Author Archives: shreechaturbhuj

The time has come to take on the policies of protectionism and unilateral measures by some developed countries that are having an adverse effect on global free trade and if this continues there will be recession in the world and no country will escape it, said Union Minister of Commerce & Industry and Railways, Piyush Goyal.

He was speaking at an international dialogue on South-South and Triangular Cooperation today in New Delhi. Commerce and Industry Minister urged that all member countries must take up reforms of the WTO and not deal with issues in a piecemeal manner. We cannot afford to walk away from the current system but all member countries of the WTO must re-engage to ensure that  the rule-based, transparent, and non-discriminatory governance that free-trade requires is taken forward honestly and in a non-discriminatory manner and keeping in mind the interests of different member countries with disparate GDP.

Piyush Goyal further stated that the policies of protectionism being followed by some countries in the developed world are affecting engagement between countries for trade in goods, services and protection of investments.

The aspirations of people cannot be held back for a better life: for sustainable growth of the seven billion people of the world and India is committed to the Sustainable Development Goals (SDGs) and believes that peoples’ aspirations cannot be held back till 2030, said the Commerce and Industry Minister. India is not going to wait till 2030 to give access to energy, literacy and clean potable water to its people, India is fast-tracking its efforts to reach the SDGs to the last man at the bottom of the pyramid. India also desires that this pace of development reaches people in the rest of the world.

South-South cooperation is a broad framework of collaboration among countries of the South in the political, economic, social, cultural, environmental and technical domains. Involving two or more developing countries, it can take place on a bilateral, regional, intraregional, or interregional basis. South-South cooperation is a manifestation of solidarity among peoples and countries of the South and the attainment of the goals of Sustainable Development.

Commerce and Industry Minister hoped that the South-South and Triangular Cooperation will help the developed world become a part of the developing world’s growth agenda.

Source: PIB

In order to provide hassle-free tax environment to the Start-ups, a series of announcements have been made by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman in her General Budget Speech, 2019, and also on 23rd August 2019. To give effect to these announcements, the Central Board of Direct Taxes (CBDT) issued various circulars/clarifications in the matter from time to time. Vide Circular No.22/2019 dated 30.08.2019, CBDT has consolidated all the circulars/clarifications issued on this subject for the ease of compliance of Start-up entities. The present circular inter alia highlights the following:-

Simplification of process of assessment of Start-ups: Circular No. 16/2019 dated 7th of August, 2019 provided for the simplified procedure of assessment of Start-ups recognized by DPIIT. The circular covered cases under “limited scrutiny”, cases where multiple issues including issue of section 56(2)(viib) were involved or cases where Form No.2 was not filed by the Start-up entity. Detailed process of obtaining mandatory approval of the supervisory authorities for conducting enquiry was also laid down by this circular.

Time limit for Completion of pending assessments of Start-ups: The time limit for completion of pending assessments was also specified by CBDT. All cases involving “limited scrutiny” were to be completed preferably by 30th September, 2019 and the other cases of Start-ups were to be disposed off on priority, preferably by 31st October, 2019.

Procedure for addition made u/s 56(2)(viib) in the past assessment: Vide clarification issued on 9th August,2019 it was provided that the provisions of section 56(2)(viib) of the Act would also not be applicable in respect of assessment made before 19th February, 2019 if a recognised Start-up had filed declaration in Form No. 2. The timelines for disposal of appeals before CsIT(Appeals) was also specified. Further, the addition made under section 56(2)(viib) would also not be pressed in further appeal.

Income-tax demand: It has been reiterated time and again by CBDT that outstanding income-tax demand relating to additions made under section 56(2)(viib) would not be pursued and no communication in respect of outstanding demand would be made with the Start-up entity. Other income-tax demand of the Start-ups would not be pursued unless the demand was confirmed by ITAT.

Constitution of Start-up Cell: Vide order dated 30.08.2019, CBDT has constituted a Start-up Cell under the aegis of Member(IT&C), CBDT to redress grievances and to address various tax related issues in the cases of Start-ups. Grievances can also be filed online at startupcell.cbdt@gov.in.

The Circular No.22/2019 dated 30.08.2019 is available on www.incometaxindia.gov.in.

PIB

The Steering Committee on Fintech related issues constituted by the Ministry of Finance, Department of Economic Affairs, today submitted its Final Report to Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman in her office in New Delhi.

The Committee was constituted in pursuance to the announcement made by the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley in his Budget Speech 2018-19 (Para 75). The report outlines the current landscape in the Fintech space globally and in India, studies the various issues relating to its development and makes recommendations focusing on how fintech can be leveraged to enhance financial inclusion of MSMEs with a view to making fintech related regulations more flexible and generate enhanced entrepreneurship. The Committee report also identifies application areas and use cases in Governance and financial services and suggests regulatory upgrades enabling fintech innovations.

The Committee has recommended that the RBI may consider development of a cash-flow based financing for MSMEs, development of an open-API MSME stack based on TReDS data validated by GSTN and a standardised and trusted e-invoice infrastructure designed around TREDS-GSTN integration.

It has also recommended that Insurance companies and lending agencies to be encouraged to use drone and remote sensing technology for crop area, damage and location assessments to support risk reduction in insurance/lending business.

Given the rapid pace at which technology is being adopted primarily by private sector financial services, the Committee recommends  Department of Financial Services(DFS) to work with PSU banks to bring in more efficiency to their work and reduce fraud and security risks. Significant opportunities can be explored to increase the levels of automation using Artificial Intelligence (AI), cognitive analytics & machine learning in their back-end processes.

The Committee has highlighted the positive impact of Fintech innovations on sectors such as Agriculture and MSMEs.  And it has recommended NABARD to take immediate steps to create a credit registry for farmers with special thrust for use of fintech along with core banking solutions (CBS) by agri-financial institutions, included Cooperative societies.

The Committee recommends a special drive for modernisation and standardisation of land records by setting up a dedicated National Digital Land Records Mission based on a common National Land Records Standards with involvement of State Land and Registration departments, with a view to making available land ownership data on an online basis to Financial Institutions.

The Committee also recommends a comprehensive legal framework for consumer protection be put in place early keeping in mind the rise of fintech and digital services.

It has also recommended adoption of Regulation technology (or RegTech) by all financial sector regulators to develop standards and facilitate adoption by financial sector service providers to adopt use-cases making compliance with regulations easier, quicker and effective. Similarly, it has also recommended that financial sector regulators develop an institutional framework for specific use-cases of Supervisory technology (or SupTech), testing, deployment, monitoring and evaluation.

Further, an Inter-Ministerial Steering Committee will be set up on fintech Applications in Department of Economic Affairs (DEA), Ministry of Finance, to continue to carry on the tasks of implementing this report, including exploring and suggesting the potential applications in government financial processes and applications, particularly accounting and asset management, welfare services, taxation, and handling citizen grievances. While the Inter-Regulatory Technical Group (IRTG) set up under the FSDC will be the forum of inter-regulatory coordination on Fintech.

Following the deliberations of the Committee it was considered necessary to have a nodal agency to coordinate developments across Ministries and Regulators in the area of Fintech. A dedicated team on Digital Economy & Fintech is being set up in the Investment Division, Department of Economic Affairs, Ministry of Finance for coordination on FinTech with relevant Ministries.

The Steering Committee, which submitted the report, is headed by Secretary, Department of Economic Affairs. The other members of the committee are Secretary (MeitY); Secretary (DFS); Secretary (MSME); Chairperson (CBIC); CEO (UIDAI); Deputy Governor (RBI); Executive Director (SEBI); CEO, Invest India with Additional Secretary (Investment), DEA as the convener of the panel

A copy of the Report of ‘Steering Committee on Fintech related issues’ has been placed on the website of the Department of Economic Affairs today.

Source: PIB