Policy Advocacy

We are pleased to inform you that the benefit of upfront exemption from Integrated GST and cess for Export Oriented Units have been extended for a period of 1 year, i.e, till March 31, 2020.  In this regard, Ministry of Commerce & Industry has issued notification no. 57/2015-20 dated March 20, 2019 amending Para 6.01(d)(ii) of Foreign Trade Policy 2015-20 to this effect. The corresponding customs notification shall be issued shortly and we shall keep you informed on the same. We would like to mention that in order to provide boost to Export Oriented Units (EOU), the government had earlier, vide notification no. 65/2018-Cus dated September 24, 2018 extended the benefit of upfront exemption from October 2018 to March 31, 2019. As you are aware, NASSCOM has been pursuing this demand with ...

Ministry of Finance has issued a Press release dated 15 March, 2019 stating that a bilateral agreement has been finalized between India and US for exchange of Country-by-Country Reports (CbCR). The proposed agreement will apply retrospectively for exchange of CbCR from the financial years commencing from 01 January, 2016. The agreement will be signed on/before March 31, 2019. The press release states that “This would enable both the countries to exchange CbCR filed by the ultimate parent entities of International Groups in the respective jurisdictions, pertaining to the financial years commencing on or after 1st January, 2016”. As a result, Indian constituent entities of international groups headquartered in USA, who have already filed CbCR in the USA, will not be required to do local fili...

Karnataka State government, vide Order NO. FD 9 CSL 2019 dated February 21, 2019 has approved Comprehensive Karasamadhana Scheme, 2019 with a view to reduce the arrears arising out of the enactments administered by the Commercial Taxes Department which existed before the introduction of Goods and Services Tax (GST) Act. The scheme will be relevant for companies who may be having arrears of penalty and interest under Karnataka State taxes. The Scheme provides for 100% waiver of arrears of penalty and interest payable by a dealer under various state laws upon fulfillment of certain conditions. The procedures and form for availing the benefit have also been prescribed in the Order. The scheme provides: a) 100%  waiver of arrears of penalty and interest payable by dealer under Karnataka Sales ...

After series of deliberations and Government engagements by NASSCOM, I’m glad to share that the work from home provisions are amended by Ministry of Commerce in line with our recommendations. Please find attached the SEZ amended Rules 2019. You would recall that the provisions of work from home were amended in SEZ amended rules 2018 and had completely overlooked instruction 85 issued in 2016 which allowed work from home to all SEZ employees thereby removing the restrictive conditions applicable before. The recent amendment issued in the form of SEZ amended Rules 2019 allows work from home to the following category of employees. Employees of Information Technology and Information Technology enabled Services Special Economic Zone units Employees of Information Technology and Information Tech...

Glad to share a recent circular issued by CBIC providing clarifications on treatment of sales promotion schemes under GST vide Circular No.92/11/2019-GST dated 7 March 2019.  NASSCOM had participated in the industry consultation called for by CBIC in the month of November and had shared a detailed submission on sales promotion schemes. We are glad that most of our asks are addressed vide this circular. A summary of the taxability, valuation and credit eligibility as clarified by the circular is provided below and a copy of the circular is attached. Sl. No Particulars Taxability Input tax credit eligibility 1 Distribution of free samples and gifts ·Does not qualify as ‘supply’ in the absence of consideration unless activity covered under Schedule I of CGST Act (related party transaction) In...

On March 5, 2019, Central Board of Direct Taxes (CBDT) issued a notification (no.13/2019) to give effect to February 19, 2019 notification issued by DPIIT stating the provisions of Section 56(2)(viib) of the Income Tax Act shall not apply to consideration received by a company for issue of shares that exceeds the face value of such shares, if the said consideration has been received from resident person by a company which fulfills the conditions specified in para 4 of notification dated the 19th February, 2019 issued by Department for Promotion of Industry and Internal Trade (DPIIT) and files a declaration referred to in para 5 of the said notification. The notification has come into force retrospectively from February 19, 2019. NASSCOM’s policy brief on DIPP notification dated February 19...

The Task Force formulated by Ministry of Finance was assigned the task to draft direct tax laws in line with the norms prevalent in other countries, incorporating international best practices and keeping in mind economic needs of the country. The discussion on these reforms started in September 2017, when Prime Minister Narendra Modi acknowledged that more than half a century old Income Tax Act needed to be re-drafted and a new Direct Tax Code be introduced. The Task Force, under the convenorship of Akhilesh Ranjan, Member (Legislation), Central Board of Direct Taxes (CBDT) was scheduled to submit its report on the new tax laws by February 28, 2019. However, it has now sought extension of three months to incorporate suggestions and submit its final report. We shall keep you posted on furth...

In another attempt to identify shell companies, the Ministry of Corporate Affairs, vide issue of notification dated February 21, 2019, has notified Companies (Incorporation) Amendment Rules, 2019 (“new rules”). The new rules are effective from February 25, 2019. The amendment seeks to introduce rule 25A which requires companies to file particulars of the company and its registered office in prescribed form. Applicability – Every company incorporated on or before 31st December 2017 to file e-form ACTIVE (Active Company Tagging Identities and Verification) Due date for filing e-form – April 25, 2019 Exceptions to the rule- Companies which have not filed financial statements or annual returns or both with Registrar shall be restricted from filing e-Form-ACTIVE (INC-22A) unless suc...

Ministry of Corporate Affairs (MCA), vide issue of notification on January 22, 2019, had directed every specified to file details in MSME Form I of outstanding dues to Micro or small enterprises suppliers existing on date of notification of the order within 30 days from the date of publication of this notification (i.e, February 21, 2019). However, pending the deployment of MSME Form I on MCA 21 portal and in order to avoid inconvenience to stakeholders, MCA, vide issue of General Circular No 01/2019 dated February 21, 2019, has clarified that the above-mentioned period of 30 days shall be reckoned from the date the said e-form is deployed on MCA 21 portal. Copy of general circular is attached for reference. NASSCOM’s earlier policy brief on the subject is accessible here: Company Rules Up...