Measures to boost Indian Economy-Presentation by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman
Taxation – Ease of life for tax payers – Income tax, GST, Customs
• Prefilling of IT returns
• Faceless scrutiny from Vijaya Dashmi 2019
• Reduction in GST returns and simplification of forms
• Refund process of GST simplified.
• Risk based approach in dealing with tax payers
• Fixed term employment for flexibility in hiring
• Contribution of ESIC reduced from 6.5% to 4%
• Web-based and jurisdiction-free Inspections
• Inspection report to be uploaded within 48 hours
• Compounding of offences
• Self certification for start-ups – 6 labour laws
• Single air and water clearance for MSMEs
• Single consent to establish a factory by MSMEs
• 1 day to incorporate a company – Central Registration Centre for name reservation & incorporation
• Integrated Incorporation Form
• Shifting of 16 offence sections to monetary penalty only
• Faster & easier approvals for mergers and acquisitions
• Modifications in provisions for Differential Voting Rights
• Withdrawal of over 14,000 prosecutions under Companies Act
• Robust IBC framework with amendments supporting MSMEs and home buyers
• Not to be treated as criminal offence and would instead be civil liability. Ministry of Corporate Affairs to review the sections under Companies Act. Government has provided companies through revised orders, time for completing ongoing projects towards fulfil their CSR obligations.
Issue of IT orders, notices, summons, letters etc through a centralized system
In order to address complaints of harassment on account of issue of notices, summons, orders etc. by certain income-tax authorities:
• On or after 1st October, 2019 all notices, summons, orders etc. by the income-tax authorities shall be issued through a centralized computer system and will contain a computer generated unique Document Identification Number.
• Any communication issued without computer-generated unique Document Identification Number shall be non est in law.
• All old notices to be decided by 1st October 2019 or uploaded again through the system
• From 1st October, 2019 all notices to be disposed off within three months from the date of reply.
Relief from enhanced surcharge on Long term/Short-term Capital Gains
• In order to encourage investment in the capital market, it has been decided to withdraw the enhanced surcharge levied by Finance (No. 2) Act, 2019 on long/ short term capital gains arising from transfer of equity shares/units referred in section 111A and 112 A respectively
Withdrawal of Angel Tax provisions for Startups and their investor
• To mitigate genuine difficulties of startups and their investors, it has been decided that section 56(2)(viib) of the Income-tax Act shall not be applicable to a startup registered with DPIIT.
• It has also been decided to set up a dedicated cell under Member of CBDT for addressing the problems of startups. A startup having any income-tax issue can approach the cell for quick resolution of the same.
Additional Credit expansion through PSBs
• Upfront release of Rs. 70,000 Cr., additional lending and liquidity to the tune of ~ Rs 5 Lakh crore by providing upfront Capital to PSBs
• This will benefit Corporates, Retail borrowers, MSMEs, small traders, etc
Banks to effect timely rate cuts
• Banks have decided to pass on rate cuts through MCLR reduction to benefit all borrowers
Banks to launch Repo rate /external benchmark linked loan products
• Reduced EMI for housing loans, vehicle and other retail Loans by directly linking Repo rate to interest rates. Working capital loans for industry will also become cheaper.
• To reduce harassment and bring in greater efficiency, PSBs to ensure mandated return of loan documents within 15 days of loan closure.
• Benefit: Borrowers who have mortgaged assets
Customer Ease: Online tracking of loan applications
• On line tracking of loan applications by customers of Retail, MSME, Housing, Vehicle, working Capital, limit enhancements ,renewals etc.
• Would increase transparency, reduce harassment, and improve turn around time for customers.
Transparent One Time Settlement (OTS) Policy
• Banks to issue improved transparent OTS policy to benefit MSME and retail borrowers in settling their overdues.
• Policy to be based on check box approach • Benefit: Increased transparency
Protecting honest decision making
• To support decision making and to prevent harassment for genuine commercial decisions by bankers, CVC has issued directions that Internal Advisory Committee (IAC) in banks to classify cases as vigilance and non-vigilance.
• Decision of the IAC and bank CVO/ DA to be treated as final.
Support to NBFCs/HFCs
More credit support for purchase of houses, vehicles, consumption goods,
• Additional liquidity support to HFCs Rs. 20,000 Cr by NHB thereby increasing it to Rs. 30,000 Cr.
• Partial Credit Guarantee scheme for purchase of pooled assets of NBFCs/
HFCs upto Rs 1 lakh Cr – to be monitored at highest level in each bank
• Prepayment notices issued to NBFCs to be monitored by Banks
Use of Bank KYCs by NBFCs
• NBFCs to be permitted to use the Aadhaar authenticated bank KYC to avoid repeated processes.
• Necessary changes shall be made in PMLA rules and Aadhaar Regulations
• Easier, fast tracked onboarding of customers
Co-origination of loans by PSBs jointly with NBFCs
• To take advantage of liquidity with PSBs and last mile customer connect of NBFCs, PSBs to fast track collaboration for loans to MSMEs, small traders Self Help Groups, MFI clients borrowers in coorigination mode with NBFCs
GST Refund to MSME within 30 days
• All pending GST refund due to MSMEs shall be paid within 30 days. In future all GST refunds shall be paid within 60 days from the date of application.
MSME Bill discounting
• TReDS to use GSTN system in medium term to enhance market for bill discounting for MSMEs
Amendment to MSME Act to move towards single definition to be considered
UK Sinha Committee recommendations
Decisions on recommendations such as on ease of credit, marketing, technology, delayed payments etc. within 30 days
Deepening of bond markets in India
• In order to improve access to long term finance, it is proposed to establish an organisation to provide Credit Enhancement for infrastructure and housing projects. This would enhance debt flow towards such projects.
• The government would soon take further action on development of Credit Default Swap markets soon, in consultation with RBI and SEBI.
• In order to improve domestic market in bonds, Ministry of Finance will work with RBI to make it more conducive for investors and bond issuers, as well as facilitate increased trading for price discovery
• Government has amended the Companies (Share capital and Debenture rules) 2014 to remove the requirement for creation of a Debenture redemption Reserve (DRR) of outstanding debentures in respect of listed companies, NBFCs and for HFCs.
Access of Indian Companies to the Global markets
The Depository Receipt Scheme 2014 is expected to be operationalised soon by SEBI. This will give Indian companies increased access to foreign funds through ADR/GDR.
Use of Aadhaar based KYCs for domestic retail investors
• In order to improve market access for the domestic retail investors, Aadhaar-based KYC to be permitted for opening of Demat account and
making investment in mutual funds
• Necessary notification for amendments in PMLA Rules to be issued
Simplified KYC for foreign and investors and FPIs
Simplified KYC procedure to improve market access for foreign investors including FPIs
Offshore Rupee market
To bring offshore Rupee market to domestic stock exchanges and permit trading of USD -INR derivatives in GIFT IFSC, Ministry of Finance is working with RBI to introduce this measure shortly
Delayed payments from Government/ CPSEs to be monitored by Department of Expenditure and performance reviewed by Cabinet Secretariat
Decision to pay 75% of the arbitration awards
In contractual disputes by Government/ CPSEs to be implemented and monitored by Cabinet Secretariat
Rs 100 lakh crores for developing modern infrastructure over 5 years
• An inter-ministerial Task force is being formed by Department of Economic Affairs to finalise the pipeline of infrastructure projects.
• The above initiative is expected to boost growth and creation of jobs. These projects would be monitored actively to accelerate capital expenditure and investments in the economy.
BS IV vehicles purchased till 31.3.20
To remain operational for entire period of registration
Revision of one time registration fees
Being deferred till June 2020
Higher depreciation for all vehicles
Additional 15% depreciation on all vehicles, to increase it to 30% acquired during the period from now till 31.03.20
Both EVs and ICVs will continue to be
Government’s focus will be on setting up of infrastructure for development of ancillaries /components including batteries for export registered
To boost demand
• Government shall lift the ban on purchase of new vehicles for replacing all old vehicles by Departments
• Government will consider various measures including scrappage policy.
Ministry of Finance to continue to engage
With stakeholders for timely and suitable interventions for different sectors
- Roll out of ‘AIS for Taxpayer’ Mobile App by Income Tax Department
- Addition sustained for claiming accumulated depreciation in Profit and Loss Account
- GSTN Advisory on HSN Code Reporting in e-Invoice on IRPs Portal
- ICAI Guidance Note on Audit of Banks, 2023 Edition
- GSTN Advisory for taxpayer to register as “One Person Company” in GST Portal