Category: INTERNATIONAL RELATIONS
U.S. stance on CAATSA unchanged
Why in news
- The U.S state department said, they urge all of our allies and partners to forgo transactions with Russia that risk triggering sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA).
- This message was reiterated in the context of India’s planned jet fighter deal with Russia at an estimated 18,148 crore.
- Despite a change in the ground realities following the clash between India and China along the Line of Actual Control (LAC) in June 2020, the U.S’s message to countries, including India, on sanctions for the purchase of Russian arms has not changed.
What is CAATSA?
- The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a United States federal law that imposed sanctions on Iran, North Korea and Russia.
- It includes sanctions against countries that engage in significant transactions with the Russian defence and intelligence sectors.
F-1 visa students cannot take all classes online: U.S.
Why in news
- Foreign students in the U.S., including thousands of Indians, are left facing the possibility of falling out of valid immigration status following a Department of Homeland Security rule about attending online classes.
The new rule
- The new rule, announced by Immigration and Customs Enforcement (ICE), said that F-1 and M-1 (non-academic and vocational students) visa holders planning to take only online classes in the fall autumn will not be allowed to remain in the U.S.
- Non immigrant F-1 and M-1 students attending schools operating entirely online may not take a full online course load and remain in the U.S.
- Those whose colleges and universities were moving to an online-only model would, therefore, have to leave the country or find another way to stay in status. Normally F-1 students are allowed to take one class or three credit hours online.
- active students currently in the United States enrolled in such programs must depart the country or take other measures, such as transferring to a school with in-person instruction to remain in lawful status. If not, they may face immigration consequences including, but not limited to, the initiation of removal proceedings.
- With at least 200,000 Indian students in the U.S, the country is the second-largest source of foreign students, China being the first. The U.S. announcement comes weeks after U.S. President Donald Trump suspended H1-B highly skilled worker visas through the end of the year. o Most of these visas go to Indian citizens each year.
- ‘Top priority’ to complete strategic roads
Why in news
- At a meeting with Border Roads Organisation (BRO) Director-General, the Defence Minister has directed the BRO that work on the strategic Darbuk-Shyok-Daulat Beg Oldi (DSDBO) road be completed by October 2020.
- China has been objecting to Indian road and infrastructure development at several points along the Line of Actual Control (LAC).
- A road branching from the DSDBO road towards the Galwan Nalah is believed to be one of the reasons for their objections here.
- From the DSDBO road, a road branches off towards Galwan Valley, a hill feature, which India wants to protect because it overlooks the area around the main road.
- India has also been building 61 strategic Indo-China Border Roads (ICBRs), measuring 3,323.57 km, under the direction of the China Study Group (CSG). 75% of the construction is complete.
- Of these, 12 roads are in the Union Territories of Jammu and Kashmir and Ladakh, while three roads are in Sikkim.
- The Darbuk-Shyok-Daulat Beg Oldie (DSDBO) road has been in the making for around two decades. It is expected to be completed in 2020. DBO is India’s northernmost corner, which in army parlance is called Sub-Sector North.
Significance of DSDBO:
- DBO is located only 9 km away from the Line of Actual Control with China and the road will help manage the border and the areas adjoining Aksai Chin, Chip Chap River and Jiwan Nalla.
- It will also ensure faster deployment of troops in the area. Before the laying of the road, the only way to reach the area was via the ALG, where heavy-lift aircraft, such as the C-130J, can land.
- Equalisation Levy for Non-Resident E-Commerce Firms
Why in News
- Recently, the Central government stated that it will not extend the deadline for payment of equalisation levy by non-resident e-commerce players, even though a majority of them are yet to deposit the first installment of the tax.
- The equalization levy is aimed at taxing foreign companies having significant local client base in India but are billing them through their offshore units, effectively escaping the country’s tax system.
- The step has come in the backdrop of the United States Trade Representative (USTR) investigations into taxes adopted or under consideration by 10 nations, including India, on revenues of American digital service companies like Netflix, Airbnb etc.
- Background for Equalization Levy: Equalisation levy at 6% has been in force since 2016 on payment exceeding Rs 1 lakh a year to a non-resident service provider for online
- It is now applicable for e-commerce companies that are sourcing revenue from Indian customers without having tangible presence here in the country.
- The amendments to the Finance Act, 2020 had expanded the ambit of the equalisation levy for non-resident e-commerce operators involved in supply of services, including online sale of goods and provision of services, with the levy at the rate of 2% effective April 1, 2020.
- The tax applies on e-commerce transactions on websites such as Amazon.com. Google in particular as the tax applies on advertising revenue earned overseas if those ads target customers in India.
- Changes in Challan ITNS 285: The income tax department has modified challan ITNS 285 (relating to payment of equalisation levy) to enable payment of the first installment by non-resident e-commerce operators.
- The challan also seeks mandatory PAN and provides for ‘Outside India’ option while seeking address.
- The non-payment could result in a penalty equal to the amount of equalisation levy, along with interest. The late-payment would attract interest at the rate of 1% per month or part of the month.
- As India is racing towards becoming a digital giant and should be negotiated to avoid any hurdles in its implementation. Further, there needs to be international consensus on taxation on a digital economy.