Obstacles on the way of Entrepreneurs

In recent scenario the credential of any countries` economy is being measured based on the wealthiest people of that country.  Quite frequently we come across the news of Warren Buffet, Bill Gates, Ratan Tata, Kumar Mangalam Birla, Mukesh Ambani, Sunil Mittal, Narayan Murthi, Azeem Premji and lot other big industrialist about their change of rank in the wealthiest category of the world or the country. The other middle class people or below that category consisting more than 80% of population are simply ignored. It is not that the people in the lower category are not having any skills. If we analyse we will come to know that some of the people are having enough potential to be listed in the category of above industrialists. You would be thinking that if the people are having potential then what the factors that are stopping their growth. We shall discuss the same further in this article.  

The God Almighty has given different quality, skills in different people. Some of the people have been bestowed with lot of wealth and some are having excellent skills and creativity. It is universal truth that to achieve success healthy cooperation among the people is required. There are certain pessimistic factors that stopped the people from coming forward and knock the door of success.  

1. Mindset of keeping the hard earned money in safe mode like deposit with Banks, Insurance Companies or government securities bearing fixed rate of returns.

Actually most of the people who are in possession of considerable amount of fund do not know the hidden facts of the system of banking and insurance companies. Nowhere in the globe can people get guaranteed securities disregard of government undertaking. We have seen lot of bankruptcy cases in recent past. Actually almost all the currency across the globe is backed by USD and analysts have proved that United States economy is heading towards bankruptcy. I wonder why people are over caring for security of the money when the most important LIFE itself is not secured.

The basic element for growth of wealth in any economy is that it should be kept on circulating in the different right hands rather than piling up in one hand. Hence hard earned money of the person or group of the person should be deployed in such a manner that mitigates the disparity of income in the society which can be achieved in contributing for starting up the business or expansion of the existing business.

2. Hesitation in executing ideas on the guise that it may be stolen by others.

Some people are of so conservative mindset that they feel very much unsecured in executing the ideas. They think that their ideas are of high importance and if he will try to execute it some other people may come to know and may be implemented by them. Actually any business idea is the monopoly of oneself but delay in implementation of the same may end up worthless. Further one has to remember universal truth that knowledge increases if shared with others.

Salvador Dali- the father of Surrealism slept on a couch with a spoon in his mouth. He would start dreaming up crazy ideas and as he would drift into his sleep, the spoon would slip out of his mouth, fall on the floor and wake him up. He would immediately get up, rush to his canvas to paint what he had just dreamt. The million $ Dalis that exist today are paintings, not mere dreams.

An idea is worth nothing. Quickly Execute it to make it valuable.

3. Hesitation in meeting with Investors!

Some cream talent in the society often found wondering here and there and wasting their valuable times and energy. They hesitate in approaching to investor on the pretext of the right time and mood of the investors.

No Investor is waiting with bated breath biting her fingernails for you to call! It’s quite the opposite scene actually. In a booming Economy (like India), investors are deluged with lots of high quality and established business investment options, so you have to fight hard to get into visitor’s area to begin with!

Capital Chases Entrepreneurs, not the other way around. Invest all your energies in building a GREAT business. Everyone will be ringing your doorbell.

4. No money to start up.

Most new business ideas today really need very little capital. If you are thinking of starting an Internet enabled business, the cloud takes away all the pain of investments. Domains cost less than 20 US$, and the rest of it is almost free. Sites like Word Press and their plugins can get you a fully loaded website up and running in a few thousand rupees spent.

Sure, if you have a more Capital Intensive business idea, then think really hard. Start Ups don’t survive on Love and Fresh Air. They need real hard cash. If you are on the Poverty Line, don’t attempt to start up. There will be better times to be more adventurous.

Be ready to sacrifice a good couple of years’ earnings into starting up and not looking like someone who lost all her baggage after a 24 hour flight. Once you have the cushion of 2 years’ savings, a lot more confidence will seep into your decision-making and improve your risk taking capabilities. Also Budget your Burn to say last for a year or whatever be your test horizon. That discipline will go a long way even after you get funded.

5. Let me Grow First. Revenues can come Later.

Unless you have a massive, massive overnight hit like a Twitter or Facebook, tread the ‘growth first, revenue last’ road with caution.

You may be suffering from a deep-seated insecurity to generate revenues and conveniently shoving that fear under the carpet by postponing revenue generation. It’s like hiding a body in the deep freezer and hoping that it will never be found.

Generating revenues is a real PAIN. And it’s best confronted in parallel to building your business. In fact, so many extra features of your service or enterprise may never be needed if you listen to the fat men with the cheques books early on. Also, as investors, partners, and potential acquirers start noticing your business, they look your Generating Revenue Experience (GRE) scores. If you didn’t apply for the exam, you wont get in.

Get that begging bowl out. Try and test (if you want to maintain Facebook like early start up Virginity) what people will pay for – but make sure that you know where the light switches are when the darkness arrives.

6. Ignorance of Technology and Business Strategy!

If you are not aware of latest market strategy and developed technology then learn!!

The demons of the mind that say that you don’t know how ‘business’ works need to be exterminated on day zero of starting up. Look all around you – the greatest geeks in the world – Steve Jobs, Bill Gates, The Google Twins, Marc Z – all have understood the science of business better than anybody else.

Today the technology and self -serve platforms have become so easy to understand and implement, they are like those do it yourself Lego Puzzles. All you need is the patience to sit down and assemble the rocket you are trying to build step by step. Read the instructions carefully and you will be set.

No entrepreneur can be in-complete. This is actually also the first step in becoming an entrepreneur – understanding a domain that you otherwise had no clue of.

Note – I am not suggesting mastering all domains, but rather just understanding them.

7. Hiring Cost of professionals and consultants! Myth 6 – Professionals whom I want are too expensive to hire.

Some entrepreneurs think that professional that they want to hire are too expensive. Actually this issue can be killed if professionals are approached positively with burning desire and they have been explained the real worth of invention of entrepreneur.

So many of the ‘been there, done that’ types are so bored and stuck en-cashing salary cheques every month. They are waiting for folks like you to go up to them and redeem them!

Professionals with big compensation packages may not quit their job in a hurry for your Love Songs, but they can certainly begin associating with you. Start meeting them and burrow into their experiences. Shed a few shares and get them on your board. You may even realize that you never needed them full time!

8. Conclusions

In a start up land, while your dreams may have taken you to heaven in a first class seat, when you actually implement the idea and hit execution, you may land up in rubble, deep under the ground.

Do not deny the ‘badness’ of the idea or the common sensical fact that ‘this was a bet that should not have been played’. Enterprises are built on hypothesis. If even a couple of assumptions or facts (which are crucial to business) don’t turn out the way as per your expectations, ditch the business, kill all engines, sit back and revise the learnings earned.

Get out, as soon as you see smoke. Don’t put on a mask and enter the fire pretending to be a fire fighter. You will not come out alive and your soul will be too charred to boot up again

All the above obstacles that we have discussed so far is due terror barrier. It is resulted when unconscious mind that is stronger than the conscious mind do not accept the new business ideas which is loaded with obvious risk, hence on the pretext of above it through in the safe zone by not proceeding towards start up. One also needs to learn the technique of killing the terror barrier to be one of the great entrepreneurs.

Wish you All The Best!

Beware Dealers Claiming Input Tax Credit

Beware Dealers Claiming Input Tax Credit

One of my clients has received the demand notice from the Commercial Tax Department of Gujarat for payment of VAT against wrong claim of Input Tax Credit. On scrutinizing the relevant documents of input tax credit it was found that Tax Invoice was issued by the supplier and other documents to prove the genuineness of the purchase transaction i.e. Purchase order, Delivery challans etc. was also found in order. The reply along with the attachment of relevant documents proving the genuineness of transactions was submitted to the department.

Surprisingly concerned CTO did not pay any heed towards the submission and bluntly stated that since the TIN no. of concerned supplier has been cancelled with retrospective effect no input credit is available to the buyer of goods.

The provision of Input Tax Credit has been provided under section 11 of Gujarat Vat Act 2003. On thorough study of the provision of section 11 it can be observed that terms and conditions of allowing Input Tax Credit have been discussed precisely under subsections 4, 5 and 7. 

·         Sub section 4 talks about the maintenance of record in the form of Tax Invoice in Original.

·         In Sub Section 5 various conditions have been listed from clause (a) to (p) describing the situation where Input Tax credit may not be available.

·         In subsection 7 the fraudulent transaction has been highlighted where Input Tax Credit is not available.

The relevant portion of the section 11 i.e subsections 4, 5 and 7 have been produced below for the ready reference of the readers.

“(4) The tax credit shall not be claimed by the purchasing dealer until the tax period in which he receives from a registered dealer from whom he has purchased taxable goods, a tax invoice (in original) Containing Particulars as may be prescribed under Sub-section (1) of Section 60 evidencing the amount of tax.

(5) Notwithstanding anything contained in this Act, tax credit shall not be allowed for purchases-

(a) made from any person other than a registered dealer under this Act;

(b) made from a dealer who is not liable to pay tax under this Act;

(c) made from a registered dealer who has been permitted under section 14 to pay lump sum amount of tax in lieu of tax.;

(d) made prior to the relevant date of liability to pay tax as provided in sub-section (3) of section 3;

(e) made in the course of inter-State trade and commerce;

(f) of the goods which are disposed of otherwise than in sale, resale or manufacture;

(g) of the goods specified in the Schedule I or the goods exempt from whole of tax by a notification under sub-section (2) of section 5;

(h) of the goods which are used in manufacture of goods specified in Schedule I or in the packing of goods so manufactured;

(i) of the goods which are in the nature of capital goods as defined in clause (5) of section 2 and which are meant for use as capital goods in the manufacture;

(j) of vehicles of any type and its equipment, accessories or spareparts (except when purchasing dealer is engaged in the business of sales of such goods)

(k) property or goods not connected with the business of the dealer;

(l) of the goods which are used as fuel in generation of electrical energy meant for captive use or otherwise;

(m) of the goods which are used as fuel in motor vehicles;

(n) of the goods which remain as unsold stock at the time of closure of business;

(o) where original invoice does not contain the details of tax charged separately by the selling dealer from whom purchasing dealer has purchased the goods;

(p) where original tax invoice is not available with purchasing dealer or there is evidence that the same has not been issued by the selling dealer from whom the goods are purported to have been purchased;

Notwithstanding anything contained in clause (a) or (b) in this sub-section and subject to conditions as may be prescribed, a registered dealer shall be allowed to claim tax credit in respect of purchase tax paid by him under subsection (1) or (2) of section 9.

(7) Where a registered dealer without entering into a transaction of sale, issues to another registered dealer tax invoice, retail invoice, bill or cash memorandum with the intention to defraud the Government revenue or with the intention that the Government may be defrauded of its revenue, the Commissioner may, after making such inquiry as he thinks fit and giving a reasonable opportunity of being heard, deny the benefit of tax credit, in respect of such transaction, to such registered dealers issuing or accepting such tax invoice, retail invoice, bill or cash memorandum either prospectively or retrospectively from such date as the Commissioner may, having regard to the circumstances of the case, fix.”

Normally dealers are advised by the consultants to ensure the following steps while claiming the Input Tax Credit.

·         To ensure that the concerned supplier is registered dealer and the TIN no. has been printed on the Invoice.

·         To ensure that proper Tax Invoice in the prescribed format has been issued by the supplier.

·         To ensure the documentary evidence like Lorry Receipt, Delivery challan duly stamped proving the receipt of delivery of material.

Even if the dealers comply with all the provisions that have been described under the Act there are chances that commercial tax department may reject the Input Tax Credit if the TIN No. of supplier who has issued Tax Invoice got cancelled.

It is pertinent to note that if any dealer fails to file the return for consecutive 3 Tax period then Commercial Tax Department cancels the registration of the dealer after issuing a show cause notice to the concerned dealer. If you are one of the genuine buyers of such dealers who are not complying with the provision of VAT Act, you may get punished for their non compliances in the form of reversal of Input Tax Credit.

Although such recovery of reversal of Input Tax Credit by the department from the dealers is absurd and challengeable with appellate authority but some of the dealers are making the payment to buy the peace of the department.

While It would be a hardship but it is recommended to verify the TIN no. of the suppliers on the website and save it as an evidence to prove that on the day of purchase the dealer was registered as per the record available on the website. At least this practice should be adopted for all the dealers from whom major purchases are made on monthly basis to safeguard the input tax credit.

On receipt of disallowance of input tax credit due to cancellation of registration of suppliers, concerned supplier should be approached for the recovery of vat that has been collected by him and not paid to the government treasurery. But recently the department is issuing the notices for the purchase transactions that had been taken place two to three years back and now the cases have been observed where suppliers had either close the business or not trace able at the address that was printed on the invoice. In such circumstances dealers will end up paying double tax once originally to the supplier and secondly on receipt of the demand notice from the department.

It is suggested that competent authority of the commercial tax department should review this situation and find some alternate way of handling such issues so that the genuine buyers do not get unnecessary punished. The action should be taken only against the right culprit who has collected VAT and not paid to the government. The input tax credit should be reversed only when the credit is taken based on non genuine purchases as stated under subsection 7 of section 11 of VAT Act 2003.

7 Deadly Interview Sins

With the job market extremely tight, even the small stuff counts, especially when you’re on a job interview. That’s why it’s so important not to say or do the wrong things, since that first impression could end up being the last one. With that in mind, here are seven deadly sins of job interviewing.

1. Don’t Be Late to the Interview

Even if your car broke down or the subway derailed, do everything you can to get to that job interview on time. “If you have a legitimate excuse it’s still hard to bounce back,” says Pamela Skillings, co-founder of job coaching firm Skillful Communications. “People are suspicious because they hear the same excuses all the time. ”On the flip side, you don’t want to show up too early and risk appearing desperate, but you do want to be there at least five minutes early or at the very least on time.”

2. Don’t Show Up Unprepared

It seems simple, but countless people go on job interviews knowing very little about the company they are interviewing with when all it would take is a simple Google search to find out. As a result, they end up asking obvious questions, which signal to the interviewer that they are too lazy to prepare. “Don’t ask if the company is public or private, how long it’s been in business and where they do their manufacturing,” says Mark Jaffe, president of Wyatt & Jaffe, the executive search firm. “Sharpen your pencil before you go to school.”

3. Don’t Ask About Salary, Benefits, Perks

Your initial interview with a company shouldn’t be about what the company can do for you, but what you can do for the company. Which means the interview isn’t the time to ask about the severance package, vacation time or health plan. Instead you should be selling yourself as to why the company can’t live without you. “Your interest should be about the job and what your responsibilities will be,” says Terry Pile, Principal Consultant of Career Advisors. “Asking about vacation, sick leave, 401K, salary and benefits should be avoided at all costs.”

4. Don’t Focus on Future Roles Instead of The Job at Hand

The job interview is not the time or place to ask about advancement opportunities or how to become the CEO. You need to be interested in the job you are actually interviewing for. Sure, a company wants to see that you are ambitious, but they also want assurances you are committed to the job you’re being hired for. “You can’t come with an agenda that this job is just a stepping stone to bigger and better things,” says Jaffe.

5. Don’t turn The Weakness Question Into a Positive

To put it bluntly, interviewers are not idiots. So when they ask you about a weakness and you say you work too hard or you are too much of a perfectionist, chances are they are more apt to roll their eyes than be blown away. Instead, be honest and come up with a weakness that can be improved on and won’t ruin your chances of getting a job. For instance, if you are interviewing for a project management position, it wouldn’t be wise to say you have poor organizational skills, but it’s ok to say you want to learn more shortcuts in Excel. “Talk about the skills you don’t have that will add value, but aren’t required for the job,” says Pile.

6. Don’t Lie

Many people think its ok to exaggerate their experience or fib about a firing on a job interview, but lying can be a surefire way not to get hired. Even if you get through the interview process with your half truths, chances are you won’t be equipped to handle the job you were hired to do. Not to mention the more you lie the more likely you are to slip up. “Don’t exaggerate, don’t make things bigger than they are and don’t claim credit for accomplishments you didn’t do,” says Jaffe. “You leave so much room in your brain if you don’t have to fill it with which lie you told which person.”

7. Don’t Ask If There’s Any Reason You Shouldn’t Be Hired

Well meaning career experts will tell you to close your interview by asking if there is any reason you wouldn’t be hired. While that question can give you an idea of where you stand and afford you the opportunity to address any concerns, there’s no guarantee the interviewer is going to be truthful with you or has even processed your information enough to even think about that. “All you are doing is prompting them to think about what’s wrong with you,” says Skillings