Lok Sabha Question No. 3602 (UNSTARRED), answered on 2019-07-15
Subject: Ease of Doing Business
Ministry: CORPORATE AFFAIRS
Asked by: N.K. Premachandran

## MINISTRY OF CORPORATE AFFAIRS

## GOVERNMENT OF INDIA LOK SABHA

UNSTARRED QUESTION NO. 3602

ANSWERED ON MONDAY, THE 15th JULY, 2019

ASHADHA 24, 1941 (SAKA)

## EASE OF DOING BUSINESS QUESTION

3602.  SHRI N.K. PREMACHANDRAN:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) the details of relaxation given by the Government for ease of doing business during the last five years;
- (b) whether the Government evaluated the result of the relaxation given and if so, the details thereof;
- (c) whether the Government is aware that only big companies are enjoying the benefits and if so, the action taken by the Government to extend the benefit of relaxation for ease of doing business to all the companies;
- (d) whether the Government monitors the tax and other payments made by the corporates and if so, the details of the corporates that failed to pay their tax and other dues to the Government;
- (e)  the  details  of  the  action  taken  by  the  Government  to  realise  such Government dues from the corporates along with the total dues owed by the corporates to the Government during the last five years; and
- (f)   the details of the action for realize the dues?

## ANSWER

THE MINISTER OF STATE FOR FINANCE AND CORPORATE AFFAIRS

वित्त एिं कॉपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(SHRI ANURAG SINGH THAKUR)

(श्री अनुराग स ंह ठाक ु र)

(a):- The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry vide its OM dated 12.07.2019 stated that:-

Government  has  given  no  relaxations  to  any  specific  company.  However,  it  has undertaken several reforms to simplify and make it easy for companies to do

business.  Major  initiatives  undertaken  to  improve  business  environment  in  the country are given in Annexure-A.

Similarly Department of Revenue, Ministry of Finance vide its OMs dated 12.07.2019 has also provided a list of major initiatives undertaken by them to improve the ease of doing business in the country which is given in Annexure-B.

(b)  and  (c):-  The  DPIIT,  further  stated  that  investments  made  in  the  country  are affected by several factors including ease of doing business and it is difficult to establish a one-to-one correlation in these factors. No evaluation has been carried out  by  the  Government  for  identifying  results  of  relaxation  given  to  businesses. However, on account of various initiatives taken including reforms for Ease of Doing Business initiative, India's rank has improved from 142 in 2014 to 77 in 2018 and FDI inflow into India has been increased from around $36 billion in 2013-14 to $64 billion in 2018-19.

A  majority  of  business  reforms  have  been  implemented  predominantly  for  small scale industries. These include:-

- i. Company incorporation fee (levied on SPICe, AoA, MoA) has been eliminated for companies with authorized capital up to INR 15 lakh.
- ii. Corporate income tax has been reduced from 30% to 25% for companies with turnover upto INR 250 crore. This limit is proposed to be increased further to Rs 400 crore vide Finance (No.2) Bill, 2019.

iii.  Risk based inspections introduced for granting construction permits where self-certification is allowed in case of low risk buildings.

iv. The Commercial Courts Act, 2015 has been amended to reduce the pecuniary jurisdiction of commercial courts from INR 1 crore to INR 3 lakh.

(d)  to  (f):-  Department  of  Revenue,  Ministry  of  Finance  vide  its  OMs  dated 12.07.2019 stated that the Government monitors the tax and other payments made by each assesse/ taxpayer registered under relevant Acts operating under Central Excise/GST/Customs.  The  defaulters  are  dealt  as  per  provisions  of  the  said Acts/Rules thereunder.  The action to recover the dues is undertaken as per the provisions of the relevant Acts and rules thereunder. Such data is not maintained corporate wise.

Further,  the  Income  Tax  Department  makes  concerted  efforts  to  recover  the arrears  of  taxes  outstanding  against  various  corporate  taxpayers  including attachment of bank accounts and debtors, attachment and sale of movable and immovable  properties,  prosecution  of  the  Directors  of  the  company  for  nonpayment of taxes, etc. The amounts of total arrears of corporate tax outstanding and the amount recovered during the last five years are as under:

(Rs. In crore)

| Financial Year   | Corporate Tax Arrear Demand   | Corporate Tax Cash Collection   |
|------------------|-------------------------------|---------------------------------|
| 2014-15          | 2,64,614                      | 70,296                          |
| 2015-16          | 4,71,489                      | 20,917                          |
| 2016-17          | 3,82,580                      | 61,504                          |
| 2017-18          | 4,70,990                      | 81,847                          |
| 2018-19          | 4,88,594                      | 84,684                          |

It  is  mentionable that  a  substantial  part  of  the  outstanding  taxes  is  not  readily collectible due to various reasons including:

- (i) Company is in liquidation.
- (ii) Company is before NCLT under Insolvency and Bankruptcy Code.
- (iii) There are not adequate assets for sale and recovery.
- (iv) The tax demand has been stayed by the Income Tax Authorities, Income Tax Appellate Tribunal (ITAT) or High Court or Supreme Court.
- (v) Assets of the company are jointly attached with other Government agencies.

********

Some of the major indicator wise reforms undertaken by the Government towards easing the business environment in the country are as under:

## a. Starting A Business:

-  Introduced  a  single  form  SPICe  (Simplified  Pro-forma  for  Incorporating Company electronically) by merging five different applications in it i.e. Name reservation,  Company  incorporation,  Director  Identification  Number  (DIN), Permanent Account Number (PAN) and the Tax Deduction/Collection Account Number (TAN).
-  Introduced an e-form AGILE (Application for registration of the Goods and Services  Tax  Identification  Number  (GSTIN),  Employees'  State  Insurance Corporation (ESIC) registration plus Employees' Provident Fund Organization (EPFO) registration). Any applicant, if he wants to register for any of these bodies, can fill in e-form AGILE and get registration at the time of company incorporation itself. This form enables a user to apply for GST, EPF and ESI registration with the SPICe form.
-  Launch of a new and simplified web based service i.e. R.U.N. (Reserve Unique Name) for reserving a name. This has also removed the requirement to use a Digital Signature Certificate (DSC) during name reservation.
-  Incorporation fee reduced to zero for companies with authorized capital up to INR 15 lakhs
-  The  requirement  to  issue  a  physical  PAN  card  has  been  eliminated. Additionally, PAN and TAN are mentioned in the Certificate of Incorporation which is considered as a sufficient proof for PAN and TAN.
-  Online and common  registration for EPFO & ESIC is provided on ShramSuvidha Portal.
-  Registrations under Mumbai Shops & Establishments Act are provided in real time without any cost and any inspection
-  Eliminated the requirement of bank account details for GST registration
- b. Dealing with Construction Permits:
-  The process of obtaining a building permit has been streamlined and made faster and less expensive to obtain a construction permit.

-  Implementing an online system that has streamlined the process of obtaining building permit at the Municipality of New Delhi and Municipality of Greater Mumbai.
-  It also improved building quality control by introducing decennial liability and insurance.
- c. Getting Electricity:
-  In Delhi, service line charges have been capped to INR 25,000/- in electrified areas for Low Tension loads up to 150 KW
-  Time taken by the utility to carry out external connection works has been reduced.
- d. Getting Credit:
-  Secured creditors are paid first during business liquidation, and hence have priority over other claims such as labor and tax.
- e. Paying Taxes:
-  Paying taxes has been made easier by replacing many indirect taxes with a single indirect tax, Goods and Service Tax (GST), for the entire country. The previous sales taxes including the central sales tax, CENVAT, state VAT and the service tax have been merged into the GST. Unification of these taxes will  reduce  the  cascading  effect  of  taxes  and  make  taxes  paid  on  inputs creditable to a higher percentage.
-  Corporate income tax has been reduced from 30% to 25% for companies with a turnover up to INR 250 crores. This limit is proposed to be increased further to Rs 400 crore vide Finance (No.2) Bill, 2019.
-  Administrative charges on The Employees' Provident Funds Scheme, 1952 (EPFS) have been reduced in March 2017 from 0.85% to 0.65% of the monthly pay. The Employees' Deposit Linked Insurance (EDLI) administrative charges of 0.01% have been removed.
- f. Trading Across Borders:
-  Time  and  cost  to  export  and  import  has  been  reduced  through  various initiatives, including the implementation of electronic sealing of containers, upgradation  of  port  infrastructure  and  allowing  electronic  submission  of supporting documents with digital signatures.
-  Enhancement  of  risk-based  inspections  for  both  imports  and  exports, whereby only about 5% of goods are physically inspected.

-  Adoption of the Advance Bill of Entry which allows importers to start the process of customs clearance before the arrival of the vessel.  Upgrading equipment on the NhavaSheva Port in Mumbai by adding 15 new Rubber Tyre Gantry Cranes. The Phase 1 of the Fourth Container Terminal at the  Jawaharlal  Nehru  Port  Trust,  with  an  additional  annual  capacity  of 2,400,000 TEUs, was completed in February 2018.  The new container terminal, Adani CMA Mundra Terminal Private Limited has been fully operational since June 2017, with an additional annual capacity of 1,300,000 TEUs.  Implemented in April 2018, e-Sanchit is an online application system, under the Single Window Interface for Trade (SWIFT) that allows traders to submit all supporting documents electronically with digital signatures. g. Enforcing Contracts  The Commercial Courts Act 2015 has been amended to reduce the pecuniary jurisdiction of commercial courts from INR 1 crore to INR 3 lakhs to establish commercial courts at the District Level. h. Resolving Insolvency Section 42 of the Insolvency & Bankruptcy Code 2016 has been amended to provide that a creditor has the right to object to decisions of the liquidator accepting or rejecting claims against the debtor brought by the creditor itself

********

-  and by any other creditor.

A list of major initiatives undertaken by Department of Revenue, Ministry of Finance to improve the ease of doing business in the country:-

## Goods & Services Tax( GST)

- (a) Based  on  the  representations  received  from  various  stakeholders  and recommendations of the GST Council, the Government has taken various steps simplify GST and improve the ease of doing business in the country. Some of the initiatives that have been implemented in this regard are as follows:
- i. Vide notification No. 10/2019 - Central Tax dated 07.03.2019, the threshold limits of aggregate turnover for exemption from registration and payment of GST for the persons exclusively engaged in thesupply of goods has been fixed at Rs. 40 lakhs. The said limit shall be Rs. 20 lakhs in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand with effect from 01.04.2019.
- ii. Service  providers  making  inter-State  supplies,  including  those  supplying through  e-commerce operators, whose aggregate annual turnover does not exceed Rs. 20 Lakh, have been exempted from the requirement of registration under GST.
- iii. The  GST  Council,  in  its  32 nd   meeting  held  on  10.01.2019,  recommended  to increase  the  limit  of  annual  turnover  in  the  preceding  Financial  Year  for availing Composition Scheme for supplier of Goods to Rs 1.5 crores. The said limit would be Rs. 75 lakh in special category States of Arunachal Pradesh, Manipur,  Meghalaya,  Mizoram,  Nagaland,  Sikkim,  Tripura  and  Uttarakhand. Also,  the  compliance  under  Composition  Scheme  has  been  simplified  as composition  taxpayers  have  to  file  only  one  annual  return  with  quarterly payment of taxes (along with a simple declaration). This has been implemented  w.e.f.  01.04.2019  vide  issuance  of  notification  No.  14/2019Central Tax dated 07.03.2019.
- iv. A Composition Scheme has been made available for suppliers of services (to those who are not eligible for the presently available Composition Scheme) with a tax rate of 6% (3% CGST +3% SGST) having an annual turnover in the preceding Financial Year up to Rs. 50 lakhs. They would be required to file one annual return with quarterly payment of taxes. This has been implemented w.e.f. 01.04.2019 vide issuance of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019.

- v. The amount of late fee payable under section 47 of the CGST Act was waived off  for  the  registered  persons  who  failed  to  furnish  the  details  of  outward supplies  in  FORM  GSTR-1  for  the  months/quarters  from  July,  2017  to September, 2018 by the due date but furnishes the said details in FORM GSTR1 and FORM GSTR-3B between the period from 22.12.2018 to 31.03.2019. This has  been  implemented  vide  notification  No.  75/2018  -  Central  Tax  dated 31.12.2018  and  notification  No.  76/2018  -  Central  Tax  dated  31.12.2018 respectively.

Some of the initiatives that have been announced and will be implemented in near future are as follows:

- vi. New return model: The GST Council, in its 31st meeting held on 22.12.2018 at New  Delhi,  decided  that  a  new  GST  return  system  will  be  introduced  to facilitate taxpayers. All taxpayers, excluding small taxpayers having aggregate turnover below Rs. 5 crores, and a few exceptions like Input Service Distributor  (ISD)  etc.  shall  file  one  monthly  return.  The  details  of  outward supplies shall be reported in FORM GST ANX-1 and FORM GST ANX-2 shall capture the details of inward supplies for availing input tax credit. Return filing dates shall be staggered based on the turnover of the taxpayer. Invoices can be uploaded continuously by the seller and can be continuously viewed and locked by the buyer for availing input tax credit. NIL return filers (no purchase and  no  sale)  shall  be  given  facility  to  file  return  by  sending  SMS.  Small taxpayers (annual turnover less than Rs 5 crores) shall have the facility to file quarterly return with monthly payment of taxes on self-declaration basis. The GST  Council,  in  its  35 th   meeting  held  on  21 st   June,  2019,  had  approved  a roadmap for the phased rollout of the new return system starting from July, 2019.
- vii. Aadhaar-enabled GST Registration: In order to ease the current process of GST registration  and  reduce  the  paperwork  involved,  GST  Council,  in  its  35 th meeting  held  on  21 st   June,  2019,  has  given  in  principle  approval  to  a  new system  for  verification  of  taxpayers  registering  themselves  under  GST  by linking their Aadhaar number with GSTIN (GST Identification Number).

## Central Excise (CX)

- i. Vide Notification  No.12/2014 - Central Excise (N.T.) dated 3rd March, 2014 the  government  has  simplified  procedures,  safeguards,  conditions  and limitations for grant of refund of CENVAT Credit under rule 5B of CENVAT Credit Rules, 2004
- ii. Vide Notification no 11/2014-CENT dated 28-02-2014 Government simplified/amended the quarterly return form for dealers/importers

- iii. Vide  Notification  No.  19/2015-CENT  dt.  18-09-2015  department  notified conditions, safeguards and procedure for supply of tags, labels, printed bags, stickers, belts, buttons and hangers produced or manufactured in an EOU and cleared without payment of duty to DTA for exports in terms of Para 6.09 (g) of FTP 2015-20.
- iv. Amendment  was  made  vide  Notification  09/2015-CENT  dt.  01-03-2015  in Central  Excise  (Removal  of  Goods  at  Concessional  Rates  of  Duty  for Manufacture of Excisable Goods) Rules, 2001 to allow submission of Letter of Undertaking in lieu of bond with surety and security by a manufacturer with clean track record.
- v. Vide  Notification  No.  40/2016-CENT  dt.  26-07-2016  Government  amended notification No. 36/2001-Central Excise (N.T.) dated 26th June, 2001, so as to exempt a manufacturer or principal manufacturer of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986) from taking central excise registration upto the full exemption limit.
- vi. Payment  of  duty  online  for  all  assesses  (Notification  9/2014-Service  Tax dated 11-7-2014- 2014 Budget)
- vii. Grant of registration online, within 2 days of filing an  application, without prior  verification  of  documents  (Order  1/2015-Service  Tax  dated  1-3-20152015 Budget)
- viii. Records can be maintained electronically and acceptance of digitally signed invoices (224/44/2014-CX dated 6-7-2015- 2015 Budget)
- ix. Reduction in litigation  and  liberalisation  of  penal  provisions  so  as  to  give opportunities to assesses to close proceedings on payment of duty, interest and reduced penalty (Finance Act 2015 - 2015 Budget)
- x. Facility  to  pay  arrears  in  instalments  delegated  to  Commissioners/Chief Commissioners (Circular 996/3/2015-CX dated 28-2-2015 -2015 Budget)

## Service Tax (ST)

- i. For all pending refund claims of accumulated Cenvat credit, provisional payment of 80% of the claimed amount within 5 days, subject to fulfilment of certain conditions (Circular 187/6/2015- Service Tax dated 10-11-2015)
- ii. E-payment of refunds and rebates through RTGS/NEFT (Circular 1013/1/2016 -CX dated 12-1-2016)
3. iii.
4. Liberalisation  and simplification of the input credit scheme (2016 Budget)
5. iv.
6. Increase the prosecution limit to Rs. 2 crores  (2016 Budget)

- v. Have arrest  provisions  only  in  cases  of  collection  of  service  tax  of  an amount   exceeding  Rs 2 crore and not depositing it with the Government (2016 Budget)
- vi. Extend the benefit of closure of proceedings against the main noticee to the co noticees also (2016 Budget)
- vii. Reduction in the rate of interest to 15% and having a higher rate of 24% only in cases of collection of service tax  and not depositing it with the Government (2016 Budget)

Customs:  Customs has  done  various  reforms  during  last  five  years  which  have resulted in quantum jump in India's ranking in 'Trading Across Borders parameter of World Bank's Doing Business Report. Further, such reforms are more related with procedural  simplification  and  upgradation  of  IT  systems.    Moreover,  all  such reforms are equally available to all eligible importers / exporters irrespective of the size of their business. Major initiatives include:

- (i) Indian Customs Single Window Project - Online message exchange

Indian Customs has introduced SWIFT (Single Window Interface for Facilitating Trade) for ensuring ease of doing business. Under Indian Customs Single Window Project, the importers electronically lodge their Customs clearance documents at a single point only with the Customs. The required permission, if any, from other regulatory agencies (such as Animal Quarantine, Plant Quarantine, Drug Controller, Textile Committee etc.) is obtained online without the importer/exporter  having  to  separately  approach  these  agencies.  Benefits  of Single Window Scheme include:

- a. Reduces cost of doing business;
- b. Enhances transparency;
- c.  Integration  of  regulatory  requirements  at  one  common  platform  reduces duplicity and cost of compliance;
- d. Optimal utilization of manpower;
5. (ii) Setting Up of Customs Clearance Facilitation Committee (CCFC)

High  level administrative Committee  i.e. 'Customs  Clearance  Facilitation Committee' (CCFC) has been set-up at every major Customs seaport and airport under  the  chairmanship  of  Chief  Commissioner  of  Customs/Commissioner  of Customs.  Its  membership  includes  the  senior-most  functionary  of  all  the departments/agencies/  stakeholder  at  the  particular  seaport/airport  to  bring coordination between them for smooth clearance of goods.

## (iii) WTO's TFA implementation and NCTF

In order to monitor implementation of Agreement of Trade Facilitation, a National Committee of Trade Facilitation (NCTF) has been formed. It is head by Cabinet Secretary and includes various stake holders from the government sector and private  sector  involved  in  the  cross  border  supply  chain.  A  National  Trade Facilitation Action Plan (NTFAP) has also been formed as a roadmap. The plan has 80 points for implementation with different time lines. They include category commitments which implementation can be enhance, category B commitments which needs priority and other points for logistic facilitation which are beyond TFA and are called 'TFA Plus'.

## (iv) Reduction in mandatory documents for imports and exports

In order to simplify procedures to facilitate genuine trade, CBIC has reduced the number of mandatory documents and prescribed only three mandatory documents for general import/export.

## (v) Introduction of Revised Authorized Economic Programme (AEO):

The  AEO  programme  seeks  to  provide  tangible  benefits  in  the  form  of  faster Customs  clearances  and  simplified  Customs  procedures  to  those  business entities who offer a high degree of security guarantees in respect of their role in the  supply  chain.  As  a  further  step  towards  trust  based  compliance,  Indian Customs has introduced the new Authorized Economic Operator (AEO) Programme wherein extensive benefits, including greater facilitation and selfcertification,  have  been  provided  to  those  entities  who  have  demonstrated strong  internal  control  system  and  compliance  with  CBIC.  It  has  a  three-tier structure  with  the  level  of  facilitation  linked  to  level  of  assured  compliance. Because of these reforms, the number of AEOs in the country has gone up to 1021 as on 10th July, 2018.

## (vi) Promotion of Direct Port Delivery (DPD):

DPD  is  flagship  initiative  of  Indian  Customs.  The  scheme  allows  registered importers to complete customs clearances at the terminal itself and thus take the container directly to the factory (without routing it through the Container Freight Stations). In order to ensure availability of DPD to importers, Customs has introduced on wheel examination within the terminal area. Priority is given in verification of assessment for DPD importers to assist Port Terminals in early evacuation  of  containers  so  as  to  enhance  overall  speed  and  efficiency  in clearance of DPD consignments.

## (vii) Enhanced Facilitation through Risk Management System:

There has been simplification of risk management system inspection process resulting in reduced time taken for clearance. Facilitated Bill of entry (having low risk)  are  cleared on the basis of self-assessment by the importer and are not subjected to ay intervention or examination. Under Single Window, integrated risk management has been introduced where risk parameters of PGAs have also been incorporated.

## (viii) Adoption of Digital Signature

In order to encourage paper less working and dispense with the requirement of physical submission of documents 'Digital Signature' has been introduced for importers, exporters, airlines, shipping lines etc.

## (ix) 24x7 Customs Clearance:

The 24X7 Customs clearances have now been extended to all Bills of Entry (and not just facilitated Bills of Entry) at 19 seaports and 17 Air Cargo Complexes. Further, no MOT charges are required to be collected in respect of the services provided by the Customs officers at 24X7 Customs Ports and Airports.

## (x) Facility of deferred payment

Customs, Deferred Payment of Import Duty Rules, 2016 have come into effect from 16.11.2016. Further, importers certified under AEO Programme (Tier-Two) and (Tier-Three) respectively have been notified for availing the benefit of these Rules.

## (xi) Amendments in Warehousing provisions for introducing record based controls:

The department has made significant amendments in warehousing provisions to leverage the benefits of automation for facilitating trade and to enable the department  to  monitor  the  permitted  period  for  which  goods  remain  in  the warehouse. The amended provisions provide a single point for the importer or owner to seek extension of the warehousing period and pay duties online.

## (xii) Abolition of Mate Receipt

With the automation of Customs procedures, manual issuance of mate receipt for  containerized  cargo  has  become  redundant  and  therefore  has  been dispensed with.

## (xiii) Reducing/eliminating printouts in Customs Clearance

With the  aim  of  ease  of  doing  business  and  promoting  paperless  clearance, CBIC has decided to do away with routine print-outs of several documents

including GAR 7 Forms/ TR 6 Challans, TP copy, Exchange Control Copy of Bill of Entry and Shipping Bill, and Export Promotion copy of Shipping Bill.

- (xiv) The Courier Imports and Exports (Clearance) Amendment Regulations, 2016

Several reforms have been initiated in Courier regulations including liberalization of norms for outsourcing and CSB form.

- (xv)  Import  Data  Processing  and  Management  System  (IDPMS)  has  been  jointly launched  with  RBI  to  facilitate  efficient  data  processing  for  payment  of imports and effective monitoring.
- (xvi)  Email  notification  service  to  importers  for  all  important  stages  related  to import clearances has been initiated.
- (xvii) Roll Out of Express Cargo Clearance System (ECCS) at Courier Terminal, Sahar Mumbai

Express Cargo Clearance System (ECCS), an automation programme, doing away the manual filing of documents for clearance of Courier parcels, gifts and documents has been made operational at Courier Terminal, Sahar Mumbai. The ECCS would carry out automated assessment and clearance.

(xviii)  Amendments  introduced  in  Customs  Act,  1962  by  Union  Budget-2017  for 'ease of doing business'

With the aim to reduce the dwell time, sub-section (3) of section 46 of the Customs Act, 1962 has been substituted thereby, making it mandatory to file a Bill of Entry before the end of the next day (excluding holidays) on which the vessel or aircraft or vehicle carrying the goods arrives at a customs station at which goods are to be cleared for home consumption or warehousing. A late charge for delayed filing of bill of entry has also been prescribed.  This has ensured that there is discipline among the trade and thus time associated with imports has reduced.

Changes have also been introduced in sub-section (2) of Section 47 by virtue of which the importers now have to make payment of duty in the same day in case of self-assessed bill of entry and in case of re-assessment or provisional assessment  the  importers  have  one  day  after  the  bill  of  entry  is  returned. Further, sub-section (2) of section 27 has been amended to allow a simplified regime of refund of customs duty paid in excess in specified cases by providing that such refunds shall be outside the scope of unjust enrichment.

- (xix) Reduction in time and cost related to export by direct port entry (DPE)

Direct Port Entry is a scheme of Customs to reduce release time and cost in the case of exports. Under this scheme, export containers are allowed direct

entry  into  the  port  terminal  prior  to  granting  Let  Export  Order  (LEO).  This scheme was earlier available only in cases of Refrigerated Containers, Over Dimensional Cargo (ODC), Motor Vehicles, Perishable non-refrigerated cargo, AEO Tier-I/II/III status holders etc. Now this facility has been extended to all factory stuffed export containers of all manufacturing entities. Currently the percentage of containers availing DPE facility at JNCH is 76%. CFS charges of US$  40-50  which  were  incurred  earlier  have  been  reduced  to  US$  2  per container owing to the availability of DPE.

## (xx) Implementation of electronic sealing for containers by exporters under selfsealing procedure

In order to strengthen the Risk Management System and create a trust based environment where compliance is in accordance with extant laws, CBIC has introduced e-sealing of export containers. The new procedure has replaced the earlier practice of supervised sealing by the departmental officers. It is a measure  by  which  Customs  have  shown  more  faith  in  exporters  stuffing containers at their premises.

Introduction  of  self-sealing  using  RFID  tamper  proof  e-seals  in  place  of physical  seals  used  earlier  has  reduced  the  time  associated  with  the clearance  of  export  containers.  It  has  also  reduced  the  cost  as  for  every supervised sealing exporter had to bear service charges of customs officers.

The data related to e-sealing is transmitted electronically to Customs through application. Till the end of June, 2018, around 4.75 lakh seals have been used by the exporters across the country.

## (xxi) Introduction of e-SANCHIT

One of the key initiatives to facilitate online clearance at a single point, is paperless processing application i.e. e-SANCHIT. It is an online application that  allows  a  trader  to  submit  all  supporting  documents  for  clearance  of consignments  electronically  with  digital  signatures.  By  using  e-SANCHIT, trader does not have to approach to different regulatory agencies with hard copy  of  the  documents  thereby  making  the  entire  process  of  consignment clearance faceless and paperless.

With e-SANCHIT facility the need for paper documentation and consequent physical touch point for every stage clearance has drastically come down. It has resulted in substantial reduction in time and cost. Bill of Entry (Electronic Integrated  Declaration  and  Paperless  Processing)  Regulations,  2018  have been issued to give a legal framework to e-SANCHIT programme.

## (xxii) Customs Audit

Customs  Audit  Regulations  have  been  notified  are  a  consequence  of legislative changes made in the Customs Act, 1962 in the Finance Act, 2018. The  regulations  would  enable  customs  to  audit  the  customs  declarations subsequent to clearance of goods, thereby placing more faith in the customs declarations made by the importer/ exporter. The regulations enable a shift from clearance based control to Audit based control.

## Direct Taxes

1. Moderation of tax rates: It is an ongoing endeavour of the Government to moderate the tax rate in order to reduce the tax burden and increase compliance. In this direction, following major steps have been taken:
2. (i) 100% tax rebate was provided to individuals having taxable income up to Rs. 5 lakh. Thus, no income-tax is payable by an individual having taxable income up to Rs. 5 lakh.
3. (ii) The  tax  rate  for  corporate  assesses  was  gradually  reduced  to  25%  and currently, only large corporates (with turnover above Rs. 250 crore) are required to pay tax at the rate of 30%. Moreover, even a large new manufacturing company having turnover above Rs. 250 crore is taxed at 25%. This limit is proposed to be increased further to Rs 400 crore vide Finance (No.2) Bill, 2019.
4. (iii) Basic exemption limit was increased from Rs. 2 lakh to Rs. 2.5 lakh.
5. (iv) Exemption limit for senior citizens was increased from Rs. 2.5 lakhs to Rs. 3 lakh.
6. (v) Tax rate for the slab Rs. 2.5 to 5 lakh was reduced from 10% to 5%.
7. (vi) Standard deduction of Rs. 40,000 was introduced for salaried taxpayers and pensioners and was further increased to Rs. 50,000.
8. (vii) Levy of wealth tax was abolished.
2. Ease of compliance for small businesses: Small businesses constitute the backbone  of  our  economy.  In  order  to  reduce  the  compliance  burden  of  small businesses  and  professionals,  following  measures  have  been  taken  by  this Government:
10. (i) Threshold for presumptive taxation of businesses was raised from Rs. 1 crore to Rs. 2 crore.
11. (ii) For maintenance of books of accounts by individuals and HUFs,

(a) income threshold was raised from Rs. 1.20 lakh to Rs. 2.5 lakh; and (b) turnover threshold was raised from Rs. 10 Lakh to Rs. 25 Lakh. (iii) Presumptive taxation was introduced for professionals having receipts up to Rs. 50 lakh. 3. Measures to promote growth and employment generation: Tax policy plays an important role in promoting the growth and creation of employment. A number of measures have been taken by this Government in this direction, some of which are as under: (i) Profit-linked deduction was introduced for start-ups. (ii) The  scope  of  investment-linked  deduction  was  broadened  by  including certain new sectors, including infrastructure, which are critical to growth. (iii) Investment allowance and higher additional depreciation was provided for undertakings  set  up  in  backward  regions  of  states  of  Andhra  Pradesh,  Bihar, Telangana and West Bengal. (iv) Incentive for employment generation was broadened and the conditions for eligibility to claim the incentive were relaxed. (v) Benefit was provided for computation of MAT liability and carry forward of losses for companies under Insolvency and Bankruptcy Code (IBC). (vi) Safe  Harbour  provisions  were  further  liberalised  to  align  with  industry standards. (vii) Scope  of  domestic  transfer  pricing  provisions  was  restricted  only  for transactions between enterprises having profit-linked deductions, and any other transaction as may be prescribed. (viii)  Pass through status was provided to Category I & II Alternative Investment Funds (AIFs). (ix) The time period for carry forward of MAT credit was increased from 10 to 15 years.

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