In Focus
NASSCOM's webinar on export control regulations with DGFT, MEITY and MEA
The webinar on July 27, 2021, discussed the industry's experiences with respect to Intangible Technology Transfers (ITT) and the Global Authorisation for Intra-Company Transfer (GAICT) policy. A NASSCOM 'Booklet on SCOMET Category 8 and Intangible Technology Transfers' (available here) was launched by senior government officials from Ministry of External Affairs, Directorate General of Foreign Trade (DGFT) and Ministry of Electronics and Information Technology (MeitY). Details on the discussions at the webinar can be found here.
Recent policy success:
- The draft of the revised GAICT policy, published by the DGFT, incorporates most of the industry's suggestions and will ease regulatory burden on the industry. We are now pursuing the government for the final notification of the revised policy and associated procedures; and
- An independent revalidation process for SCOMET authorisations has been notified by the DGFT on July 27, 2021. This benefits the industry in terms of a streamlined and simple procedure for revalidation of export control authorisations.
Few other policy developments being considered positively by the Government, including:
- An online system for amendment/revalidation of export control authorisations and post-reporting requirements is expected to be introduced from August 5, 2021. A web-based online portal will be a big step towards ease of doing business;
- A dedicated chapter on SCOMET authorisations under India's Foreign Trade Policy. The revised Foreign Trade Policy is expected to be come into force in October 2021;
- Formulating a policy for bulk-licenses to be utilised for multiple end-users and destinations, beyond the restrictions of intra-company transfers; and
- A Handbook on Intangible Technology Transfers to be released in the upcoming months by MeitY.
We will continue to work closely with the industry and government to drive these developments. For more information, kindly write to garima@nasscom.in.
DoCA: Suggestions on the revised draft of Consumer Protection
(e-Commerce) Rules
NASSCOM made a submission in response to the stakeholder consultation on the draft amendments to the Consumer Protection (e-Commerce) Rules, 2020 (e-Commerce Rules) by Department of Consumer Affairs (DoCA), Ministry of Consumer Affairs. Overall, our submission emphasised the centrality of consumer protection while regulating e-commerce under the Consumer Protection Act, 2019, imposing obligations while considering the uniqueness of different e-commerce models and ensuring maximum protection to the consumer in case unfair trade practices are undertaken. Our detailed submission along with a clause-by-clause review of the proposed amendments and suggested changes to the text of the e-Commerce Rules can be found here.
MoF: Request for deferment of timeline for completion of assessments for 3 successive Assessment Years under the Income Tax Act, 1961 (IT Act)
As per the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and subsequent circulars/notifications issued, the deadline for concluding assessment proceedings for the following Assessment Years (AY) is September 30, 2021:
- AY 2017-18 - for Transfer Pricing (TP) cases,
- AY 2018-19 - for TP cases as well as non-TP cases
- AY 2019-20 - for non-TP cases.
Coincidence of timelines for completion of assessment for 3 AYs would not only be a burden on the taxpayers but may also result in additional workload on the revenue authorities, considering the COVID-19 situation. In this regard, we have made a submission to Ministry of Finance (MoF) requesting them to defer the timelines for AY 2018-19 and AY 2019-20 in a staggered manner (say to December 2021 and March 2022 respectively).
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MoF: Request for clarifications under S. 194-O of the Income Tax Act, 1961 relating to deduction of tax at source by e-commerce operator
Based on the feedback received from the industry, NASSCOM made a submission to MoF highlighting issues which require clarification for smooth implementation of S. 194-O. The issues include exclusion of payment gateways/ intermediaries from the definition of e-commerce operator, clarity on treatment of sales returns, non-applicability of TDS provisions on incidental charges and exports, amongst others. We have requested MoF to issue guidelines under S. 194-O of the IT Act clarifying the above aspects, similar to Circular no.13 of 2021 which provided guidelines for implementation of S.194Q of IT Act.
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MoF: Request for extension of timeline for filing Form 1 relating to Equalisation Levy (EL) due to technical issues
Equalisation Levy Rules, 2016 requires furnishing of annual statement in Form 1 in respect of all specified services chargeable to EL during any financial year before June 30 of the following financial year. Due to catastrophic second wave of COVID-19, the time limit was extended by one month to July 31. However, taxpayers are facing issues in accessing the income tax portal for filing Form 1. As a result, the industry has not been able to file Form 1 due to technical glitches. In this regard, we have made a submission to MoF requesting them to grant extension in filing Form 1 for financial year 2020-21 by one month (i.e., till August 31, 2021).
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NFRA: Response to Consultation Paper on Enhancing Engagement with Stakeholders
National Financial Reporting Authority (NFRA) was established in October 2018 as an independent regulator for accounting and auditing. NFRA has rolled out a consultation paper to seek views from public on enhancing engagement with stakeholders. Based on feedback from industry, NASSCOM has submitted a detailed response on specific questions highlighted in the consultation paper. Our suggestions include ways to fill up positions on the Stakeholder Advisory Group, need for a full-time fellowship programme for conducting research studies, importance of public communication with stakeholders on a regular basis, formulating clear policies for finalising the principles and methodology for selecting companies for inspection, contents of the website and mobile application of NFRA, among others.
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MoLE: Feedback on Code on Social Security (Employee's Compensation) (Central) Rules, 2021
NASSCOM based on the industry inputs received from the industry made a submission towards the Draft Rules to the Ministry of Labour and Employment (MoLE). In our submission, we suggested that the timeline for the payment of compensation should be changed from the default 30 days to the 30 days from the date of receipt of the notice of claim from the employee. We further sought clarity on the applicability of the provisions that mandate certain establishments to maintain a notice book.
Data Centre Policy: Interaction with Government of Karnataka
Karnataka is formulating a Data Centre Policy for the State. In an interaction organised the Govt. of Karnataka and NASSCOM, leading industry players suggested that suitable land be made available closer to the major cities, uninterrupted power be provided, building norms be relaxed and a deemed approval system be introduced for regulatory clearances, among others.
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Public Procurement: Alternate mechanism to calculate local value addition
Government of India has mandated that only local suppliers can participate in any public procurement with an estimated value less than INR 200 crores. To address the difficulties that arise out of this, we held discussion with MeitY and suggested an alternate formula to calculate local value addition that focusses on employment and investment in India. Further, we requested that all empanelled CSPs be treated as local suppliers, as these CSPs deliver services to the Government using the resources in India. We have also made the same suggestions to Ministry of Commerce.
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Labour Reforms: Meeting with Karnataka Labour Department on Draft IR Rules
NASSCOM participated in a meeting with the Karnataka labour department which was organised to discuss the industry feedback on the Karnataka Industrial Relations Rules, 2021. In line with our submission, NASSCOM reiterated the need for the Government to consider providing flexibility on the requirement of Grievance Redressal Mechanism and Work Committee for those establishments which already have an existing redressal mechanism in place or towards maintaining amity between the employer and the employee. We also recommended that the Rules should enable employers to notify changes in the working conditions in an electronic medium instead of mandating establishments to publish such changes in physical form.
Request for suggestions for Pre-Budget Memorandum 2022-23
NASSCOM has begun preparation on the Pre-Budget Memorandum 2022-23 (PBM) to be submitted to Ministry of Finance. We plan to structure the document around seven themes to suggest measures to boost Indian economy post COVID-19 and to sustain global competitiveness of the Indian IT-BPM sector. In this regard, we request you to share your inputs/ suggestions before August 20, 2021 with tejasvi@nasscom.in and jayakumar@nasscom.in.
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National Health Authority (NHA): Consultation paper on Unified Health Interface (UHI)
UHI is an open, interoperable platform which intends to connect all digital health solutions and aims to transform the way digital health services are rendered in India. The paper provides an overview of the proposed design, scope, and role of UHI and invites comments from the stakeholders. We request members to share any feedback to jayakumar@nasscom.in on or before August 16, 2021.
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Request for Inputs: Draft Code on Wages (Rajasthan) Rules, 2021
The Rajasthan labour department on July 14,2021, published the Draft Code on Wages (Rajasthan) Rules 2021 (available here). The Rules prescribe the process and fixation of calculating the Minimum Rate of Wages, process of making payment, process of constituting the State Advisory Board for the purpose of fixing Floor Wage, procedure of deduction of wage and recovery etc. Last date for sending inputs to Govt. is August 28, 2021. Kindly send your inputs to deepak@nasscom.in latest by August 15, 2021.
MoCA: Feedback on Draft Drone Rules, 2021
On July 15, 2021, Ministry of Civil Aviation (MoCA) had released Draft Drone Rules, 2021, which will supersede the Unmanned Aircraft System Rules, 2021, that came into force on March 12, 2021. According to MoCA, the overhaul of the rules is aimed at providing a fillip to the drone industry. NASSCOM had invited inputs from the industry till July 29, 2021 and will be making a submission to MoCA.
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Report Launch: Digital Lending
NASSCOM and PwC are coming up with a report on Digital Lending where we will be highlighting the existing bottlenecks in the lending space, discuss regulatory support needed to promote innovation in this sector while safeguarding the interests of borrowers. The Reserve Bank of India (RBI) has set up a Working Group (WG) to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place. NASSCOM has been providing inputs to the WG at regular intervals based on industry consultation. This report we are working on, is also aimed in the same direction, i.e., to provide feedback and suggestions to the RBI WG.
NASSCOM Survey: Building a robust start-up ecosystem
NASSCOM in partnership with TiE Delhi-NCR and Grant Thornton Bharat, is conducting a survey of start-ups, start-up founders and investors to gain deeper insights on issues such as access to domestic and international capital, innovative ways of raising capital, streamlining the process for foreign investments, among others. Please participate in the survey here. The responses will be used to provide recommendations to the government. For more details, kindly contact garima@nasscom.in.
DGFT: Notification of independent revalidation process for SCOMET authorisations
As a response to NASSCOM's advocacy with the DGFT, an independent revalidation process for SCOMET authorisations has been notified by the DGFT vide Public Notice 27/2015-20 dated July 27, 2021. This benefits the industry in terms of a streamlined and simple procedure for revalidation of export control authorisations.
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DGFT: Notification of revised draft of GAICT
In response to our earlier submissions, DGFT has published a revised draft of the GAICT policy. The revised draft policy has incorporated most of our suggestions, such as, applicability to exports and/or re-export of SCOMET items, intra-company transfers from an Indian parent company to its foreign subsidiary to be made eligible, a third-party may also be involved in the supply chain and included in the GAICT authorisation, removal of the condition that the original import must have been under a license exception etc.
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