PAN common identifier for businesses: Compliances reduced: 3400 provisions decriminalized

PAN common identifier for businesses: Compliances reduced: 3400 provisions decriminalized

In the Budget 2023, the focus of the Finance Minister was to increase ease of doing business. Presenting the Union Budget 2023-24 on Wednesday, Finance Minister Nirmala Sitharaman announced a slew of measures to enhance the ease of doing business.

Ms. Sitharaman said, “More than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised. For furthering trust-based governance, we have introduced the Jan Vishwas Bill to amend 42 central acts”.

She also highlighted that a national data governance policy would be brought out to unleash innovation and research by startups.

She announced that “It will enable access to anonymous data. The KYC process will be simplified and will be adaptive to a sense of risk based, rather than one-size-fits-all. Financial sector regulators will also be encouraged to have KYC system fully amenable to the needs of Digital India”.

She said "for all business establishments required to have a Permanent Account Number, PAN will be used as a common identifier for all digital systems".

Industry observers wanted the budget to address the issue of multiple identities needed for conducting business operations. Currently, enterprises are required to obtain multiple identities (PF, ESIC, PAN, CIN, TAN, etc.) issued by various central and state government departments. This has created a situation wherein there is no single identifier for building corporate compliance and risk profiles. Today’s announcement is one step in that direction.

The FM had highlighted that "an entity Digilocker will be set up for use by MSMEs, large businesses and also charitable trusts. This will be towards storing and sharing documents online securely whenever needed with various authorities".

In a relief to MSMEs, Sitharaman also mentioned in case of MSMEs failing to execute contracts during the COVID period, 95% of the forfeited amount relating to the bid or performance security would be returned to them by government and government undertakings."

To settle contractual disputes of government and government undertakings wherein arbitral award is under challenge in a court, Sitharaman said a "warranty settlement scheme" with standardised terms will be introduced. "This will be done by offering graded settlement terms depending on the pendency level of dispute," she added.

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