Submissions and Representations

United Nations: NASSCOM feedback on inclusion of software in definition of royalties The United Nations (UN) Tax Committee (Committee) released a discussion paper on amending the current definition of Royalties included in Article 12 of the United Nations Model Double Taxation Convention Between Developed and Developing Countries (Article 12 of UN Model). Given the significance and based on inputs received from industry, NASSCOM made a submission to the Committee on October 1, 2020 highlighting that all software payments cannot be generalised and characterised as "royalty". Moreover, overlaps of proposed taxation of software payments by UN with taxation of digital economy under Organisation for Economic Co-operation and Development's (OECD) Pillar 1 and 2 guidance and unilateral measures of some countries as well as proposed Article 12B by the UN Committee on Automated Digital Services need to be addressed (read more).  COVID-19: NASSCOM sought extension of timelines for various compliances under Goods & Services Tax (GST) The GST law prescribes strict timelines for specified compliances by the registered person on or before September every year. The unprecedented situation prevailing in the country due to COVID-19, where majority of the companies are operating on a Work from Home (WFH) model, has made it difficult for companies to adhere to these timelines. Considering this, NASSCOM made a submission to GST Policy Wing on October 7, 2020 requesting them to relook at the time limit for credit availment, issuance of credit notes and rectification of invoices/ debit notes for FY 2019-20 (read more).  SEBI: NASSCOM feedback on amendments proposed under SEBI LODR Regulations In September 2020, Securities and Exchange Board of India (SEBI) released a consultation paper to solicit comments on proposed amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). Based on feedback received from members, NASSCOM submitted its response to SEBI on October 9, 2020 on the proposed amendments. While majority of the proposed amendments are beneficial in nature, the proposal on disclosure of financial results to stock exchange within 30 minutes of approval by the board may create unintended practical challenges and potentially disrupt established board processes. We have also requested SEBI to have a common unified filing portal (for both stock exchanges) where disclosure under particular requirement be made once and get disseminated to both the exchanges (read more).  SEBI: NASSCOM’s suggestions to address concerns related to disclosure requirements pertaining to forensic audit on listed companies SEBI recently issued Press Release No. 52/2020 dated September 29, 2020, which requires listed companies to make disclosure to stock exchanges of forensic audits without application of materiality. Such disclosure is required to be made in case of initiation of forensic audit as well as final audit report and comments of the management, once the audit is completed. Considering this, NASSCOM made a submission to SEBI on October 22, 2020 highlighting that the requirement of disclosure in case of initiation of forensic audit to stock exchanges can have an unintended effect of harming the interest of the Company without any corresponding public benefit. Further, NASSCOM has suggested safeguards to enable certain necessary precaution and protection in relation to the disclosures with respect to forensic audit reports (read more).  Exemption from Diesel Generator ban in Haryana; In discussions with Uttar Pradesh The Environment Pollution (Protection and Control) Authority (EPCA) had directed the Government of the States/Union Territories of National Capital Region (NCR) to implement measures under the 'Very poor' and 'Severe Category' of the Graded Response Action Plan (GRAP) from October 15, 2020, which includes ban on usage of diesel generators for purposes that are not specifically exempted. Given the implication of this measure over the functioning of Information Technology - Business Process Management (IT-BPM) industry in NCR, NASSCOM made a representation to the Government of Haryana and Uttar Pradesh on October 14, 2020 and discussed the issue with relevant authorities. In our representation, we had requested that IT-BPM sector be allowed to use diesel generators during power outage and housing colonies be exempted from the ban as most IT-BPM employees are currently working from home. In response to our request, the EPCA has exempted IT sector in Haryana from the ban.We are engaging with the Government of Uttar Pradesh for a similar exemption. In the meantime, on October 28, 2020, the Central Government promulgated an Ordinance which in effect has disbanded EPCA and has formed a new Commission to manage air quality in NCR. However, all past actions of the EPCA will continue to remain valid and be considered as taken by the new commission (read more).  TRAI: Feedback on Enabling Unbundling of Different Layers Through Differential Licensing NASSCOM submitted its response to the consultation paper issued by Telecom Regulatory Authority of India (TRAI) on October 30, 2020 on unbundling of differential layer through differential licensing. In our response, we have recommended the need to unbundle the Unified License (UL) into separate licensing regime to bring in greater competition at various layers. Currently, only one UL is required to procure network, infrastructure, and provide all telecom services. However, because of technological developments, we have suggested that there is a need for delinking the underlying networks from provision of services. We have further recommended that for service layer, Government should introduce a light touch regulatory regime (read more).

Dialogue and Discussion

Department of Telecom (DoT): Meeting of Joint Working Group on Other Service Provider (OSP) terms and conditions A meeting of the members of the Joint Working Group (JWG) along with the Secretary, DoT was held on October 5, 2020 to discuss industry requirements related to WFH under OSP terms and conditions. In the meeting, NASSCOM highlighted the need to extend the current relaxations under OSP terms and conditions for WFH on a permanent basis. NASSCOM further reiterated the need to review the OSP regime in light of the changing business requirements and advocated for a simpler OSP regime towards ease of doing business. NASSCOM is working closely with DoT towards significant easing of the OSP regime.   Union Budget 2021-22: Industry Consultations The Union Budget 2021-22 consultations by the Ministry of Finance are round the corner. In this backdrop, NASSCOM, in partnership with Deloitte India, organised video conferencing meetings on October 8 and October 13, 2020 to discuss key recommendations for Union Budget 2021-22 with member companies. The session cumulatively witnessed participation from more than 50 participants. NASSCOM will soon be making the submission to the Government on the key asks of the IT-ITeS for Union Budget 2021-22 (read more).   India AI Stack: Industry Interaction with DOT's AI Standardisation Committee The AI Standardisation Committee (AI Committee), constituted by DoT, published a discussion paper on the Framework of an Indian AI Stack in September 2020 for public consultation. In this background, NASSCOM organised an interaction on October 15, 2020 between the industry experts and the AI Committee members to discuss the proposal. The objective of developing an AI stack, key concerns that the stack aims to address and the challenges in developing the AI stack were the key points that were discussed. Further to this discussion and basis the inputs received, NASSCOM will submit detailed feedback on the discussion paper to DoT (read more).   NITI Aayog: Virtual Policy Roundtable on Data Empowerment and Protection Architecture NASSCOM organised a virtual policy roundtable on October 16, 2020, to discuss NITI Aayog's draft discussion paper on Data Empowerment and Protection Architecture (DEPA). The roundtable saw participation from companies who are both actual (for instance, existing Account Aggregator licensees) and potential stakeholders in the DEPA framework. The stakeholders raised several points with respect to the implementation roadmap for DEPA mission and the foreseeable challenges in its operationalization. NASSCOM is examining the proposals to formulate a comprehensive response to the DEPA discussion paper. Industry has been requested to send their feedback latest by November 6, 2020 to garima@nasscom.in (read more).   Second meeting of the Inter-Ministerial Working Group for enabling WFH NASSCOM, on October 19, 2020, attended the second meeting of the Inter-Ministerial Working Group (IMWG) constituted by Ministry of Electronics and Information Technology (MeitY) to look into the industry requirements pertaining to WFH. During the meeting, we reiterated the need for necessary clarifications and amendments in the existing policies related to Special Economic Zones (SEZ), Software Technology Parks of India (STPI), telecom, labour and taxations laws, for both operational certainty and ease of compliances. The meeting was attended by senior leadership from MeitY and other members of the working group.   Ministry of Labour and Employment: Meeting to discuss Standing Orders NASSCOM, as part of the CII Industrial Relations Committee, participated in the meeting organised by Ministry of Labour and Employment on Standing Orders on October 23, 2020. During the meeting, NASSCOM emphasised that standing orders were introduced to govern the working conditions of the traditional sector and the applicability of the same to IT-ITeS companies will be detrimental to the industry. We also recommended that given the unique requirements of each industry, Government should consider introducing different model standing orders for different sectors. The meeting was chaired by the Labour Secretary.   TRAI: Meeting to discuss OSP terms and conditions NASSCOM met the Chairman TRAI on October 23, 2020 to discuss various challenges currently being faced by the industry under the OSP regime. In line with our submission to TRAI's consultation paper on OSP regime (here), NASSCOM stressed on the need to abolish OSP regime altogether towards ease of doing business. We have also suggested that if required, then only entities providing voice based services should come under OSP regime and non-voice based entities including Captive Contact Centre services should be kept outside the OSP registration framework.   Data Protection: NASSCOM, DSCI Interaction with European Union (EU) Delegation to India on the impact of Schrems-II and other developments on the future of EU-India digital trade The decision of the Court of Justice of the European Union (CJEU's) in the case of Data Protection Commissioner v Facebook Ireland Ltd, Maximilian Schrems (Schrems-II) led to wide-reaching ramifications in terms of cross-border data transfers outside the EU, conducted on the basis of Standard Contractual Clauses (SCCs). In its decision, the CJEU emphasized upon the need for organisations to conduct assessments along the lines of the factors for adequacy listed out under Article 45(2) of the EU GDPR, to determine whether European data subjects are afforded appropriate safeguards, enforceable rights and effective legal remedies in the jurisdiction of export. Being outside the scope of a formal adequacy decision under the GDPR, coupled with the possibility of multiplicity of opinions across relevant DPAs, has led to uncertainty in terms of achieving meaningful compliance with SCCs and the provisions of the GDPR. Against this backdrop, NASSCOM and DSCI interacted with members of the EU Delegation to India, along with representatives of the European Commission's Department for Justice and Consumers (DG JUSTICE) and the Directorate-General for Communications Networks, Content and Technology (DG CONNECT) earlier in September. The objective of the meeting was to inter alia discuss developments relating to data regulation in India and Europe, including the Supreme Court's decision in K.S. Puttaswamy v. Union of India, the provisions of the Personal Data Protection Bill, 2019, the decision of the CJEU in Schrems-II, and the potential impact of these developments upon the future of India-EU digital trade (read more).

New and Upcoming

Virtual discussion: Policy issues affecting Start-ups in India As India is maturing as a start-up hub, it is imperative for the start-up ecosystem to remain attractive. While there are many initiatives taken by the Government to facilitate growth of Indian start-ups, there remain several policy issues that needs further attention. In this context, NASSCOM is planning to organise a virtual discussion focussing on the policy issues impacting start-ups in India, including those related to the app-store policy, anti-trust laws, access to capital, taxation of employee stock options, listing of Indian start-ups etc. As NASSCOM plans to formulate an action plan to pursue important issues with the relevant government departments, we request members to participate in the discussion actively and reach out to garima@nasscom.in in case there are specific policy issues that need to be highlighted and discussed. Further details about the policy discussion will be updated shortly.   Seeking Inputs: Amendments to Copyright Act, 1957 The Copyright Act, 1957 was passed with an objective to provide a legal framework to protect the rights of the creators of Copyright work. Subsequently, several amendments were made in the Copyright Act in 1983, 1984, 1992, 1994 and 1999 to meet the national & international requirements. Keeping in view the technological developments and increased use of internet and digitalization, the Copyright office in Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, is seeking comments on whether there is a need for amendment in the Copyright Act, 1957. In this regard, we request members to share their feedback on the same latest by November 15, 2020 as per the format available here. Kindly email your feedback to deepak@nasscom.in, indrajeet@nasscom.in and garima@nasscom.in   Webinar on labour reforms and their impact on the IT-BPM industry NASSCOM, in association with Nishith Desai & Associates will be organizing webinars on the three labour codes - Code on Social Security, Code on Industrial Relations and Occupational Safety, Health and Working Conditions Code, passed by both houses of the parliament in September 2020 ( details here). The webinar will focus on key provisions of the labour codes and their impact on the IT-BPM industry. For further details and registration, kindly write to deepak@nasscom.in.   Seeking Inputs: OECD's Report on Pillar One Blueprint and Pillar Two blueprint to address tax challenges arising from digitalisation The Inclusive Framework of OECD has released public consultation document consisting of the Report on Pillar One Blueprint and the Report on Pillar Two Blueprint. These Blueprints reflect convergent views on key policy features, principles and parameters of both Pillars, and identify remaining technical and administrative issues as well as policy issues where divergent views among Inclusive Framework members remain to be bridged. In this regard, we request you to provide your inputs on the questions specified in the consultation paper and suggestions on how it may be improved so as to ensure fairness and certainty on the incidence of taxation in a manner that imposes least compliance burden. Kindly email your inputs before November 10, 2020 to tejasvi@nasscom.in and jayakumar@nasscom.in (read more).   Seeking Inputs: Draft Industrial Relations Code (Central) Rules, 2020 The Ministry of Labour and Employment has published draft Industrial Relations Code Rules, 2020 (Draft Rules) for stakeholders' feedback. The Code on Industrial Relations 2020 (The Code) have already been passed by both houses of the Parliament earlier this year (read here). The Draft Rules prescribe the manner for selecting workers' representatives for the Bi-Partite forums, Grievance Redressal Committee as mandated under the Code. It further lays down the process of certification of model standing order, manner of notifying the change in working condition of the worker, etc. Members are requested to kindly share their feedback latest by November 16, 2020 as per the format available here. Kindly email your inputs to deepak@nasscom.in

Other Updates

GST: Status of issues raised by NASSCOM during second meeting of Karnataka Grievance Redressal Committee The second meeting of Karnataka State Grievance Redressal Committee (GRC) was organised on September 15, 2020 wherein NASSCOM raised some key issues highlighted by members. Pursuant to the meeting, GRC has shared its response with NASSCOM on the recommendations. GRC has agreed to take up some of the policy related issues like extension of IGST exemption on certain services consumed in SEZ, extension in date of filing GST annual return with GST Policy Wing (read more).   Extension of due date for furnishing Income Tax Returns and Audit Reports and GST Annual Returns Ministry of Finance (MoF) has extended the due dates of various compliances under the Income Tax Act and GST Act, pursuant a representation made by NASSCOM on October 12, 2020 requesting for extension of due date for filing income tax returns and audit report by companies for FY 2019-20 as well as to GST Policy Wing for extension of timelines for filing annual returns (Form GSTR-9 and 9C) for FY 2018-19 (read more).   Patents (Amendment) Rules, 2020 DPIIT, vide notification No. G.S.R. 652(E) dated 19.10.2020, has published the Patent (Amendment) Rules, 2020 (Rules). The key amendments introduced relates to the working Statement regarding the working of Patented Invention in India as required under Form 27 and changes to the provisions of filing of Priority documents under Rule 21 of the said Rules.The Rules have come into force from October 19, 2020 (read more).   International Financial Services Centres Authority released Framework for Regulatory Sandbox The International Financial Services Centres Authority (IFSCA) released a Framework for Regulatory Sandbox on October 19, 2020. Under this framework, entities operating in the capital market, banking, insurance and financial services space shall be granted certain facilities and flexibilities to experiment with FinTech solutions in a live environment with a limited set of real customers for a limited period. NASSCOM is engaging with various regulators and government departments, including MeitY and IFSCA, on various aspects of Regulatory Sandbox/Innovation Office. We are also working on creating awareness about Regulatory Sandbox among start-ups and identifying new areas/sectors where creation of Regulatory Sandbox is desirable (read more).

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