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Policy Update
Industry pitches for GST rate of 18%: Companies have pitched for a standard goods and services tax (GST) rate of 18 per cent and sought time to switch over to the new regime at a meeting with the empowered committee of state finance ministers chaired by West Bengal Finance Minister.

States, which are seeking a higher tax rate of 20 per cent, asked companies if they would pass on low rates to consumers. The finance ministers did not buy the argument of the e-commerce industry, which sought an exemption from the tax, that it merely provided a platform for vendors and customers and did not make money out of sales.

This was the first meeting of the empowered committee of state finance ministers since the passage of the Constitution Amendment Bill for the GST in Parliament. The meeting discussed GST rates and the accountability of the goods and services tax network.

Thirteen states have ratified the Bill. Telangana and Mizoram have had the legislation approved by their assemblies.

The Centre is targeting April 1, 2017 to roll out the GST, but industry said it needed more time to prepare. The Federation of Indian Chambers of Commerce and Industry (Ficci) said at least six months would be needed from the date of adoption of the GST law by the GST Council. Flipkart, Amazon and Snapdeal argued they provided service to vendors and were liable to pay the tax only on service income. They said the vendors selling goods on their portals should be liable to pay the GST.
BS, Aug 31, 2016)

MeitY draws up draft National Software Policy: The draft of the National Policy on Software Products is likely to be put up for public consultation within days, according to sources close to MeitY. Early August, Minister of State for Electronics and IT PP Chaudhary told the Lok Sabha that the government has drawn up the draft National Policy on Software Products.

Expectations from the policy to revamp the software product sector are high. The policy should be aimed at making a conducive environment for the sector, said Ravi Gururaj, who chairs the product council at Nasscom.

"While many of the startup ecosystem challenges are being addressed, a policy should specifically address startup needs of the IT sector -software products, cloud solutions, etc. Specific infrastructure needs like evaluation infrastructure, and sector focus such as IoT that DeitY is currently acting on could be enhanced," said Gururaj.

One of the main aims of the new policy is to help the software product industry increase its contribution to the economy.

"The government has drawn up the draft National Policy on Software Products with an aim to strengthen the software products ecosystem in the country and to give further impetus, so that software product sector contributes significantly in terms of business and employment," the minister had said, in his written reply to the Lok Sabha on August 10.
(ET, Aug 23, 2016)

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