04 June, 2021 - Daily Current Affairs Analysis & MCQs - The Daily News Simplified from The Hindu
- Equalization Levy (Economy)
- Black carbon and Brown carbon (Environment)
- SDG India Index - NITI Ayog (Social Issues)
- NASA's Venus Missions (Science & Technology)
- Sedition Law (Polity & Governance)
- Question for the Day
UPSC Current Affairs: Digital tax tussles | Page – 06
UPSC Syllabus: GS Paper III- Indian Economy
Sub Theme: Controversy over Digital Taxes | UPSC
Recently, US decided to impose retaliatory tariffs on goods imported from six countries, including India in retaliation for the digital taxes imposed by them. Later, USA decided to postpone the imposition of retaliatory tariffs by 6 months. This was done in order to find global solution under the OECD framework to deal with the digital taxes.
On one hand, US believes that imposition of Digital tax in the form of Equalization levy by the Indian Government is discriminatory against US based companies such as Apple, Microsoft, Amazon etc. On the other hand, India believes that Equalization Levy is not discriminatory since it is applicable to all foreign non-resident companies and not specifically only to US companies.
The existing tax norms have been framed keeping in mind the brick-and-mortar business models. Hence, these tax norms are not suitable to tax internet-based companies such as Google, Amazon, Microsoft etc. Hence, in order to bring these companies under the ambit of tax, the Indian Government introduced Equalization Levy in the Union Budget 2016. Later, in Budget 2020, the scope of Equalization levy was expanded to cover all the foreign e-commerce companies. However, there was considerable confusion related to the scope of Equalization Levy as to which companies would be covered and what type of Goods and services would be covered under the new regime. Hence, in order to provide more clarity, the Parliament has passed Finance Act, 2021. The act has clarified number of aspects related to implementation of Equalization levy in India.
Details about Equalization Levy (Introduced in 2016)
The equalization levy of 6% is applicable on the foreign E-commerce company which is not a resident of India. Any person or entity in India which makes a payment exceeding Rs 1 lakh in a financial year to a non-resident technology company (such as Google) for some B2B (Business to Business) transactions needs to withhold 6% of the gross amount to be paid as equalization levy.
The two conditions to be met to be liable to equalization levy:
- The payment should be made to a non-resident service provider.
- The payment should be made for placing digital advertisements on the platforms such as Google, YouTube etc.
- The annual payment made to the service provider should exceed Rs. 1 lakh in one financial year.
Expansion of Equalisation Levy in Union Budget 2020
The Finance Act, 2020 has inserted a provision to impose Equalisation levy of 2% on the revenues generated through the online sale of goods and services by non-resident e-commerce companies. The Equalisation levy would be applicable only if the aggregate revenues for a non-resident e-commerce companies exceed a threshold of Rs 2 crores.
In order to clear confusion related to the expansion in scope of Equalisation Levy, the Finance Act, 2021 has provided the following clarifications:
- Earlier, the Equalisation levy was applicable only for placing Digital Advertisements. Now, it has been expanded to cover all the Goods and Services which are sold through the online platforms such as Amazon, Netflix, Trivago etc.
- Earlier equalisation levy was applicable only on B2B transactions. But now, the new equalisation levy would be applicable on every transaction undertaken by non-resident e-commerce companies which includes both B2B as well as B2C transactions.
- The tax would be applicable on the total payment (and not commission) received by the e-commerce companies on selling Goods and services sold through their online platforms.
The new modification introduced in the Finance Act, 2020 has been opposed by the foreign e-commerce companies on account of following reasons:
Wider Application of Taxation Regime: Earlier, the Equalisation levy was applicable only on the advertising revenue of non-resident companies. Now, this would be applicable on the all the revenue earned through the online sale of goods and services by non-resident e-commerce companies. The scope of the application of Equalisation levy is so wide that it will bring almost all the foreign based technological companies under the tax bracket. This includes e-commerce companies such as Amazon; online streaming/ content service providers such as Netflix, Amazon Prime; online travel aggregators such as Trivago, TripAdvisor etc.
Higher Tax Burden: Earlier equalisation levy was applicable only on B2B transactions. But now, the new equalisation levy would be applicable on every transaction undertaken by non-resident e-commerce companies which includes both B2B as well as B2C transactions.
Lack of Distinction between Digital services and Goods/Services provided through Digital Mode: If you watch a movie online on a digital platform such as Amazon Prime, Netflix etc, then it can be considered as Digital service. On the other hand, if you book a movie ticket online through a platform (such as Book My Show) and then watch it in a multiplex, then it cannot be considered as completely Digital Service. Here, the booking platform is providing you with the service of booking a movie ticket through the Digital mode. It is not providing movie as a Digital service.
Hence, such booking platforms are quite distinct from streaming services such as Amazon Prime, Netflix etc.
Accordingly, some of the companies have pointed out that it would be unfair to tax the companies that provide Goods/services through Digital mode on par with companies that provide Digital Services. Hence, even though, the Government’s idea is to tax e-commerce transactions, but it may end up taxing even those transactions where Internet is just a medium.
UPSC Current Affairs: Strong policies on black carbon can sharply cut glacier melt: World Bank study I Page 10
UPSC Syllabus: Mains – GS III- Environment & Biodiversity
Sub Theme: Impact of Black carbon| UPSC
Context: World Bank specialists conducted a research study on Impact of Black carbon on Himalayan region and released a report “Glaciers of the Himalayas, Climate Change, Black Carbon and Regional Resilience” on Thursday
- Black carbon(soot) is a short-lived particulate matter (PM 2.5) that is formed by the incomplete combustion of fossil fuels, wood and other fuels.
- It is a short-lived climate pollutant with a lifetime of only days to weeks after release in the atmosphere
- residential solid fuels such as wood and coal
- Burning of fossil fuels for transportation and industrial use
- Open Bio mass burning (Forest fires, burning of forests for land clearing, crop stubble burning, burning of municipal waste)
- Emissions from brick kilns
Impacts of Black carbon:
- Climatic Impact
- Though Black carbon is short lived its warming potential is significantly stronger than C02. It is very effective at absorbing sunlight and heating its surroundings. It reduces the albedo of snow surfaces
- It also influences cloud formation and impacts regional circulation and rainfall patterns
- Health Impacts
- At 2.5 micrometres or smaller in diameter, these particles can penetrate the deepest regions of the lungs and facilitate the transport of toxic compounds into the bloodstream. It results in chronic respiratory disease such as bronchitis, aggravated asthma, and other cardio-respiratory symptoms
- Impacts on vegetation and ecosystems
- Black carbon can affect the health of ecosystems in several ways- by depositing on plant leaves and increasing their temperature, dimming sunlight that reaches the earth, and modifying rainfall patterns.
World Bank’s study of Black carbon’s Impact on Himalayan region:
The study covers Himalaya, Karakoram and Hindu Kush (HKHK) mountain ranges. The mountain ranges of the Himalayas, the Hindu Kush, and the Karakoram span 2,400 kilometres across six nations and contain 60,000 km² of ice – storing more water than anywhere besides the Arctic and Antarctic.
- The report says, glaciers are melting faster than the global average ice mass. Rate of retreat of HKHK glaciers is estimated to be 0.3 metres per year in the west to 1.0 metre per year in the east
- Glacier melt produces floods, Landslides and Glacial Lake outburst floods
- Melting glaciers and loss of seasonal snow of this region impacts the water security of the entire South Asian region
- Industry [primarily brick kilns] and residential burning of solid fuel together account for 45–66% of regional anthropogenic black carbon deposition
In 2020, another similar study done by the Wadia Institute of Himalayan Geology also confirmed increasing deposition of Black carbon on Gangotri glacier.
- According to this study, summer season (April to June) shows significant increase in black carbon concentration primarily due to increased tourist activities and forest fires in the season
- Replace traditional cooking stoves with LPG stoves and eliminate kerosene lamps
- Upgrading brick kiln technologies
- Phasing out diesel vehicles and promoting electric vehicles in the region
- Controlling forest fires and ban on stubble burning
UPSC Current Affairs: Significant progress in SDGs on clean energy, health: NITI index I Page 01
UPSC Syllabus: Prelims: Government Schemes and Initiatives
Sub Theme: SDG Index | UPSC
Niti Aayog has released 3rd edition of SDG India Index. The index comprehensively documents the progress made by India’s States and Union Territories towards implementing the 2030 SDG targets.
NITI Aayog has constructed the SDG India Index spanning across 13 out of 17 SDGs (leaving out Goals 12, 13, 14 and 17). The Index tracks the progress of all the States and Union Territories (UTs) on a set of 62 National Indicators, measuring their progress on the outcomes of the interventions and schemes of the Government of India. The SDG India Index is intended to provide a holistic view on the social, economic and environmental status of the country and its States and UTs.
States and Union Territories are classified as below based on their SDG India Index score:
- Aspirant: 0–49
- Performer: 50–64
- Front-Runner: 65–99
- Achiever: 100
Performance and Ranking of States and UTs on SDGs 2020–21, including change in score from last year:
Important points from the SDG India Index
- India saw significant improvement in the Sustainable Development Goals (SDGs) related to clean energy, urban development and health in 2020.
- There has been a major decline in the areas of industry, innovation and infrastructure as well as decent work and economic growth.
- Although the index shows improvement on the inequality SDGs, the NITI Aayog has omitted key economic indicators used to measure inequality in income and expenditure last year and given greater weightage to social indicators instead.
- Kerala retained its position at the top of the rankings in the third edition of the index, with a score of 75, followed by Tamil Nadu and Himachal Pradesh, both scoring 72.
- At the other end of the scale, Bihar, Jharkhand and Assam were the worst performing States.
- However, all the States showed some improvement from last year’s scores, with Mizoram and Haryana seeing the biggest gains.
Thrust on social equality and removal of economic equality
In 2019, the indicators for inequality included the growth rates for household expenditure per capita among the bottom 40% of rural and urban populations, as well as the Gini coefficient — a measure of the distribution of income — in rural and urban India. The 2018 indicators included the Palma ratio, another metric for income inequality.
Such economic measures have been omitted from the indicators used for this SDG in the 2020 edition of the Index. Instead, it gives greater weightage to social equality indicators, such as the percentage of women and Scheduled Caste/Scheduled Tribe representatives in State Legislatures and the Panchayati raj institutions and the levels of crime against the SC/ST communities. The only economic indicator this year is the percentage of population in the lowest two wealth quintiles.
In March, an assessment by the UN of the impact of COVID-19 on the SDGs said the region India is part of may see rising inequality due to the pandemic.
The NITI Aayog Index shows some improvement in the SDG on inequality, but a look at the indicators used to assess this goal shows that the think tank has changed the goalposts.
UPSC Current Affairs: NASA two missions for Venus I Page 01
UPSC Syllabus: Prelims: Science & Technology
Sub Theme: NASA’s Mission to Venus | UPSC
Missions to Study Venus
Part of NASA’s Discovery Program, the missions aim to understand how Venus became an inferno-like world when it has so many other characteristics similar to ours – and may have been the first habitable world in the solar system, complete with an ocean and Earth-like climate.
DAVINCI+ (Deep Atmosphere Venus Investigation of Noble gases, Chemistry, and Imaging)
DAVINCI+ will measure the composition of Venus’ atmosphere to understand how it formed and evolved, as well as determine whether the planet ever had an ocean.
In addition, DAVINCI+ will return the first high resolution pictures of the unique geological features on Venus known as “tesserae,” which may be comparable to Earth’s continents, suggesting that Venus has plate tectonics.
This would be the first U.S.-led mission to Venus’ atmosphere since 1978, and the results from DAVINCI+ could reshape our understanding of terrestrial planet formation in our solar system and beyond.
In 1978, NASA sent two Pioneer spacecraft to Venus
VERITAS (Venus Emissivity, Radio Science, InSAR, Topography, and Spectroscopy)
VERITAS will map Venus’ surface to determine the planet’s geologic history and understand why it developed so differently than Earth. Orbiting Venus with a synthetic aperture radar, VERITAS will chart surface elevations over nearly the entire planet to create 3D reconstructions of topography and confirm whether processes such as plate tectonics and volcanism are still active on Venus
UPSC Current Affairs: ‘Journalists need protection against sedition charges’| Page 01
UPSC Syllabus: Mains: GS Paper 2: Polity & Governance
Sub Theme: Sedition law in India | UPSC
History of Sedition
Sedition laws were enacted in 17th century England, when lawmakers believed that only good opinions of the government should survive, as bad opinions were detrimental to the government and monarchy. This sentiment and law was borrowed and inserted into the IPC in 1870.
Section 113 of Macaulay‘s Draft Penal Code corresponds to the present section 124A of IPC on sedition. The punishment proposed was life imprisonment. The offence of sedition is provided under section 124A of the Indian Penal Code, 1860 (IPC).
The law was first used to prosecute Bal Gangadhar Tilak in 1897. That case led to Section 124A of the IPC being amended, to add the words “hatred” and “contempt” to “disaffection”, which was defined to include disloyalty and feelings of enmity. Even Mahatma Gandhi was later tried for sedition for his articles in Young India.
Even in Constituent Assembly, an attempt was made to incorporate sedition to restrict free speech which was opposed by Jawaharlal Nehru.
Sedition has been defined in Indian Penal Code under section 124A.
Whoever by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the Government established by law in, shall be punished with imprisonment for life, to which fine may be added, or with imprisonment which may extend to three years, to which fine may be added, or with fine.
The expression “disaffection” includes disloyalty and all feelings of enmity.
Comments expressing disapprobation of the measures of the Government with a view to obtain their alteration by lawful means, without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section.
Comments expressing disapprobation of the administrative or other action of the Government without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section.
Supreme Court on sedition
The Supreme Court in Romesh Thapar v State of Madras declared that unless the freedom of speech and expression threaten the security of or tend to overthrow the State, any law imposing restriction upon the same would not fall within the purview of Article 19(2) of the Constitution.
In KedarNath Singh vs State of Bihar,1962, a Constitution Bench had ruled in favour of the constitutional validity of Section 124A (sedition) in the IPC.
The Court held that a person can be prosecuted for sedition only if his acts caused “incitement to violence or intention or tendency to create public disorder or cause disturbance of public peace”. Unless an act of a person does not incite violence or disturb public order cannot be booked under the dangerous section of sedition.
In 1995, the Supreme Court, in Balwant Singh v State of Punjab, acquitted persons from charges of sedition for shouting slogans such as “Khalistan Zindabaad” and “Raj Karega Khalsa” outside a cinema after Indira Gandhi’s assassination. Instead of looking at the “tendency” of the words to cause public disorder, the Court held that mere sloganeering which evoked no public response did not amount to sedition, for which a more overt act was required; the accused did not intend to “incite people to create disorder” and no “law and order problem” actually occurred.
On invoking sedition charges
Thus invoking sedition charges at times is viewed as a reprehensible measure of the state to silence political dissent or an alternative view.
Article 19(1) guarantees freedom of speech and expression subject to reasonable limitations under Article 19(2) on grounds of -
interests of the sovereignty and integrity of India,
the security of the State,
friendly relations with foreign States,
public order, decency or morality or
in relation to contempt of court, defamation or incitement to an offence.
Observation of Law Commission
- Dissent and criticism of the government are essential ingredients of a robust public debate in a vibrant democracy. In a strong observation Commission said that if the country is not open to positive criticism, there lies little difference between the pre- and post-Independence eras.
- Right to criticise one’s own history and the right to offend are rights protected under free speech under Article 19 of the Constitution. While it is essential to protect national integrity, it should not be misused as a tool to curb free speech.
- It said “every restriction on free speech and expression must be carefully scrutinised to avoid unwarranted restrictions.
- In a democracy, singing from the same songbook is not a benchmark of patriotism. People should be at liberty to show their affection towards their country in their own way.
- The Commission has asked the logic to retain the colonial provision of sedition in India when Britain themselves have abolished sedition in their country.
- The Commission said an that an expression of frustration over the state of affairs cannot be treated as sedition.
- For merely expressing a thought which is not in consonance with the policy of the government of the day, a person should not be charged under the provision of sedition.
- The consultation paper was published a day after the Supreme Court while hearing a petition challenging the pan-India crackdown and arrests of five activists held that dissent is the safety valve of democracy.
- The Commission has posed a query that if contempt of court invites penal action, should contempt of government.
- The Commission also asked whether it would be worthwhile to rename Section 124A and find a suitable substitute for the term - sedition.