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SHS Advisory Group
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SHS Advisory Group
SHS Advisory Group

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How to slove business problem? (in Tamil)

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The INDO-JAPANESE Business relations have always been very strong. Last month a major development was the event, where the Honourable prime minister of Japan visited India and Inaugurated the "BULLET TRAIN" under the initiative of the Honourable prime minister of India.

Few unknown facts about INDIA-JAPAN correlation are - based on the outside sources-
Around 13000 Japanese are living in Tamil Nadu and Karnataka
Japanese corridor in Chennai and nearby districts
Lots of Indian companies had tied up with JAPAN’s companies for partnerships and technology enhancement
Good amount of investment has come from Japan to India’s infrastructure and manufacturing as private equity investments. Moreover, there are lots of business and relationship chambers between Japan and India

Knowing all the facts, SHS has done a couple of deals with identified Japanese partners in India for investments and quite a number of them for technology tie-ups. SHS has also helped a couple of Indian promoters to create and build a business in Japan.

There is a recent coverage about us in a Japanese magazine about our vision and plan.
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How to manage business debt? Tips to Manage business loan against property - Tamil

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Decode GST is a series of articles on GST for common people to business people

Goods and Service Tax (GST) part 1: Existing Tax System
In this post, I am trying to explain about Existing Tax System in simple language to make you easily understand. Let us also discuss briefly Sales Tax, Central Excise Tax, and Value Added Tax etc. The information about Goods and Service Tax (GST) in this website explains in two parts. You may read both parts to have a clear idea about GST.

What is GST? What is the concept of GST? How does GST work? How does GST differ from other taxes? What is the need of GST? What is the impact of GST on Indian economy?
As you know, present taxation system of India consists of mainly Direct Tax and Indirect Tax. Apart from direct and indirect tax, you might have heard other categories of taxes like Ad valorem Tax, Progressive and regressive tax etc.

What is a Direct tax?
Let me explain in simple language about direct tax. You may go deeply later with its complete understanding. For your immediate and easy understanding,

let me explain about direct tax as below:
A Direct Tax is a tax whose liability cannot be shifted to someone else. For example, you work in a multinational company and drawing a salary. On that salary, you have to pay tax to the government, ie, Income Tax. You cannot shift this tax liability to someone else.
There are other taxes also like corporate tax, wealth tax, Minimum Alternate Tax (MAT) etc.

What is an Indirect tax?
Indirect tax is the tax liability one can shift to someone else.

3 Important Indirect Taxes:
What are the three important indirect taxes?
Three important indirect taxes are Central Excise Tax, Sales Tax and Service Tax.

What is Central Excise Tax?
Central excise is the tax on production/manufacturer of goods. We can also call central excise tax as CENVAT.

What is Sales Tax?
Sales Tax is the tax on distribution of goods, also known as state-level VAT.

How does Service Tax Work?
Service Tax is the tax on production and distribution of goods and many other indirect taxes.

What is VAT?
Let us discuss with an example for the purpose of understanding VAT initially and then GST.Let me explain with an example about movement of goods and value addition with a very simple explanation.

A shopkeeper sells Cake. He gets cake from Baker. Baker makes cakes with flour which he buys from a Miller. Miller buys wheat from Farmer.
Again to make you easily understand on VAT and GST, I simplify the above example by mentioning 4 stages of examples. I hope, this will help you to understand about VAT and GST very easily. All examples for understanding purpose only. Let us split the above example as below:

Stage1: The Farmer produces Wheat.
Wheat is produced by farmer. For the purpose of producing wheat, the farmer undertakes all farming process. He buys raw materials also. Ok, let us assume, the farmer buys inputs for Rs. 10.00. After completing all the process of farming the wheat is ready for sale to Miller to make flour. He sells wheat for Rs.30.00 by keeping a profit of Rs.20.00.

Stage2: The wheat becomes flour by milling
The miller purchases wheat from farmer for Rs.30.00. He mills wheat and sells flour to Baker for Rs.50.00 with a margin of Rs.20.00 again.

Stage3: The baker makes cakes with flour
The baker who bought flour for Rs.50.00 from miller makes cakes and sells for Rs.90.00. Here, he keeps a margin of Rs.40.00

Stage4: The Shopkeeper sells cakes
Finally, the shopkeeper buys cakes from the baker for Rs.90.00 and sells for Rs.100.00 with a profit of Rs.10.00.

I hope, the above 4 stages of explanation are very simple to understand.
Now let us come back to VAT. What is Value Added Tax (VAT)?
Let us presume central excise tax or Sales tax rate is 10%. As you know, this tax is levied on the output. In the first stage, output is Rs.30.00. So, central excise/sales tax is Rs.3.00 (10% of Rs.30.00). In the second stage, Central excise/ sales tax rate at 10% works out to Rs.5.00 (10% of Rs.50.00 output). Rs.9.00 would be the central excise/ sales tax rate under 3rd stage of this example (10% output of Rs.90.00) and in 4th stage, the shopkeeper pays Rs.10.00 as central excise/sales tax as his output is Rs.100 (ie. 10% of Rs.100.00). And the total excise/sales tax becomes Rs.27.00, if you add all stages. So this is the tax liability in all these stages under the central excise/sales tax regime.

Do you notice a problem here? The problem is that on the input, ie, when the raw material at 1st stage is taxed, the output became Rs.30.00. Again the raw materials are taxed at the second stage, and again at 3rd stage and finally at 4thstage.

Here tax is imposed on tax paid. That means tax on tax. This is the present Central excise/Sales tax regime which carries a major problem and stupidity.

What happens here when tax on tax are imposed? Simple, the cost of production increases.

So the Central government realized this issue and decided to eliminate central excise and decided to replace central excise with Value Added Tax (VAT). In turn, the central government asked the state governments to replace sales tax with VAT (Value Added Tax).

... To be continued | Part 2: Introduction to GST
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Decode GST is a series of articles on GST for common people to business people

Goods and Service Tax (GST) part 1: Existing Tax System
In this post, I am trying to explain about Existing Tax System in simple language to make you easily understand. Let us also discuss briefly Sales Tax, Central Excise Tax, and Value Added Tax etc. The information about Goods and Service Tax (GST) in this website explains in two parts. You may read both parts to have a clear idea about GST.

What is GST? What is the concept of GST? How does GST work? How does GST differ from other taxes? What is the need of GST? What is the impact of GST on Indian economy?
As you know, present taxation system of India consists of mainly Direct Tax and Indirect Tax. Apart from direct and indirect tax, you might have heard other categories of taxes like Ad valorem Tax, Progressive and regressive tax etc.

What is a Direct tax?
Let me explain in simple language about direct tax. You may go deeply later with its complete understanding. For your immediate and easy understanding,

let me explain about direct tax as below:
A Direct Tax is a tax whose liability cannot be shifted to someone else. For example, you work in a multinational company and drawing a salary. On that salary, you have to pay tax to the government, ie, Income Tax. You cannot shift this tax liability to someone else.
There are other taxes also like corporate tax, wealth tax, Minimum Alternate Tax (MAT) etc.

What is an Indirect tax?
Indirect tax is the tax liability one can shift to someone else.

3 Important Indirect Taxes:
What are the three important indirect taxes?
Three important indirect taxes are Central Excise Tax, Sales Tax and Service Tax.

What is Central Excise Tax?
Central excise is the tax on production/manufacturer of goods. We can also call central excise tax as CENVAT.

What is Sales Tax?
Sales Tax is the tax on distribution of goods, also known as state-level VAT.

How does Service Tax Work?
Service Tax is the tax on production and distribution of goods and many other indirect taxes.

What is VAT?
Let us discuss with an example for the purpose of understanding VAT initially and then GST.Let me explain with an example about movement of goods and value addition with a very simple explanation.

A shopkeeper sells Cake. He gets cake from Baker. Baker makes cakes with flour which he buys from a Miller. Miller buys wheat from Farmer.
Again to make you easily understand on VAT and GST, I simplify the above example by mentioning 4 stages of examples. I hope, this will help you to understand about VAT and GST very easily. All examples for understanding purpose only. Let us split the above example as below:

Stage1: The Farmer produces Wheat.
Wheat is produced by farmer. For the purpose of producing wheat, the farmer undertakes all farming process. He buys raw materials also. Ok, let us assume, the farmer buys inputs for Rs. 10.00. After completing all the process of farming the wheat is ready for sale to Miller to make flour. He sells wheat for Rs.30.00 by keeping a profit of Rs.20.00.

Stage2: The wheat becomes flour by milling
The miller purchases wheat from farmer for Rs.30.00. He mills wheat and sells flour to Baker for Rs.50.00 with a margin of Rs.20.00 again.

Stage3: The baker makes cakes with flour
The baker who bought flour for Rs.50.00 from miller makes cakes and sells for Rs.90.00. Here, he keeps a margin of Rs.40.00

Stage4: The Shopkeeper sells cakes
Finally, the shopkeeper buys cakes from the baker for Rs.90.00 and sells for Rs.100.00 with a profit of Rs.10.00.

I hope, the above 4 stages of explanation are very simple to understand.
Now let us come back to VAT. What is Value Added Tax (VAT)?
Let us presume central excise tax or Sales tax rate is 10%. As you know, this tax is levied on the output. In the first stage, output is Rs.30.00. So, central excise/sales tax is Rs.3.00 (10% of Rs.30.00). In the second stage, Central excise/ sales tax rate at 10% works out to Rs.5.00 (10% of Rs.50.00 output). Rs.9.00 would be the central excise/ sales tax rate under 3rd stage of this example (10% output of Rs.90.00) and in 4th stage, the shopkeeper pays Rs.10.00 as central excise/sales tax as his output is Rs.100 (ie. 10% of Rs.100.00). And the total excise/sales tax becomes Rs.27.00, if you add all stages. So this is the tax liability in all these stages under the central excise/sales tax regime.

Do you notice a problem here? The problem is that on the input, ie, when the raw material at 1st stage is taxed, the output became Rs.30.00. Again the raw materials are taxed at the second stage, and again at 3rd stage and finally at 4thstage.

Here tax is imposed on tax paid. That means tax on tax. This is the present Central excise/Sales tax regime which carries a major problem and stupidity.

What happens here when tax on tax are imposed? Simple, the cost of production increases.

So the Central government realized this issue and decided to eliminate central excise and decided to replace central excise with Value Added Tax (VAT). In turn, the central government asked the state governments to replace sales tax with VAT (Value Added Tax).

... To be continued | Part 2: Introduction to GST
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5 interesting facts about Eid al-Fitr

The Arabic name Eid al-Fitr translates to ‘festival of the breaking of the fast’ in English. It is celebrated at the end of the Islamic holy month of Ramadan and the beginning of the Islamic month of Shawwal, the 10th month of the lunar Islamic calendar.

The festival of Eid is a reward for the Muslims around the world after observing the holy month of Ramadan by fasting from dawn to dusk.The celebration of Eid also marks the anniversary of the Quran being revealed.

Here are 5 interesting facts about the ‘festival of the breaking of the fast’.

1. Breakfast before the special prayer
sweets

It is customary to eat breakfast before the special prayer of Eid, as Prophet Muhammad used to eat something sweet before offering his prayers.

2. Public Holiday
Holiday

In Muslim countries Eid is an official public holiday that lasts for three days.

3. Crescent moon above Mecca
Mecca-on-Eid

As the crescent moon of Eid appears on different dates in different countries, many Muslim communities celebrate Eid on the day it appears over the sky above Mecca.

4. The Eid Prayer
Prayer

The Eid prayer is different from the regular prayer known as Adhaan. The special prayer can be done anytime between the Ishraq (dawn) and Zawal (midday) prayers.

5. Zakat-ul-Fitr
Money

Muslims usually give a special gift of money to charity also known as Zakat-ul-Fitr which is collected and given to Muslims who are poor or in need.
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