Google will also leverage its advantage as a ‘data company’ and deploy technology as the key differentiator with expertise in areas such as Artificial Intelligence and Machine Learning
Technology behemoth Google is investing heavily in people and partnerships to grab a larger share of the Indian Cloud market, as it takes on global rivals Microsoft, IBM and Amazon Web Services in the country, a top company executive said.
Google will also leverage its advantage as a ‘data company’ and deploy technology as the key differentiator with expertise in areas such as Artificial Intelligence and Machine Learning, said Karan Bajwa, the newly appointed managing director of Google Cloud in India.
“The technology is right. The brand is right. Google’s hiring great talent and putting the right people in front of the customers, and there’s very strong investments happening on the Google Cloud across the world, as well as in India,” Bajwa told ET.
Only 20% of workloads have so far moved to the cloud and there is opportunity in the remaining 80% which has yet to migrate to public or private clouds, he said.
The ongoing economic crisis unleashed by the Covid-19 pandemic will fast track the shift as more companies look at cost efficiencies, Bajwa said.
Although IBM and Microsoft have a lead over Google in the cloud business, that was not a point of concern, he said.
“For 80% of the companies, the journey will start now, so the fact that somebody is ahead and somebody is behind, I honestly don’t worry about it.”
As capital becomes scarce going forward, people will want to conserve every dollar. “It’s going to move to an operational expense from a capital expenditure. So, there will be a faster acquisition of customers…,” he said.
Google will build a “differentiated partner strategy” compared to rivals. It will also leverage on its huge reach due to its dominance of Search and areas like payments and advertising, he said.
Over the last 60 days, “digital natives” have been looking to optimise existing technology, and companies that have so far not adopted the cloud are opening up to the opportunity due to cost pressures, he pointed out.
“We’ve always seen that incumbency is a strong advantage, Google’s incumbency has built the business in most of these organizations where Google is helping these customers acquire new customers, get into new markets, grow revenues, grow margins, and that’s a very strong incumbency than anyone else,” Bajwa, who was earlier IBM India head and who has had a long stint with Microsoft as its MD of sales and marketing, said.
Google will bet on building a team that wins top customers and competes with the dominant players, he said. “By the time we are done with Covid-19, we will be bringing on board very senior people from the industry who have led organizations and who have very strong credibility. That makes a huge difference as customers feel comfortable with the people they are buying from,” he said.
Last week, Google appointed Microsoft veteran Anil Bhansali as vice president of engineering.
Google already has a tie-up with Bharti Airtel for its cloud business and the search giant also recently announced a second cloud region in Delhi, after it launched the Mumbai region in 2017.
“We would not be making these investments in the tens of billions of dollars if we did not think we would make money with customers,” Bajwa added.
Financial creditors moving the National Company Law Tribunal (NCLT) for initiation of insolvency process will have to mandatorily file ‘default record’ from the information utility (IU). No new petition will be entertained without record of default under Section 7 of the Insolvency and Bankruptcy Code (IBC), said the NCLT in a new directive.
The NCLT has also directed authorised representatives/ parties, in the cases pending for admission under Section 7 of the IBC, to file default record from an IU before the next date of hearing.
What is an IU?
An information utility is a repository of electronic evidence. It is an information network that stores financial data such as borrowings, default, and security interests, among others, of firms.
In India, the National e-Governance Services Limited ( NeSL), in mid-2017, became the first IU for bankruptcy cases under the insolvency and bankruptcy code (IBC).
A record of default is a statement of default on a particular loan and facility. With the latest NCLT move, the entirety of an IU as an integral part of the process to establish default and allow immediate admission before such a Tribunal is now complete, say experts.
The Corporate Affairs Ministry (MCA) had, about four months back, internally taken a decision that there is a need to make IU evidence mandatory in insolvency admission matters.
Today, the NeSL, which started its journey in September 2017, has information of loan details of 100 per cent of the corporates in India. It is sitting on data of ₹76-lakh crore of corporate borrowing outstanding.
As of end April this year, 220 financial institutions, including 75 banks, 147 NBFCs, and two debenture trustees, have uploaded data on the NeSL. Reacting to the latest NCLT move making record of default from an IU mandatory, S Ramann, Managing Director and CEO, NeSL, said: “We are satisfied that the Information Utility is playing its part as per the design of the IBC.”
Vidisha Krishan, Partner, MV Kini & Co, a law firm, said that till date the default record from IU was not mandatory, and even other records or evidence were sufficient to demonstrate a default.
However, now it has been made compulsory vide the latest direction, she added.
The package works out to roughly 10 per cent of the GDP, making it among the most substantial in the world.
Key Highlights of the Special economic and comprehensive package of Rs 20 lakh crores Announced by the Govt. of India, for relief and credit support related to businesses, especially MSMEs to support Indian Economy, Atmanirbhar Bharat and to fight against COVID-19.
GOI Presentation on Rs. 20 Lac Crore Special Package: AtmaNirbhar Bharat (COVID-19)
Hon’ble Prime Minister Shri Narendra Modi yesterday announced a Special economic and comprehensive package of Rs 20 lakh crores, equivalent to 10% of India’s GDP. He gave a clarion call for आत्मनिर्भर भारत अभियान or Self-Reliant India Movement. He also outlined five pillars of Aatmanirbhar Bharat– Economy, Infrastructure, System, Vibrant Demography and Demand.
During the press conference here today, Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman said in her opening remarks that Prime Minister Shri Narendra Modi had laid out a comprehensive vision in his address to the Nation yesterday. She further said that after spending considerable time, the Prime Minister has himself ensured that inputs obtained from widespread consultation form a part of economic package in fight against COVID-19.
“Essentially, the goal is to build a self-reliant India that is why the Economic Package is called Aatma Nirbhar Bharat Abhiyaan. Citing the pillars on which we seek to build Aatma Nirbhar Bharat Abhiyaan, Smt. Sitharaman said our focus would be on land, labour, liquidity and law.
The Finance Minister further said that the Government under the leadership of Prime Minister Shri Narendra Modi has been listening and is a responsive Government, hence it is fitting to recall some reforms which have been undertaken since 2014.
“Soon after Budget 2020 came COVID-19 and within hours of the announcement of Lockdown 1.0, Pradhan Mantri Garib Kalyan Yojna (PMGKY) was announced,” Smt. Sitharaman said. She further said that we are going to build on this package.
“Beginning today, for the next few days, I shall be coming here with the entire team of the Ministry of Finance to detail the Prime Minister’s vision for Aatma Nirbhar Bharat laid out by the Prime Minister yesterday,” Smt Sitharaman said.
Smt. Nirmala Sitharaman today announced measures focused on Getting back to work i.e., enabling employees and employers, businesses, especially Micro Small and Medium Enterprises, to get back to production and workers back to gainful employment. Efforts to strengthen Non-Banking Finance Institutions (NBFCs), Housing Finance Companies (HFCs), Micro Finance Sector and Power Sector were also unfolded. Other than this, the tax relief to business, relief from contractual commitments to contractors in public procurement and compliance relief to real estate sector were also covered.
Over the last five years, the Government has actively taken various measures for the industry and MSME. For the Real Estate sector, the Real Estate (Regulation and Development) Act [RERA] was enacted in 2016 to bring in more transparency into the industry. A special fund for affordable and middle income housing was set up last year to help with the stress in this segment. To help MSMEs with the issue of delayed payment by any Government department or PSUs, Samadhaan Portal was launched in 2017. A Fund of Funds for startups was set up under SIDBI to boost entrepreneurship in the country and various other credit guarantee schemes to help flow of credit to the MSMEs.
Key Highlights of the Special economic and comprehensive package of Rs 20 lakh crores Announced by Govt. of India (COVID-19)
a) Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs
To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29 February 2020, in the form of a Term Loan at a concessional rate of interest will be provided. This will be available to units with upto Rs 25 crore outstanding and turnover of up to Rs 100 crore whose accounts are standard. The units will not have to provide any guarantee or collateral of their own. The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3.0 lakh crores to more than 45 lakh MSMEs.
b) Rs 20,000 crore Subordinate Debt for Stressed MSMEs
Provision made for Rs. 20,000 cr subordinate debt for two lakh MSMEs which are NPA or are stressed. Government will support them with Rs. 4,000 Cr. to Credit Guarantee Trust for Micro and Small enterprises (CGTMSE). Banks are expected to provide the subordinate-debt to promoters of such MSMEs equal to 15% of his existing stake in the unit subject to a maximum of Rs 75 lakhs.
c) Rs 50,000 crores equity infusion through MSME Fund of Funds
Govt will set up a Fund of Funds with a corpus of Rs 10,000 crore that will provide equity funding support for MSMEs. The Fund of Funds shall be operated through a Mother and a few Daughter funds. It is expected that with leverage of 1:4 at the level of daughter funds, the Fund of Funds will be able to mobilise equity of about Rs 50,000 crores.
d) New definition of MSME
Definition of MSME will be revised by raising the Investment limit. An additional criteria of turnover also being introduced. The distinction between manufacturing and service sector will also be eliminated.
e) Other Measures for MSME
e-market linkage for MSMEs will be promoted to act as a replacement for trade fairs and exhibitions. MSME receivables from Government and CPSEs will be released in 45 days.
f) No Global tenders for Government tenders of up to Rs 200 crores
General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services of value of less than Rs 200 crores.
g) Employees Provident Fund Support for business and organised workers
The scheme introduced as part of PMGKP under which Government of India contributes 12% of salary each on behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2020. Total benefits accrued is about Rs 2500 crores to 72.22 lakh employees.
h) EPF Contribution to be reduced for Employers and Employees for 3 months
Statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months. This will provide liquidity of about Rs.2250 Crore per month.
i) Rs 30,000 crores Special Liquidity Scheme for NBFC/HFC/MFIs
Government will launch Rs 30,000 crore Special Liquidity Scheme, liquidity being provided by RBI. Investment will be made in primary and secondary market transactions in investment grade debt paper of NBFCs, HFCs and MFIs. This will be 100 percent guaranteed by the Government of India.
j) Rs 45,000 crores Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs
Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.
k) Rs 90,000 crore Liquidity Injection for DISCOMs
Power Finance Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS to the extent of Rs 90000 crores in two equal instalments. This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies. Further, CPSE GENCOs will give a rebate to DISCOMS on the condition that the same is passed on to the final consumers as a relief towards their fixed charges.
l) Relief to Contractors
All central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements.
m) Relief to Real Estate Projects
State Governments are being advised to invoke the Force Majeure clause under RERA. The registration and completion date for all registered projects will be extended up to 6 months and may be further extended by another 3 months based on the State’s situation. Various statutory compliances under RERA will also be extended concurrently.
n) Tax Relief to Business
The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.
o) Tax related measures
Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.This will provided liquidity to the tune of Rs 50,000 Crore.
The due date of all Income Tax Returns for Assessment Year 2020-21 will be extended to 30 November, 2020. Similarly, tax audit due date will be extended to 31 October 2020.
The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December, 2020.
The Institute of Chartered Accountants of India ( ICAI ) has clarified that there is NOT a bar in the revised Code of Ethics on acceptance of more than 15% fees from a single client.
The ICAI has said that some members have expressed their concern on one of the provisions contained in Paragraph R410.4 of the Volume-I of revised Code of Ethics on measures for addressing self-interest threats resulting from the dependence of Fees from a single client.
The ICAI clarified that there is NOT a bar in the revised Code of Ethics on acceptance of more than 15% fees from a single client. There is the only requirement of disclosure, and taking safeguards prescribed therein, if the total gross annual professional fees from the audit client and its related entities represent more than 15% of the total fees received by the firm expressing the opinion on the financial statements of the client for two consecutive years.
Accordingly, the Audit may be continued while taking safeguards as mentioned in the said Paragraph. The ICAI further clarified that this rule would not apply in case of audit of Government Companies, public undertakings, nationalized banks, public financial institutions, or where appointments are made by Government; OR where the total gross annual fees of the Firm does not exceed five lakhs of rupees.
It may also be relevant to note that the rule applies ONLY where such Fees are received from an AUDIT CLIENT.
Move comes after a group of IRS created panic and tax policy uncertainty.
After rejecting “ill-conceived” suggestions by a group of Indian Revenue Services (IRS) officers, the Central Board of Direct Taxes (CBDT) directed officials not to keep any communication with assessees or issue scrutiny notices to them without the board’s approval.
According to it, any such notice would have an “adverse effect” on the assessees amid the coronavirus (Covid-19) pandemic.
These directives are part of the interim action plan for the first quarter (April-June) prepared by the direct tax board. It highlights certain areas which need immediate attention and preparedness until normalcy returns.
The move comes at a time when the tax department faced widespread criticism on a report prepared by a group of IRS officers. It had created panic and tax policy uncertainty at a time when India is already going through a difficult economic situation.
“Identification and preparedness regarding the issuance of notice under Section 148, which deals with income escaping and return filing in all eligible cases, should be done by June 30. However, these notices are to be issued only after getting fresh communication from the board in this regard,” said the CBDT note.
It added that due to the unprecedented situation arising out of Covid-19-induced social distancing and lockdown this year, a relatively short interim action plan has been issued.
Considering the current situation, we have been putting a slew of tax relief measures to mitigate the impact on business and even on household.
Any such communication may put pressure on the taxpayers and create unnecessary panic. A new system had already been put in place to make officials accountable for their communication with assessees.
However, during the lockdown, even such communication would not go without the board consent, said a CBDT official. Other than keeping no communication with assessees, the tax officials have been asked to centralise cases where searches took place in the financial year 2019-202.
This is because once lockdown is lifted, the officials would work on disposing them on merit.
Moreover, the CBDT asked officials to be prepared for tax demands in cases of international taxation, tax deduction at source and exemption-related charges.
The board wants the department to examine all pending demands, according to permanent account number (PAN) and assessment years.
It also removed demands which are creating duplication and are lying in the system. Besides, officials were asked to reconcile brought-forward cases, especially on TDS, based on the information available on the Traces portal for TDS units. The interim action plan also instructed officials to dispose of all applications concerning granting registration to charitable trusts received upto March 31.
Meanwhile, the direct tax board told its officials to upload manual orders on the systems, especially those under Section 263. It deals with appeals where the principal commissioner or commissioner may call for and examine the record of any proceeding. He or she may consider an order passed by the assessing officer to be erroneous, if it is prejudicial to the interests of the revenue.
Earlier, such registrations/approvals were granted without any specific expiry period unless specifically withdrawn by concerned tax authority. Under the new law introduced by Finance Act 2020 and effective from June 1, 2020, all such registrations/ approvals would now be issued with an expiry period of 5 years.
In a relief to religious trusts, educational institutions and other charitable institutions, the income tax department on Friday deferred by 4 months till October 1 the requirement of registration of these entities.
In a relief to religious trusts, educational institutions and other charitable institutions, the income tax department on Friday deferred by 4 months till October 1 the requirement of registration of these entities.
“In view of the unprecedented humanitarian and economic crisis, the CBDT has decided that the implementation of new procedure for approval/ registration/notification of certain entities shall be deferred to 1st October, 2020,” an official statement said.
Finance
Act 2020 prescribed substantial changes in law pertaining to
registration/approval of trusts and charitable institutions, whose
income are exempt under section 10(23C), Section 11 or for the purpose
of Section 80-G of the Act for tax deductible donations.
Earlier,
such registrations/approvals were granted without any specific expiry
period unless specifically withdrawn by concerned tax authority.
Under
the new law introduced by Finance Act 2020 and effective from June 1,
2020, all such registrations/ approvals would now be issued with an
expiry period of 5 years.
Further, all trusts/charitable institutions already having approval or registration were also supposed to file applications for renewal of there registration/approval within 3 months of new law coming into force, i.e. August 31, 2020.
Nangia
Andersen Consulting Shailesh Kumar said “in light of COVID-19 outbreak
and consequent lockdown, giving relief to the taxpayers, this timeline
has been deferred by 4 months. Thus, new law which was supposed to come
in effect from 01 June 2020 would now come in effect from 01st October
2020.
“All
existing trusts/ charitable institutions would now need to file
applications for renewal of their registrations/ approvals by December
31, 2020 instead of earlier August 31, 2020,” he added.
The
statement said various representations were received to the finance
ministry expressing concerns over the implementation of new procedure
from June 1, 2020 due to outbreak of coronavirus (COVID-19) and
consequent lockdown and there have been a number of requests to defer
the applicability of new procedure.
“This is a welcome move and provides expected relief in light of genuine hardships created by COVID-19. The entities benefited by this circular would be religious trusts, hospitals, educational institutions or other public charitable institutions created for welfare of public and allows exemption from income tax on account of their activities and charitable purpose,” Kumar added.
Consulting
firm AKM Global Tax Partner Amit Maheshwari said, “This is a welcome
clarification as in the absence of this extension, it was extremely
difficult to comply with these procedures. Several representations had
been made on this matter and this is indeed a welcome move.”
As per existing norms, if a payment default exceeds 90 days then the lender concerned has to refer the account for resolution under IBC or any other mechanism permitted by the Reserve Bank of India (RBI). The lender does not have the option to restructure the loan.
The government has decided to suspend insolvency and bankruptcy proceedings for at least six months owing to challenges businesses are facing due to the Covid-19 pandemic.
A new Section is likely to be added to the Insolvency and Bankruptcy Code (IBC).
It will suspend Sections 7, 9, and 10, which are used to trigger insolvency proceedings for six months or a period not exceeding one year from the date they commence, the official said.
A new Section is likely to be added to the Insolvency and Bankruptcy Code (IBC).
It will suspend Sections 7, 9, and 10, which are used to trigger insolvency proceedings for six months or a period not exceeding one year from the date they commence, the official said.
Section 7 of the Code enables
financial creditors to start insolvency proceedings against a company while
Section 9 gives operational creditors these powers.
Under Section 10, the promoter of the company can trigger insolvency proceedings against his or her own concern.
All the three Sections will cease to be effective for six months or further.
The provision is likely to require a change in the Act, according to experts.
“This is a positive step for companies.
But for companies, which were otherwise already in stress and could have found resolution under the IBC, their resolution may also be delayed due to this suspension,” said Anshul Jain, partner, PwC India.
Jain also said it needed to be seen if this move would have a positive impact on privately negotiated transactions on mergers and acquisitions.
In March, Union Finance Minister Nirmala Sitharaman had indicated the government would consider suspending the IBC for a few months if the Covid situation persisted and caused stress to businesses.
Already, the default threshold for stressed companies facing insolvency has been increased from Rs 1 lakh to Rs 1 crore.
In March, Union Finance Minister Nirmala Sitharaman had indicated the government would consider suspending the IBC for a few months if the Covid situation persisted and caused stress to businesses. Already, the default threshold for stressed companies facing insolvency has been increased from Rs 1 lakh to Rs 1 crore.
