DPIIT asks RBI, SEBI to set up startup teams

The Department for Promotion of Industry and Internal Trade (DPIIT) has asked regulatory bodies and the central tax body to establish dedicated teams within their institutions to address regulatory and compliance issues of startups.

In letters to regulators Reserve Bank of India, Securities and Exchange Board of India and the Central Board of Direct Taxes, DPIIT has advised constant engagement with startups to address their issues.

“They have done a lot of good work for startups. But as part of an ongoing effort, we have asked them to set up dedicated teams that look into startups’ issues on a constant engagement basis," said a CNBC TV18 report quoting DPIIT secretary Guruprasad Mohapatra.

In August last year, the CBDT had set up a special cell to resolve their problems. It said in a notification that the cell will be responsible for addressing grievances and tax-related issues of startups.

The government has also been planning to set up a National Startup Advisory Council, where people from the startup ecosystem and relevant ministries will meet to discuss issues.

The Council, which will be presided over by Union Commerce Minister Piyush Goyal, will have about 44 members including entrepreneurs, investors, policymakers and government officials.

DPIIT has been talking to some global investors including SoftBank, Tiger Global and Naspers to join the council as participants.

Indian startups for long have been complaining about the absence of a structural setup to raise their concerns and engage with the government.

They keep raising issues related to exemption from capital gains tax for investors, Angel Tax and lack of a good ecosystem for startups, ease of doing business and tax on employee stock ownership plans (ESOPS).