Will wait to hear from telecom department on AGR issue: FM Sitharaman

The ministry will look into startups' concerns on the applicability of easing ESOP norms

Finance Minister Nirmala Sitharaman on Monday said her ministry will wait to take a view on the adjusted gross revenue (AGR) issue after hearing from the telecom department.

"In light of court's orders, the department is engaging with telecom companies after the reviews and I will wait to hear from the department to take a position," said Sitharaman who was in Bengaluru as part of post-budget consultation programme.

On the budgetary proposal to impose 1 per cent TDS (tax deducted at source) on ecommerce transactions, the Finance Minister said that this was not a new tax and the ministry has heard the concerns of the stakeholders.

This year's budget has proposed a new levy of one per cent TDS on e-commerce transactions, a move that could increase burden on sellers on such platforms.

The Finance Minister also tried to allay concerns relating to limited application of proposed ESOP (employee stock option) norms for the startups. "We have asked the startups to give us a representation on this matter," she said.

This year's budget proposes to defer the tax payment on the exercise of ESOPs by five years, or until an employee leaves the company, or when he/she sells the shares, whichever is earlier. However, some industry players have said that though India has around 50,000 startups, only 27,000 are registered under DPIIT India programme, and if the section 80-IAC (as mentioned in the Budget 2020 document) is followed, less than 250 startups that are recognised by the IMB (Inter-Ministerial Board) will be eligible for this benefit.

On delays in giving GST compensation to states, the Finance Minister said that the compensation cess collection saw a dip in December, which led to delay in compensating the states. "We should clear it (GST compensation due to the states) in two instalments from the surplus collected in the last two years," said Sitharaman.

When asked about the steps being taken to boost consumer confidence in cooperative banks, she said that the government has amended the Banking Regulation Act to include cooperative banks under its ambit.

"Except for fluctuations seen due to the prices of perishable goods, the prices of most goods and food products are being kept under the norm," she said answering to a query on inflation.