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MONTHLY MAILER, OCTOBER 2022 | NASSCOM PUBLIC POLICY

Sudipto

@Sudipto

October 7, 2022

Monthly Newsletters

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NASSCOM : Public Policy | Volume 3 | Issue 10 | October 2022

Call for inputs: The Indian Telecommunication Bill, 2022

On September 21, 2022, the Department of Telecommunications (DOT) released a draft Indian Telecommunication Bill, 2022 (Telecom Bill), following the consultation paper in July, 2022 to which we have submitted comments. The Telecom Bill proposes to replace - Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950. It introduces changes to the interface between the DOT and the Telecom Regulatory Authority of India (TRAI) by amending the TRAI Act, 1997. Comments on the DOT are to be submitted by October 20, 2022. Kindly share your inputs by October 14, 2022, to vertika@nasscom.in, sudipto@nasscom.in and varun@nasscom.in.

NASSCOM-DSCI Survey: Compliance with Cyber Security Directions

The Directions issued by the Indian Computer Emergency Response Team (CERT-In) have now been in effect for over three months. Further, the short window of general exemption to MSMEs and a specific exemption to data centres, virtual private network/server providers, and cloud service providers, from subscriber validation requirement, has expired on September 25, 2022. We are conducting an industry wide survey to assess the readiness of the industry and the challenges faced in complying with these Directions (available here). Kindly share your responses by October 10, 2022.

DOT: NASSCOM-DSCI feedback on creating a new telecommunication framework in India

In our response to the DOT's consultation, prior to the release of the Telecom Bill, we have proposed the following outcomes in the new law (1) moving away from licensing by default (2) lower market entry and compliance barriers for telecom based value added services (3) a modern framework for spectrum management (4) privacy safeguards in interception frameworks (5) ensuring that standards align with global standards and (6) regulatory governance framework being encoded in the law.

TRAI: Feedback on entry fees and bank guarantees

We have requested the TRAI to consider rationalising entry fees and bank guarantees in telecom licenses. We have highlighted that there is no justification to continue requirements like entry fees and bank guarantees and they should be removed across the board to lower market entry barriers in the telecom sector.

CERT-IN: Representation on Cyber Security Directions

As discussed above, as part of our ongoing advocacy efforts, we have requested the CERT-IN to: (1) incorporate the clarifications provided in the FAQs and verbally into the text of the Directions (2) recognise the concept of "reasonable security practices" so that entities can implement the Directions to their specific sectoral and organisational contexts (3) rework the concept of "validation" in Direction 5 to ensure that obligation is proportionate and compliance is practically implementable. For more information, kindly write to varun@nasscom.in and apurva@nasscom.in.

Goods and Services Tax (GST): Representation to review tax position on secondment arrangements

We have requested the GST officials to review the tax position on secondment arrangements pursuant to a recent Supreme Court (SC) ruling in case of M/s Northern Operating Systems Pvt Ltd. The SC ruling has overruled the earlier settled precedent on the taxability of salary reimbursements for employees on secondment. We have requested for a one-time tax waiver for pre-GST regime and one-time waiver of interest and penalty under the GST.

GST: Representation on proposed changes to Form GSTR-3B

Several procedural changes have been introduced in Form GSTR-3B approved by the GST Council in its 47^th meeting. To ensure clarity and ease to the industry, we have sought clarifications on many of the changes, like, whether inter-head adjustment of excess credit notes against GST liability is allowed and whether any change in the value of auto-populated number can lead to inquiry proceedings.

Securities and Exchange Board of India (SEBI): Representation to rationalise Minimum Public Shareholding (MPS)

We made a representation to the SEBI to rationalise the existing mechanism to meet MPS norms under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. We have requested for 1) allowing promoters of listed entity to sell a pre-determined percentage of shares through off-market sale to identified buyers or institutional investors; 2) including trusts with independent trustees (not linked to promoters) for complying with MPS; and 3) reducing the current MPS threshold from 25% to 20%.

SEBI: Representation on exercise of employee stock options granted by listed entities

We made a representation to the SEBI to allow cashless exercise of stock options through Sell-All and Sell-to-Cover mechanism under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations. Allowing this change would provide clarity to the option holders and facilitate ease of doing business in India.

Special Economic Zone (SEZ): Representation for clarification on debonding of second-hand IT assets from SEZ

We made a representation to SEZ and Customs officials requesting them to clarify that the requirement of obtaining permission from the Directorate General of Foreign Trade (DGFT) under Foreign Trade Policy applies only when IT assets are being imported in India for the first time. Currently, authorities are asking for permission from DGFT in case of exit from SEZ or movement of employees from SEZ to Domestic Tariff Area (DTA), by treating them as import of second hand/ used goods into India. However, till date, authorities have not issued any permissions in the past for de-bonding assets from SEZ to DTA unit, thereby leading to challenges for the industry.

Ministry of Health and Family Welfare (MoHFW): Feedback on the draft Medical Devices (Amendment) Rules, 2022 (Draft Rules)

In a welcome move, the Draft Rules propose exemption from licensing requirements for manufacturing and import of a certain class of medical devices (Class A non-measuring/non-sterile). We have highlighted to the MoHFW the need for clarity on the application of various Chapters of the Medical Devices Rules, 2017 to the exempted devices and the treatment of fee already paid for obtaining license on such devices.

Reserve Bank of India (RBI): Representation on Card-on-File Tokensiation (CoFT)

We have highlighted to the RBI the very low success rate of recurring payment transactions in a tokenised transactions and challenges with one-time payments that are likely to disrupt the operations of digital service providers from October 1, 2022, when RBI’s mandate to scrub card on file data and shift to tokenised transactions comes into effect.

DGFT: Feedback on the proposed amendments related to export of drones

We submitted feedback on the proposed amendments to the export control laws concerning export of Drones. We have made the case that the proposed inclusion of commercial drones, such as, delivery drones and surveillance drones with greater than 10x zoom as items to be covered under the ambit of export control is a challenge for the industry. Instead, India's export control list should be aligned to the international Missile Technology Control Regime.

Department of Consumer Affairs (DoCA): Feedback on proposed adoption of the Indian standard on Online Consumer Reviews

As part of our consultations with the DoCA, we have highlighted the likely unintended consequences, especially for the small sellers, of mandating the adoption of a what has been designed as a voluntary standard (International Standard Organisation (ISO) standard 20488:2018). Further, we suggested ways to strengthen the Consumer Protection (e-Commerce) Rules, 2020 to curb manipulation of online user reviews.

Uttar Pradesh (UP): Feedback for state IT Policy

We had a discussion with the UP government on the upcoming Uttar Pradesh Information Technology Policy 2023-2027. We have suggested the 1) creation of an IT-ITeS advisory council to aid policy implementation; 2) development of a digital platform for companies to avail benefits under the upcoming policy; 3) provision of capital and operating expenditure support to companies setting up units in the state.

Haryana Labour Department: Notification to employ women in the night shift

We met the Additional Chief Secretary to the Government of Haryana, Labour Department to discuss the challenges the industry is facing in implementing the Night Shift Notification which lays down conditions for employing women during night shifts in the state of Haryana. The meeting was constructive, and we are expecting a revised notification to address the concerns of the industry. For more information, kindly write to sudipto@nasscom.in and dagarwal@nasscom.in.

Bureau of Indian Standards (BIS): Reviewing the Standard on Online Consumer Reviews

We participated in the discussion organised by BIS to review the Indian Standard titled, 'Online Consumer Reviews - Principles and Requirements for their Collection, Moderation and Publication'. Our recommendations focused on making the Standard more flexible to achieve the intended objective. The BIS is likely to publish a revised version of the standard. For more information, kindly write to garima@nasscom.in.

Call for inputs: Consultation Paper on Building Trust in the Open Network for Digital Commerce (ONDC)

ONDC has released a consultation paper on 'Building Trust in the ONDC Network'. The paper seeks responses on trust considerations in order placement, payments, grievance management, etc. The deadline for response is October 31, 2022. Kindly share your inputs on the consultation paper by October 20, 2022, by writing to garima@nasscom.in.

Call for inputs: Customs Consultative Group (CCG) meeting

Directorate General of Export Promotion is in the process of scheduling 16^th All India CCG meeting. To prepare the agenda for discussion, they have invited inputs from NASSCOM. Kindly share your inputs by October 5, 2022 by writing to tejasvi@nasscom.in.

Call for inputs: Standing Committee on Finance (Committee) to review the Competition (Amendment) Bill, 2022 (Competition Bill)

In August 2022, the Speaker of the Lok Sabha referred the Competition Bill to the Committee for examination and report within three months. Although the Committee has not initiated a public consultation on the Competition Bill, we are engaging with the industry to get their feedback. Kindly share your inputs by writing to dagarwal@nasscom.in and sudipto@nasscom.in.

Report: Enabling India's Drone Ecosystem

We are working on a report to examine the existing policy and regulatory challenges faced by the drone industry and provide our suggestions for the same. The report includes challenges including talent and skill gap, government procurement related concerns, research, and development of drones by private entities, etc. For more information, kindly write to apurva@nasscom.in.

Start-ups: Policy recommendations for enabling access to capital for start-ups

We, in partnership with TiE Delhi-NCR and Grant Thornton Bharat, will be releasing a report to highlight policy recommendations to enable access to capital by start-ups at various stages of their growth journey. The paper will present the findings of the survey conducted by us in August 2021. For more information, kindly write to garima@nasscom.in.

Ministry of Commerce and Industry: Extension of Foreign Trade Policy till March 2023

On September 26, 2022, a press release by the Ministry of Commerce and Industry notified the extension of Foreign Trade Policy 2015 - 2020 (FTP) by further 6 months, i.e., till March 31, 2023. This was followed up by a public notice by the DGFT, extending the Handbook of Procedures 2015 - 2020 for the same period. For more information kindly write to garima@nasscom.in.

RBI: Guidelines on Digital Lending

RBI has released guidelines on Digital Lending. The Digital Lending Guidelines are applicable to regulated entities (REs). The guidelines prohibit pool accounts of any third party, require a key fact statement, and transparency around product information.

International Financial Services Centres Authority (IFSCA): Cross border and FinTech Innovation with Monetary Authority of Singapore (MAS)

IFSCA and MAS have signed a FinTech Cooperation Agreement to facilitate regulatory collaboration and partnership in FinTech. Through this, they intend to promote collaboration in regulatory sandbox and sharing of information.

IFSCA: Guidelines for IFSCA FinTech Incentive Scheme, 2022

The IFSCA has launched a FinTech Incentive Scheme to provide financial support to FinTech activities in the form of specific grants. The scheme shall be open for both domestic and foreign FinTechs and has specific types of grants including FinTech Start-up grant, Sandbox grant, etc.

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Sudipto