Regulatory Updates

Registers Under Various Labour Laws Goes Online
TRAI’s Consultation Paper on Using Alternative Sources of Energy
Recommendations on Licensing Framework for Audio Conferencing/Audiotex/Voice Mail Services
Amendments to The India-Israel Tax Treaty

Registers Under Various Labour Laws Goes Online

On 21 February 2017, the Ministry of Labour and Employment released new Rules for maintaining various registers under various labor laws. In some cases, these registers are combined. So from a unwieldy 56 registers it is now 5, and that too online. It is estimated that nearly 5.85 crore establishments in agriculture and non- agriculture sectors, will benefit from this.

These registers are related to details of employees, their salaries, loans/recoveries, attendance and others.

With ease of doing business, one can certainly expect better compliances.

TRAI’s Consultation Paper on Using Alternative Sources of Energy

On 16 January 2017, TRAI released a Consultation Paper on Approaches towards Sustainable Telecommunications. This aims in making ICT sector (Information and Communications Technology) in India, more energy efficient. Amongst other goals, this paper outlines methods that telecom service providers can use for energy efficient technologies and to rely on alternative sources of energy. The deadline for comments from stakeholders is extended to 14 March 2017.

Recommendations on Licensing Framework for Audio Conferencing/Audiotex/Voice Mail Services

On 19 August 2013, the Department of Telecommunication (DoT) had issued the guidelines for grant of Unified Licenses for Audio Conferencing/Audiotex/Voice Mail Services. With the change in technology there was a need to review these guidelines.

DOT had referred to TRAI, the updated terms and conditions for issuance of fresh licenses and migration of existing licenses for Voice Mail Services/Audiotex/Unified Messaging Services for its review.

TRAI released its consultation paper on 14 April 2016 on Review of Voice Mail Services/Audiotex/Unified Messaging Services License for stakeholders’ recommendations.

Now, TRAI has recommended a new chapter in Unified License for Audio Conferencing/Audiotex/Voice Mail Services which includes an option for existing licenses of Voice Mail Services/Audiotex/Unified Messaging Services License to migrate to Audio Conferencing/Audiotex/Voice Mail Services. The salient features of recommendations are available here.

Amendments to The India-Israel Tax Treaty

The recently revised Indo-Israel tax treaty has several amendments which come into force from 1 April 2017. Apart from the

1) Limitation of Benefit (LOB) and Principal Purpose test

The LOB Article has been inserted to restrict the tax treaty benefits if the principal purpose test is not met. It states that the benefits of the tax treaty will not be available to a resident of Israel, if the purpose of setting up an entity in Israel was to obtain the benefits under this tax treaty.
The LOB Article also provides that the benefits under the tax treaty would be available only to the beneficial owner of the income. It also provides both countries with the right to apply domestic laws on prevention of tax evasion or tax avoidance (i.e. General Anti-Avoidance Rule (GAAR) which will be enforced in India from 1 April 2017).

2) Most Favoured Nation clause of the Protocol gets deleted

As per the existing tax treaty, clause 2 (the Most Favoured Nation) of the Protocol provides that, in case India enters into a tax treaty with any other country which provides a lower rate or a restrictive scope for payments in the nature of royalty, Fees for Technical Services (FTS), interest and dividend, then such lower rate or restrictive scope shall also apply to the tax treaty between India and Israel.   In the revised tax treaty, the MFN clause has been omitted.

3) Other highlights

  • The article on exchange of information categorically states that requests for information cannot be denied solely because the said information is held by a bank, a nominee, a person in an agency acting in a fiduciary capacity or any other financial institution. Further, if the information is sought by one country, then the other country cannot refuse to divulge the information on the grounds that it does not need the said information for its tax purposes.
  • The existing tax treaty provided that the gains earned from the alienation of shares, the assets of which consists of immovable property, may be taxed in India. The revised tax treaty provides that gains from the alienation of shares, deriving more than 50% of their value directly or indirectly from immovable property situated in India (at the time of alienation or at any time during the 12 preceding months), may be taxed in India.
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