CBIC extends validity of e-way bills in new set of relaxations

Source: The Economic Times, Jun 28, 2020

The Central Board of Indirect Taxes and Customs (CBIC) extended the end-date till August 31 for several relaxations including issuance of order and appeals by tax authorities, including in case of refunds, and extended the validity of e-way bills issued before lockdown till September 30.

In notifications issued on Saturday, the Board further extended the time limit, till August 31, for authorities to issue orders or notices in case of rejection of full or partial refund claims.

“for the words, figures and letters 29th day of June 2020, the words, figures and letters “30th day of August 2020” shall be substituted; and for the words, figures and letters “30th day of June 2020”, the words, figures, and letters “31st day of August 2020” shall be substituted,” the Board said in one of the notifications, referring to an earlier notification dated June 9.

Separately, the Board also extended the due date of compliance related to assessment procedures, notices, orders, filing of appeals and replies among others, for authorities and tribunals – falling between March 20, and June 29, to June 30 – till August 31.

The Board also extended the validity of e-way bills till September 30, which were set to expire during the period of March 20 and April 15, issued before the lockdown period. This would be the third extension granted by the Board, which was first given till May-end and then till June-end, and would help in faster transportation of goods within the country.

Cabinet approves participation of private sector in space activities

Source: Business Standard, Jun 24, 2020

The Cabinet on Wednesday approved participation of the private sector in the entire range of space activities, including planetary exploration missions, Union minister Jitendra Singh said.

The newly-created Indian National Space Promotion and Authorisation Centre (IN-SPACe) will provide a level playing field for private companies to use Indian space infrastructure, Singh, who is the Minister of State in the Prime Minister’s Office, said.

The Department of Space comes under the PMO.

This centre will also hand-hold, promote and guide the private industries in space activities through encouraging policies and a friendly regulatory environment, Singh added.

The ‘New Space India Limited (NSIL), a PSU under the Department of Space, will endeavour to re-orient space activities from a ‘supply driven’ model to a ‘demand driven’ model, thereby ensuring optimum utilisation of our space assets, the minister said.

The Cabinet decisions come weeks after Finance Minister Nirmala Sitharaman announced opening up of the space sector for private entities.

Some of the planetary exploration missions will also be opened up to private sector through an ‘announcement of opportunity’ mechanism, a government statement said.

“This will not only result in an accelerated growth of this sector but will enable Indian Industry to be an important player in global space economy. With this, there is an opportunity for large-scale employment in the technology sector and India becoming a global technology powerhouse,” it said.

The proposed reforms will enhance the socio-economic use of space assets and activities, including through improved access to space assets, data and facilities. These reforms will allow ISRO to focus more on research and development activities, new technologies, exploration missions and human spaceflight programme, Singh said.

India slaps anti-dumping duty on steel from China, Vietnam, Korea

Source: Business Standard, Jun 24, 2020

Mumbai: In a bid to curtail cheaper imports of flat steel in the value-added segment, the government on Monday announced anti-dumping on flat-rolled product of steel, plated or coated with aluminium and zinc.

However, the duty is applicable on products originating from or exported from China, Vietnam, and South Korea and imported into India. The anti-dumping duty will be effective for a period of five years from the date of imposition of provisional anti-dumping effective October 15, 2019, and shall be payable in Indian currency.

The duty has been imposed after the final findings of commerce ministry’s investigation arm Directorate General of Trade Remedies (DGTR) that the product was imported into the country from these destinations below its associated normal value which has resulted in dumping.

“It’s a good move and will prevent dumping at lower prices and discourage unfair trade into India,” Jayant Acharya, director commercial at JSW Steel said.

Early June, the centre extended anti-dumping duty on a certain variety of steel products till December 4, with a view to guard domestic manufacturers from cheap imports coming from China, Malaysia and Korea. The duty on imports of ‘hot-rolled flat products of stainless steel 304 series’ from the said countries was first imposed by the finance ministry on June 5, 2015, for five years. The duty was imposed in the range of USD 180-316 per tonne.

A new e-commerce policy to curb Chinese imports

Source: The Economic Times, Jun 19, 2020

New Delhi: India may soon make it compulsory for e-commerce companies to display clearly whether a product being sold on their platform is made in the country or not, as the government seeks to curb Chinese imports.

The clause is likely to be a part of the e-commerce policy that the commerce and industry ministry is drafting. “We will mandate e-commerce players to display whether a product is made in India or not. We are actively looking to enable that. This will help cut out Chinese goods,” said an official aware of the matter.

China had a trade surplus of about $47 billion with India in the first 11 months of the fiscal year ended on March 31, 2020.

“It will be like a checkmark, wherein consumers can decide to buy goods made in India,” said the official, adding that the policy would soon be put in public domain for comment.

The Draft National E-commerce Policy, which the Department for Promotion of Industry and Internal Trade had floated last year, mandated e-commerce companies to make seller details available on the marketplace website for all products. It had proposed that the full name of the legal entity, its address and contact details be provided.

“Sellers must provide an undertaking to the platform about genuineness of products they are selling and the same must be made accessible to consumers,” the draft had proposed, as part of a measure to check online sale of counterfeits.

Experts said the move to have clearly labelled goods on e-marketplaces was a positive one and would support Atmanirbhar Bharat mission, besides giving consumers the option of buying locally made products upfront. “Given the sentiment today, it syncs well with the country’s agenda of self-reliance and will alert people to what they are buying,” said an expert on e-commerce. The draft policy may also pitch for a regulator with powers to penalise those who spread misinformation. The policy aims at promotion of e-commerce, jobs, rural productivity and exports.

With a law, India plans lasting ban on cryptos

Source: The Economic Times, Jun 12, 2020

NEW DELHI: India is looking to introduce a law to ban cryptocurrencies, as the government sees a legal framework as being more effective than a circular from the Reserve Bank of India (RBI) in this regard. “A note has been moved (by the finance ministry) for inter-ministerial consultations,” a senior government official told ET.

The spur for the draft cabinet note was the March 4 decision of the Supreme Court to quash the April 2018 circular from the RBI that prevented banks from providing services in support of cryptocurrencies, said the official cited above.

The note will be sent to the cabinet after consultations and, subsequently, to Parliament. If it is along similar lines as an earlier proposal, the law will deal a blow to investors, exchanges and other entities dealing in virtual currencies such as bitcoin, experts said.

A high-level government panel, in July 2019, prepared a draft law providing for a ban on all forms of private cryptocurrencies. It had suggested a fine of up to Rs 25 crore and imprisonment of up to 10 years for anyone dealing in them.

SC Lifted De Facto Ban
At the time, the court had said: “While we have recognised… the power of RBI to take a preemptive action, we are testing in this part of the order the proportionality of such measure, for the determination of which RBI needs to show at least some semblance of any damage suffered by its regulated entities. But there is none.”

The ruling lifted a de facto ban on trading in bitcoin and other such instruments and had prompted startups to say they would revive plans to invest and expand business in India.

However, the going hasn’t been smooth, industry experts said. Several banks haven’t allowed payments for currency trades in India or overseas, in the absence of any specific communication from the RBI following the Supreme Court decision. Still, transactions have been taking place through other channels, the experts said.

The draft rules in the July 2019 proposal were too harsh, said one of them. Such a proposed legislation would make it “illegal to hold, sell, issue, transfer, mine or use cryptocurrencies and, if passed in the current form, would completely decimate the crypto-industry in India,” said Amit Maheshwari, partner, AKM Global.

He hoped the government would conduct stakeholder consultations and not go ahead with the bill in its present form.

The panel, headed by former finance secretary Subhash Garg, had, in its report, advocated a ban on all forms of private virtual currencies, though it asked the RBI and the government to look at introduction of an official virtual currency.

The draft law prepared by the committee said any direct or indirect use of cryptocurrency will be punishable with a fine or imprisonment, which shall not be less than one year, but may extend up to 10 years.

As per the draft law, a repeat offence will be punishable by imprisonment of up to five years, which could extend to 10 years with a fine. The fine could be three times the loss or harm caused by the person, three times the gain made by a person, or up to ₹25 crore.

Govt allows startups to issue sweat equity for 10 years after registration

Source: Business Standard, Jun 10, 2020

Mumbai: Start-ups can now issue equity shares to their employees for up to 10 years from the date of their incorporation or registration.

The Ministry of Corporate Affairs (MCA) has amended the Companies (Share Capital and Debentures) Rules, 2014, to allow start-ups to issue sweat equity shares not exceeding 50 per cent of its paid-up capital.

The earlier limit of five years was changed to bring the MCA provision in line with the Department for Promotion of Industry and Internal Trade’s order.

Industry experts say the move will help start-ups better incentivise their staff and retain talent. This will also act as an alternative medium of compensation for employees and avoid pay cuts.

“Any help to companies and employees in terms of seat equities will help in retention of talent, and the entire ecosystem will, then, benefit considerably,” said Naganand Doraswamy, managing partner Ideaspring Capital, a venture fund and a start-up mentor.

Usually, start-ups issue sweat equity to their employees or directors against any form of intellectual property or technical knowhow without any vesting period. Employee Stock Options allotment, on the other hand, is linked to employees’ performance and based on completion of the vesting period.

Doraswamy downplayed the concerns that the rule may act as a deterrent to future fund-raising plans. “Ensure the employees benefit when the company does well and the venture capitalists (VCs) automatically make money,” he said.

Apoorva Ranjan Sharma, co-founder of start-up incubator Venture Catalysts and VC accelerator 9Unicorns, said: “The employees will also have a sense of ownership and can reap benefits as the valuation of the company increases.”

“Most of the start-ups usually take over 3-5 years to raise funding in bigger rounds. And, many a time, the top talent is known to quit after encashing the equity (in the early stages),” said Sharma.

Legal experts who worked closely with start-ups also welcomed the change. “It is a positive step, with reduced cash flow in the ongoing pandemic situation. This amendment will help the start-ups that are in operation for more than five years also to issue sweat equity to its employees,” said N Raja Sujith, partner – head (South India), Majmudar & Partners.

The amendment will also help start-ups attract fresh talent from the market. Also, VCs and PEs, typically, favour start-ups with such equity schemes as the employees have “skin in the game” and they perform better to increase the valuation of the company, according to Shalini Jain, partner, people advisory services, EY India. The MCA also dropped a provision that required listed companies with privately placed debentures to mandatorily set aside the reserves for every year.

Export curbs now only on specific diagnostic kits, instruments: DGFT

Source: The Economic Times, Jun 10, 2020

New Delhi: The government on Wednesday decided to continue the export curbs only on specific diagnostic kits, reagents, and instruments such as swabs sterile synthetic fibre, silicon columns and magnetic stand, amid the coronavirus outbreak. In a notification, the Directorate General of Foreign Trade (DGFT) said all other diagnostic kits/reagents/instruments/apparatus are freely exportable subject to submission of an undertaking by the exporter to the customs authorities at the time of export.

On April 4, DGFT had put restrictions on exports of all diagnostic kits and reagents. The move was aimed at dealing with the COVID-19 crisis as these products are required for testing of patients.

Reagents are substances or mixtures that are used in a chemical analysis.

Putting a product under the restricted category means that an exporter would require a licence from DGFT for outbound shipments.

Amending the notification dated April 4, it said only specified diagnostic kits/reagents/ instruments/apparatus “are restricted for exports whether as an individual item or as a part of any diagnostic kits/reagent”.
The other products which are still under restricted category include VTM kits, RNA extraction kits, RT-PCR kits and reagents, 15mn falcon tube, beads, probes (specific for Covid-19 testing), and reverse transcriptase enzymes.

India simplifies clinical trial rules for Covid-19 vaccine manufacturing

Source: Business Standard, Jun 04, 2020

Mumbai: The health ministry has allowed some relaxations to the Drugs and Cosmetics Act, 1940, and the subsequent rules. This has been done to make “suitable vaccines” available to meet emergency requirements arising due to the pandemic.

Simpler rules would help Indian players to get a vaccine to the market faster.

Earlier, if a company intended to manufacture and stock vaccine for Covid-19, which is under clinical trial, it had to follow a complex process for marketing authorisation (for sale or distribution). Several applications were to be made for conducting clinical trials. Upon completion of the trials, the firm had to again follow a series of application processes. A prior permission was also required from the Central Licensing Authority under the New Drugs and Clinical Trials Rules, 2019, to manufacture the vaccine.

Now, the health ministry has said some of the rules shall be “deferred in public interest” to meet the situation. “We are in talks with vaccine makers here. So far, it looks like some of the global candidates, like the Oxford one, may be available sooner than the others. There are some key Indian candidates, too. The government will take an inter-departmental approach to ensure that the right vaccine candidate is available for Indians at the earliest,” said a government official.

Already, Indian vaccine majors are moving rapidly towards developing the right vaccine that would offer protection against Covid-19.

Hyderabad-based Bharat Biotech is developing a vaccine with the Indian Council of Medical Research (ICMR).

The researchers have recently indicated that the next month is a crucial stage in this development. Pune-based Serum Institute is in discussions with AstraZeneca that has booked millions of doses for Oxford’s frontrunner Covid-19 vaccine candidate. Serum is trying to sign a deal with the British drug major and if everything goes well, it plans to make 100 million doses of the vaccine in India.

Industry welcomes India’s electronic manufacturing schemes

Source: LiveMint.com, Jun 02, 2020

Industry leaders in India have welcomed the government’s new schemes to promote electronics manufacturing in India. The production linked incentive (PLI) scheme, in particular, has been applauded by various stakeholders, while many said that the Scheme for Promotion of Manufacturing of Components and Semiconductors (SPECS) will help promote component manufacturing in the country.

“The PLI instituted on mobile phones is indeed the first ever scheme announced by a Government in the post-independence period, whereby, similar PLI is extended for both domestic Indian champions and global supply,” said Pankaj Mohindroo, Chairman, India Cellular and Electronics Association (ICEA).

The PLI scheme takes the largest portion of what the government announced, standing at approximately Rs. 40,000 crore and is expected to help large scale mobile manufacturing. It offers an incentive of 4-6% over a period of 5 years for manufacturing in India. The application dates are open from today to July 31st.

Nitin Kunkolienker, President of the Manufacturers Association of Information Technology (MAIT), also applauded the schemes, while clarifying that they had been in the works for 2-3 months. “The move in this scheme will help meet targets under the National Policy on Electronics (NPE) 2019,” he said. “Also, it is imperative that the government bring the major electronics ecosystem onboard through these schemes,” he added.

In its announcement today, the government said that companies can now start applying for the benefits of these schemes. At the moment, mobile phone makers etc. assemble products here after importing components from overseas. SPECS provides a 25% reimbursement on capital expenditure for active and passive components, semiconductors, ATMP and specialized sub assemblies.

“We applaud the steps announced by the Hon’ble Union Electronics and Information Technology Minister, Ravi Shankar Prasad and are certain that the Production Linked incentive, electronic manufacturing cluster scheme and especially the SPECS scheme that helps overcome disabilities of manufacturing electronic components in India, will provide the needed impetus to increase the manufacturing capacity of the country,” said Muralikrishnan B, COO, Xiaomi India.

“At the moment, the electronics industry is one of the fastest growing sectors, expected to reach $400 billion by 2025 with potential import opportunity of $150 billion, which can be leveraged locally,” said Manish Sharma, President and chief executive officer (CEO) of Panasonic India. In his address today, IT Minister Ravi Shankar Prasad had said that the government wants mobile phones to become the largest exported item from India and domestic value addition of 35-40% to mobile manufacturing by 2025.

According to the IT Minister, the electronics manufacturing industry in India grew from Rs. 1,90,366 crore in 2014 to Rs. 4,58,000 in 2018. The country’s share in global manufacturing also rose from 1.3% in 2012 to 3% in 2018. Between 2018 and 2019, exports grew by 38% year-on-year, according to the government.

Government extends validity of scrips under export incentives schemes for exporters

Source: The Economic Times, Jun 01, 2020

NEW DELHI: The government on Monday extended the validity of scrips or certificates, provided under export incentive schemes, which are expiring between March 1 and June 30 this year till September 30. The Foreign Trade Policy (FTP) provides tax incentives for goods and services under the Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS).

Depending on the nature of services and product, the government gives duty credit scrips or certificates to exporters. These scrips can be transferred or used for payment of a number of duties including the basic customs duty.

“Relaxation has been provided for applicable late cuts for SEIS/MEIS applications and the validity of scrips issued under Chapter 3 of FTP which are expiring between March 1 and June 30 this year has been extended up to September 30 this year,” the Directorate General of Foreign Trade (DGFT) said in a public notice.

In a separate trade notice, the DGFT said that as per a pact signed between India and Mozambique for import of pigeon peas and other pulses grown there, 2 lakh tonnes of pulses will be imported during 2020-21 with certain conditions.

It said import will be allowed only through 5 ports — Mumbai, Tuticorin, Chennai, Kolkata and Hazira — and it will be subject to production of “Certificate of Origin” certified by the authorised signatories in the ICM (Instituto de Cereasi de Mocambique) with stamps provided by the Government of Mozambique, which is being shared with the concerned customs authorities of these ports and the Central Board of Indirect Taxes and Customs.

Although quantitative restrictions has been imposed on import of moong, peas, and toor dal, it has been notified that the restrictions shall not apply to the government’s import commitments under any bilateral or regional agreement or memorandum of understanding.