Search
Register

Policy Advocacy

NASSCOM Submits its Recommendations on National Open Digital Ecosystems

|

On 31 May, 2020 NASSCOM submitted its feedback to the Ministry of Electronics and Information Technology (MeitY) on the National Open Digital Ecosystems (NODE) Whitepaper. We provide below an overview of the key recommendations made in our submission: Use of distributed ledger technology to unlock the potential of NODE– The government should explore the use of blockchain particularly in land-record and title management, payment systems, education certification management, immunisation and supply chain management. This will help mitigate the risk of malicious actors manipulating information for various front end and backend access mechanisms. Need for delivery platforms to be open-source– Platforms should be open sourced so that the community can collaborate and work to improve ...

Definition of MSME revised

|

On 13th May, the Finance Minister made the first set of announcements, on the economic package. The measures focused on providing much needed liquidity infusion, esp for the MSME sector. As a part of these announcements, definition of MSMEs was changed. India, till then, defined MSMEs based on investment in plant and machinery. Also, the limit was seen too low. with many small companies being left out of the definition. The change in definition was to address this. The new definition announced is based on investment in plant/machinery and Turnover.  Further,  No distinction in definition for manufacturing and service enterprises. The new definition announced is below. Micro – Investment below 1 crore & turnover upto 5 crores Small – Investment below 10 crores & turnover upto 50 cro...

NASSCOM’s Point of View on Equalization Levy introduced vide Finance Act 2020

|

Equalisation Levy (“EL”) was introduced in India vide Finance Act 2016, subsequent Final Report of Organisation for Economic Co-operation and Development (“OECD”) dealing with tax challenges of the Digital Economy. The scope of EL introduced in 2016 was limited. It applied only on certain ‘specified services’, i.e. online advertisement and any provision, facility or service for digital or online advertising. The focus of this EL was on B2B transactions and levy applied only if aggregate amount received/ receivable by Non-Resident (“NR”) service provider exceeds INR 100,000 in a financial year. Resident or NR having Permanent Establishment (“PE”) in India were required to withhold EL @ 6%. Latest amendments to the EL provisions represent a significant increase in the scope of levy as it ext...

Representation on The Occupational Safety, Health and Working Conditions Code, 2019.

|

NASSCOM earlier this month made a detailed representation to the Government, highlighting the industry concerns on the proposed labour code on the Occupational Safety, Health and working conditions. Below is a brief summary of some of the issues highlighted by us. Overlapping Provisions: The contains several overlapping provisions related to welfare facilities, working conditions, registration etc. which already exists in the State specific Shops and Commercial Establishment laws and therefore leading to duplication. We therefore suggested that Since IT-ITES companies are regulated under the State specific Shops and Commercial Establishment Act (SCEA), the welfare measures prescribed under the SCEA should be made applicable. Further, given the nature of IT services is different from other ...

[Update] DGFT Relaxes Procedural Requirements for SCOMET Applications

|

The Directorate General of Foreign Trade (DGFT) has relaxed some procedural requirements for SCOMET export applications given the challenges which the industry is facing in export compliance due to the SARS-CoV-2 pandemic. The following clarifications were intimated to NASSCOM by the DGFT over email, and are temporary measures to ease export compliance requirements on the industry. DGFT to accept scanned signed copies of EUC & PO for SCOMET Export Licence applications: The DGFT has relaxed the requirement of original End Use Cum End User Certificate (EUC)/Purchase Order (PO), and allowed scanned signed copies of the same for SCOMET export licence applications. This is subject to the condition that each such document submitted before DGFT for consideration is duly authenticated by the a...

CBDT notifies Safe Harbor Rules for AY 2020-21

|

Central Board of Direct Taxes (CBDT), vide issue of Income Tax (9th Amendment) Rules, 2020  has notified Safe Harbor Rules (SHR) for Assessment Year (AY) 2020-21. As per the notification, rates applicable from AY 2017-18 to 2019-20 will continue to apply for AY 2020-21. Introduced in 2009, safe harbors provide for circumstances in which a certain category of taxpayers can follow a simple set of rules and rates under which transfer prices that are aligned to such rules are automatically accepted by the revenue authorities. It aims to provide an element of certainty to taxpayers. A safe harbor regime will, in particular, benefit taxpayers in the services sector by adopting a transfer pricing mark-up at the rate prescribed to avoid protracted litigation. Post 2009, first round of SHR provisio...

Submission to Ministry of Finance to consider revision in Advance Pricing Agreements (APAs) and mark-ups under Safe Harbour Rules

|

As you are aware, spread of Novel Coronavirus (COVID- 19) and the resulting economic slowdown has ripple effects across a range of markets hampering Multinational Enterprises (MNEs)’s operations, upsetting corporate forecasts and business plans. Global economic turmoil will, in many cases, lead to group-wide losses for entities throughout the value chains of MNEs. This unprecedented situation has warranted a revision in pricing policies while dealings within MNE groups, and in turn impacting re-allocation of profits amongst various countries where global MNEs have footprints. India is home to multiple Information Technology – IT enabled Service (IT-ITeS) companies, ranging from MNEs’ captive service units to entrepreneurial & high-end IT development companies. Disruption due to COVID-1...

NASSSCOM’s Recommendations for Data Centre Policy

|

Globally, data is being created at an unprecedented pace. Global Datasphere, which is the total amount of data created, stored and replicated is estimated to grow from 33 ZB in 2018, to 175 ZB by 2025.[1] Given this trend, there is a need for building more Data Centres to store data, which in turn can be leveraged to provide a variety of cloud services. In this background, the Finance Minister in the Budget speech this year proposed bringing out a policy to enable the private sector to build data centre parks in India. In response to this announcement, NASSCOM formed a 10 member Data Centre Policy Taskforce, comprising of senior industry leaders, to propose recommendations that can help promote the growth of Data Centres in India. The taskforce, after deliberations, arrived at specific rec...

Ministry of Finance clarifies that the provisions of section 269SU of the Income-tax Act shall not be applicable to B2B transactions

|

Context In a move towards a less-cash economy, a new provision namely Section 269SU was inserted in the Income-tax Act, 1961, vide the Finance (No.2) Act 2019. This section requires every person carrying on business and having sales/turnover/gross receipts from business of more than Rs 50 crore in the immediately preceding previous year to mandatorily provide facilities for accepting payments through prescribed electronic modes. Subsequently, vide notification no. 105/2019 dated 30.12.2019 the following modes were notified as “prescribed electronic modes”: Debit Card powered by RuPay Unified Payments Interface (UPI) (BHIM-UPI) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code) The industry and stakeholders raised concerns over the provisions set out...

Guidelines on preventive measures to contain spread of COVID-19 in workplace settings

|

The Ministry of Health & Family Welfare has issued Guidelines on preventive measures to contain spread of COVID-19 in workplace settings (link here). The guidelines, apart from detailing the preventive measures, provides clarity to companies on measures to taken when an employee shows symptoms or tests positive for Covid-19. As per the guidelines, when one or two employees are found positive, the disinfection procedure will be limited to place/areas visited by the employee in the last 48 hours. There is no requirement to close the entire office building or halt work in other areas of the office. If there is a larger outbreak, the entire building is to be closed for 48 hours, after disinfection. In case one or more employees show symptoms, they are to be isolated within the workplace an...