NASSCOM : Public Policy | Volume 3 | Issue 04 | April 2022
In Focus
NASSCOM Report: Suggestions on Goods and Services Tax (GST) for creating a conducive environment for small sellers
NASSCOM has submitted a report to the Ministry of Finance as well the State Governments with recommendations on how the GST regime can be used to create an all-inclusive ecosystem.
As part of the report, we have requested the government to: (a) bring parity between online and offline sellers by doing away with the mandatory registration under GST for small sellers, (b) allow such sellers to avail the benefits under composition scheme, (c) permit a virtual place of business for easing working capital, (d) strengthen compliances, and (e) use technology to implement guardrails to increase availability of data to the government. These measures will encourage small sellers to transform themselves into the organised sector and promote entrepreneurship. The report also highlights the evolution of e-commerce and its transition to 'Offline + Online' models and the role played by small businesses.
Unlocking the potential of MSME's in e-commerce
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Dialog & Discussion
Discussion with Ministry of Electronics and Information Technology (MEITY) on data protection and measures to enable the startup ecosystem
We interacted with senior officials of MEITY on the draft Data Protection Bill, 2021 (DPB) and measures to enable the startup ecosystem in India. On the DPB, we offered suggestions on: (a) making the approach to protecting personal data scalable and citizen-centric, (b) making the regulation of international data transfers more risk-based and agile, and (c) enabling policy interoperability with other jurisdictions' data protection regimes. We also suggested taking up newer issues such as software and hardware certification and non-personal data separately.

On startups, we made suggestions based on industry inputs, specifically for the FinTech, MedTech and Cybersecurity startups. Our suggestions focused on removing regulatory bottlenecks and enabling more innovation, for example, by enabling recognition of blockchain based signatures by making the regulatory framework technology neutral, easing norms to enable FinTechs into factoring business, enabling availability & access to high value datasets to train Artificial Intelligence (AI)/ Machine Learning (ML) systems, building a brand India for cybersecurity startups etc. For more information, write to policy@nasscom.in.
Public procurement: Determination of local content for cloud service
We interacted with MEITY, along with the industry, to discuss the mechanism to determine local content for cloud services. MEITY has proposed a framework in which the local content in various layers - Cloud, IT infrastructure and basic infrastructure - will be evaluated to compute local content. We are engaged with all empaneled cloud service providers and other stakeholders to evaluate the proposal and will share the industry view with MEITY soon. For more information, write to jayakumar@nasscom.in.
Knowledge Session on DPB for NASSCOM Global Capability Centre (GCC) Meet
At the NASSCOM Northern Capital Region (NCR) GCC Meet, we made a presentation highlighting the changes that have been proposed in DPB by the Joint Parliamentary Committee Report. The presentation focused on (a) new subjects introduced in DPB - such as frameworks for hardware/software certification; (b) regulation of international data transfers; and (3) review of the DPB from a data adequacy perspective.
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Submission & Representation
Non-Personal Data: India Data Accessibility and Use Policy
We submitted suggestions on the draft 'India Data Accessibility and Use Policy' (IDAUP) published by MEITY. The IDAUP aims to establish a new governance framework on sharing non-personal data in the public sector. Our suggestions focused on better defining the material scope, resolving jurisdictional overlaps with existing frameworks, better securing data quality to make public sector data more re-usable, introducing a phased and structured implementation plan, and bringing in well-defined safeguards to preserve privacy and security.
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SEBI: Response to Consultation Paper on Disclosures for 'basis of issue price' section of offer document
We responded to the Securities Exchange Board of India (SEBI) Consultation Paper on Disclosures for 'Basis of Issue Price' section in offer document under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Our suggestions included, the need to review the proposal requiring demonstration of the linkage of Key Performance Indicators (KPI) with the issue price, need for guidelines by SEBI on the manner in which KPIs need to be disclosed, voluntary disclosure of KPIs for a initial few years, matching the look-back period for KPIs with the period for which financial metrics have been disclosed etc.
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Telecommunication Engineering Center (TEC): Fairness Assessment for AI/ML Systems
We submitted feedback to the paper published by TEC on the development of a Framework for Fairness Assessment of AI/ML Systems. Among other things, we have provided input on the various fairness metrics used by the industry and explained the challenges in arriving at a classification system of AI/ML systems for the purpose of fairness assessment. We noted that 'fairness' is a normative concept with no universal definition and is context dependent. Given that the concept of 'fairness' has not reached a stage of sufficient clarity, we are of the view that standards cannot be prescribed even if meant to be adopted voluntarily.
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Ministry of Finance (MoF): Post Budget Memorandum 2022-23
We have submitted a detailed post budget memorandum to MoF highlighting the concerns and recommendations to strengthen the Budget 2022-23 proposals. Our suggestions include, need for clarity on the definition of virtual digital asset and challenges around valuation and computation of income arising from transfer of such assets, withdrawal of amendment on application of 'source of source' in case of loans or borrowings, bringing parity in the tax rates on long term capital gains on sale of shares of unlisted companies for resident investors and non-resident investors etc.
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Labour Reforms: Feedback on Telangana State Rules
We made a submission to the Government of Telangana on the draft Occupational Safety, Health and Working Conditions Rules (OSHW Rules) and Social Security Rules (SS Rules). On OSHW Rules, we proposed deletion of certain mandatory particulars such as Aadhaar, ESIS/UAN etc. from the appointment letter. We also recommended changes in the daily working hours limit to enable employers to adopt flexible working models. On Social Security rules, we sought clarity on implementation of some of the provisions related to class of employers that are required to maintain notice book, timeline for the payment of cess etc. For more information, write to deepak@nasscom.in.
Ministry of Corporate Affairs (MCA): Request for clarity in provisions related to accounting software to be adopted by companies
The Companies Act, 2013 requires a company using accounting software to maintain its books of account in such accounting software which can record audit trail of every transaction and create edit log of changes made. This requirement needs to be complied with effect from April 1, 2022. In this regard, we made a submission to MCA requesting clarity on certain aspects like definition of accounting software, details required as part of audit trail and edit log etc. We also requested that reasonable time be given to the industry to incorporate the changes in their accounting software.
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Organisation for Economic Co-operation and Development (OECD): Submission on Pillar One Amount A Tax base determination
We responded to OECD's Consultation Paper on Pillar One Amount A Tax Base Determination. Our submission includes request to provide an opportunity to stakeholders for giving inputs on unresolved issues/policy decisions/components which will be clarified in commentary once consensus has been reached. We have also requested OECD to provide an exhaustive list of expenses that will be disallowed while calculating the financial accounting profit/loss. We have also shared this submission with MoF.
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MCA: Request for amendment in requiring Independent Directors to pass Online Proficiency self-assessment test
We approached MCA to request exemption of certain class of foreign directors from the requirement to pass the online proficiency self-assessment test, which is otherwise required under the Companies Act, 2013 and the rules thereunder. Subjecting foreign directors with relevant experience to pass the proficiency test may not be necessary and adds to the compliance burden.
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News & Upcoming
Telecom Regulatory Authority of India (TRAI): Paper on Use of street furniture for small cell and aerial fiber deployment
We seek industry's inputs on the recently released consultation paper by TRAI on 'Use of Street Furniture For Small Cell and Aerial Fiber Deployment'. The paper aims to understand the challenges related to outdoor small cell deployments and use of street furniture for small cell, and aerial fiber deployment for the successful rollout of next generation networks in the country. The paper seeks suggestions on amendments to the existing right of way regulatory framework for aerial fiber deployment and other related matters. Industry is requested to share inputs to deepak@nasscom.in by April 11, 2022.
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TRAI: Paper on Rating of buildings or areas for digital connectivity
We seek industry's inputs on the recently released consultation paper by TRAI on 'Rating of Buildings or Areas for Digital Connectivity'. The paper stresses on the importance of good quality of telecom services in building complexes and areas and thus seeks suggestions towards introducing digital infrastructure evaluation matrix for building and areas based on users experience amongst other related matters. Industry is requested to share inputs to deepak@nasscom.in and jayakumar@nasscom.in by April 24, 2022.
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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 etc. For more information, write to garima@nasscom.in.
Assessing the impact of UK-India FTA on digital trade
As part of our engagement with the industry and the government in both India and UK for the upcoming India-UK Free Trade Agreement (FTA), we are seeking 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. We are gathering inputs via a survey and interviews, as appropriate. To share your inputs, kindly click here. For more information, write to garima@nasscom.in.
other update
SEZ: Extension of WFH timelines for IT/ITeS companies
In lieu of the Covid-19 pandemic, the SEZ authorities of Maharashtra and Tamil Nadu have extended the WFH facility for the IT/ITeS units till June 30, 2022. Beyond this period, the Santacruz Electronic Export Processing Zone (SEEPZ) Authority in Maharashtra has directed units to resume operations with 50% workforce from office till August 31, 2022, and 100% from September 1, 2022. Earlier, we had written to the SEZ authorities seeking extensions of WFH timelines towards safety of IT employees employed by the SEZ units. For more information, write to deepak@nasscom.in.
Ministry of Commerce and Industry unveiled the signed India-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA)
On March 28, 2022, Hon'ble Minister of Commerce and Industry released the text of the India-UAE CEPA. This agreement is expected to come into effect from May 1, 2022. This is the first comprehensive free trade agreement signed by India with any country in the last decade. The Agreement incorporates a separate chapter on 'digital trade', with commitments on personal data protection, cross-border flow of data, paperless trading, customs duties on electronic transmission, digital identities, online consumer protection, open data, digital government etc. Access the text of the agreement here. For more information, write to garima@nasscom.in.
Reserve Bank of India (RBI): Framework for Geo-Tagging of Payment System Touch Points
RBI has launched framework for geo-tagging of payment system touch points to deepen digital payments and inclusive access to citizens through robust digital payment infrastructure. Geo-tagging of payment system touch points will enable proper monitoring of availability of payment acceptance infrastructure like Points of Sale (PoS) terminals, Quick response (QR) codes among others. Under this framework, all banks and non-bank payment system operators are required to capture and maintain geographical coordinates for all payment touch points. For more information, write to apurva@nasscom.in.
RBI launches UPI for feature phones (UPI123PAY) and 24*7 helpline for digital payments (DIGISAATHI)
On March 8, 2022, RBI launched two key initiatives - UPI123Pay to make UPI payments for feature phones and DigiSaathi - a 24*7 helpline to address queries of digital payment users across products. These initiatives have been launched with the aim of deepening digital ecosystem and promoting financial inclusion. UPI123Pay shall be based on four functionalities - App based, missed call, interactive voice response, and proximity sound-based payments. Prior to this, in January 2022, RBI had launched a framework for facilitating small value digital payments in offline mode.
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