India Advocacy

The Delhi High Court has issued a final ultimatum to the Centre, granting it eight weeks to formulate a policy on the online sale of drugs. The court expressed dissatisfaction with the prolonged delay, emphasizing that ample time had already elapsed for the Union of India to establish the necessary framework. The division bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna warned that if the order is not complied with within the stipulated eight weeks, the concerned joint secretary must appear before the court at the next hearing.

Long-standing Delay: The court noted that over five years had passed since the directive was issued, and it expected the government to expedite the formulation of the policy. Despite the government’s claim of ongoing consultations and deliberations on the 2018 draft notification related to online drug sales, the court emphasized the need for prompt action.

Background of the Case: The High Court was addressing a series of petitions urging a ban on the illicit online sale of drugs. These petitions also contested the draft rules proposed by the government to amend the Drugs and Cosmetics Rules of 1945.

Previous Court Orders: In 2018, the Delhi High Court had issued an interim order instructing the government to take action against individuals involved in the online sale of drugs without a valid license. Subsequently, contempt petitions were filed against the government for its alleged failure to address the issue of non-compliant e-pharmacies.

The court’s insistence on a prompt policy formulation reflects its commitment to regulating the online sale of drugs and ensuring public safety in the pharmaceutical sector.*

In a move to streamline the adjudication process, the Indian government is contemplating a request to the Supreme Court to consolidate all Goods and Services Tax (GST) online gaming cases currently in litigation. A senior official from the Finance Ministry explained that the request is grounded in the need for a unified interpretation of the taxability issue surrounding online gaming.

Clubbing Cases for Clarity: If accepted by the Supreme Court, the order would consolidate all pending cases, preventing multiple interpretations of the same tax law. This would simplify the decision-making process, bringing coherence to the legal landscape surrounding GST on online gaming.

Efficiency and Resource Saving: The potential consolidation aligns with the government’s aim to save resources and time for the Central Board of Indirect Taxes and Customs (CBIC). Combining cases into a single litigation would facilitate a comprehensive resolution and avoid redundant legal procedures.

Gameskraft Case and GST Council’s Decision: The move coincides with the imminent Supreme Court hearing on the Gameskraft case, where the gaming company contests a notice demanding Rs 21,000 crore in GST arrears. The GST Council had earlier approved a 28 percent GST rate on all online games effective from October 1, 2023, leading to multiple GST notices totaling Rs one lakh crore issued to online gaming companies this year.

Dispute Over Tax Applicability: The government’s interpretation, asserting the applicability of the 28 percent tax rate before October 1, 2023, has sparked disagreements with online gaming firms. Companies argue that the revised tax rate should only be effective from October 1, 2023.

Ongoing High Court Cases: Various High Courts, including Bombay HC, Goa bench of Bombay HC, and Sikkim HC, are currently hearing cases related to GST notices served to online gaming companies and casinos. The legal battle involves major players like Dream 11, Games 24×7, and Head Digital Works.

Legal Developments: Recent legal actions, such as the Bombay High Court in Goa prohibiting authorities from making definitive decisions without prior court approval, and the Sikkim High Court staying a GST demand notice of Rs 628 crore against Delta Corp, highlight the intensity of the ongoing legal tussle between the government and online gaming entities.*

In a significant funding round, Direct-to-Consumer (D2C) beauty and wellness startup Nat Habit has raised $10.2 million in a series B funding, with Bertelsmann India Investments (BII) leading the investment. The funding round also included participation from existing investor Fireside Ventures, along with Amazon India Fund, Mirabilis Investment Trust, and Sharrp Ventures.

Exit Strategy for Early Investors: A noteworthy aspect of the funding is the allocation of $2 million to facilitate an exit for early-stage investors, promising substantial returns of nearly 4.5 to 5 times their initial investment over a four-year period, according to a statement from Nat Habit.

Strategic Utilization of Capital: Nat Habit intends to utilize the capital for various purposes, including research and development, product development, brand building, offline expansion, and recruitment. The startup aims to strengthen its position in the market and enhance its offerings.

Company Background and Vision: Founded in 2019 by Swagatika Das and Gaurav Agarwal, Nat Habit has garnered a significant customer base, serving approximately 14 lakh customers and shipping 15,000 units per day. The startup emphasizes natural and ayurvedic care, positioning it as a lifestyle choice for consumers.

Proprietary Formulations and Expansion Plans: Nat Habit distinguishes itself by creating proprietary formulations using fresh ingredients such as raw milk, fruits, and herbs. With the recent funding, the company plans to double down on building a stronger community and aims to become the preferred brand for daily personal care needs in India.

Market Outlook: The Indian beauty and personal care market are poised for substantial growth, with Nat Habit aiming to capitalize on this trend. Over the next 24 months, the company plans to expand its product portfolio and venture into offline channels to reach a broader audience.

The beauty and personal care market in India is projected to experience a compound annual growth rate of 10%, reaching $30 million by 2027. Nat Habit’s unique approach to fresh products and natural ingredients has garnered customer love and strong retention, making it a noteworthy player in the evolving landscape.

Limited Liability Partnership (LLP) in India offers a streamlined and cost-effective business structure, providing partners with limited liability protection. Here’s a step-by-step guide on how to register an LLP online:

1. Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN):

• Acquire a DSC from licensed Certifying Authorities, serving as a legally recognized digital signature.
• Obtain a unique DIN for individuals appointed as directors in the LLP.

2. Reserve Unique Name (LP-RUN):

• Utilize the free name search facility on the Ministry of Corporate Affairs (MCA) portal.
• Enter up to six proposed names for approval by the Registrar, ensuring uniqueness and non-similarity to existing entities.

3. Fill and Submit Form 1:

• Click on the ‘E-form’ link and select Form 1 for name reservation.
• Provide details of at least two designated partners of the proposed LLP.
• Attach DSC and submit the form along with the applicable fee.

4. Incorporation Document and Statement (Form 2):

• Once the name is approved, log in to the MCA portal.
• Navigate to MCA Services > E-Filing > LLP Forms Download > Incorporation Document and Statement (Form 2).
• Fill the form and pay the required fee based on the total monetary value of partners’ contributions.

5. Digital Signatures and Submission:

• Digitally sign the form using the designated partner’s permanent DPIN.
• Additionally, the form must be digitally signed by an advocate, company secretary, chartered accountant, or cost accountant.

6. Registrar’s Approval and Certificate of Incorporation:

• The registrar will analyze the submitted form.
• If found satisfactory, the LLP will be registered within 14 days.
• A Certificate of Incorporation will be issued, marking the official establishment of the LLP.

Note: Complying with these steps ensures a smooth online LLP registration process, providing entrepreneurs with the benefits of limited liability and simplified annual compliances.

Choosing the right term insurance plan can be daunting, but careful consideration of key factors ensures clarity and addresses common concerns. To secure financial stability during health crises, evaluating your requirements and understanding policy nuances is paramount. Here are seven crucial tips to guide you in selecting the most fitting term insurance plan.

1. Evaluate Financial Commitments: Initiate the process by assessing your financial commitments, including loans, family expenses, and future goals. Determine a coverage amount that adequately supports your dependents, factoring in inflation and potential liabilities.

2. Thorough Policy Document Examination: Before finalizing a term insurance plan, meticulously read the policy document. Understand terms, conditions, and exclusions, paying particular attention to claim settlement procedures, premium payment frequency, and the policy’s tenure.

3. Wisdom from Adhil Shetty, CEO, Bankbazaar.com: Adhil Shetty emphasizes paying attention to crucial details such as claim settlement procedures, premium payment frequency, and potential hidden clauses. Clarifying doubts with the insurer ensures transparency for informed decision-making.

4. Choosing the Right Insurer: Select a reputable and financially stable insurer. Research various insurance companies, considering their claim settlement ratios, customer reviews, and overall market reputation. Opt for an insurer known for prompt and fair claim settlements and quality customer service.

5. Compare Premiums and Benefits: While affordability is vital, don’t solely focus on the lowest premium. Compare premium rates and benefits offered by different insurers, ensuring a balance between affordability and comprehensive coverage. Explore additional features like riders or add-ons.

6. Honesty in Information Disclosure: Provide accurate and complete information during the application process. Misinformation or non-disclosure can lead to claim rejection. Disclose health conditions, habits, and relevant details truthfully to ensure hassle-free claim settlements.

7. Consider Add-Ons or Riders: Explore additional riders or add-ons available with term insurance policies. Critical illness cover, accidental death benefit, or premium waiver for disability can enhance coverage. Evaluate cost-effectiveness before opting for additional riders.

8. Regular Policy Reviews: Life circumstances can change unexpectedly. Periodically review your term insurance policy to align with current needs. Major life events such as marriage, childbirth, or career advancements may necessitate adjustments in coverage. Stay updated with policy modifications and changes.

By adhering to these seven considerations, you can confidently navigate the term insurance landscape, making decisions that effectively safeguard your family’s financial future.

The Ministry of Micro, Small, and Medium Enterprises (MSME) has reported a remarkable increase in the share of women-owned MSMEs registered on the government’s Udyam portal. As of December 4, 2023, out of the total 3.16 crore MSMEs registered since the portal’s launch on July 1, 2020, an impressive 37.13% (1.17 crore units) are led by women entrepreneurs.

Rapid Growth from 19.43% to 37.13%

This surge represents a significant leap from the 19.43% share reported as of August 1, 2023, indicating a rapid increase in women’s participation in the MSME sector. Minister of State in the MSME Ministry, Bhanu Pratap Singh Verma, shared these statistics in a written reply to the Rajya Sabha, highlighting the positive trend.

Government Initiatives and Schemes

Various government initiatives and schemes have played a crucial role in fostering the growth of women-led MSMEs. Schemes such as the Prime Minister’s Employment Generation Programme (PMEGP), Mahila Coir Yojana, and increased guarantee coverage of credit to 85% for women entrepreneurs under CGTMSE have contributed to this encouraging shift.

Amit Shah’s Endorsement and Empowerment Metrics

Home Minister Amit Shah, acknowledging the government’s commitment to women’s empowerment, highlighted key achievements. These include over 27.7 crore loans issued to women entrepreneurs under the Mudra scheme, more than Rs 33,000 crore loans sanctioned under the StandUp India scheme, and women-owned MSMEs delivering orders worth Rs 15,922 crore through the government public procurement marketplace (GeM).

In summary, the data reflects a positive trajectory for women in the MSME sector, with government support and focused schemes propelling their increased participation and success.

India’s gross GST collections for October 2023 stood at Rs 1.72 Lakh crore, marking a 13.4% increase from the previous year. Six years since its introduction, the Goods and Services Tax (GST) system has contributed to enhanced tax buoyancy, streamlined logistics, improved tax administration, and increased formalization of the economy. The sustained growth in tax collections reflects economic resilience amid global macroeconomic and geopolitical uncertainties.

Positive Fiscal Position

The fiscal year’s gross GST collections, totaling Rs 1.66 Lakh crore, exhibit an 11.4% growth compared to the same period last year. While the growth rate has moderated from the post-pandemic recovery years, the overall Compound Annual Growth Rate (CAGR) of ~11% since FY19 surpasses nominal GDP growth (~9.5%). This trend underscores the increasing formalization of the economy.

GST’s Evolution: A Unifying Force

The implementation of GST aimed to realize the vision of “One Nation, One Tax,” unifying and centralizing taxes on goods and services. The transformation has led to increased transparency, formalization, and a reduction in the compliance burden on taxpayers. The GST Council’s unique federal structure and the use of technology, including Data analytics, Artificial Intelligence, and RFID Tags, have played pivotal roles in achieving these objectives.

Effective Measures Against Tax Evasion

Efficient handling of fake GST invoices has contributed to revenue growth. Measures such as early identification of suspected entities, anti-evasion drives, and investigations have been instrumental. The GST Council’s continuous assessment and correction of inverted structures and tax loopholes, along with standardized rates, have encouraged businesses to join the tax net.

Structural Resilience Amid Global Headwinds

Despite global challenges, India’s economy has demonstrated remarkable resilience, reflected in high-frequency indicators and robust GST collections. Ongoing efforts to address challenges in the system, coupled with structural reforms, indicate a collective commitment to the economy’s structural resilience.

The ‘Discard ITR’ feature has emerged as a valuable tool for taxpayers seeking to rectify errors in their filed income tax returns (ITRs). This feature serves as a delete option for ITRs that have been submitted but are still pending verification. However, it comes with certain caveats and considerations that taxpayers must be mindful of.

When to Discard: Unveiling the Process

The ‘discard’ option is particularly beneficial for individuals who discover mistakes in their filed ITRs after submission. This feature allows them to delete the incorrect ITR and submit a new one with the necessary corrections. It’s important to note that the discard option is exclusively available for unverified ITRs. Once the e-verification process is complete, the discard button becomes inaccessible, requiring any corrections to be addressed through a revised return.

Important Considerations: Timing and Obligations

While the discard ITR feature provides flexibility, taxpayers should be aware that the filing of a new return after discarding is obligatory. The new filing date must adhere to the due date specified in income tax provisions to avoid potential penalties and interests associated with belated returns.

Irreversible Action: Exercise Caution

Choosing to discard an ITR is an irreversible action. Taxpayers must exercise caution and carefully evaluate the need for discarding, as a discarded ITR is considered as not filed at all. The income tax department expects the submission of a new ITR in place of the discarded one.

In summary, the ‘Discard ITR’ feature offers a solution for correcting errors in filed returns, but users should approach it with caution, understanding the implications and obligations associated with this decision.

In a recent “India’s Investment Readiness” survey conducted by Policybazaar.com across 350 cities, 63% of respondents expressed a clear preference for the Old Tax Regime over the New Tax Regime. The survey, targeting individuals within the taxable income bracket, aimed to understand the factors influencing Indians’ choice of tax regimes, especially with the New Tax Regime becoming the default option.

Factors Driving Preference

The findings reveal that tax-saving benefits and a sense of security offered by long-term savings instruments are key drivers behind the continued popularity of the Old Tax Regime. PPF (Public Provident Fund) and life insurance emerged as the most favored tax-saving instruments, chosen by 39% and 34% of respondents, respectively.

Demographic Shifts in Financial Prudence

The survey suggests a positive trend of financial prudence across India, with 71% of respondents making their tax regime choice based on meticulous calculations. Interestingly, women exhibited a slightly higher proactive approach than men, with 74% of women calculating tax liability under both regimes. Across age groups, a noteworthy shift is observed, with a majority in the 18-50 age group opting for the Old Regime, signaling an openness towards long-term investments.

Regional Dynamics and Preferred Instruments

Demographic sections traditionally limited in financial knowledge are showing recovery, with Tier 1, 2, and 3 respondents actively opting for the Old Regime. Southern India displayed the highest investment readiness at 65%, reflecting a collective shift in financial behavior.

Insurance and PPF: Shaping the Tax-Saving Landscape

The survey highlights a shift towards diversified investments, with PPF and life insurance emerging as the top tax-saving tools. This reflects an evolving financial landscape, indicating heightened awareness, prudent decision-making, and a preference for long-term financial stability among Indian investors.

These insights collectively paint a picture of a savings-centric mentality, where individuals are not only considering immediate tax benefits but also looking towards long-term gains from retirement-linked instruments, provident funds, pensions, and insurance.