Finance Minister Honourable Smt. Nirmala Sitaraman Address to Media and Press Release On 23rd August 2019

q The whole presentation was structured in 32 slides with 6 compartments of Specific areas of concern for economic slowdown.

q Global GDP is at 3.2% and likely to be revised downwards, being global demand is very weak.

q Advanced economies also facing slow down largely due to trade war between US and China and China continuously devaluing its currency.

q India bubble positioned very high in terms of Growth rate, probably the highest in world.

FM reiterated the Prime Minister quote that “Govt. Respect & Honour the Wealth Creators”

Further, the Govt. endeavour is towards Reforms, which is top of agenda since 2014. The whole momentum is towards the reforms of:

ü  Environment Clearances

ü  Labour Reforms

ü  Taxation Reforms : Prefilled IT Returns ; Faceless Scrutiny to start from Vijyadashmi festival (Oct 5, 2019)

And constant focus on Ease of Doing Business

·        Reduction in number of GST returns

·        Refund of GST process will be automatic

·        Risk based approach in dealing with all tax payers

·        Jurisdiction free labour inspection

·        Single window clearances for MSME under various laws

·        Compounding of offences will be shifted to monetary penalty rather than prosecution

·        Shifting of 16 offence sections to monetary penalty only instead of prosecution

·        Withdrawal of 1400 prosecutions under the Companies Act.

·        Govt. has no intention of harassment of assesses and pursue prosecution

·        Robust IBC framework

Section 1 : Respecting Wealth Creators

Ø CSR: Delay in execution of projects will not be a criminal matter rather considered civil matter

Ø Income Tax orders, notices, summons will all be issued through Centralised Computer System with Document Identification Number (DIN) from 1^st October 2019

Ø All existing pending notices as on 1^st October 2019 will be routed through DIN mechanism

Ø Any harassment issues will be addressed in favour of assesse

Ø All notices to be dispensed by officials within 3 months of reply submitted.

Section 2: Taxation

Ø Relief from enhanced surcharge announced in budget 2019 in Short Term and Long Term Capital Gains in Equity u/s 111A and 112A

Ø Enhanced surcharge on FPIs have been removed and brought back to pre-budget scenario; Impact on Govt. collection to the tune of Rs. 1400 crores

Ø Anti-abuse Angel Tax provisions will not be applicable in case genuine difficulty for start-ups registered with DPIIT. Section 56 (2)(b) of IT Act will not be enforced to start- ups.

Ø Dedicated cell under the supervision of Member of CBDT to address the issues of start- ups

Ø Additional comment during question-answer session by FM that surcharge on HNIs will be reviewed on 75^th Anniversary of Independence Day of India.

Section 3: Banks/ NBFCs/MSME Sector

Ø Govt. will release upfront Rs.70K crores announced in budget 2019 and another Rs. 5 Lakh crore to Public Sector Banks (PSBs)

Ø PSBs have decided with Govt. to pass on the benefits of rate cuts through MCLR reduction.

Ø Also PSBs have agreed to link interest rates  with Repo Rates or External benchmarks as insisted by RBI

Ø PSBs have agreed to handover the documents of mortgage (title deeds etc.) within 15 days of closure of loans (housing, vehicle, corporate loans etc.)

Ø Clients will have facility of online tracking of application of loans (similar like courier tracking) which will increase transparency and reduce harassment.

Ø One time loan settlement (OTS) will be introduced based on checkbox approach

Ø Protect decision making by officials of bank which will remove fear and stagnation. IAC will be formed woahich will classify decisions on Vigilance and Non Vigilance categories.

Ø Credit support to retail sector (viz, Auto, Home & consumer loans) through additional liquidity announcement from Rs. 20K crores to Rs. 30 K crores by NHB.

Ø Also partial credit guarantee scheme for NBFCs through support of Rs. 1 Lakh crores

Ø NBFCs can now accept KYC through Aadhar

Ø Liquidity movement from PSB to NBFC will increase

Ø GST refunds due to MSME will be released in time bound manner with 30 days

Ø Future GST refunds to be sorted out within 60 days

Ø TReDS system for MSME will be able to use GSTN system ; banks/NBFCs will honour and accept invoices through GSTN system for Invoice discounting under TReDS

Ø Govt. will make amendment in MSME Act for comprehensive Single definition which may link to investments in plant & machinery rather only to turnover

Ø Govt. is trying to implement recommendations of UK Sinha committee

Section 4: Financial Markets

Ø Indian Companies will have access to global markets through ADR and GSR issue

Ø Aadhar based KYC for opening Demat A/c

Ø Simplified KYC norms for FPIs

Ø Offshore Rupee market will be permissible through GIFT City / IFSC for USD-INR bond issues

Section 5: Infrastructure

Ø All delayed payments by Govt. departments / CPSEs will be monitored through Dashboard

Ø Rs. 30 K crores payments for Infra projects will be cleared quickly, except cases of litigation.

Ø Provision of 75% payment clearance through Arbitration award

Ø Govt. will provide Rs. 100 Lakh crores to develop modern infra over 5 years

Section 6: Automotive

Ø Clarification that all BS-IV vehicles purchased until 31^st March 2020 will be operation until entire period of registration.

Ø Upward Revision of registration fees have been deferred until June 2020

Ø In order to address the issue of piled up inventories of vehicle with dealers, Govt. announces additional 15% depreciation eligibility on all type of vehicles purchased from now till 31^st March 2020. (Depreciation increased from 15% to 30%)

Ø In order to boost demand Govt. is lifting ban on Govt. departments to replace old vehicles. Hence, Govt. buying of new vehicles for replacing old ones will start.

Ø EVs and ICEs both will be registered and co-exist in the country.

Ø Govt. will soon come with Vehicle Scrappage policy after addressing the issues of Infrastructure for scrappage and mechanism of issuing coupons to scrapping vehicle owners.

Additional Input by FM for Home Buyers

Ø Realising the issue of unsold inventory in NCR and Mumbai Govt. will soon announce a solution for easing the real estate challenges of unsold inventory.

Home buyer and some of the other areas will be announced by FM some time middle of next week (may be twice address to Media)