Sarat Chandra IAS Academy

Current Affairs of 26th September-2020

 

1)Retrospective taxation: the Vodafone case, and The Hague court ruling:

Context: International Tribunal rules that India’s demand is in breach of fair treatment

  • In a unanimous decision, the Permanent Court of Arbitration at The Hague ruled that India’s retrospective demand of Rs 22,100 crore as capital gains and withholding tax imposed on the British telecommunication company for a 2007 deal was “in breach of the guarantee of fair and equitable treatment”.

What did the Permanent Court of Arbitration at The Hague say?

  • One of the major factors for the Court of Arbitration to rule in favour of Vodafone was the violation of the BIT and the United Nations Commission on International Trade Law (UNCITRAL).
  • The court has also asked India not to pursue the tax demand any more against Vodafone Group.
  • It also directed India to pay $ 5.47 to the company as compensation for its legal costs.

What is the case?

In May 2007, Vodafone had bought a 67% stake in Hutchison Whampoa for $11 billion.

  • This included the mobile telephony business and other assets of Hutchison in India.
  • In September that year, the India government for the first time raised a demand of Rs 7,990 crore in capital gains and withholding tax from Vodafone, saying the company should have deducted the tax at source before making a payment to Hutchison.
  • Vodafone challenged the demand notice in the Bombay High Court, which ruled in favour of the Income Tax Department.
  • Subsequently, Vodafone challenged the High Court judgment in the Supreme Court, which in 2012 ruled that Vodafone Group’s interpretation of the Income Tax Act of 1961, gave ruling in favour of Vodafone
  • The same year, the then Finance Minister, the late Pranab Mukherjee, to overcome the Supreme Court’s ruling proposed an amendment to the Finance Act, thereby giving the Income Tax Department the power to retrospectively tax such deals.
  • The Act was passed by Parliament that year and the onus to pay the taxes fell back on Vodafone. The case had by then become infamous as the ‘retrospective taxation case’.

What happened after India passed the retrospective taxation law?

  • Once Parliament passed the amendment to the Finance Act in 2012, the onus to pay the taxes fell back on Vodafone.
  • The amendment was criticized by investors globally, who said the change in law was “perverse” in nature.
  • “The retrospective amendment that overturned the decision of the highest court of the land
  • Following international criticism, India tried to settle the matter amicably with Vodafone, but was unable to do so.
  • After the new NDA government came to power, it said it would not create any fresh tax liabilities for companies using the retrospective taxation route.
  • By 2014, all attempts by the telco and the Finance Ministry to settle the issue had failed.
  • Vodafone Group then invoked Clause 9 of the Bilateral Investment Treaty (BIT) signed between India and the Netherlands in 1995.
  • The two countries would, under the BIT, ensure that companies present in each other’s jurisdictions would be “at all times be accorded fair and equitable treatment and shall enjoy full protection and security in the territory of the other”.
  • In 2014, when the Vodafone Group had initiated arbitration against India at the Court of Arbitration, it had done so under Article 9 of the BIT between India and the Netherlands.
  • Article 9 of the BIT says that any dispute between “an investor of one contracting party and the other contracting party in connection with an investment in the territory of the other contracting party” shall as far as possible be settled amicably through negotiations.
  • The other was Article 3 of the arbitration rules of UNCITRAL, which, among other things, says that “constitution of the arbitral tribunal shall not be hindered by any controversy with respect to the sufficiency of the notice of arbitration, which shall be finally resolved by the arbitral tribunal”.

What did the Permanent Court of Arbitration at The Hague say?

  • One of the major factors for the Court of Arbitration to rule in favour of Vodafone was the violation of the BIT and the United Nations Commission on International Trade Law (UNCITRAL).

 

2) Media regulation:

The Supreme Court last week came down heavily on a TV channel that was intent on broadcasting hate-filled programmes.

  • In April 2018 when the Information and Broadcasting Ministry issued a circular stipulating that the accreditation of a journalist found to have “created and/or propagated” fake news will be suspended or permanently cancelled.
  • The next 15 hours witnessed a huge public anger against the circular, culminating in the I&B ministry revoking the circular.
  • Unregulated power is always dangerous. Some checks and regulations are obviously required.

What are the possible forms of such regulation?

  • Government regulation,
  • Self-regulation and independent regulation.

Government regulations

  • Are, of course, not desirable as these could interfere with the freedom of speech and expression enshrined in the Constitution (Article 19)
  • The same Article also provides for “reasonable restrictions” on this freedom.
  • Provisions within the Cable Television Network Rules of 1994, the Cable Television Networks (Regulation) Act of 1995, and the Policy Guidelines for up linking of Television Channels from India of 2000 give it the power to block the transmission and retransmission of any channel in the country. How effective or fair this is, is a matter for critical examination.

The second alternative — self-regulation

That brings us to the third and most desirable option — independent regulation. Who will set it up?

Incidentally, a fourth model has accidentally evolved — self-cum-independent regulation.

NBSA as self-regulatory and an Independent body:

  • The News Broadcasters Association (NBA), which was set up in 2008, in turn, set up the National Broadcasting Standards Authority (NBSA)
  • NBSA has no interference from the parent body — the NBA so this is an example of self-regulation and Independent as it has no interference from NBSA
  • With the legendary former Chief Justice of India, Justice J S Verma, as its chairman. He agreed to chair this body on the express condition that this will be an independent body and that he would brook no interference from the parent body — the NBA — a condition which the Association has always honored.
  • The CJI said, he was an independent member for nearly seven years and can vouch for the total non-interference of the parent body, despite several orders going against the members.
  • It imposed heavy cash fines on recalcitrant channels and, more significantly, forced them to telecast a public apology at prime time, often for several days.
  • The channels seemed more scared of this humiliation than the cash fines.

Loopholes in NBSA:

  • First, its writ extended only to its members, which was limited due to its voluntary membership.
  • Those who were unhappy with a verdict found it easy to walk out, hence needs a statutory backing, extending its jurisdiction to non-members as well, besides empowering it to take punitive action like suspending and cancelling licenses.

UK offers a good example in the form of OfCom (Office of Communications) — the government-approved regulatory and competition authority for the broadcasting, telecommunications and postal industries. Like the NBA, OfCom functions through fees from the industry itself.

It is created by an Act of Parliament. This implies that the OfCom is given authority by the British parliament, is answerable to it and has been given legitimacy. Not long ago, in February 2020, the UK government announced that it intended Ofcom to have a greater role in internet regulation to protect users from “harmful and illegal” content.

One model is empowering the NBSA with statutory backing, more stringent powers and extending its writ to all news channels.

Other Alternate models:

  • The other model could be an SC-appointed monitoring panel — like the one it set up in 1998 to monitor encroachments in Delhi which worked very effectively
  • The Press Council model is an equal failure, spineless and toothless, despite a retired SC judge heading it.
  • The fourth model is like the Election Commission — a constitutionally-appointed body which was empowered by the SC in 2002 as a regulator to enforce the model code of conduct evolved by the political parties voluntarily for self-discipline.

Whichever model it chooses, the Supreme Court must not fall prey to the diversionary tactics of vested interests

 

3) Quad:

Foreign ministries, of the Quad group of countries – India, the US, Australia and Japan met virtually

  • The ministers discussed on going and proposed practical cooperation in the areas of connectivity and infrastructure development
  • Noting the importance of digital connectivity and secure networks the officials discuss ways to promote the use of trusted vendors particularly for 5th generation networks
  • In an effort to stop Chinese giant Huawei from setting up shop networks in other countries current US Secretary of the state has been promising clean telcos – a list of companies considered by US administration to be free from security risk and the risk of surveillance by Chinese government
  •  The Other topics discussed include counterterrorism, cyber and Maritime security and quality infrastructure in the region
  • The United States also reiterated their readiness to work with ASEAN and all other countries towards realizing a common and a promising vision for Indo Pacific and ASEAN’S leadership in in the architecture of the region

 

4) NOC for Groundwater Extraction:

The Centre has notified new guidelines to regulate extraction of groundwater, making it mandatory for new and existing industries, group housing societies, and private water supply tankers to get a no objection certificate (NOC) for withdrawal of groundwater.

Non-compliance of NOC conditions may attract a penalty between Rs 50,000 and Rs 10 lakh

The guidelines have exempted 5 categories from getting an NOC —

  • Individual domestic consumers in both rural and urban areas for drinking water and domestic uses
  • Rural drinking water supply schemes
  • Armed Forces Establishments and Central Armed Police Forces establishments in both rural and urban areas
  • Agricultural activities
  • Micro and Small enterprises drawing groundwater less than 10 cubic metre/day.

Installation of digital water flow meters is mandatory for all users seeking NOC.

  • The NOC issued under the new guidelines will be valid for 2-5 years depending on the entity.
  • Non-compliance of NOC guidelines will draw a penalty between Rs 50,000 to Rs 10, 00,000, depending on the violation.
  • The guidelines say extraction of groundwater for commercial use by industries, infrastructure units and mining projects without a valid NOC will be considered illegal and they will be liable to pay Environmental Compensation for groundwater extracted.

 

5) Vasa (AdhatodaVasica) and Guduchi for the management of Covid-19:

In view of the need for accelerated solutions for Covid-19, the Ministry of AYUSH has taken up systematic studies on different possible solutions through multiple channels.

  • As part of this effort, a proposal for a clinical study to assess the role of Vasa Ghana, Guduchi Ghana and Vasa-Guduchi Ghana in therapeutic management of symptoms in Covid-19 positive cases has recently been approved.
  • This will be a “randomized, open label three armed” study, and will be conducted at the All India Institute of Ayurveda (AIIA), New Delhi, in collaboration with the IGIB unit of CSIR.

The project would look into the following specific considerations:

  • The efficacy/action of mono-herbal formulations of whole extracts of Vasa and Guduchi respectively,. The impact of the said formulations on the speed of viral replication.
  • Vasa and Guduchi are time tested herbs in Indian healthcare traditions, used in a variety of disease conditions. The outcome of this study would therefore be of considerable interest to the entire Ayush Sector.

 

6) Faceless Appeals launched by CBDT today:

The Income Tax Department today launched Faceless Income Tax Appeals.

  • Under Faceless Appeals, all Income Tax appeals will be finalized in a faceless manner under the faceless ecosystem with the exception of appeals relating to serious frauds, major tax evasion, sensitive & search matters, International tax and Black Money Act.
  • Transparent Taxation – Honoring the Honest platform, had announced launching of Faceless Appeals on 25th September, 2020 on the birth anniversary of Pt. Deen Dayal Upadhayay.
  • Also, in recent years the Income Tax Department has carried out several reforms in Direct Taxes for the simplification of tax processes and for ease of compliance for the taxpayers.
  • There will be no physical interface between the taxpayers or their counsel/s and the Income Tax Department. The taxpayers can make submissions from the comfort of their home and save their time and resources.
  • The Faceless Appeals system will include allocation of cases through Data Analytics and AI under the dynamic jurisdiction with central issuance of notices which would be having Document Identification Number (DIN).
  • As part of dynamic jurisdiction, the draft appellate order will be prepared in one city and will be reviewed in some other city resulting in an objective, fair and just order.
  • The Faceless Appeal will provide not only great convenience to the taxpayers but will also ensure just and fair appeal orders and minimize any further litigation.

The new system will also be instrumental in imparting greater efficiency, transparency and accountability in the functioning of the Income Tax Department

 

7) National Medical Commission (NMC):

Union Government constituted the National Medical Commission (NMC), along with four Autonomous Boards.

With this, the decades old institution of the Medical Council of India (MCI) stands abolished.

  • Along with NMC, the four Autonomous Boards of UG and PG Medical Education Boards, Medical Assessment and Rating Board, and Ethics and Medical Registration Board have also been constituted to help the NMC in day to day functioning.
  • This historic reform will steer medical education towards a transparent, qualitative and accountable system.
  • The basic change that has happened is that the Regulator is now ‘selected’ on merits, as opposed to an ‘elected’ Regulator.
  • Men and Women with impeccable integrity, professionalism, experience and stature have been now placed at the helm to steer the medical education reforms further.
  • In addition, NMC will have 10 nominees from Vice Chancellors of Health Universities from States/UTs, 9 nominees from State Medical Councils, and three expert members from diverse professions.
  • Renowned social worker working in tribal Melaghat area of Maharashtra and ShriSantosh Kumar Kraleti, CEO, Foot Soldiers for Health Pvt Ltd have been nominated as these expert members. Dr R K Vats will head the Secretariat as Secretary of the NMC.
  • Four Autonomous Boards have also been constituted and come into effect

The key functions of the NMC

  • Streamlining regulations,
  • Rating of institutions,
  • HR assessment,
  • Focus on research.
  • Work on modalities of the common final year exam after MBBS (NEXT- National Exit Test) to serve for both registration and PG entrance;
  • Prepare guidelines for fee regulation by private medical colleges;
  • Developing standards for Community Health Providers to serve in primary healthcare with limited practicing license.

With the coming into effect of the NMC Act from 25th September, 2020, the Indian Medical Council Act, 1956 stands repealed and the Board of Governors appointed in supersession of Medical Council of India has also been dissolved with effect from the said date

 

8) FAME scheme:

In a big push towards electric mobility the Government has sanctioned 670 Electric buses in the states of Maharashtra, Goa, Gujarat and Chandigarh and 241 Charging Stations in Madhya Pradesh, Tamil Nadu, Kerala, Gujarat and Port Blair under Phase-II of FAME India Scheme.

  • The decision reflects government’s commitment to reduce dependence on fossil fuel and to address issues of vehicular emissions.
  • The decision is in line with Prime Minister Shri Narendra Modi’s vision for eco-friendly public transportation.
  • The Department of Heavy Industries (DHI) under Ministry of Heavy Industries and Public Enterprises, is administering the Faster
  • Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme since April, 2015 to promote adoption of electric/ hybrid vehicles (xEVs) in India .
  • In the First Phase of the Scheme up to 31st March 2019, about 2, 80, 987 hybrid and electric vehicles were supported by way of demand incentive, amounting to about Rs 359 crore.
  • At present, Phase-II of FAME India Scheme is being implemented for a period of 3 years w.e.f. 01st April, 2019 with a total budgetary support of Rs. 10,000 crore.
  • This phase focuses on supporting electrification of public & shared transportation and aims to support, through subsidies, approximately 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2 Wheelers.
  • In addition, creation of charging infrastructure is also supported to address the anxiety among users of electric vehicles.

FAME I

  • Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-India) Scheme is launched under National Mission on Electric Mobility in 2011/ National Electric Mobility Mission Plan 2020, unveiled in 2013.
  • The scheme aims to encourage progressive induction of reliable, affordable and efficient electric and hybrid vehicles (xEV).
  • The First Phase of the scheme was initially approved for a period of 2 years, commencing from 1st April, 2015. The Scheme has been extended from time to time, with the last extension allowed for a period up to 31st March 2019.
  • It is under the frame work of Demand Incentive Disbursement Mechanism.
  • Incentive amount has been determined for each category of vehicle like Mild Hybrid, Strong Hybrid, Plug-in Hybrid and Pure Electric technologies and battery specification.
  • It is implemented and monitored by National Automotive Board under D/o Heavy Industry.
  • It is one of the DBT schemes categorized under in-kind mode

 

9) Novel Brucella vaccine:

Department of Biotechnology (DBT), facilitated Transfer of Technology of novel Brucella vaccine viz. Brucella abortus S19 delta per vaccine, through Video Conferencing (VC), earlier this week and a MoU was signed.

  • This vaccine was developed by ICAR-Indian Veterinary Research Institute (ICAR-IVRI), Izatnagar, Uttar Pradesh through a Network project on Brucellosis supported by DBT in which a gene was knocked out from Brucella abortus S19 strain.
  • This vaccine has confirmed protection against virulent challenge in experimental mice model conducted at IVRI, Izatnagar and in buffalo calves conducted at National Institute of Animal Health, an institute of Department of Animal Husbandry and Dairying.
  • Brucella abortus S19 delta per vaccine can play an important role in National Brucellosis Control Programme initiated by Department of Animal Husbandry & Dairying, Ministry of Fisheries, Animal Husbandry & Dairying and Government of India.
  • Brucellosis is a zoonotic disease which causes production losses in livestock.
  • The disease induces abortion at the last stage of pregnancy, infertility and other reproductive problem which causes losses in production of milk and meat.
  • Globally the disease is reported in approximately half a million human population every year.
  • In India huge population involved in dairy farming is directly affected with the Brucellosis.

 

10) Vasa (AdhatodaVasica) and Guduchi for the management of Covid-19:

  • In view of the need for accelerated solutions for Covid-19, the Ministry of AYUSH has taken up systematic studies on different possible solutions through multiple channels.
  • As part of this effort, a proposal for a clinical study to assess the role of Vasa Ghana, Guduchi Ghana and Vasa-Guduchi Ghana in therapeutic management of symptoms in Covid-19 positive cases has recently been approved.
  • This will be a “randomized, open label three armed” study, and will be conducted at the All India Institute of Ayurveda (AIIA), New Delhi, in collaboration with the IGIB unit of CSIR.
  • Vasa and Guduchi are time tested herbs in Indian healthcare traditions, used in a variety of disease conditions

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