Unfair Gaps🇮🇳 India

Sporting Goods Manufacturing Business Guide

19Documented Cases
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All 19 Documented Cases

त्रैमासिक रॉयल्टी रिपोर्टिंग में विलंब और भुगतान सत्यापन

₹2-8 lakh annual working capital loss per agreement; 1-1.5% monthly interest on delayed royalty payments; 15-30 day DSO extension

Licensing agreements specify quarterly royalty payment cycles. Manual sales data compilation, deduction calculation, and statement preparation typically take 10-15 days post-quarter. Licensor verification and dispute resolution add 14-28 days. Result: actual cash payment occurs 30-45 days late, triggering late payment interest (typically 1-1.5% per month under licensing terms) and strain on licensor relations.

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रॉयल्टी गणना में छूटी हुई बिलिंग और कम रिपोर्टिंग

₹5-15 lakh annually per agreement; 2-5% of royalty revenue leakage

Royalty calculation requires multiplication of royalty rate by net sales, with specific deductions for returns, quantity discounts, and freight charges. Different licensing agreements define 'net sales' differently, creating ambiguity. Manual tracking across wholesale channels, e-commerce, and retail leads to missed revenue recognition and underreporting to licensors.

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उत्पादन क्षमता हानि

₹20-40 lakhs/month in idle equipment costs for mid-sized units (2-5% of ₹120 crore market capacity loss); overtime 20-50% excess labor during peaks[2][1]

Seasonal demand for sports goods like fitness equipment surges during festivals and post-pandemic home fitness trends, but manual scheduling results in idle machinery in low seasons (e.g., rural 65.5% market untapped) and supply shortages in peaks, as seen in Covid-induced demand spikes where local manufacturers struggled to cope[1][5].

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रॉयल्टी गणना और कर अनुपालन में मैनुअल श्रम और बहु-विभागीय समन्वय की लागत

40-60 hours/quarter/agreement = ₹80,000-1,20,000 annually (at ₹400/hour blended labor cost); External legal review: ₹15,000-50,000/year/agreement; Tax advisory: ₹10,000-25,000/year/agreement; Total: ₹1,05,000-1,95,000 per agreement annually

Quarterly royalty accounting across multiple agreements requires: (1) Sales data extraction from ERP/POS systems; (2) Deduction validation (returns, discounts, freight per agreement terms); (3) Net sales calculation and royalty rate application; (4) Tax classification (royalty income, TDS applicability); (5) ITR/TDS reporting; (6) Licensor statement preparation and dispute resolution. Each step is manual, error-prone, and time-consuming, particularly for manufacturers with 5-15 licensing agreements.

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