1. Economy
1. 1.
Startups cheer as rule changes ease path for receiving new investments
CBDT clarifies relief like an increase in the limit
to Rs 25 crore and raising of benefit period to 10 years will be available from
February 19.
Indian startups are cheering the bonanza of the
proposed implementation of the recent changes to the ‘angel tax’ from February
19. The Department for Promotion of Industry and Internal Trade (DPIIT) has
announced new norms including a change in the definition of startups to help
budding entrepreneurs to benefit from the full range of the angel tax
concession, media reports say.
The new norms that the Central Board of Direct
Taxation (CBDT) has issued raise the limit of investments that can benefit from
angel tax norms to Rs 25 crore. The angel tax is the income tax payable on
capital unlisted companies raise through the issue of shares where the share
price is in excess of the fair market value of the shares sold. The excess
realisation is treated as income and taxed accordingly. The angel tax was first
introduced in the 2012 Union Budget by then finance minister Pranab Mukherjee
to tackle money laundering. The tax has come to be called angel tax because it
mostly affects angel investments in startups.
The CBDT will implement the detailed framework the
DPIIT has formulated for which it recently issued a new clarification,
according to a report in The Economic Times. The CBDT has said section 56
(2)(viib) of the Income Tax Act prescribing the angel tax will not apply to
consideration in excess of the fair value of shares issued to an investor if
the funds had been received in accordance with the DPIIT’s conditions. In the
past, the amount a startup raises by the issue of shares in excess of the fair
market value was being deemed as income from other sources liable to be taxed
at 30 per cent, deterring angel investors.
The new provisions have also raised the investment
limit for a startup to seek exemption under the section to Rs 25 crore from Rs
10 crore. The startups would also be able to avail themselves of the tax
benefits for up to 10 years as against seven years earlier, according to
reports. The only condition is that the startup will have to submit a
self-declaration about the use of the raised amount to the DPIIT, which will be
forwarded to the CBDT.
“……this was a procedural notification which the
CBDT was required to issue to put in place the mechanism for claiming benefit
given to startups by the earlier DPIIT notification. Startups are elated the
notification came at a time when many said they had received notices under
Section 56(2)(viib), adversely affecting their businesses. The CBDT has
reportedly directed the field staff to clear the proceedings if the tax demands
have been raised.
(Source: International Business Times – By
Prathapan Bhaskaran, 8 March 2019)
2. 2.
Government completely bans import of solid plastic waste to fight pollution
It is to be noted that China had banned such
imports a few years ago, in the meanwhile India became one of the largest
importers of plastic waste.
The central government has now completely banned
the imports of solid plastic waste/scrap into the country. The decision has
been taken to fight the ever-growing plastic waste in India. As per the
official data, the country generates 25,940 tonnes of plastic waste daily. In
the past, such imports were partially banned as only the special economic zones
(SEZ) were allowed to import such solid wastes. Additionally, the government
had also allowed the imports of plastic waste/scrap by export-oriented units
(EOUs) which used to procure it from abroad as post-recycling resources.
Quoting one of the environment ministry officials,
national daily, the Times of India reported that keeping up with India’s
commitment to completely phase out single-use plastic by 2022, the government
has now entirely banned the imports of solid plastic waste. He added, “The
country has now completely prohibited the import of solid plastic waste by
amending the Hazardous Waste (Management & Trans-boundary Movement) Rules
on March 1.” He further said that the rules were changed because of the huge
mismatch between waste generation and recycling capacity in the country.
It is to be noted that China had banned such
imports a few years ago. Meanwhile, India became one of the largest importers
of plastic waste. In India, many companies were misusing the partial ban on the
pretext of being in an SEZ. The country lacks the adequate capacity to recycle
plastic waste and it is because of this reason a huge amount of such wastes
remains uncontrolled. This eventually causes heavy damages to soil and water
bodies. A study conducted by the Central Pollution Control Board (CPCB) shows
that out of 25,940 tonnes of plastic waste per day around 10,376 tonnes remains
uncollected. The figures are astonishingly high as it is almost 40 per cent of
the total waste generated.
The ministry has made changes in the existing
rules, now white category (practically non-polluting or very less polluting) of
industries will dump their hazardous wastes generated to authorised users,
waste collectors or disposal facilities. Since its inception in 1950, global
plastic production has increased exponentially, from 2 million tonnes to 380
million tonnes in 2015. Its sheer convenience — lightweight and durability –
has made this man-made material present in every sphere of human existence. In
the last 70 years, 8.3 billion tonnes of plastic have been produced.
(Source: International Business Times – By Ashesh
Shukla, 7 March 2019)
3. 3.
Cross-border insolvency law changes to boost ease of doing business in India
A separate section in the Insolvency and Bankruptcy
Code (IBC) modelled after international best practices will help partners in
foreign tie-ups.
A proposal by the Narendra Modi government to tweak
the bankruptcy law to tackle cross-border insolvency is expected to boost the
country’s ease of doing a business ranking, media reports say. India made huge
strides in the World Bank’s Ease of Doing Business ranking to reach 77th
spot among 190 countries in 2018 from 100 in 2017.
The government proposes to bring about the changes
through an ordinance amending the Insolvency and Bankruptcy Code (IBC) and
adding a chapter on cross-border insolvency, a report said. The amended law is
aimed at giving comfort to foreign investors in India and vice-versa. The new
law will reduce the time for exchanging information with another country,
encouraging foreign investors and multi-lateral agencies such as the World
Bank.
A panel headed by Corporate Affairs Secretary
Injeti Srinivas recommended using the model law formulated by the United
Nations Commission on International Trade Law, known as the UNCITRAL model,
which has been accepted by 44 nations including some from where India’s major
investments originate like the US, the UK and Singapore. A cabinet nod for the
new law is soon expected, according to a report in Business Standard.
In view of the general election 2019 in a couple of
months, only the next government may introduce a bill in parliament. Such
cross-border insolvency provisions empower foreign creditors to get back money
lent to Indian corporate entities. The reciprocity of the law makes it easier
for Indian companies to claim their dues from foreign companies. The
cross-border insolvency provisions in sections 234 and 235 of the IBC have not
yet been notified and cannot be enforced. The amended law will replace the
provisions and make the Indian law up to international best practices.
The government is aware of the limitations of any
law handling cross-border insolvency because in the case of some foreign
governments bilateral treaties are required for effective execution, an
unidentified official in the Ministry of Corporate Affairs told the newspaper.
Such treaties take a long time finalising as each
one is different and all through the protracted negotiations, foreign investors
will be uncertain of the provisions. The ambiguity will also affect Indian
courts and the National Company Law Tribunal (NCLT), which have to handle each
case separately.
The compulsion for an altogether separate section
for handling insolvency of cross-border investors is to make the law more
comprehensive based on a global model so to encourage its global acceptance.
The new law will revolutionise the key aspects of cross-border insolvency
litigation. The law will give direct access to foreign insolvency professionals
and foreign creditors to participate in or commence domestic insolvency
proceedings against a defaulting debtor. Under the law, foreign proceedings and
remedies will find acceptance in Indian courts. It will enable cooperation
between domestic and foreign courts and domestic and foreign insolvency practitioners
as also coordination between two or more concurrent insolvency proceedings in
different countries, according to sources.
(Source: International Business Times – By
Prathapan Bhaskaran, 5 March 2019)
2. Science
4. 4.
New study finds evidence of extraterrestrial life on Mars; could revolutionise
future space missions
The discovery of alien life on Mars is expected to
revolutionise future Mars missions and planetary colonisation projects.
Conspiracy theorists including popular
extraterrestrial researcher Scott C Waring have been long alleging that alien
life might be thriving or might have thrived on Mars. Adding heat to these long
spanning claims, a new study published in the Journal of Astrobiology and Space
Science has suggested the possible presence of alien life forms on the Red
Planet.
As per the new study report, NASA’s Curiosity Rover
has snapped images of fungi and algae on Mars. Even though NASA has not
admitted or denied the conclusions made in the study, several space experts
strongly believe that this research report is indisputable proof of alien
presence on Mars.
It should be noted that the potential alien life
which has been now spotted on Mars are not evolved, but rather simple living
beings like fungi and algae.
As per Dr Regina Dass of the Department of
Microbiology, School of Life Sciences, India, the lead author of the study,
Curiosity Rover has sent at least 15 images that show fungi and algae growing
on the Martian surface.
“There are no geological or other abiogenic
forces on Earth which can produce sedimentary structures, by the hundreds,
which have mushroom shapes, stems, stalks, and shed what looks like spores on
the surrounding surface. In fact, fifteen specimens were photographed by NASA
growing out of the ground in just three days,” said Dass, Express.co.uk
reports.
Dr Vincenzo Rizzo, a
National Research Council biogeologist revealed that the seasonal fluctuations
of methane in the Martian atmosphere can be connected with natural life-and-death
cycles of organic matter on earth.
The study report is expected to revolutionise
future space missions to Mars. Upcoming probes to Mars by NASA is expected to
analyse these Martian fungi so that the habitat in which they are thriving can
be studied in depth. Potential life on Mars, even in its simplest form will
also raise the hope of surviving on Mars during colonisation.
Earlier, SpaceX founder Elon Musk had revealed that
he will surely go to Mars despite minimal chances of survival. With this new
discovery, it has been proved that alien life, at least in the simplest form
can survive on the Red Planet, and this will surely elevate the projects which
are being now carried out aiming at colonizing Mars.
A few weeks back, self-proclaimed researcher Scott
C Waring had claimed to have spotted fossil-like structures on Mars. In a post
on his website ‘UFO Sightings Daily’, Waring argued that Mars was once home to
an alien civilisation. The researcher also urged United States President Donald
Trump to make him the head of NASA, so that he can unveil the unknown mysteries
surrounding alien life on the Red Planet.
(Source: International
Business Times – By Nirmal Narayanan, 25 March 2019)
