30th July 2024: On July 30th, HYSEA and PwC hosted a session on Recent Tax Developments in the IT/ITES sector, featuring Rajesh Dhuddu, Partner, Emerging Tech at PwC, and subject matter experts Tapan Gupta and Abhinav Srivastava, both Partners and Managing Directors at Price Waterhouse & Co LLP.

Key highlights include:

• Opportunities for Tech Companies: Implement tech-based underwriting for MSMEs in public banks and advance AUSC technology for 46% efficiency in Power & Renewable Energy.
• BFSI Sector: Improved outcomes under the Insolvency and Bankruptcy Code (IBC).
• Agriculture: Increased tech funding and digital infrastructure for land ownership.
• Production Linked Incentive (PLI): Significant growth in medical devices, pharmaceuticals, drones, and specialty steel with INR 13,933 crore allocated for FY 25, up 74% from FY 24.

Union Budget Measures:

• Reduced TDS for e-commerce.
• Withdrawal of the 2% equalization levy and angel tax.
• Adjustments in customs duties to boost domestic electronics manufacturing.
• ⁠New corporate tax regime at 25.17%, with no deductions (except certain sections) and no MAT set-off.

GST Updates:

• Scheme introduced for grant of waiver of interest and penalties for FY 2017-18 to 2019-20 subject to fulfilment of conditions
• ⁠Amendments introduced to allow authorised representatives to appear on behalf of the companies
• ⁠Rationalization of provisions pertaining to issuance of demand notices
• ⁠One time window given to claim credit (pertaining to the period 1 July 2017 to 31 March 2021) within the extended time period

Other Key Considerations:

• GST for OIDAR services requires additional compliance.
• ⁠GST issues on specific activities such as testing, sub-contracting etc
• ⁠GST provisions relating on cross charges and inter-office transactions amended
• Evaluation of PE risk, transfer pricing, GST, and withholding tax for secondment and cross-charge transactions.

The session offered insights into managing these changes and simplifying compliance.