of raw materials in India has been continuously going up and has become quite uncompetitive in comparison with major paper-producing countries. To deal with these problems, the paper industry in India is dependent on state-of-the-art technologies to reduce its production costs. In doing this, the paper industry is also attempting to match global standards.

GOING AHEAD

The outlook for the paper industry in the country is very optimistic. Its growth is expected to be driven by the rising demand for paper products, which is majorly supported by various government education programmes. The concern, however, is to be not only environmentally viable but also sustainable.

Adopting clean technology and practicing energy conservation measures is the need of the hour to make the Indian industry world-class and globally-competitive.

Writing and printing paper (WPP) manufacturers have reported high capacity utilization levels over the past five years on the back of high domestic paper demand. This has prompted significant capacity additions by existing WPP manufacturers and switch over to the WPP segment by other paper manufacturers such as Kraft and newsprint in recent years.

However, paper demand has not kept pace with capacity additions, creating a mismatch which may continue in the current year too. Analysts expect modest growth in demand to marginally benefit operating profitability of paper companies.

It is a well admitted fact that the market today is quite challenging. In this situation, it turns out to be very crucial for all business owners and investors to make smart, rational and practical financial decisions. Rational financial decisions by taking all relevant factors into consideration and help you in saving your business from financial loss or instability. If you are among those responsible business entrepreneurs, then you need to know that it is very essential for you to have a well crafted Brisbane Tax Return plan with the help of experienced Brisbane Tax Advisor that is financially sound and implements in pragmatic manner. They provide valuable business and tax advice, thus helping you to achieve your financial goals.

If you are planning to engage any Business Advisor, Brisbane has to offer, then you need to ensure that you are hiring the reliable and experienced advisors who are competent enough in computing Company Tax Brisbane and providing you the best Business Advice Brisbane. Thus,before choosing any financial advisor, it is essential for you to get a clear idea about different types of their work experience and also about the services offered by them. With the help of internet and technological advances, now its possible for you to retrieve every necessary information and minute details about these advisors. So, it is quite beneficial to rely on online mediums for finding the competent and exceptionally experienced Brisbane Tax Return experts and professionals.

If you don’t want to spend your time researching about the Brisbane Tax Advisor, then you need to know about the reliable team of CPA-qualified and Chartered Accountants that are available online at agilisaccountants.com.au, who have proven experience and expertise in tackling all sorts of financial situations. With the skilled team of advisors here can guide you through the turbulent times and can thereby proved to be of great support to all their clients.

They are known for providing best advises and working with all scales of businesses, from sole traders, to big businesses and all their clients ranging from medical professionals, to traders, mining executives and owners, IT professionals, media and communications, to property investors, developers and mortgage consultants. Besides this, it is noteworthy to mention here that these professionals are well versed with the financial planning methodologies and other variety of disciplines existed in Brisbane, such as estate, taxes, financial planning and managing, etc. With these financial experts by your side, you can rest assured that you will never go wrong or suffer from unnecessary loses.

Self Manage Super Funds              

Self Manage Super Fund is kind of fund which is given to its members at the time of retirement. The biggest difference between SMSF and other funds is that the members of   Self Manage Super Fund are the trustees of the fund. The main object to run these funds is to provide financial benefits to its members in retirement. All the investments are made in the name of Self Manage Super Fund and trustee hold the right to control it. Self managed superannuation fund also known as ‘do it yourself superfund’ They have their own account and all the amount is deposited in itself Manage Super Fund requires trustee and there are two trustee structure options are available.

1. Corporate Trustee – In this type of option a company acts as a trustee and other members as a director. This is very simple and easy structure of maintaining administration and record keeping. It also gives flexibility in membership and easy working style. A company fees is applicable in it.
2. Individual Trustee – In this kind of option each member is selected as a trustee and minimum two trustees required.

Responsibilities of Self Manage Super Fund trustee

1. The trustees are responsible for making investment decision and implementation of their funds with strategy.
2. Self Manage Super Fund has strict rules and regulations which trustees have to follow strictly. They have to maintain records, file tax returns, organize audit. They can hire audit experts for this work.
3. They are full responsible for their decisions.

 Self Manage Super Funds Types 

1. My Super – This is a new kind of account which has replaced all super fund default accounts.  If you do not go for super fund then employers job to employer contribution into My Super Account.
2. ATO Regulated SMSF – This fund is managed by Australian Tax Office and there are very few members in this type of account. Anyone cannot become trustee who is not a member.  There is no remuneration given to the trustee for providing services.
3. Approved Deposit Fund – Approved Deposit Funds can be managed by single or multi-member. They can hold, invest or receive funds until the accounts are removed.
4. Non Regulated Super Fund – This type of fund does not come under the rules of Australian Tax Office. Non Regulated Self Manage Super Funds cannot be complying fund unless it is exempted from public sector schemes.The SMSF is a very comfortable fund in terms of transferability. In emergency circumstance you can even withdraw money. 

Gulf nations were for long decades considered among the wealthiest countries in earth as a result of the exceptional oil revenues that reached tremendous amounts in mid-2014. These significant revenues allowed citizens of these countries to benefit from various government aids in the form of subsidies permitting the reduction of prices of electrical energy, food products, administrative services, oil, schooling …

Currently, with the severe fall of oil prices, governments can no longer support this spending trend and it is up to the citizens to support national accounts in order to overcome the intense budget deficit for this year and the coming ones.

The ideal and fair solution to this issue is the establishment of a modern fiscal system that allows the participation of every citizen in the efforts to maintain the equilibrium of the national budget.

The fiscal system in these nations can be partitioned into two central categories of taxpayers: natural persons (individuals) and legal entities (corporations).

1- Natural persons: various forms of taxation can be adopted by golf countries in the category of personal tax. The first and principal type is income tax. This kind of taxation is a progressive tax rate on the annual revenue (or revenues) earned during a fiscal year.  The rates must take into consideration the specificities of each and every country (number of employees, percentage of foreigners, nature of commercial activities…). The amount of the tax can be collected in two ways: for employees, it will be withheld on salaries or wages by employers who are in charge to deposit the total amount in a required time. For commercial activities, managers should declare their total revenues at a specified date (generally before April the 1st) and pay the due tax at the same time.

The second form concerns real estate or property taxes. In this frame, multiple contributions can be implemented. For instance, the taxation of operations involving the buying and selling of properties with differences depending on the nature of the sold estate (land, commercial or residential). Moreover, a yearly tax on properties can be implemented according to the estate and its destination (commercial, residential, rented, vacant). The revenue of this contribution can be devoted to financing the budgets of municipalities or regions, which will constitute an important financial source for local communities to spend on development programs (public services, infrastructures, waste management…) in order to minimize government participation on local budgets.

2- legal entities: the first and primary tax in this category is corporate or company tax. In several countries this tax is usually in the form of one rate (generally around 25 to 35%). Gulf countries can adopt this same principle or implement a progressive corporate tax rate based on the annual corporate profit or turnover.

Furthermore, corporations should pay a second tax which relies on the amount invested on equipment and properties. The income of this tax can be allocated to municipalities and regions considering the fact that the profit of enterprises is derived from the exploitation of city’s infrastructure. Nevertheless, the rate of this tax should not be very high to the point of negatively impacting firms’ investments.

In addition, gulf countries can implement the widely adopted system of the Value Added Tax. The VAT, or consumption tax, is a neutral tax paid without taking into account the revenue or activity of the payer. This tax could reduce the burden on the national budget in light of the fact that gulf communities are known for their consumption habits allowing the collection of significant amount. In this regard, the countries can start, at the beginning, by taxing only some luxurious merchandises and then progressively include other products into VAT scope.

Whatever the selected system is, it should take into consideration some exemptions and incentives in all types of taxes in order to encourage investments, hiring national employees, creating new companies, maintaining adequate economic growth…

The gulf governments have for long time supported local communities by redistributing oil revenues which allowed the population to benefit from various advantages, but now it is time for population to participate in the development of their countries and help government diversify budget sources. A modern fiscal system is, for these countries, a source of development for both the government and citizens.

A report by Bloomberg in April 2014 revealed that property tax collection in the US is increasing at a faster pace since the housing market crash sent government revenue dipping. This put an end to the era of local budget cuts. The revenue collection is highest in California, Tennessee, Houston, San Jose, Washington, and Nashville. The tax on a property may depend on who the owner is, what the property is used for, and when it was last sold. Also, the administrator may ask for income, medical condition, age, and previous military service details of the owner.

Slashing your Property Tax Bill
Property taxes take up a major share of your earnings, but is there a way to smartly manage your taxes and end up saving more for your future? The answer is of course.
Unless you live in a low property tax imposing state like Louisiana, Hawaii, Alabama, Delaware, West Virginia, South Carolina, Arkansas, Mississippi, New Mexico, or Wyoming, you will be spending a great deal on property taxes.

Check if the Assessments on your Property are Accurate
The assessment value of a property is usually determined by the local or state municipality and is generally lower than the actual market value of the home. Double check the assessment and see if it is updated. This can be done by comparing the assessed value of the property with other properties in the area. It is important that you keep yourself updated about the changing value because in some cities the assessments are adjusted quickly when the value of property is increasing, but the entire process can be slow when value is decreasing.

Appeal the Assessment
There are chances that you may get a reduction after the appeal, but you need to be sure of how the system works in your city, which you can do by calling the assessor to learn the protocols applicable in your case. If there are some documents that speak of the age and condition of the home, these can be used as proof. You can also take pictures of the house and floors and look for the home renovations record if you have done any renovations.

Rezone the Property
Outdated zoning can invite higher property taxes. Zoning laws change with time, and one should keep  track of these to save money on the tax. However, only the long-term owner should consider rezoning the property because it is a time consuming process, and changing the zone of the property again could be impossible.

Another important thing to consider is that one has to have the approval of neighbors before completing any sort of rezoning request. Their support or opposition can make or break your case. Saving on property tax is one thing, but there could be instances when one makes tax mistakes and ends up paying more. Some of the most common mistakes are:

1. You might have taken the property tax deduction for the year you actually paid it. Some tax authorities work a year behind, which means they won’t bill you for 2014 property taxes until 2014. Enter the amount that you have actually paid in the tax year irrespective of the date present on the tax bill.
2. If you seek the services of a lender, he might escrow funds to pay the property tax, but this doesn’t mean you can deduct the escrowed amount. There are chances that the amount that you pay into the escrow account every month could be a little more or less than the property tax bill.
3. Homeowners often forget to keep a record of the repair expenses, home maintenance, and other documents. Good records will save a lot of headaches and dollars at the time of tax payment. Most homeowners save every renovation bill in different places in the house. In the end, they are unable to find all of them, so it is a safer bet to scan each document and file it.
4. Installation of energy efficient doors and windows can get you up to a 10% tax credit, so don’t forget to mention it in the declaration. Be aware that this is a lifetime credit and can be claimed only once. Also, installation of a solar water heater, small wind energy system, or any other solar system can also make a property owner eligible for Residential Energy Efficient Property Credit. For all this you have to fill out a complicated Form 5965, and you have to cross check it with many other IRS forms.

A Few Last Words
While it can be easy for a single property owner to keep track of the property, what if you have multiple properties? The more properties you have, the more difficult it becomes to track everything; and when tax filing time comes you might find yourself clueless of how much mortgage loan has been paid for every property, what all has been spent on renovations, and what the assessment is for each property. To avoid the last minute complexities, it is always better to seek property tax tracking services of a reputable firm. There are a number of companies that offer manual and automated support to property owners so that they can focus more on ROI instead of spending time on property tax calculations.

Asset Protection Can Save your Assets

Assets are things of monetary value which are owned such as funds in a bank account, real estate, jewelry, securities, and vehicles.  Asset protection is all about protecting your assets from theft, court ordered seizures to pay monetary debts, and government forfeiture due to committing crimes or failing to pay income taxes.  People hire international law firms or accounting firms or offshore entity creation companies to set up a strategy to protect their assets.  It is important to hire competent and experienced asset protection experts to advise you on the best strategies based on the types of assets you own and their location.

One strategy is to move funds out of your home country and deposit them into bank accounts in a country with strong privacy laws, strict bank secrecy laws, and no income taxes levied on income earned outside of that country.  There are several countries which can do all of these which asset protection experts like to use.

There are Northern European countries which levy low taxes on their legal entities such as corporations and private foundations on their bank account interest and worldwide income derived outside the borders of the country.  One criticism of creating a legal entity in these countries by asset protection experts is that they are more expensive to create a corporation or private foundation and maintain them every year than other countries. 

The Caribbean islands and some Central American countries provide similar asset protection privacy services as the Northern European countries but at a much lower cost. 

One important feature of an asset protection plan is to choose a no income tax country to create a corporation or private foundation which will earn bank account interest tax free inside the country but will operate offshore by earning income outside the host country which will not be taxed.  So, avoiding paying income taxes is an important feature for standard asset protection.

A second feature for asset protection is privacy in one’s financial matters.  That requires creating a corporation or private foundation whereby no one knows who really owns the entity other than the law firm or offshore company creator.  Most of the above-mentioned countries have laws allowing for anonymous ownership of their legal entities.  They also have laws protecting their banks customers from being identified to non-authorized persons or governments.  These are commonly known as bank secrecy laws.

Asset protection requires the client to transfer ownership of the assets he or she wishes to protect to the legal entities set up in other countries.  For instance, ABC Offshore Corporation based in a Caribbean Island nation will own an apartment building in the client’s home country or elsewhere where the rents will be directly sent to an offshore bank account of the offshore corporation by the renters.  Now the funds are safely tucked away in an offshore bank account.  This is just one example of how global asset protection can work to safeguard your assets and keep the funds outside of your country.     

The introduction of Goods and Services Tax (GST) in India looks to be a certainty. With the government making a lot of efforts to rope in the opposition to reach a consensus, it is likely that the implementation will happen by the year 2017. The impact of GST will be felt far and wide and no sector is likely to remain untouched by impact of GST. Already the “sin” industry which includes “pan masala”, cigarettes, and tobacco are feeling the heat after the Subramanian panel report has proposed a taxation of 40% on them. Some sectors will benefit, while the others may see the benefits getting withdrawn when the GST is finally introduced. Let us see the impact of GST on some of these sectors.

Retail and dealerships: With the goods and services being taxed under the common head in GST, the retail and dealership sector is going to benefit the most. At present they pay VAT on the sale of goods and they are unable to offset the excise duty on procurement of goods and service tax gst on rentals, freight, and advertisement etc. This is going to be different and the taxes which were getting built into the cost of the goods will be available as input tax credit. The huge population of retailers and dealers is going to benefit from this change.

Services: The service providers are being taxed at a rate of 14.5% now. The rates of service tax have risen from zero levels to the current state over the years. Also more and more services have been brought under the ambit of service tax. The cost of services has thus gone up substantially. The goods manufacturers who utilized these services were unable to offset the service tax against the VAT or excise duty paid by them on the goods. Similarly the service providers were not able to offset the VAT and sales tax paid on infrastructure against the service tax on their services. The GST which is the common tax for goods and services will benefit the service providers as well as the buyers of the services.

Manufacturing: With the GST converting the country into one unified market, the interstate taxation is likely to go. The manufacturing industry that paid the CST and Octroi on interstate purchases and was not able to avail it as an input credit will see the change happening under GST. The state border checkpoints that slowed down the movement of the goods across states are likely to be eliminated or modified for faster clearances.

Pharmaceuticals: The industry pays CST on sale of goods in various states. To avoid this they have built warehouses in several states and transfer the goods there. With the GST transforming the country into one market, the pharmaceutical industry will be able to strategize the locations of the warehouses for purposes other than tax avoidance. The industry also pays a higher duty on the ingredients that it procures as compared to the duty that is levied on the sale of finished drugs. It always had a greater input tax credit which was not availed. This is likely to be streamlined with the GST and will be beneficial for the industry.

Similarly there are other sectors like textiles, automobile, and telecom etc. which are likely to feel the impact of GST. Each sector will have to do its own analysis and study and come out with an effective strategy to maximize the benefits from GST.

This comparison is based on the suggestion of the First Discussion Paper formed by the Empowered board of state finance ministers (henceforward mentioned as EC) and the Report of the Task Force on GST established by the Thirteenth Finance commission.

Before going on the conversation we should describe GST and the Aim behind it.

Definition of Goods and Services Tax?

GST or also known Goods and Services Tax is a tax on things and services with an inclusive and continuous chain of set-off advantage from the Producer’s point and Service supplier’s point up to the retail level. It is in essence a tax only on the value additional at each stage and a supplier at every stage is allowed to set-off through a tax credit mechanism. Under GST audit organization, all dissimilar phases of production and distribution can be understood as a mere tax pass through and the tax fundamentally sticks on final consumption within the taxing jurisdiction.

As part of administering the goods and services tax (GST), we will from time to time conduct several tax audits recognized as ‘audits’ or ‘reviews’. GST audit delivers a means to verify whether the appropriate amount of goods and services tax has been paid.

Aim behind GST

a) The occurrence of tax only falls on domestic consumption.

 b) The effectiveness and equity of the system are enhanced.

c) There should be no distribution of taxes thru taxing jurisdictions.

d) The Indian marketplace should be combined into a single common marketplace.

e) It improves the reason of cooperative federalism.

Our relative discussion will be found only on important points building overall GST.

Goods and services tax MODEL

A dual structure has been suggested by the EC. The two modules are: Central GST (CGST) to be executed by the center and state good & service tax (SGST) by the states. The Task Force has also suggested for the dual tax imposed simultaneously by the states and the center, but self-sufficient to promote co-operative federalism. Both the Central GST and State GST should be charged with a common and identical base.

Both have recommended for consumption kind goods and services tax GST, that is, there should be no difference between raw resources and capital goods in letting the input tax credit. The tax base should widely spread over entire goods and services up to a last consumption point.

Agreeing to Task Force this will outcome in the shift from manufacture to consumption whereby imports will be responsible to both SGST and CGST and exports should be released of the load of goods and services tax by zero score. Thus, revenues will increase, in which the consumption is considered to take place.

The Task Force on goods and services tax GST said the calculation of CGST and SGST responsibility should be based on the Invoice credit technique. I.e., let credit for tax paid on entire middle goods and services on the basis of invoices give out by the supplier. As an outcome, all dissimilar stages of distribution and production can be interpreted as a simple tax pass-through and the tax will efficiently ‘stick’ on final consumption within the taxing jurisdiction.

If you have a driving passion for making money and have chosen to veer into the accounting business, you have chosen well. Else, you are well advised to take your passion and your business elsewhere, for the accounting business has always been all about money. And why not, as its very purpose is to assist a client to keep his financial books in order even as it helps both the client and the vendor make even more money!

As with all successful business, your intention to set up a new accounting business starts with a good business plan. The business plan works as the holy-grail for a new setup. It is the plan to invest your time and energy on, if you intend to interest firms to invest in your business. It also helps you clarify within yourself what you seek to do with your business, and how you propose to do it (in detail). With a good business plan, the execution that follows is sure to be well-planned, and hence seamless.

If you are a rookie and have never worked on a business plan before, then this article can help you. Here is how you can go about creating a bookkeeping and tax services business plan:

Executive summary: This has to be the most eye-catching segment of your business plan, as this is perhaps all investors will initially glance through, to determine if your business is worth their time and money. In your executive summary, clearly summarize your business intention, and the “lucrative service” you will provide to your clients. Your investor has to be convinced that your business is indeed useful enough to invest in. A good executive summary can do this for you.

Objectives: Here, you outline your future intentions. You may be setting up a new business, or enhancing your existing business with new services. Explain what you intend to do, through well-defined objectives.

Mission: Why are you involved in the business that you presently are in? Why has the business been set up in the first place? Your “mission” will force you to delve into these fundamental questions, so you have a clear insight on your business.

Keys to success: A good bookkeeping and tax services business plan is empowered by a good mission and vision. These are the WHY’s. Your objectives are the WHAT’s. The keys to success are the HOW’s, and help you define measures to gauge your success (in meeting your objectives).

Services: But off course, you cleverly outline your book keeping and tax services in your business plan. Make them unique while capturing your USP so investors understand while potential clients will chose you over other businesses.

Market analysis: This is perhaps the most important part of your bookkeeping and tax services business plan. You may have the most brilliant business idea ever; but if the current market doesn’t support your plan, no investor worth his salt will vouch for your business. Make your business a lucrative proposition for future investors by capturing positive trends and market analysis in your business plan.

These are the initial elements of your bookkeeping and tax services business plan that will define its quality. If you have these ironed out, you will find that following sections like the execution strategy, financial plan and strategy easily follow and are in line with your business intent. Good luck!

Many states have a sales tax exemption for businesses that use gas, water, and electricity for the express purpose of production or manufacturing. If your company has been paying taxes on these utilities, not only is there the possibility that you can receive an exemption on a percentage of future sales tax, but you may be entitled to a full or partial refund of previous sales tax paid on utilities.

Understanding the law on utility sales tax exemptions in Indiana can have a huge impact on your operating costs. Sales and use taxes apply to retail purchases and Indiana law specifies that utilities purchased for use in production, manufacturing, agriculture, and several other specific types of businesses, are not retail purchases and thus exempt from the sales tax. In order for your gas, electric, and other utility purchases to be exempt from sales tax, it needs to be purchased from a public utility or power company and either metered separately from your other utility use or otherwise separated from your non-exempted utility use.

The law in Indiana provides for only public utilities to be exempted for production, manufacturing, and other appropriate use, so for example, propane, gasoline, coal, etc., are not exempted from sales tax and still qualify as retail purchases. Examples of utilities that are exempted from sales tax include electricity, gas, water, and steam.

Not sure if your company’s utility use is exempt from sales tax? If the utility use is specific to the product your company produces, it is exempt. On the other hand, if the utility use is for the comfort of the employees, it is not exempt.  For example, keeping a room at a specific humidity level because otherwise the product would fail would be utility use that might qualify as exempt. Determining what utility use is exempt and what is not is complicated and the help of a professional might be necessary in your application process.

Determining and proving the percentage of utility use that qualifies for the sales tax exemption is the burden of the tax payer. You will need appropriate documentation to prove the percentage of utilities used for the production or manufacturing in your business and fill out the necessary paperwork required for the exemption to be approved. This process can take anywhere from several weeks up to several months to complete.

The complex nature of determining your company’s sales tax exemption often requires the use of a law firm that specializes in sales tax exemptions as an appropriate expenditure. Companies that specialize in areas like this can analyze all necessary data and determine your percentage of exemption for you. Often they will fill out the necessary paperwork and file the application for you as well.

Hiring a company to assist in filing your sales tax exemption for you is also worth the cost because they can help determine if you qualify for a full or partial refund of taxes already paid. There is a limit on how far back you can receive a refund on your utility sales tax, but any amount refunded can be a huge help in your company’s financial accounts. Additionally, having the proper sales tax exemptions set up will potentially save your company a significant amount of money over the years.

Understanding the law regarding utility sales tax exemption in Indiana is important to saving you the most money and you may wish for an updated study to validate that you are still receiving the greatest exemption possible. Many of the companies that will help you set up your exemptions will also audit your utility usage and ensure that you are utilizing this law to the greatest extent.