NASSCOM : Public Policy | Volume 2 | Issue 12

Data Governance: Joint Parliamentary Committee on Personal Data Protection Bill adopts its Report

As per news reports, the Joint Parliamentary Committee (JPC) examining the Personal Data Protection Bill (PDP Bill) adopted its report on the PDP Bill on November 22. It will now be presented during the ongoing Winter Session of the Parliament. Some members of the JPC have submitted dissent notes on specific aspects of the PDP Bill.

Going by the information available in the public domain, the report seems to provide 93 recommendations both on the text of the PDP Bill as well as more generally on digital policy. On the PDP Bill, the report recommends that (i) it serves as a single law and establishes a single regulator for both personal data and non-personal data (ii) any State agencies exempted from the PDP Bill shall be required to adhere to a "just, fair, reasonable and proportionate procedure" (iii) the State shall be given more room to process personal data without consent. On digital policy front, the report recommends (i) devising a legal framework to treat social media platforms as publishers (ii) creating an Indian alternative to the SWIFT Payment System, etc.

The report of JPC is recommendatory and not binding on the Central Government. The Government is free to directly present JPC's version of the PDP Bill or to prepare its own revised version and present it before Parliament. The JPC has also recommended that a transition time of 2 years be provided to enforce the PDP Bill. For more information, kindly write to varun@nasscom.in.

NASSCOM submits Pre-Budget Memorandum 2022-23 to Ministry of Finance

The Indian Information Technology - Business Process Management (IT-BPM) industry has proven its ability to grow, transform and remain resilient even during challenging times. This is evident from the fact that the sector clocked an estimated revenue of USD 178 billion (excluding hardware) in Financial Year (FY) 2020-21 which is over 50% to overall services exports. The Tech sector's agility has enabled the services, globally, to work pretty much seamlessly during the COVID-19 pandemic. With an addition of 138,000 people in FY2020-21, the industry continues to be a net hirer with total employment estimated at about 4.47 million (~3.2% growth).

The pandemic has created an irreversible shift where digital technologies have become an imperative across organisations and governments globally. This represents a unique opportunity for India to accelerate growth and become the digital talent hub for the world. We believe that the industry has the potential to achieve a 2X growth in annual revenue to reach USD 350 billion level by 2025-26. Given this and based on Industry inputs, we have submitted a detailed memorandum of suggestions for the Union Budget 2022-23 to Ministry of Finance. As part of our submission, we have requested government to provide clarification regarding applicability of income tax holiday in case of work from home by employees of Special Economic Zones (SEZ) units, expand scope of utilisation of SEZ Re-investment reserve, measures to improve start-up eco-system and promote Research & Development (R&D) in India, amongst others.

MeitY: Feedback on draft Handbook of Intangible Technology Transfer (ITT) Controls

We submitted feedback to MeitY on the draft Handbook on ITT Controls (draft ITT Handbook). Our feedback focussed on seeking clarity on the proposed audit mechanism and including examples to explain the meaning of 'development', 'use' and 'production' within the definition of 'technology', as well as the meaning of 'basic scientific research' and 'information in public domain'. We also suggested that a helpdesk facility be set-up by the concerned government authorities for addressing export control related queries of the industry.

Labour Reforms: Submission to Telangana State Labour Rules

We made a submission to the Government of Telangana on the draft Code on wages rules. As part of our submission, we proposed changes in the manner of calculating minimum wages, working hours, simplifying procedure for deduction and recovery of wages, amongst others. We also suggested removal of certain mandatory details such as Aadhaar number, father's name etc. from the wage slip. In addition, we also provided our feedback to the Telangana Industrial Relations Rules and made several recommendations to ease the compliance burden on the industry. For more information, kindly write to deepak@nasscom.in.

SEBI: Response to Consultation Paper on review of public issue framework

We submitted our response to Securities Exchange Board of India (SEBI) Consultation Paper on review of certain aspects of public issue framework under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. As part of our response, we highlighted that new age technology companies typically raise funds for expanding into new micro-markets and for adding or acquiring new customers, companies, technology etc. Therefore, regulations need to recognise this while addressing any gaps, in the interest of investor/shareholder protection. We also suggested that prescriptive norms that may unduly restrict a company's ability to raise capital from the public should be avoided in order to make India an attractive ecosystem for new entrepreneurs.

MeitY: Suggestion for India - UAE Free Trade Agreement (FTA); non-discrimination of digital products

Negotiations for India-United Arab Emirates (UAE) FTA are underway. MeitY sought NASSCOM's suggestions on the commitments related to 'non-discriminatory treatment of digital products'. Overall, we support the inclusion of these commitments as this will pave way for securing non-discriminatory market access for Indian digital products in the UAE. As part of our response, we highlighted that i) the term 'digital products' be defined in a manner that it includes products delivered electronically or over a carrier medium (as is the case under the India-Singapore FTA), ii) non-discrimination on digital products be with respect to foreign products as compared to Indian products and iii) the text should clarify if the non-discrimination commitment means customs duties cannot be imposed on digital products. For more information, kindly write to garima@nasscom.in.

Roundtable on United Kingdom (UK)-India FTA: Leveraging cross-border data flows to enhance digital trade

We engaged with the governments of India [Ministry of Commerce and Industry (MoCI) and MeitY], government of UK (Department for International Trade and Department for Digital, Culture, Media and Sport) and the Industry on both sides, along with UK India Business Council and TechUK, to give recommendations on the digital trade chapter of the forthcoming India-UK FTA. Our recommendations focussed on cross-border data flows along with mechanisms for adequate protection of personal data in order to boost digital trade between the two countries. For more information, kindly write to garima@nasscom.in.

Department of Commerce: Digital Trade under India-UK FTA

We engaged with the Joint Secretary, Trade Policy Division, Department of Commerce, MoCI to highlight priority areas for Indian IT Industry with respect to commitments under the digital trade chapter of the upcoming India-UK FTA. As part of the discussion, we highlighted that cross-border data flows, data protection, co-operation on data innovation, fin-tech, cybersecurity and Artificial Intelligence (AI), online consumer protection and sharing of source code remain as top priority for the Indian industry, to grow digital trade between India and UK. Other topics of importance include paperless trading, customs duties on electronic transmission and online consumer protection. We are developing a position paper on all the topics mentioned above. In case you are interested in discussing any of these topics, kindly write to garima@nasscom.in.

Public Procurement: Joint meeting with DPIIT and MeitY

We organised a joint meeting with MeitY and Department for Promotion of Industry and Internal Trade (DPIIT) to enable a solution to the issue of mandated local value addition in public procurement for software products and Cloud Service Providers (CSPs). During the interaction, the Industry leaders explained the difficulty in applying the current definition for determining local content of software products and cloud service and suggested an alternate mechanism to calculate local value addition.

National Single Window System: Interaction with DPIIT

The National Single Window System (NSWS), a business portal that will allow investors to identify, apply and obtain various pre-operations approvals required for setting up a business unit in India, was soft launched in September 2021. Approvals required by various business sectors are being brought under the NSWS in a phased manner. During an interaction with the Secretary, DPIIT, we shared our feedback on the portal and requested that all relevant approvals for IT-BPM unit and Data Centers should be packaged based on use case.

Call for Inputs: Interim Report by RBI’s Working Group on Digital Lending

Earlier this year, the Reserve Bank of India (RBI) had constituted a Working Group (WG) on digital lending. The WG has now released its interim recommendations which are at three levels – regulated entities of the RBI; other regulated entities; and the unregulated entities. The key recommendations by the WG include – setting up a self-regulatory organisation to cover the participants in the digital lending ecosystem; separate legislation to prevent illegal digital lending; setting up baseline technology standards amongst others. Please share your feedback/ suggestions on the Report with apurva@nasscom.in before December 13, 2021.

Call for Inputs: NITI Aayog's Discussion Paper on Digital Banks

The NITI Aayog has released a discussion paper on "Digital Banks - A Proposal for Licensing and Regulatory Regime for India". The paper presents digital banks as the solution to a variety of challenges that exist in banking today. It also presents a Digital Bank Global Regulatory Index to assess global regulatory responses to digital banking. The Report contains a template framework and outlines a regulatory sandbox as a step towards getting a full-stack banking license. Kindly share your inputs on the discussion paper with apurva@nasscom.in before December 13, 2021.

Call for Inputs: Challenges being faced due to issue of Instruction 95 by MoCI

As you are aware, MoCI issued Instruction 95 in June 2019 which restricts benefit of taxes on cafeteria, crèche, gymnasium and similar facilities. NASSCOM has made multiple representations to government officials on the difficulties faced by the Industry. However, we wanted to understand and seek inputs on any specific issues faced as a result of implementation of the Instruction. In this regard, we solicit your inputs on any issues being faced at the ground level on account of aforesaid instruction so that it can be taken up with the concerned authorities. Kindly share your inputs with tejasvi@nasscom.in before December 13, 2021.

Start-ups: Policy paper on strengthening the start-up ecosystem

NASSCOM, in partnership with TiE Delhi-NCR and Grant Thornton Bharat, is finalising a policy paper to highlight the concerns faced by start-ups, founders, and investors at various stages of a start-up's growth journey. The paper will also present the findings of the survey conducted by us in August 2021. The aim of this paper is to provide recommendations to the government on issues such as access to domestic and international capital, innovative ways of raising capital, facilitating compliances to be undertaken by start-ups etc. For more information, kindly contact garima@nasscom.in.

Assessing the impact of UK-India FTA on digital trade

In the context of the upcoming negotiations on the India-UK FTA and in order to make meaningful suggestions to the Government on digital trade, we are planning to seek inputs from the industry on the following: (1) top priorities for a future trade deal between India and UK, especially pertaining to digital trade; (2) challenges being faced while trading with the UK; (3) recommendations for improving digital trade between India and the UK, and (4) estimated impact of India-UK trade deal on the industry. To this end, we will be gathering inputs via a survey and interviews, as appropriate. If you are interested in participating, kindly write to garima@nasscom.in.

Discussion Paper on streamlining multi-state labour compliances and the Future of Work

NASSCOM, in partnership with Trilegal, released a discussion paper to discuss and deliberate upon the compliance challenges faced by the tech companies having multi state presence due to variations in the state specific labour laws such as Shops and Establishments (S&E) laws. The paper discusses how such challenges are likely to get amplified since the forthcoming labour codes also contain provisions that overlap and/or contradict the entitlements under S&E laws, thereby leading to both operational and compliance uncertainties. The paper also discusses issues in context of remote and hybrid working models including proposing solutions for addressing such challenges.

Call for inputs: Draft Code on Wages (Delhi) Rules, 2021

As part of implementation of labour reforms, the labour department of Delhi Government has published the draft Code on Wages (Delhi) Rules, 2021 (Rules) for stakeholder inputs. The Rules prescribes the process and fixation of calculating the minimum rate of wages, process of making payment, constituting the Central Advisory Board for the purpose of fixing floor wage, procedure of deduction of wage and recovery, amongst others. Kindly share your inputs with deepak@nasscom.in latest by December 19, 2021.

Central Government likely to consider regulating cryptocurrencies formally

The list of business of the Lok Sabha released on November 23 indicated that a Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 would be discussed in the ongoing Winter Session of the Parliament. However, this is absent in the revised list of business released on November 30. Whether or not a Bill is actually introduced, it is clear that one is under formal consideration. In the past, the Ministry of Finance had recommended banning cryptocurrencies, but enabling use of other blockchain applications, and empowering RBI to create its own "central digital bank currency". It remains to be seen whether this is still the prevailing policy position.

India and US agree on transitional approach of 2% Indian Equalisation Levy

India and United States of America recently have reached an agreement to adopt a transitional approach on 2% Equalisation levy (2% EL). This was announced vide issue of press release dated November 24, 2021 by Indian Ministry of Finance, Government of India. This agreement follows the trade tensions between India and the US on account of the findings of United States Trade Representative (USTR) under S.301 of the US Trade Act, 1974. The USTR concluded that 2% EL was inconsistent with the principles of international taxation and discriminatory against US companies and that it should, therefore, be repealed.

RBI launches Integrated Ombudsman Scheme

On November 12, RBI launched its Integrated Ombudsman Scheme. In line with "One Nation-One Ombudsman", the scheme merges three existing Ombudsman schemes by the RBI. The scheme offers a single platform for grievance redressal against regulated entities like banks, non-banking financial services, payment system operators. The complaints with the Ombudsman can be filed online through https://cms.rbi.org.in.

MoCA: The National Unmanned Aircraft System Traffic Management Policy

In order to manage the interplay between manned and unmanned (drones) aircraft systems, the Ministry of Civil Aviation (MoCA) notified the National Unmanned Aircraft System Traffic Management Policy Framework (UTM Policy) on October 24. The Policy comes after the much-awaited liberalised Drone Rules, 2021 and the Product-Linked Incentive scheme. The Policy regulates the architecture and mechanism of drones in "very low level" (VLL) airspace i.e., up to 1000 feet above the ground level (UTM airspace). The Policy attempts to allow identified stakeholders to connect and communicate with each other and provide situational awareness of VLL airspace to stakeholders.

RBI: First ever global hackathon "HARBINGER 2021- Innovation for Transformation"

The RBI has announced its first global hackathon - "Harbinger, 2021: Innovation for Transformation". The theme of this hackathon is "Smarter Digital Payments". It aims to identify and develop potential solutions to increase accessibility of digital payments amongst all sections of the society, enhance ease of payments and user experiences vis-à-vis consumer protection and security of digital payments.

GST: Accumulated TDS/TCS credit refundable under GST

The Telangana High Court, in the case of Appario Retail Private Limited vs. The Union of India held that excess cash balance available in electronic cash ledger on account of Tax Collection at Source (TCS)- Tax Deduction at Source (TDS) credits is eligible for refund claim under S.49(6) of the Central Goods and Services Tax Act, 2017 (CGST Act). Therefore, the petitioner is entitled to claim refund of the balance in electronic cash ledger under proviso to sub-section (1) of S. 54 of CGST Act.

MoF: Clarifications on deduction and collection of tax at source

Central Board of Direct Taxes (CBDT) has recently issued Circular 20 of 2021 to provide clarifications regarding applicability of S.194-O, S.194Q, and S.206C(1-I) of Income Tax Act, 1961. The Circular provides some important clarifications in respect of non-applicability of S.194O in case of e-action activities carried out by e-auctioneers, non-applicability of S.194Q on the component of indirect taxes other than GST.

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