Cryptocurrency and the Blockchain technology that underpins it are often seen as innovative and disruptive. However, not only the governments of various nations, but also the people of various sections and groups, have responded differently to this unique phenomenon, and everyone has observed Cryptocurrency through their own lens.

Cryptocurrency is a virtual or digital money that is protected by encryption, making double-spending and counterfeiting nearly difficult. The term “cryptocurrency” comes from the encryption technology that is utilised for network security. Cryptocurrency is supported by the conviction of its users in a market that will hold its worth. The majority of cryptocurrencies are decentralised networks built on blockchain technology, which is a distributed ledger system that records and verifies transactions via a peer-to-peer consensus method.

A cryptocurrency, sometimes known as a virtual currency, is a digital asset meant to function as a means of exchange, with transaction records kept in a digital ledger. It does not exist in the form of paper currency. It is not centralized, which means it is not issued by a government or central bank (for example in India, the currency is issued by the Reserve Bank of India). This property of cryptocurrencies makes them theoretically impervious to government intervention or control.

It functions as a public transaction database in a decentralised system using distributed ledger technology, most often a blockchain. In 2009, the first cryptocurrency, known as Bitcoin, was published. There are more than 4000 cryptocurrencies that are accessible presently.

Purpose of cryptocurrency:-

Cryptocurrency is designed to make it easier for two people to transfer cash without the use of a trusted third party like a bank or credit card firm. Instead, these transactions are protected by the use of public and private keys, as well as other types of incentive systems like as Proof of Work and Proof of Stake. In current cryptocurrency systems, a user’s “wallet,” or account address, has a public key, but the private key is only known by the owner and is used to sign transactions. Fund transfers are performed with low transaction costs, allowing users to avoid the exorbitant fees charged by banks and financial institutions for wire transfers.

Due to the semi-anonymous nature of cryptocurrency transactions, they are ideally suited for a wide range of illegal activities, including money laundering and tax evasion. Cryptocurrency supporters, on the other hand, place a high importance on anonymity, citing benefits such as whistleblower protection and demonstrators living in harsh regimes. Some cryptocurrencies have a higher level of security than others. Bitcoin, for example, is a comparatively poor option for doing criminal business online owing to forensic examination of the Bitcoin blockchain, which has helped authorities to capture and prosecute perpetrators. There are, however, more privacy-oriented cryptocurrencies like Dash, Monero, and ZCash, which are far more difficult to track.

Cryptocurrency regulations:-

Cryptocurrency is currently uncontrolled. Historically, under Section 35A[i] read with Section 36(1)(a)[ii] and Section 56[iii] of the Banking Regulation Act, 1949, and Section 45JA[iv] and 45L[v] of the Reserve Bank of India Act 1934, the RBI issued a notification titled ‘Prohibition on Dealing in Virtual Currencies (the ‘Crypto Ban Notification’) on April 6, 2018 and Section 10(2)[vi] of the Payment and Settlement Systems Act of 2007 was amended to prohibit all banks and financial institutions from offering services connected to cryptocurrency transactions, as well as from having any type of contact with those who already provide those services. Besides that, it has issued several cautionary statements about investing in it. Cryptocurrency, according to the RBI, are “stateless digital currencies” that trade via encryption methods and are protected from government intervention since they are not backed by a central bank. As a result, they may be often utilized in illegal transactions.

The crypto sector was virtually hamstrung as a result of the banking service, which needed exchanges to send and receive money in order to convert cash into cryptocurrency and pay employees, suppliers, and office space, among other things. Cryptocurrency customers were compelled to cash out immediately, and the sector was impacted on two fronts as a result of the loss of both banking services and fewer transactions.

Judicial approach to cryptocurrency:-

The Supreme Court knocked down a long-standing circular prohibiting cryptocurrency circulation in the nation on the following grounds in the case of Internet and Mobile Association v. RBI, a 180-page lengthy ruling by Justice V Ramasubramanian:

1. The Reserve Bank of India (RBI) must not abuse its regulatory authority over virtual currencies.
2. Any trade that supports the use of cryptocurrency is prohibited, which is disproportionate.
3. It is also against the law under Article 19(1) (g)[vii] of the Constitution, which stipulates that businesses engaged in legal commerce are protected by the basic right to engage in any vocation, trade, or business.

The key elements of the decision are worth noting since the court and petitioners conducted significant worldwide benchmarking in defining cryptocurrencies, their identity, the instrument they entail, and who has the jurisdiction to regulate them. Many organisations across the world see cryptocurrency as having money-like characteristics, despite the fact that none of them have recognised it as legal tender, thus the RBI has the authority to regulate virtual currencies in this situation. The RBI has spoken in the past about confronting its entities and enterprises to avert harm to the banking industry and the economy, but there is no factual evidence to support this claim. It is critical to pay attention to these points listed below:

1. The actions of the virtual currency function have not caused any harm to the RBI in the last five years or more.
2. Virtual currencies were outlawed.
3. Even the Inter-Ministerial Committee, which was formed in 2017 and proposed a particular legislative framework as well as the adoption of a new law, the Crypto-taken Regulation Bill 2018, had the goal of regulating rather than prohibiting the actions.

The court stated that RBI did not establish alternative procedures to protect against the aforementioned dangers. The court stated to the president of the European Union Parliament that the European Central Bank and Parliament had looked into not abandoning the cryptocurrency business, but instead recommended strengthening the financial system and regulatory schemes, and that the RBI had overlooked alternative measures in this case. The court also considered the four-prong criteria provided by the petitioners to assess the proportionality of the action that the RBI measures should pass, as stated in the case Modern Dental College and Research Centre v. State of Madhya Pradesh, 2016, as follows:

• Measures taken by the RBI should be used for a specific purpose
• Reasonably related to the goal
• There are no less intrusive alternatives
• The importance of goal and the limitation of rights should be linked

The court stated that the RBI’s use of terms like as “money laundering” or “black money” does not qualify as a valid purpose, and that other options should have been examined. The most important takeaway from this decision is that the Supreme Court chastised politicians, multiple committees, and two draft bills for failing to take a clear stance on cryptocurrencies.

Regulation of Cryptocurrency trade:-

Because cryptocurrency is an inalienable part of any state, and because cryptocurrencies are encroaching on this domain, regulating cryptocurrency would necessitate oversight from a variety of agencies as well as stringent laws, such as:

1. The Reserve Bank of India (RBI) is in charge of regulating cryptocurrencies as legal money.
2. The Directorate of Enforcement has issued a statement prohibiting the usage of cryptocurrencies in the case of economic crimes.
3. The Department of Economic Affairs is in charge of regulating cryptocurrency’s involvement with the state’s economic policy.
4. SEBI has approved the use of cryptocurrency in security contracts.
5. Tax implications of cryptocurrency trade, according to India’s tax authorities.

As a result, putting together a complete framework to regulate every element of cryptocurrency trading appears to be a difficult undertaking. To establish an administrative presence in the crypto area, the RBI may rely on the blockchain system. It may also contemplate issuing licenses to cryptocurrency exchange, which would only be granted after a thorough review of records and the fulfillment of crucial compliance criteria.

Furthermore, a structure that, among other things, requires the reporting of exchange data to the RBI within a certain time frame may be established, which not only ensures the safety of exchanges and limits illegal usage, but also helps to increase consumer protection.

The tax authorities may tax the income made from purchasing and selling cryptocurrency as capital gains. The Securities and Exchange Board of India (SEBI) has the authority to regulate the trading elements of cryptocurrency transactions as well. This would boost traders’ morale since they will know that sufficient due diligence is being performed on crypto transactions, decreasing the danger of embezzlement in such transactions. Furthermore, businesses can sell initial coin offers (ICOs), which are similar to initial public offerings (IPOs), through which they may be able to obtain cash by releasing tokens in exchange for cryptocurrencies. To ensure the safety of customers and investors, SEBI may supervise the entire process and provide a return mechanism if delivery fails.

Blockchain Introduction:-

Blockchains are a sort of network chain (a way of assembling information and values) that generates “trust” in networks by providing audibility and consensus. Blockchain technology fosters trust by providing stakeholders with relevant records that have a low failure rate. It ensures security since no one can edit or alter a blockchain network, and no one can possess it without the consensus of its peers. In layman’s terms, it is the technology that stores information in a public database.

The blockchain is a technology that allows users to send information from one person to another in a secure and automated manner in the digital world. By forming a chain, one person has the ability to transfer information.

Pros and Cons of Blockchain:-

There are certain pros and cons of the technology. They are as follows:

Blockchain pros:-

• Security & Durability

Blockchain technology ensures the highest level of transaction security and durability. This technology’s general management makes it more durable. Furthermore, the system distributes information blocks throughout the network, which improves durability by eliminating the possibility of transaction failure. It also offers strong security to consumers by providing “public key infrastructure.”

• Integrity

Another significant feature of blockchain technology is that it provides users and stakeholders with a high level of integrity and confidence. When compared to other networks, blockchain has been found to provide high levels of data safety and integrity. It implies that it protects the data by ensuring that the data is always correct and that no one can change or add anything to the ledger once it has been posted.

• Transparency & Immutability

This is the most important aspect of blockchain technology. The immutable characteristic of the technology or system offers a system in which users cannot remove or change the data saved in the network. It is secure because each block has a Hash ID, and if someone tries to modify it, the block will totally change the ID.

Furthermore, it gives a fantastic transparency system since it is available for everyone to view, and if someone tries to change the data, the users will discover right immediately.

• Faster processing

Before blockchain technology became operational, traditional technologies required a significant amount of time and money to complete the task. However, since the adoption of blockchain technology, transactions have become much quicker and more frequent. This is also one of the most significant benefits of blockchain, since it saves time and money on the network.

• Traceability

It is regarded as one of the most notable aspects of blockchain technology. The blockchain technology structure is designed in such a manner that it can easily trace the location of the network and is recognised as a safe and reliable source of transaction. It also leaves a permanent audit trail.

Blockchain cons:-

• Complex regulations

It is one of the most serious drawbacks of blockchain technology. It is not required for any blockchain technology to have adequate rules and regulations in the network’s operation. As a result of the lack of laws and regulations, frauds occur, giving rise to the notion of ICO.

• Privacy concerns

Another significant disadvantage of blockchain technology is that it poses privacy concerns. The most essential thing for every commercial firm is to protect privacy in order to maintain the value of their brand in the long term. However, owing to the absence of privacy in blockchain, many companies must face the loss of profit since information may be shared with competitors.

• High cost

Although blockchain is less expensive than other networks, its solutions might be very expensive. In general, the cost is greatly depending on your requirements and the sort of blockchain functionality you need.

• Dispensable performance

It is also a significant disadvantage of blockchain technology since the calculations necessary in this network are more repetitious than those required in traditional networks. It usually happens when new nodes are added when the ledger is updated. When there is an update in the ledger version, all of the network’s nodes update as well.

Current scenario of Cryptocurrency in India:-

Recent developments in the crypto world, also like Bitcoin’s drop from $65,000 in April to below $40,000 as a result of Elon Musk’s remarks, have refocused attention on legislation governing cryptocurrency governance in India. Around 7 million Indians have already invested more than $1 billion in cryptocurrencies, and the government faces a difficult challenge in allowing the fintech sector to thrive in India while ensuring that there are no safety issues.

Stand of Government on Cryptocurrency:

After months of deliberation on whether to legalize or prohibit cryptocurrencies, the Indian government has made an optimistic step toward regulating digital currencies in India. The Ministry of Corporate Affairs (MCA) has made it necessary for businesses to report their cryptocurrency trading/investments within the fiscal year. Experts regard it as a positive start and anticipate that the taxes laws will be implemented. This is seen as the first step in regulating cryptocurrencies in India.

The accounting of crypto assets aims to reduce illegal activities and the circulation of black money through cryptos. Transparent disclosures can also help to enhance company governance. The Centre has informed crypto stakeholders that there would be no blanket ban on digital currencies and that it is currently developing its final position on the issue. Finance Minister Nirmala Sitharaman has stated that the government is open to experimenting with new technologies and is not dismissive of them. While the government has reservations over cryptocurrencies, it is also developing its own digital money. The government does not want to be left behind in the new age digital revolution, and it intends to capitalize on the advantages that blockchain technology provides. “The time has come to capitalize on its uses while also fortifying the digital infrastructure,”.

 

Conclusion

Unless and until a robust regulatory framework is implemented, India’s cryptocurrency industry would remain uncontrolled. While the Supreme Court’s ruling has boosted the crypto industry, and cryptocurrency start-ups in India are expanding and releasing new products, there are some concerns since the finance ministry has launched a government bill for inter-ministerial talks that may ban cryptocurrencies. Despite this, cryptocurrency start-ups in India are optimistic about cryptocurrency’s enormous potential and future, and they are pressing the government to avoid implementing a blanket ban.

 

[i] The Banking Regulation Act, 1949. Act no.  10 of 1949, section 35A: Power of the Reserve Bank to give directions.

[ii] The Banking Regulation Act, 1949. Act no.  10 of 1949, section 36(1) (a): Further powers and functions of Reserve Banks.

[iii] The Banking Regulation Act, 1949. Act no.  10 of 1949, section 56: Act to apply to co-operative societies subject to modifications.

[iv] Reserve Bank of India act, 1934. Section 45JA: Power of Bank to determine policy and issue directions.

[v]  Reserve Bank of India act, 1934. Section 45L: Power of Bank to call for information from financial institutions and to give directions.

[vi] The Payment and Settlement System act, 2007. No. 51 of 2007, section 10(2): Without prejudice to the provisions of sub-section (1), the Reserve Bank may, from time to time,

issue such guidelines, as it may consider necessary for the proper and efficient management of the

payment systems generally or with reference to any particular payment system.

[vii] Indian Constitution , Art.19(1)(g): to practise any profession, or to carry on any occupation, trade or business

 

References

 

(1) Nehaa Chaudhuri & Anirudh Rastogi, India needs legal framework for cryptocurrencies, (Mar.11, 2020), https://economictimes.indiatimes.com/news/economy/policy/view-india-needs-legal-framework-for-cryptocurrencies/articleshow/74567416.cms?from=mdr.

(2)Vijay Pal Dalmia, Explaining Bitcoin and Legal Position in India,(Mar. 28, 2020), https://www.lexology.com/library/detail.aspx?g=5cc1e39e-2bd5-45cf-a555-63b4e80ed52b.

(3) Rachit Garg, Key insights on legal framework of cryptocurrency in India,(Apr. 25, 2021), https://blog.ipleaders.in/key-insights-legal-framework-cryptocurrency-india/#Status_in_India.

(4) Ayush Verma, Regulation of bitcoin under Indian framework, (Feb. 8, 2021), https://blog.ipleaders.in/regulation-bitcoin-indian-framework/.

(5) BusinessToday.In, Cryptocurrency in India: What’s the govt’s stand, legal status, its future, (Jun. 26, 2021), https://www.businesstoday.in/latest/corporate/story/cryptocurrency-in-india-what-the-govt-stand-legal-status-its-future-296570-2021-05-20.

(6) Disha Ganguli, Cryptocurrency and its rising importance in India in 2021, (May 14, 2021), https://www.analyticsinsight.net/cryptocurrency-and-its-rising-importance-in-india-in-2021/.

(7) Ayush Verma, Laws and regulation of blockchain along with its status in India, (Oct. 30, 2020), https://blog.ipleaders.in/laws-regulation-blockchain-status-india/#What_is_blockchain.

 

 

 

 

 

 

 

 

 

The imposition of the Goods and Services Tax[i] (GST) has largely influenced the way start-ups in India function. In the three years since its effective implementation, the number of new start-ups has grown considerably. The introduction of a new tax framework was critical to the elimination of numerous indirect taxes for the startups. GST guidelines for start-ups were established under the motto “One Nation, One Tax” to make compliance easier for MSME, particularly start-ups.

India’s Eligibility for New Start-ups

Prime Minister Narendra Modi launched the start-up India initiative in 2016 to promote entrepreneurs and increase India’s entrepreneurship. The programme aimed to encourage start-ups by encouraging bank funding, easing formation processes, offering tax exemptions, and providing other benefits.

In India, start-ups can take advantage of numerous GST perks and exemptions if they qualify as an “Eligible Start-up”.  To be considered a qualified start-up, a firm must meet a number of requirements. According to the Start-up India Action Plan, a small business concept must meet the following requirements in order to be considered a start-up.

1. From the date of formation, a company must be formed or registered in India for about seven years (ten years for biotech firms).
2. In any of the preceding financial years, the company’s annual turnover should not have exceeded INR 25 crore.

An eligible start-up is a company that aims to improve business processes, commodities, or services via innovation, invention, deployment, and commercialization. Start-ups must be technologically advanced, with intellectual property and technology as their driving forces.

3. A start-up cannot be created by reorganising or dissolving an existing firm.
4. The Inter-Ministerial Board structure requires a start-up business to get an eligibility certificate.
5. A start-up can be formed as a private limited company, a registered partnership, or a limited liability partnership.

GST Impact on Indian Start-ups | GST Benefits

In India, the Goods and Services Tax (GST) has effectively absorbed all indirect taxes, resulting in a single tax structure. As previously stated, the “One Nation, One Tax” system has benefited growing start-ups. Several start-ups around the country have reaped the benefits that GST has provided over the years.

 

GST Registration — Increased Start-up Threshold Limit in India:-

Businesses with revenue of more than INR 5 lakh in a financial year (FY) were required to register under the former tax regime. Since the implementation of the GST, businesses having a yearly turnover of more than 40 lakh rupees (20 lakh for service providers) have been required to register under the GST system.

The GST’s higher threshold level is intended to make compliance easier for small enterprises in India, especially start-ups. In India, the GST system has also established the composition plan for small companies and entrepreneurs, which reduces the amount of tax paid by start-ups with yearly revenues of up to INR 1.5 crore.

Tax Credit on Purchases:-

Prior to the introduction of GST, service-oriented start-ups were required to collect and remit service tax to the government. Because most start-ups in India are in the service industry, one of the primary issues was the non-utilization of VAT paid on business transactions. There are no mechanisms for claiming credits on state VAT paid against service tax liability.

Since GST has consolidated many indirect taxes into a single tax structure, claiming Input Tax Credits is no longer an issue. Start-ups can now deduct taxes spent on procurement from taxes paid on sales under the Goods and Services Tax (GST) system.

 Procedures simplified for GST Registration and Return Filing:-

Over the last decade, India has largely revolutionised by shifting from manual to digital processes. To get a GST registration number, businesses no longer need to go from one government office to another and submit paper paperwork. Each procedure has been simplified and accelerated thanks to Digital India. Getting a registration number is a no-brainer job once you’ve organised all of your GST accounts and documents.

Several start-ups are affected by budget constraints; these start-ups can now take advantage of the GST system. GST has increased the threshold limit for registration and tax credits on purchases since its inception. In India, the simplicity with which returns may be filed has given relief to start-ups and small enterprises.

Calculating Taxes in a Simpler Way:-

Start-ups frequently operate on a tight budget, and they can’t afford to dedicate separate resources to different compliances such as Excise[ii], CST[iii], VAT, Service Tax, and so on. Instead, the introduction of the GST regime has streamlined tax compliance procedures, allowing start-ups to focus on other aspects of their businesses.

In India, the digital compliance system has expanded the scope of accounting software. Example – Imprezz, India’s first GST invoicing and billing software has been assisting small businesses with tax computations and return submission. Using accounting automation, you may do all of your tasks with a single click of a button.

Instead of several compliances and tax payments, it is considerably easier for start-ups that deal with both products and services to submit a single tax return and pay GST. According to the 22nd GST council meeting, which took place on October 6, 2017, start-ups with annual sales of up to INR 1.5 crore can file quarterly reports and pay quarterly taxes. Small companies and start-ups in India would benefit from the compliance relief.

India’s E-Commerce and Online Start-ups:-

Most innovative start-ups today utilise online presence rather than giving it all to traditional setups; most innovative start-ups today leverage online presence rather than giving it all to traditional setups. They trade online, which means they sell goods and services via the internet. The interstate movement of products is not a problem for e-commerce and other internet start-ups because GST is applied uniformly across the country.

Various VAT taxes were formerly applied in different states. For example, an online store delivering products to Karnataka must have a registered delivery vehicle and a file with the state’s VAT declaration. In the event the appropriate documentation is not produced, the products may be seized by the state’s tax officials.

States like as Rajasthan, Kerala, and West Bengal, on the other hand, regard these providers as facilitators or mediators and do not need them to register for VAT. All of these variations over how supplies were treated typically resulted in compliance issues. To make tax compliance easier, GST has combined all of these into a single tax structure.

Increased logistical efficiency:-

To avoid the CST and state entrance tariffs on inter-state goods transportation, logistics companies in India maintained numerous warehouses across states. The majority of warehouses were underutilised, resulting in higher operational expenses. Currently, the GST has lifted limitations on commodities transit across states, allowing warehouse consolidation across the country.

As a result, warehouse operators and e-commerce companies in India are showing an interest in establishing warehouses in key areas. It lowers needless logistical expenses, allowing start-ups involved in the delivery of products to make early profits.

India’s Tax Burden on Manufacturing Start-ups:-

Manufacturing start-ups face the brunt of the damage. According to Indian excise rules, manufacturing firms with an annual turnover of more than INR 1.50 crore were required to pay excise duty. However, after the implementation of GST, this threshold has been decreased to INR 40 lakh, raising the tax burden on numerous firms.

Consequences of Tax Evasion under GST Laws

To tackle tax evasion, India’s GST Council has required e-invoicing and digital return filing methods. The effective execution of the GST law necessitates the imposition of severe penalties on violators. It is critical to have a thorough understanding of the GST legislation. Otherwise, fines may be difficult to cope with for start-ups and new enterprises. Here are some of the most prevalent GST offences and penalties for small businesses in India.

• Penalty for failing to register for GST.

For unpaid taxes, the penalty is 10% of the amount owed, or INR 10,000, whichever is     greater.

• Non-issuing of GST invoices carries a penalty.

10% or INR 10,000 penalty for tax due, whichever is higher.

• Penalty for not filing GST returns.

For unpaid taxes, the penalty is 10% of the amount owed, or INR 10,000, whichever is higher.

• Under the GST, there is a penalty for committing fraud.

10% or INR 10,000 penalty for tax due, whichever is higher.

• Penalties for failing to file GST returns on time.

The late charge will be INR 200 per day (INR 100 per day under the CGST Act and INR 100 per day under the SGST Act), with a maximum fine of INR 5,000.

• Penalty for using the composition scheme when the Start-up is not qualified.

In the event of fraud, a penalty of INR 10,000 or 100% of the tax payable (whichever is larger) would be imposed under Section 74.

In the absence of fraud, a penalty of INR 10,000 or 10% of the tax owed (whichever is greater) will be imposed.

• Unlawfully charging higher GST rates will result in a penalty.

Penalties for unpaid taxes are either 10% or INR 10,000, whichever is greater (in case additionally charged GST amount is not submitted to the government).

• Unlawfully charging lower GST rates will result in a penalty.

Penalties for unpaid taxes are either 10% or INR 10,000, whichever is greater (in case additionally charged GST amount is not submitted to the government).

• Penalties can be imposed if GST returns are filed incorrectly.

A penalty of INR 25,000

• Invoices that are incorrectly issued are subject to a penalty.

A penalty of INR 25,000

• Penalty for charging the wrong GST type (IGST, CGST, or SGST) without authority.

For this form of tax avoidance, there is no penalty. Businesses can pay the correct GST amount and get a refund for an earlier GST payment that was incorrect.

New ITR e-filing portal: Check benefits, features and other details

On June 7, 2021, the Income Tax Department has introduced its new e-filing system. The new e-filing platform is designed to provide taxpayers with ease as well as a contemporary, seamless experience. For a brief period of 6 days, from June 1 to June 6, 2021, the Department’s present portal was unavailable to taxpayers and other external stakeholders in preparation for this launch and migration efforts. The Department will not set any compliance deadlines at this time to avoid causing taxpayers any difficulty.

Furthermore, from the 10th of June 2021 onwards, orders have been issued to schedule hearings of cases or compliances only from the 10th of June 2021 onwards, to give taxpayers time to adjust to the new system. If a hearing or compliance that needs online submissions is planned during this time, it will be postponed or adjourned, and the work items will be rescheduled after this time.

External entities that use PAN verification services, such as banks, MCA, GSTN, DPIIT, CBIC, GeM, and DGFT, have also been informed of the non-availability of the services, and have been asked to make arrangements to ensure that their customers/stakeholders are informed, so that any relevant activity can be completed prior to or after the blackout period.

To avoid any difficulties during the blackout period, taxpayers were advised to finish any urgent activities involving any submission, upload, or download by June 1, 2021.

Benefits & Features of new ITR e-filing portal:-

·         To offer rapid refunds to taxpayers, the new taxpayer-friendly site is connected with instant processing of Income Tax Returns[i] (ITRs).

·         All interaction, uploads, and pending actions will be shown on a single dashboard for the taxpayer to review and act on.

Free ITR preparation software is accessible online and offline, including interactive questions to assist taxpayers in filling out ITRs even if they have no prior tax experience, as well as prefilling to reduce data entry effort.

·         New call centre for taxpayer support including FAQs, Tutorials, Videos, and a chatbot/live agent to provide immediate solutions to taxpayer questions.

·         All major desktop portal features will be available on the Mobile App, which will then be activated for full anytime access on the mobile network.

·         For simple payment of taxes, a new online tax payment system on a new portal will be introduced later with various new payment methods like as netbanking, UPI, credit card, and RTGS/NEFT from any taxpayer’s account in any bank.

The Department has asked taxpayers and other stakeholders for their patience throughout the transition to the new e-filing portal and the ensuing initial time while they become comfortable with the new system. This is another attempt by the CBDT to make compliance easier for its taxpayers and other stakeholders.

Conclusion:-

When it comes to bringing ideas to life, execution is crucial. Similarly, GST serves a similar role in the implementation of an effective tax system that aims to benefit Indian businesses. Furthermore, the new tax computation method is more user-friendly and efficient than the old, inefficient approach. It is reasonable to assume that GST is playing an important role in helping India’s start-ups reach their full potential.

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[i] Act No. 12 of 2017.

[ii] Central Excise Act, Act No. 1 of 1944.

[iii] Central State Tax Act, Act No. 74 of 1956.

[iv] Income Tax Act, Act No. 43 of 1961.

 

References

 

(1) Amitmundra, GST Rules for Start-ups in India, (Feb. 22, 2021), https://www.imprezz.in/gst-rules-for-start-ups-in-india/.

(2) NovoJurisLaw, Start ups and MSMEs: Registration and Advantages features of Atma Nirbhar package, (Aug. 11, 2020), https://www.novojuris.com/thought-leadership/start-ups-and-msmes-registration-and-advantages-features-of-atma-nirbhar-package.html.

(3) Ayush Verma, Procedure for registration of GST, (May 22, 2021),

https://blog.ipleaders.in/procedure-registration-gst/#What_is_the_benefit_of_Registration_of_GST.

(4) The Gazzet Of India, The Central Goods And Service Act,2017, (Apr. 12, 2017), http://gstcouncil.gov.in/sites/default/files/CGST.pdf.

(5) Harshita Tyagi, Income Tax Dept to launch new ITR e-filing portal: Check benefits, features and other details, (May. 25, 2021), https://www.timesnownews.com/business-economy/personal-finance/income-tax/article/income-tax-dept-to-launch-new-itr-e-filing-portal-check-benefits-features-and-other-details/761308.

(6)The Central Board of Indirect Tax and Custom, The Central Goods and Services Tax Act, (Jun. 18, 2021), https://cbic-gst.gov.in/CGST-bill-e.html.

 

As the world prepares to celebrate Pride Month in June, one may question what Pride Month is and why we celebrate it, especially because there are still many stigmas and a lack of understanding around Pride and the Pride Month.

The LGBTQ community has long struggled for the freedom to live a decent life. As a result, the world celebrates Pride month every June in recognition of community members who have overcome various barriers in their lives and have come a long way. The Pride month also shows how far LGBT rights have progressed and how much work remains to be done.

This Pride month is all about teaching acceptance, imparting pride history, and, most importantly, teaching love. Several initiatives and activities are being launched to educate people about the dangers of homophobia.

 

History of pride month

A brawl broke out in Stonewall Inn outside Manhattan, New York, in the early hours of June 28, 1969. Over 500 individuals — drag queens, butch lesbians, transgender persons, homosexual men, and homeless youngsters – attacked the New York City Police officers who were harassing and beating up the bar’s LGBT clients. Over a thousand individuals had joined the disturbances by the next day. For the first time, people had taken to the streets to protest the harsh anti-gay legal system and the institutions that enforced it. Stonewall shifted the trajectory of LGBTQIA+ rights throughout the world.

The world’s first Pride Parade took held in New York City on June 28, 1970. The procession began on Washington Place between Sheridan Square and Sixth Avenue and went up Sixth Avenue, concluding with a “Gay-In” in Central Park. It was then known as the Christopher Street Liberation Day March, named after the street on which Stonewall is located. On that day, 5000 people marched. This year, on the 51st anniversary of Stonewall, more than 3 million people marched to express their pride.

 

Advancement in India  

The first Pride Parade in India, known as the Kolkata Rainbow Pride Walk, took place in Kolkata on July 2, 1999. It is also the oldest Pride march in South Asia. Despite the fact that it attracted participants from other places like as Mumbai and Bangalore, there were only approximately 15 in total, none of them were women.

The march, also known as the Friendship Walk, is thought to have been organised in Kolkata because of the city’s long history of and close ties to various human rights movements, including feminist, Dalit, disabled, and child rights. This is comparable to why Stonewall happened so close to New York City, and why the world’s first pride march was staged there as well — in the late 1960s, New York was the epicentre of several movements, including the civil rights and anti-Vietnam war movements. Pride benefits from its intersectionality, as seen by this. Another example is how, in India, Pride Parades sometimes include caste-related debate and demonstrations.

It’s been 22 years since the Rainbow Pride Walk in Kolkata in 1999. Pride Parades are being organised in more than 21 Indian cities.

In the years 1999, 2003, 2004, and 2005, Kolkata was the only place where pride marches were organised. Bengaluru, Delhi, and Puducherry marched in unison with Kolkata in 2008. Nearly 2500 individuals took part in the event. The BJP caused some disturbances, but they mainly went off without a hitch. The then-Prime Minister’s support for LGBTQ rights, as well as the Delhi High Court’s decision decriminalizing homosexuality in 2009, was a significant step forward.

Bengaluru’s pride parade, known as the Bengaluru Namma Pride March, has taken place every year since 2008, usually around December. It is preceded by Queer Habba, a month of queer festivities. Coalition for Sex Workers and Sexuality Minority Rights is organizing the event (CSMR). Corporate businesses including as Goldman Sachs, Google, and IBM are known to participate in the Bengaluru pride march.

The Delhi Pride Parade takes place every year on the last Sunday of November. It runs from Barakhamba Road to Jantar Mantar, stopping at Tolstoy Marg on the way. It is totally supported by the community, and the organisers have continuously declined corporate sponsorship. The Delhi Queer Pride Parade also openly promotes Dalit, feminist, and disability rights movements. In 2018, more than 5000 individuals took part.

In Guwahati, Assam, the first pride parade in the North East was staged in 2014. It has been held every year in the first week of February since then. It arose from Guwahati’s involvement in a Global Day of Rage held in 2013 in protest of the Supreme Court’s reinstatement of Section 377[i] after the Delhi High Court had abolished it in 2009. The 2017 march slammed the AFSPA and urged that it be repealed. On the 3rd of February, 2019, Queer Pride Guwahati held its most recent iteration.

Another huge pride parade, this one in Chennai, began in 2009. It’s called Chennai Rainbow Pride , every June during Pride Month. It is organised under the umbrella of the Tamil Nadu Rainbow Coalition, and a stringent no-corporate-sponsorship policy is in place. Last year, about a thousand individuals took part in the Self-Respect March, which is also known as the Self-Respect March.

In 2017, pride marches around India protested the proposed Transgender Persons Bill[ii] 2016, and Kolkata had a Transgender Day of Rage on the same day as the march.

In India, 2018 was a particularly happy year for pride parades, as the harsh section 377[iii] was repealed. In 2018, the LGBTQ community marched around the country as relatively free citizens.

The Hyderabad Queer Pride, Pride de Goa, Queer Gulabi Pride Jaipur, Bhopal Pride March, and others are all prominent pride parades in India.

 

Indian pride parade timeline

The Indian LGBTQ community has come a long way after facing high criticism from the society as well as government. The final judgement on the freedom of LGBTQ community’s future in India with Navtej singh johar’s[iv] case. In India, there has been no shortage of discussions on homosexuals’ rights. Section 377 of the Indian Penal Code of 1860, which dealt with unnatural offences and, among other things, criminalized homosexuality, was also a contentious topic. The entire notion of homosexuality was viewed as being against nature’s will and so unwelcome in society. The debate over the criminalization of homosexuality centred on the Indian constitution’s articles 14[v], 15[vi], and 21[vii], which are basic rights that guarantee equality, non-discrimination on the basis of sex, and personal liberty, respectively, and that section 377 infringes on these rights. The above landmark case decriminalized homosexuality while also addressing several critical constitutional issues.

 

Current status of their legal rights

Same-sex couples, single person, and unmarried couples have found it increasingly difficult to adopt since the Central Adoption Resource Authority (CARA) established adoption rules. Many Indian residents have been denied equality in numerous facets of their lives just because of their sexuality. This may be seen in the fights for marriage equality, adoption rights, the freedom to serve openly in the military, and a variety of other fights to abolish discrimination based on sexual orientation.

The gay and lesbian assertion on their rights – “to be treated equally, fairly, and equitably as citizens of India; that respect should be given to who they are, what they are; the right to choose, the right to be unmarried, and the right to their own sexual orientation” – is a crucial point in the discussion on the politics of liberation. In India, the demand for gay and lesbian freedom and equality was first made in a concerted way around the end of 1991. The Charter of Demands, which consists of 19 points, was released in the report less than Gay’s last chapter.

Only the first cause, such as the removal of the discriminatory section of the IPC, has been addressed so far, leaving the remaining demands unaddressed. Adoption is becoming more popular among lesbians and gays as a means of forming families. In adoption processes, however, same-sex couples have a lot of trouble getting fair treatment from the courts. In rejecting adoption to lesbians and gays, courts often neglect actual data and the unique facts of the case, according to judicial rulings. Lesbians and gay males have had an especially tough time gaining equal footing with heterosexuals in the family arena. “Discrimination against gays is pervasive in the family law environment where judges and agencies have extensive discretion,” say proponents of same-sex adoption. Lesbians and gay men who want to raise children regularly face discrimination and misunderstandings about their sexual orientation, which “turn courts, lawmakers, experts, and the public against them, usually leading in undesirable consequences such as physical custody loss.”

Human rights are based on the assumption that all people are equal. As a result, all persons possess dignity and should be treated equally. Anything that diminishes its dignity is a violation, as it goes against the concept of equality and allows prejudice to flourish. Lesbian, gay, bisexual, transgender, and intersex people’s human rights are gaining momentum across the world, with significant progress being made in several countries in recent years, including the introduction of new legislative safeguards. Legal protection should include equal protection under the law for job opportunities, marriage, and adoption, putting the LGBT population on level with heterosexuals.

 

Issue with section 377

• Is Section 377 of the IPC a violation of Article 14 of the Constitution’s Right to Equality?
• Is Section 377 of the IPC a violation of Article 19 of the Constitution’s guarantee of freedom of speech and expression?
• Is Section 377 of the IPC a violation of Article 21 of the Constitution’s right to life with dignity?
• Is it a violation of Article 15 of the Constitution to discriminate based on sexual orientation under Section 377 of the IPC?
• Was the Supreme Court’s judgment in the Suresh Kumar Koushal[viii] case reasonable in terms of defining morality as social morality?

To arrive on the conclusion of the case the bench also referred to judgments in NALSA v Union of India[ix] (recognized transgender identity) and Justice K.S. Puttaswamy v Union of India[x] (recognized fundamental right to privacy).

 

Conclusion

A person’s ability to choose a mate should not be limited by his or her sexual orientation. It denies them not just their basic fundamental rights to equality and privacy, but also their right to live in dignity, which is contained in the right to life and liberty. In India, those who are born outside of the two primary genders are shunned and rejected on the grounds that they are of a third gender. In order to provide a better living environment for the LGBT community, the Indian government’s Home Department must take the lead and collaborate with state governments in sensitising law enforcement agencies and involving all stakeholders in identifying and implementing measures to achieve the constitutional goal of social justice and the rule of law. There are no laws protecting homosexuals and lesbians from job discrimination or allowing them to marry their preferred partner.

The rising gay and lesbian movement provides not only new identities, but also new possibilities for societal change. Despite its small size, the movement rejects both the monolith and the mass. It serves as a reminder that if forced conformity is to be resisted, human lives must be represented as varied; selfhood as numerous; and communities as voluntary and diverse. A new definition of political pluralism would be one that assesses a society not only on the number of organizations it accepts, but also on the number of identities it permits people to adopt. There are still areas in India where people haven’t heard of the LGBT movement and believe that gays and transgender individuals should be shunned from society. The Researcher, on the other hand, believes that India can only be declared free when society no longer discriminates against those who are homosexual, gay, bisexual, transgender, cisgender, or straight.

[i] The Indian Penal Code, 1860, S. 377.

[ii] The Transgender Persons (Protection of Rights) Bill, (Sep. 08, 2016).

[iii] Id. at 1

[iv]  Navtej Singh Johar v. Union of India, (2018) 10 SCC 1.

[v] Indian constitution. Art.14: Equality before law

[vi] Indian constitution. Art.15: Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth

[vii] Indian Constitution. Art.21: Right to Life and Personal Liberty

[viii] Suresh Kumar Koushal and Anr. v. Naz Foundation and Ors., (2014) 1 SCC 1.

[ix] National Legal Services Authority v. Union of India and others,  AIR 2014 SC 1863

[x] Justice K S Puttaswamy and Anr v. Union of India and Ors [Writ Petition (Civil) No. 494 of 2012]

 

References

 

1. Hamsadhwani Alagarsamy, The History Of Pride Parades In India,( June. 24, 2019),

https:/feminisminindia.com/2019/06/24/pride-parades-india-history

2. Primelegal, Status of LGBTQ Community in gender equality,(Mar.31, 2021), https://primelegal.in/2021/03/31/status-of-lgbtq-community-in-gender-equality/
3. TheFreePress, When is Pride Month and why is it celebrated at this time? History, significance and more,( June 1, 2021),( 11:39 AM IST), https://www.freepressjournal.in/india/when-is-pride-month-and-why-is-it-celebrated-at-this-time-history-significance-and-more
4. Diganth Raj Sehgal, Case Comment on Navtej Singh Johar v. Union of India, (Nov.22, 2019), https://blog.ipleaders.in/case-comment-navtej-singh-johar-v-union-india/
5. Arohi ambade, Case Summary: Navtej Singh Johar v. Union of India thr. Secretary Ministry of Law and Justice,( Jul. 23, 2020), https://lawlex.org/lex-bulletin/case-summary-navtej-singh-johar-v-union-of-india-thr-secretary-ministry-of-law-and-justice/25100
6. Shalini Ojha, Showing solidarity to LGBTQ: Why is June ‘the pride month’, (Jun 03, 2018)( 12:18 am), https://www.newsbytesapp.com/news/india/pride-month-show-solidarity-to-lgbtqa-this-june/story
7. Yash Dahiya, National Legal Services Authority vs Union of India – Case Analysis,( Aug. 27, 2018), https://blog.ipleaders.in/national-legal-services-authority-vs-union-of-india-case-study/

 

 

 

Global social media giant WhatsApp has moved to the High Court of Delhi, challenging the new IT Rules introduced by the Government of India. WhatsApp specifically protests against the traceability clause and contends it to be unconstitutional. This petition comes at a time when social media operators stand at the verge of being banned from continuing operations in India, as the three-month long deadline given by the Ministry of Electronics & Information Technology (MEITy) has expired.

 

What are the new rules?

 

The Information Technology (Guidelines for Intermediaries And Digital Media Ethics Code) Rules, 2021, notified by the Centre on February 25, 2021, inter alia to regulate and elevate ethical and grievance redressal standards and mechanisms followed by social media intermediaries. Such regulations purports to mandating such intermediaries, and especially those that hold a ‘significant’ position in society, to ensure a three-tier grievance redressal mechanism. Furthermore, the rules also mandate appointment of Chief Compliance Officer who shall ensure compliance with IT Act, 2000 and the rules made thereunder, along with appointing a nodal officer who shall be at 24/7 disposal for coordinating with law enforcement agencies.

Apart from the above, one of the most controversial and also extremely significant rules imposed is that of enabling ‘Traceability’. This rule mandates social media intermediaries to modify tech so as to enable tracking the origin of messages and posts.

 

Why challenge?

 

 

In a challenge to the clause of Traceability, WhatsApp contests that “The threat that anything someone writes can be traced back to them takes away people’s privacy and would have a chilling effect on what people say even in private settings, violating universally recognized principles of free expression and human rights.”

 

To enforce such a clause the social media intermediary would have to do away with its ‘end-to-end encryption’ facility, that ensures complete privacy protection of users. The operator also expresses concern about decoding and storing personal messages of users, which will be violative of the spirit of Article 21 and the Right to Privacy, a fundamental right recognized in Justice K.S. Puttaswamy vs. The Union of India.

 

References

1. The Information Technology (Guidelines for Intermediaries And Digital Media Ethics Code) Rules, 2021
2. Information Technology Act, 2000
3. Justice K.S. Puttaswamy vs. Union of India (2017) 10 SCC 1
4. WhatsApp https://faq.whatsapp.com/general/security-and-privacy/what-is-traceability-and-why-does-whatsapp-oppose-it

The 10 month long brawl

 

The case  Kunhi Muhammed Etayattil Vs. The Asst. Registrar of Companies  the High Court of Kerala, purports to a writ petition filed by the petitioner in order to set aside a rejection letter given by the Registrar of Companies, regarding an application for incorporating an LLP, with regards to the name “Reef Wellness and Excellence LLP”. The rejection letter, as contended by the petitioner did not specify any reasons for dispute or non-compliance.

The petitioner intended to incorporate a Limited Liability Partnership for the purposes of doing a recreational and wellness centres business, under the aforesaid name. Therefore, he filed an application on the Ministry of Corporate Affairs website under the RUN-LLP forum, for reserving the name under Rule 18(2) of the LLP Rules, 2008. The said application was approved, and it was stated that the name was available.

Subsequent to receiving this communication, the petitioner filed the FiLLP form for incorporating the Limited Liability Partnership under the name ‘Reef Centre for Wellness and Excellence LLP’. However, this application received a series of objections and was declined time and again for the following reasons:

 

1. The respondent in his first response to the above application noted: “No Resemblance found, TM Checked u/c (Under Class) 44,35,41 Name can be given.” However, this communication also pointed out some defects and deficiencies in the application,
2. The petitioner rectified the application and resubmitted it, void of all defects.
3. The resubmitted form was again replied to by the respondents asking for an NOC which should be in the name of the person whose name is mentioned on the annexed utility bill.
4. To this the petitioner submitted a clarification that the above requirements have already been met.
5. The respondents again rejected the application and that in the case of proprietorship, NOC should be given on the letterhead duly stamped and signed and further that Business Visa of one of the partners, who is a resident of India, also has to be submitted.
6. The petitioner replied to the same, however owing to inaction by the respondents, he filed a complaint with the Escalation Authority under the Ministry of Corporate Affairs, which without referring to the contentions rejected the complaint.
7. The petitioner again responded to the Authority stating that an OCI Card from an Indian Passport Holder cannot be sought. Pursuant to which, the authority asked him to file a fresh FiLLP form as the maximum number of re-submissions allowed have been exhausted.
8. The fresh FiLLP form was rejected by the respondents stating that the proposed names included the word REEF which is already there in TM under Class 5. The petitioner responded with a clarification that Class 5 dealt with pharmaceuticals whereas this application was under class 35.
9. The petitioner was again asked to resubmit the FiLLP form with the remark, which was subsequently denied, and he made the representation that the name was already reserved by him, though the time limit expired. However, this was again not accepted by the respondents leading to this appeal.

The Issue in  Kunhi Muhammed Etayattil Vs. The Asst. Registrar of Companies  case

 

Whether the Registrar of Companies was correct on rejecting the application based on an existing trademark in another class of goods and services?

Court’s Opinion

 

 

 The above tussle(Kunhi Muhammed Etayattil Vs. The Asst. Registrar of Companies) continued for over 10 months and the High court rightly “described as a ‘system generated harassment’ aggravated by non-application of mind by officials who leave

everything to be dealt with by the system, thereby putting the common man to an agonising phase of suffering, where he is condemned to deal with faceless men and machines.” The Hon’ble court was unpleased with the sorry state of affairs and also gave clarification on the law relating to trademarks, while referring to Nandhini Delux v.Karnataka Co-operative Milk Producers Federation Limited. It stated that while the LLP Act read with the Trade Mark Act, 1999 disallow the use of same, similar or identical names, Section 28 of the latter act makes it clear that such exclusive right is limited with the proprietor in relation to the goods and services in respect to which the trademark is registered. Therefore, there is no question of confusion or deception in the matter of Trademark if the products or services fall in distinct and different classes.

The high court directed the respondents to incorporate the LLP without raising any disputes regarding the name.

 

 

References

1. Kunhi Muhammed Etayattil Vs. The Asst. Registrar of Companies [1] WP(C). No. 3057 OF 2021(F)
2. Nandhini Delux v. Karnataka Co-operative Milk Producers Federation Limited [AIR 2018 SC 3516]