Policy Advocacy
Consultation Paper: Framing India’s Response on Electronic Transmissions at WTO
The World Trade Organisation (WTO)’s Customs Moratorium on Electronic Transmissions (Moratorium) is due for re-assessment at the 12th Ministerial Conference of the WTO being held at Nur-Sultan, Kazakhstan from 8 to 11 June 2020. Currently, digitised products are not subjected to customs as historically this presented a technical challenge and thereafter the Moratorium gave it a legal cover. Overtime, the technical feasibility has improved and therefore the case for an automatic rollover of the ‘temporary’ moratorium without assessing the economic implications has weakened. Both the economic impact and technical feasibility are directly related to what is considered under the scope of electronic transmission. A wide definition could present many challenges and make it impractical to lift th...
SCOMET Licensing Issues Impacting the IT Industry in India
On 18th December, 2019 the Directorate General of Foreign Trade (DGFT) organised an interaction with the industry in New Delhi to take feedback on export of dual use items. NASSCOM and DSCI participated in this meeting to provide their feedback on SCOMET licensing issues. NASSCOM’s inputs (over and above inputs from NASSCOM members present at the meeting) have been summarised below: Licence Exceptions for Encryption Items Some Indian IT-ITeS companies provide customised software to business consumers abroad which incorporate encryption functionality for the purposes of data confidentiality, even where information security is not the primary function of the software. In such cases, the company must obtain an export licence as information security items are typically controlled items under t...
NASSCOM Fintech Policy Roundtable on MDR and Digital Payment Adoption | 17th January in Mumbai
Dear Members, Over the last few days, major developments have taken place pertaining to the zero MDR announcement, such as: Businesses with turnover of more than ₹ 50 crore have to mandatorily provide facilities for accepting payments through electronic modes, such as, RuPay debit cards, UPI and UPI QR codes. Section 10A of the Payment, and Settlement Systems Act 2007 when read in conjunction with Section 269SU of the Income-tax Act, 1961, alludes that no bank or system provider shall impose any charge on a payer making payment, or a beneficiary receiving payment, through RuPay debit cards, UPI and UPI QR codes. The MDR reimbursement schemes by MeitY stands closed. We are organizing a roundtable to understand the impact of these policy changes on different stakeholders. Based on the discus...
Event Update-NASSCOM-DSCI Consultation Series on the Personal Data Protection Bill, 2019 (Session 4 – Bengaluru)
Dear Members, The Personal Data Protection Bill, 2019 (PDP Bill, 2019), which was tabled in the Lok Sabha on 11 December, 2019, now stands referred to a Joint Parliamentary Committee (JPC) of both houses of the Parliament, chaired by Smt. Meenakshi Lekhi, Member of Parliament. The JPC will be submitting its report on the PDP Bill, 2019 in the last week of the Budget Session of the Parliament in 2020, after due consultation with stakeholders. In this backdrop, NASSCOM-DSCI has been conducting a series of member consultation meetings to solicit inputs and identify key impact areas of bill for the industry. We would be using these inputs to enrich our position paper that would be taken to the JPC and the Government. Do note that NASSCOM-DSCI has already provided detailed submissions in respec...
Policy Brief: RBI permits video-based customer verification to address KYC challenges faced by the fintech industry
Context On 9 January 2020, in a welcome step, the Reserve Bank of India (RBI) issued a circular to amend the Master Direction on know-your-customer (KYC). The circular enables leveraging of digital channels for Customer Identification Process (CIP) by Regulated Entities (REs). It permits Video based Customer Identification Process (V-CIP) as an alternate method of establishing the customer’s identity, for customer on-boarding. It also highlights the possibility of use of e-KYC facility by fintech companies for verifying customers who voluntarily provide their Aadhaar number. NASSCOM had made several representations to the Department of Revenue, Unique Identification Authority of India (UIDAI), NITI Aayog, Ministry of Electronics & Information Technology (MeitY) and RBI with a request t...
Formulation of Startup Advisory Council to address regulatory issues of startups
The Department for Promotion of Industries and Internal Trade (DPIIT) recently decided to constitute a startup advisory council to study various regulatory issues impacting growth of startups in India. These, amongst others, will include measures aim at easier incorporation of a company, easier compliances, reduction of tax compliance to less than one hour per month. The Council will provide an institutional platform to the startup eco-system wherein stakeholders will be able to highlight their concerns and engage with the government. In effect, the Council will act as a bridge between the startup community as well as the government and all the regulators. The advisory council will comprise of current entrepreneurs, past startup founders, incubators, representatives from academia, global a...
MCA Clarification on CSR: Unspent CSR amount must be carried forward and spent
As per section 135 of Companies Act, 2013 (“Companies Act”), every company having net worth of INR 500 crore or more, or turnover of INR 1000 crore or more or net profit of INR 5 crore or more during the immediately preceding financial Year (FY) shall spend at least 2% of its average net profits as Corporate Social Responsibility (CSR). Further, as per 2nd proviso to sub-section 5 of section 135, “if a company fails to spend CSR amount, the Board shall, in its report, specify reasons for not spending the amount. In a recent communication to NASSCOM, Ministry of Corporate Affairs (MCA) has clarified that in order to comply with this mandate, companies need to compulsorily spend the entire CSR amount (i.e. 2% of the net profits of the company). Accordingly, even if the Director’s Report spe...
NASSCOM’s Representation to GST Council on key issues faced by IT-BPM industry
Based on inputs from our members, NASSCOM has submitted a detailed note to GST Council highlighting suggestions to address GST related issues faced by IT- BPM industry. The suggestions are divided into three categories: Change in GST rate Amendment to GST Act Issue of notifications/clarifications. Implementing these measures would significantly improve ease of doing business and provide certainty to the industry with respect to the treatment under the GST. The document is attached for your kind reference.
Seeking Inputs: Labor Codes on Social Security and Industrial Relation 2019
Dear Members, As you are aware, the Government is undertaking labour reforms to rationalize and simplify existing labor laws by codifying them into four Labour Codes i.e. Codes—on wages, social security, industrial relations, and health, safety and working conditions. Out of these, the Code on Wages has already been passed by the parliament and awaiting its affective date of implementation. The Code on safety, health and working condition was introduced in the last monsoon session and was sent to Standing Committee for its examination. The report of the Standing Committee is yet to be tabled. The last two Codes i.e. the Codes on Industrial Relations 2019 and Code on Social Security 2019 were introduced in the last parliament session and sent to the Standing Committee on Labor under the Cha...
Policy Brief: Highlights of the new type of semi-closed PPI introduced by RBI
Context On 24 December, the Reserve Bank of India (RBI) released the specifications of the new type of semi-closed PPI. The Central Bank said that the directive is issued under Section 18 read with Section 10(2) of Payment and Settlement Systems Act, 2007 and is effective from the date of issuance of the circular. Accordingly, the Master Direction on Issuance and Operation of Prepaid Payment Instruments (PPI-MD) have been modified to introduce this new type of PPI, it added. On 5 December, RBI had proposed to introduce a new type of PPI which can be used only for purchase of goods and services up to a limit of ₹10,000. It had also announced revision of P2P (peer-to-peer) lending limits and issuance of on-tap licenses for small finance banks. These were a part of various developmental and r...
