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I am the director of a One Person Company. I am...

I am the director of a One Person Company. I am planning to start 3 coaching centres in 3 differe...

I am the director of a One Person Company. I am planning to start 3 coaching centres in 3 different places in India.


Each coaching classes will be run by three separate individual entity ( say operating entity) on profit sharing basis with my OPC. We will be out-sourcing/ purchasing study material from certain vendor/company.


Initial capital expenditure I/c purchase of requisite equipment like projectors , laptop etc ( Appx Rs 3-5 lakh) has to be done by OPC.


What will be efficient taxation wise - receiving tuition fee in name of opc & making expenditure by it subsequently sharing profit with operating entity.


Or providing loan/ grant to operating entity in lieu of capital expenditure ( Rs 3 lakh or so ) and allow tuition fee collection in name of operating entity subsequently sharing profit with operating entity.


What type of collaboration will be efficient taxation wise. PS - OPC has still no GST no . This year we are not expecting turnover to exceed by Rs 20 lakh.

0
Chiranjibi Chapagain Jun. 08, 2018

Just making a recommendation on the basis of the facts provided by you.... both options shall have the same tax implications.

However, any day of the week,the first option is more beneficial. This is because OPC has GSTN, it can claim credit also on the GST portion of input paid.

It is better if the centre bills in its name and then passes the OPC's share in order to minimise GST.

If you want us to look further into the matter, you can book the services of any one of our experts.

I am the director of a One Person Company. I am planning to start 3 coaching centres in 3 different places in India.


Each coaching classes will be run by three separate individual entity ( say operating entity) on profit sharing basis with my OPC. We will be out-sourcing/ purchasing study material from certain vendor/company.


Initial capital expenditure I/c purchase of requisite equipment like projectors , laptop etc ( Appx Rs 3-5 lakh) has to be done by OPC.


What will be efficient taxation wise - receiving tuition fee in name of opc & making expenditure by it subsequently sharing profit with operating entity.


Or providing loan/ grant to operating entity in lieu of capital expenditure ( Rs 3 lakh or so ) and allow tuition fee collection in name of operating entity subsequently sharing profit with operating entity.


What type of collaboration will be efficient taxation wise. PS - OPC has still no GST no . This year we are not expecting turnover to exceed by Rs 20 lakh.

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