Table of Content:
- What do we need to start a business?
- Foreign Trade
- How can one start an Import Export business?
- What is tax?
- Custom Tariff of an Import and Export business
- 5 types of Import Custom duties
A business is an enterprising entity. Engaged in commercial activities, professional activities or industrial activities are businesses. It takes a lot of planning and hard work to have and run a successful business. For example, Walmart in the States or Amazon is a great example of a successful business.
An entrepreneur is a person who initiates with a business plan. An entrepreneur comes with an idea for the business. For example, Steve Jobs came up with the marvelous business idea of Apple. It depends on the owner or the number of partners what the business structure is going to be like. There are four main business structures which are Sole proprietorship, Partnership, Limited liability company and Corporation. Each one of these business structures comes with its own pros and cons.
What do we need to start a business?
There are a few things which are necessary when starting an import export business. Five important steps to start your business are:
The market research
In starting an import and export business is conducting thorough market research. Doing this research will tell you whether the product you are going to be manufacturing, selling , importing, exporting etc will be successful or not.
A business plan
Second step is to have a proper export and import business plan. This plan will be a map of your company, your company’s structure and how you will run and grow your company. Let’s take Japan for an example. Japan is the market leader for manufacturing cars and car parts. The brand names like Toyota, Honda, Suzuki and many more are all Japanese brands. They had a business plan and beautifully executed it. This led to building a successful export and import business and a good brand name. PL Global Impex Pte Ltd will guide you further if you are thinking of starting an import export business.
Funding your business
Starting an import export business does require you to invest a lot in your business fund. Even with minimum funding starting an import export business is possible. This initial investment in your business is your capital. This capital is a liability. It is a business liability to pay this capital back to the owner. But one doesn’t always need high investment to start an export and import business. You can start an import export business with minimum investments too. For securing a funding, you can loan it from a bank or from any investors of your business. Alternatively, you can also borrow money from your family or relatives.
Picking a suitable business location
Picking a suitable business location can change the game for your business. Let’s take an example. Your business is a restaurant whose menu consists of very high end Italian pasta and European cuisines. The price of the food is also on the higher end. But you choose a location away from the city center in a dodgy alley. Would this business succeed? It may succeed with a stroke of luck. But a business should be based on surety and solid planning.
Opening a business bank account and registering your business
A business needs a bank account where all the transactions happen from. You also need an account for the legal taxes. For a business you need to open a current bank account. It’s pretty easy to open a bank account especially if you have the right paperwork for it.
Are you stuck and need more professional help while starting an import export business? You can visit our website P.L Global Impex Pte Ltd and find the perfect solution to your business needs.
Just like the name suggests, Foreign trade is an exchange of goods which happen mutually. This exchange is between International regions and borders. In this trade there are varieties ie; Import and Export. These concepts are necessary for the national economy. All the country’s goals are in line with these concepts.
The foreign trade policy consists of decisions, measures and many other things which are implemented by the countries in order to attain their goals. The foreign trade policy is very old but still remains one of the most important forms of international division of labor.
To explain foreign trade in simple terms, a country engages in foreign trade to fulfill requirements. We can take the example of India. India needs to meet its crude oil requirements. So, in order to fulfill this requirement, India imports crude oil from foreign countries like Russia, Saudi Arabia and other middle eastern countries. Similarly, India is the biggest exporter of Petroleum. India’s biggest trading partners are China, United states, United Arab Emirates (UAE), Netherlands among many others.
Import and Export are very important aspects of Foreign trade. Some of the major exporting companies in India are Tata steel, Tata motors, Reliance Industries etc. One can start their own import and export business following a few steps.
How can one start an Import Export business
For starting an import export business you can read the 5 important steps for starting a business listed above. But if you want professional help from the best import export agency in the market head on to P.L Global Impex Pte Ltd and get the best services for your business tailored to your needs.
Starting an Import and Export business include a few more points:
The first important step in starting an import export business is selecting the product which you wish to export or import. This is a crucial step because selecting the right product is going to be a determining factor of your businesses success. For example, let’s take india. In India the most successful product for import and export is clothes. So, you search for which products to import or export depending on your country and the country you wish to import from or export to.
Another very important step is documents. During starting an import export business in India these documents are necessary. So, in order to have a smooth sailing procedure of acquiring the documents, one has to have a Pan card. It is also a mandatory requirement for a registered business to have a pan card with the Income Tax Department.
Registration Cum Membership Certificate (RCMC) is a very important step. India has numerous export promotion councils. These councils work together to promote the exports of various products and services. RCMC is valid throughout India. The time taken to get an RCMC is approximately one week.
Selecting the right market for exporting your products. If your choice of location to where you want to export the products doesn’t generate enough demand for the product your import export business will not earn enough profit. Hence, it is necessary to choose the export location after analyzing the market demand for the product.
At our company P.L Global Impex Pte Ltd you can find the best solutions to take your business to the next level. So, log on to our page and get ready for your business to soar high with success.
What is Tax?
Imposed on a tax payer, tax is a financial charge. Taxes are by the government. Paying taxes is compulsory. This revenue which the government collects is used from developing and providing various public infrastructures and facilities.
Income tax or the IT act 1961 is a tax act in India. The income which is taxed by this act can be garnered by any source including profits which is received from salaries and investments, owning a company, house or property etc.
The wealth tax act applies to individuals whose net wealth exceeds 30 lakhs. Then they are liable to pay 1 percent of the exceeded amount as tax. This also applies to companies whose generated revenue is over 10 crores p.a.
Tax which is imposed on the sale of any product is Sales tax . This tax is levied on the seller of the product who passes it on to the customer who purchases the products. The price of the product will include the sales tax in the bill which has to be paid by the customer. The hitch with this tax is that it is a tax which is imposed on a particular product. The seller won’t be able to apply sales tax on it, if the seller is reselling the product.
Service tax is similar to sales tax. The bill includes the service tax. Places like restaurants are the ones who charge a service tax. As tax, the restaurants can charge up to 40% of the total bill.
Direct and Indirect taxes
A direct tax is a tax that you pay directly to the government. The government levies these taxes on an individual or an entity. These taxes cannot be transferred to another entity or individual. For example, Income tax, Wealth tax, Gift tax, Interest tax etc all come under direct taxes.
An indirect tax is collected by an entity who is usually a producer or retailer. This entity then pays this tax to the government. However, it is given to the customer as a part of the purchase price of the good. Examples of indirect tax are sales tax, service tax etc.
Custom tariff on Import Export business
Custom tariff is also known as Custom duty. It is an alternative form of an Indirect tax. On every good imported, this tax is liable. Albeit, it is not liable for all of the goods which are exported. This custom duty is levied on all imported goods by the government of India. But, other countries around the world all levy these taxes to raise extra revenue. It is also levied to shield domestic institutions from predatory or productive from foreign countries.
In India, the custom duty is under the Customs Act, 1962. In this act it is stated that the government is allowed to levy taxes on the exports and imports of goods. The government is also allowed to prohibit the export and import of the products along with penalties and offenses conducted with the procedure of import and export. The Central Board of Excise and Customs handles all the matters which are related with custom duty. The CBEC has several divisions that are in charge of this field work including customs, Commissionerate of customs, Central revenue control laboratories etc.
5 types of Import Custom Duty
There are different kinds of custom duties. These are levied on almost all the imported products all over the world. The Export custom tariff which is levied on a few goods which come under the Second Schedule. There are five kinds of import duties which are Basic customs duties, Protective duty, Additional Customs duty, Education cess, Safeguard duty and Anti-dumping.
Basic customs duties
Basic customs duties are applied on all the products imported which fall under section 12 of the Act 1962. In the First Schedule to Customs Tariff act 1962, the rates are prescribed. In accordance with this the duties are levied. It is under the terms that are specified in section two of the act.
Protective duty is to shield the domestic institution. It is to protect from the imports by a rate. The Tariff commissioner recommends the rate.
Additional Custom duty
Additional Custom duty is applied on the products which are under section three of the Customs Tariff Act, 1975. This is equivalent to the Central Excise duty. For all the products produced in India, the Central Excise duty is applicable on.
Education Cess duty
Education Cess duty is applied at 2% and higher education Cess. Applied of the aggregate custom duty is another 1%
When the government feels that a sudden rise in the amount of exports can lead to a potential damage to the domestic industry. The use of safeguard duty is during this.
Below the fair market price imported products fall under this duty. It is restricted to the difference between the export price, and the normal price. Another name for normal price is dumping margin.