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Will engage with startups, finance ministry on ESOPs issue, says DPIIT secretary Guruprasad Mohapatra

Updated : February 03, 2020 09:25 PM IST

Department for Promotion of Industry and Internal Trade (DPIIT) secretary  Guruprasad Mohapatra on Monday said there has been a lot of improvement in terms of taxation policies on startups since last year.

He told CNBC-TV18 that the department will engage with startups and finance ministry on employee stock ownership plan (ESOPs) issue.

"Now, there is an issue (ESOP) raised that could be expanded to cover startups which do not exactly fulfil this particular section of the Income Tax Act requirement. So, this definitely will require a relook at the issue. Definitely we are not averse to re-looking at the issue and we will be discussing this."

"There are pros and cons of everything, this is an issue which has just come up after the introduction of the Budget, so we will have a look at it."

On CGST collections, John Joseph, Member - Tax Policy at CBIC, said: "Firstly, we have revised the collection target downwards from the great expectation that we had in the beginning of the year. Secondly, January collections we got almost more than Rs 1.1 lakh crore, so it shows that things are improving."

"We were expecting to collect around Rs 1.15 lakh crore, but we almost made it to Rs 1.12 lakh crore."

The whole problem is that there are certain deviants who are gaming the system and that is what is creating the problem, Joseph added.

"We have also identified roughly almost 10,000 entities which are deviants. So that shows how deep the problem is in the system."

On tax payer charter, Pramod Chandra Mody, chairman of CBDT, said: "It goes with the basic ethos which the department is trying to follow that from a tax enforcement agency we are now more of tax facilitators."

"In that respect, the citizen's charter was already there. What we have further gone and done is that we have given it a statutory recognition and that work is in progress and very soon the charter will be put in the public domain."

The basic idea is whatever was given by way of citizen's charter it was more of an administrative mechanism but now once it is put in this statute then it becomes enforceable, it brings in more discipline, he added.

"Now, that we are perceiving ourselves to be tax facilitators, then in that case certain deliverable are there and some timeframe is there, certain benchmarks are there."
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