NASSCOM : Public Policy | Volume 3 | Issue 12

Ministry of Finance (MoF): NASSCOM's Pre-Budget Memorandum 2023-24

Our key recommendations submitted to the MoF focus on fostering start-up ecosystem, rationalising tax regime and other ease of doing business issues:

	Start-ups: Suggestions focus on improving access to talent and capital, for example, make it easy for start-ups to offer the available deferment of the time of payment of tax on ESOPs to their employees; attract domestic investors in start-ups, etc.
	Ease of doing business: Suggestions cover transfer pricing dispute resolution, rationalisation of mark-up rates; standardising process of summons, rationalising penalties; prescribing timelines for - disposal of appeals, various proceedings, refund; increase technology adoption for better taxpayer services.

Department of Telecommunication (DoT): Draft Indian Telecommunications Bill, 2022

We, along with the Data Security Council of India (DSCI), made a submission to the DoT on the Draft Indian Telecommunication Bill. Our principal recommendation highlights the way the licensing regime may be designed using an activity-led and risk-based approach in a manner that is likely to help achieve the objective of obligations being imposed on an activity are proportionate to the harms and risks associated with it. Other recommendations cover - identification of subscribers, spectrum management, treatment of equipment, provisions on national security & public safety, Telecom Development Fund and avoiding regulatory overlaps.

Telecom Regulatory Authority of India (TRAI): Consultation on Leveraging Artificial Intelligence (AI) and Big Data (BD) in the Telecom Sector

We, along with DSCI, made our final submission to the TRAI on their Consultation Paper on leveraging AI and BD in the telecom sector. We highlighted the need for the paper to avoid an attempt to suggest a general definition of AI, to recognise that enablers beyond just telecom networks are essential to unlocking the potential of these technologies, and to anchor the regulatory design basis risk.

Securities and Exchange Board of India (SEBI): Consultation Paper on Cloud Framework

We submitted our feedback on the SEBI Consultation Paper on Cloud Framework, wherein we submitted that certain elements needed to be reworked, including (amongst others) the broad data residency requirements; the proposal to allow regulated entities (REs) to only outsource cloud services to Ministry of Electronics and Information Technology (MeitY) empanelled Cloud Service Providers (CSPs) even though MEITY's framework is meant only for Government data; the blanket statements that there shall be no 'shared responsibility'; and that REs shall themselves audit their CSPs, leaving out scope for relying on third party audits. For more information, kindly write to vertika@nasscom.in and varun@nasscom.in.

Reserve Bank of India (RBI): Representation on Digital Lending (DL) Guidelines

We have highlighted the industry's concerns on implementation of the DL Guidelines. These include the broad mandate to localise all data and certain restrictions on involvement of third-parties such as Payment Aggregators for flow of funds.

Online Network for Digital Commerce (ONDC): Response to the Consultation on Building Trust in ONDC

In our response to ONDC Consultation Paper on building trust, we have highlighted concerns which may arise during transactions over the ONDC network, which can have an impact on the buyer's trust in ONDC. For example, if a buyer is frequently getting in a situation where the delivery price is discovered towards the end of a transaction and it is higher than expected, it may impact their trust. Similarly, if a buyer's issues are frequently remaining unresolved or taking a long time for resolution because liabilities of the network participants are not clearly defined, it may impact the buyer's trust.

Bureau of Indian Standards (BIS): Suggestions for amendment of the Standard on Online Consumer Reviews

In our submission to BIS on revision of the Standard on Online Reviews, we have suggested amendments to make the standard implementable with the least impact to the industry's ease of doing business. These include, reducing the minimum time period for which records of a removed review must be retained, clarifying that reviews can be removed by administrator if they are against the terms and conditions etc.

Organisation for Economic Co-operation and Development (OECD): Suggestions on the Progress Report on Administration and Tax Certainty of Pillar One

As part of our submission to the OECD and the MoF, we have suggested that the framework should: a) specify that 'Amount A' profit in a jurisdiction should be taxed at the corporate tax rate applicable to domestic corporations in that jurisdiction; b) where covered group has presence in a market jurisdiction, 'Amount A' allocation should be added to the income of those local entities and corresponding tax liability should also be discharged by those entities; c) provide illustrations on the use of four different approaches for identifying relieving entities, amongst others.

Goods and Services Tax (GST): Representation on Implementation of e-commerce Parity Issue for Online Sellers

The GST Council, in June 2022, decided to extend GST registration threshold of INR 40 lakhs for online supplier of goods under GST Law w.e.f. January 1, 2023. However, till now, the APIs have not been released for testing by the Industry. In this regard, we have requested the GSTN and the GST Policy Wing to issue a notification specifying date for implementation of the above decision. The parity for small sellers is a business reform in addition to being a tax law change. Therefore, we have also requested the Government to release the APIs at the earliest, for testing in the sandbox environment.

SEBI: Suggestions on review of Disclosure Requirements for Material Events or Information

In response to a Consultation Paper released by SEBI on review of disclosure requirements for material events or information under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), we have requested SEBI to retain the timeline of 24 hours for disclosure of certain material events instead of 12 hours, provide a leeway from disclosure for common/ regular demand notice for tax/ statutory dues, provide clarity if disclosure needs to be done for actions related to closure of branch, amongst others.

Report launch: NASSCOM's Report on “Enabling India's Drone Ecosystem - Policy Suggestions”

We recently released our report titled “Enabling India's Drone Ecosystem - Policy Suggestions”. The Report highlights some of the challenges faced by the industry and provides policy suggestions to address them. These include, skill and talent related challenges, issues with respect to research and development related exemptions for private entities, import concerns vis-à-vis the SCOMET categorisation, challenges faced in the government procurement process and gaps which make it difficult to avail benefits of existing government schemes for start-ups and Small and Medium Enterprises. The Report has been submitted to concerned officials from the Ministry of Civil Aviation and Directorate General of Foreign Trade (DGFT).

DGFT: Proposed Amendments Related to Export of Drones

We met with the DGFT to discuss the proposed amendments to the export control laws concerning export of drones. DGFT acknowledged the need for liberalising the compliance requirements for export of drones in a step-by-step manner and that the discussions are underway within the Government to finalise the proposed amendments. For more information, kindly write to garima@nasscom.in.

Call for Inputs: Draft Digital Personal Data Protection Bill 2022

On November 18, 2022 MeitY released, for public consultation, a new draft of a comprehensive data protection law for India, entitled the draft Digital Personal Data Protection Bill. As compared to the earlier drafts, this is a shorter draft. Its material scope is limited to 'digital' personal data. The Bill is available here, along with an Explanatory Note here. Comments are to be submitted to MeitY by December 17, 2022, using this portal. Kindly share your inputs by December 9, 2022, by writing to varun@nasscom.in and vertika@nasscom.in.

Call for Inputs: NITI Aayog's Paper on Facial Recognition Technologies

On November 29, 2022 NITI Aayog announced, on their Twitter page, that the deadline for receiving inputs on their discussion paper on facial recognition technologies has also been extended till December 30, 2022. The discussion paper is here. Please share your inputs to us by December 23, 2022 by writing to sudipto@nasscom.in and varun@nasscom.in.

Webinar on Compliance with Export Control Obligations

A webinar is being planned to release a model document outlining the elements of an effective Internal Compliance Programme that can be adopted by organisations engaged in export of dual-use items. This document is aimed at making it easier for the industry to comply with export control obligations. Click here to register. For more information, kindly write to garima@nasscom.in.

Registration for Discussion on New Standard Contractual Clauses for Transfers under the General Data Protection Regulation

After the Schrems-II judgment, the European Commission released an updated set of standard contractual clauses (SCCs) for international data transfers between the European Economic Area and territories outside it (including India). These updated SCCs will apply across the board after December 27, 2022 (see here for more details). We are seeking to understand their importance for our industry and have requested industry members to express their interest on this issue through this form (available here). For more information, kindly write to varun@nasscom.in.

RBI: Inclusion of GSTN as a Financial Information Provider (FIP) under the Account Aggregator (AA) Framework

The RBI has included GSTN as a FIP under the AA framework. This inclusion has been made to facilitate cash-flow based lending to MSMEs. The Department of Revenue shall be the regulator of GSTN for this specific purpose. The financial information for this purpose shall be the GST Returns, viz. Form GSTR-1 and Form GSTR-3B.

TRAI: Release of Recommendations on Regulatory Framework for Promoting Data Economy

On November 18, 2022 the TRAI released new recommendations to promote India's data economy. The recommendations inlcude: (1) introducing India-specific building standards for data centres (2) extending the trusted source procurement framework to data centres (3) setting up a new 'data digitisation and monetisation council' to oversee all issues related to digitisation, sharing and monetisation of data, and entrusting the work of steering to the TRAI. For more information, kindly write to vertika@nasscom.in, sudipto@nasscom.in and varun@nasscom.in.

A revised Standard for Online Consumer Reviews published by BIS and Department of Consumer Affairs (DoCA)

The revised Standard on Online Consumer Reviews takes on board some of our suggestions including reduction in the minimum time period for which records of a removed review must be retained, clarification that reviews can be removed by administrator if they are against the terms and conditions. Currently, the Standard is being encouraged by the Government for voluntary implementation, with the possibility that it will become mandatory in the future. We have written to DoCA highlighting the likely unintended consequences, especially for the small entities, of mandating the adoption of this standard in the future. For more information, kindly write to garima@nasscom.in.

GST: Supply of Business Process Outsourcing Services Qualifies as Export of Services (and not Intermediary)

The High Court of Punjab & Haryana in the case of Genpact India Private Limited (Genpact India) held that supply of Business Process Outsourcing services by Genpact is not in the nature of “intermediary services” under GST Law and will qualify as “export of services”, thereby allowing refund of INR 26 crores. This ruling should aid in resolving several pending litigations and ease processing of pending refund claims held up as a result of exports being viewed as "intermediary services".

RBI: Operationalisation of Central Bank Digital Currency - Retail (e₹-R) Pilot

The RBI has announced launch of pilot for retail digital rupee. The pilot will cover select locations - Delhi, Mumbai, Bangalore and Bhubaneswar in a closed user group comprising participating customers and merchants. It has identified eight banks for a phase-wise participation. The first phase will begin with State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank.

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