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Coronavirus Dashboard


These are rough times. We will bring you regular updates on Covid-19 and how it may impact your finances through this Coronavirus Dashboard.

Covid-19 Dashboard

Tax Compliance Updates

Income Tax

  • Ministry of Finance to release pending Income Tax refunds up to INR 5 Lakh & all pending GST and Customs refunds. A highly appreciated move during crucial times. Are you expecting a long due refund? Check your Income Tax Refund status here.
  • The last date for filing Income Tax Returns for FY 18-19 extended to June 30 from March 31 due to the Covid outbreak.

  • Subsequently, all compliances under the Income Tax Act, Wealth Tax Act, Benami Transaction Act, Vivaad se Vishwaas, have been extended to June 30, 2020.
  • May 15, 2020, Last date for Employers to issue Form-16.
  • June 15, 2020, Quarterly Form 16A.
  • June 30, 2020, Last date for investing under chapter VIA.
  • June 30, 2020, Last date for filing Belated Tax Return for FY 2018-19.

GST

  • The last date for filing March-April-May GST returns extended to June 30, 2020.
  • No interests, penalty or late fees to be charged for late filing of GST Returns for companies with Turnover of INR 5 Crore of less.

TDS

  • Interests charged on delayed deposits of TDS reduced to 9% from 18%.
  • April, 30, 2020, Last date for TDS Deposits.
  • May 15, 2020, Due date Q4 TCS Deposit.
  • May 31, 2020, Due date for Q4 TDS Return
  • June 7, 2020, Due date for TDS Deposit.
  • June 15, 2020, Quarterly TDS Certificate

ROC Compliance

  • Mandatory requirement of holding board meetings relaxed by 60 days, this relaxation is for the next two quarters.
  • Newly incorporated companies get an additional 6 more months to file the declaration.
  • (MSMEs) The threshold for default under IBC raised to INR 1 Crore from INR 1 Lakh.

Economic Package Updates and other Financial Updates

Economic Package

March 26, 2020, For the next three months, the Government to pay the full contribution to EPF for companies with 100+ employees and 90% earning below INR 15,000 per month.

  • FM announced Economic Package of INR 1.7 Crore.
  • Insurance cover of INR 50 Lakh per person announced for Doctors, Paramedic and Healthcare Workers.
  • 20 Crore women Jan Dhan Yojna account holders to get INR 500 every month for the next 3 months.
  • 8.69 Crore farmers to get INR 2000 under PM-Kisan Yojna
  • FM announces an ex-gratia of INR 1,000 for 3 Crore poor senior citizens.
  • Under PM Garib Anna Yojna, 80 Crore poor people to get 5 Kg grains per month for 3 months.

Other Financial Updates

April 3, 2020, World Bank approves and emergency fund of $ 1 Billion to India.

April 1, 2020, Financial year 2020-21 starts in India.

March 27, 2020, In a Press Conference, RBI Governor announced the reduction in Repo rates by 75 bps to 4.4%. Earlier the Repo Rate was 5.15%.

  • The Reverse Repo rates have been cut by 90 bps to 4%.
  • A liquidity boost of INR 3.7 Crore announced by the RBI.

March 20, 2020, The IRS declared that US taxpayers can file their taxes until July 15. The previous deadline was April 15.

March 19, 2020, Prime Minister Narendra Modi announces an 'Economic Task Force' for providing Economic packages to MSMEs and other worst-hit sectors. Read More.

March 18, 2020, Several companies, banks, NBFCs have refused to comply with the summons of the Income Tax Department, stating COVID-19 as a reason.

March 14, 2020, GST on Repair and Overhaul on aircraft reduced to 5% to boost the badly affected Aviation Industry.


COVID-19 Latest Updates


5 Essential thins to limit Covid-19 spread.

April 9, 2020, India crosses the 5,700 mark of total positive cases. Odisha- first state to extend lockdown till 30th April.

April 6, 2020, Doubling rate of COVID-19 at 4 days as India registered 4367 infected cases. 330 Individuals have recovered.

April 3, 2020, Asia's biggest slum, Dharavi registers 3 new cases.

April 1, 2020, White House projected 1,00,000- 2,40,000 deaths due to COVID-19. New York became the newest epicenter of the Virus registering over 1,500 deaths alone.

March 31, 2020, As many as 2000 Individuals found at the Nizamuddin area. Individuals were a part of Tablighi-Jamat.

March 30, 2020, Total number of infected Individuals in India reaches 1200 and recovered Individuals reach 102. Sadly, 29 Individuals have deceased.

  • Train Coaches being prepared as Isolation Wards for COVID-19 patients as cases continue to surge.

March 28, 2020, Thousands of Migrant laborers accumulated at Delhi's Vasant Vihaar Bus Terminal wanting to go back to their native land.

March 25, 2020, Prince Charles of the British Royal Family tested positive for Covid-19.

March 24, 2020, PM announces complete lock-down for 21 days i.e until April 14, 2020. INR 15,000 Crore allocated for Healthcare systems.

  • Tokyo Olympics to be held in the Summer of 2021

March 23, 2020, India has suspended operations of domestic schedule commercial airlines effective from the midnight that is 23.59 hours IST on 24/3/2020

  • COVID-19 causing mass hysteria among investors. BSE hit its 10% lower circuit level after reopening to a 45-minute halt. S&P BSE lost 3,600 points.

March 22, 2020, The Government in India halts passenger trains till 31st March 2020.

Match 19, 2020, PM Narendra Modi addressed the nation and announced a Janta Curfew on Sunday. An 'Economic Package' was also announced by PM Modi.

March 18, 2020, Indian Army reports its first case of Covid-19.

March 12, 2020, India registers it's first confirmed death from Covid-19. The 76-year-old man from Karnataka had traveled from Saudi Arabia.

March 11, 2020, WHO declares Covid-19 as a 'Pandemic', urges countries to take proactive measures.

January 30, 2020, India registers its first Covid-19 case. Quarantined Individual from Kerala. The patient is a student at Wuhan University, China.


Quicko Updates

March 21, 2020, Being a responsible team of developers, chartered accountants and content creators, we have decided to Work From Home. It does not dilute our commitment to make Taxes Simple For All.

March 20, 2020, Quicko's celebrates partnering with HDFC Securities, with https://hdfcsecurities.quicko.com/. The official tax compliance partner for HDFC Traders.

March 20, 2020, Taxes for Traders are now simpler. Quicko announced https://trader.quicko.com/.


Useful Resources

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✈ Stay-cation for Non Residents


Byte on while staying informed on COVID-19


covid-19-newsletter-9th-march

Hey,

If you start getting overwhelmed by the amount of COVID news all around you, think about the reduction in pollution levels: the Himalayas are visible in parts of India 125 miles away for the first time in 30 years.


This Week’s Dose-

  • What The Pandemic Means For A Non Resident
  • Digital Taxes Might Create Tax Risk for India
  • Deadlines

What The Pandemic Means For A Non Resident

The Story.

The work scenario has changed across the world due to Covid with most employees working from home. Millions of them are stuck in foreign countries because of the lockdown.

The Questions...

A non-resident is stuck in India for 182 days. Is he liable to pay taxes in India?

Cross-border workers can be stuck in India for a long period of time. Will this impact their Tax Residency? Will this result in Permanent Establishment (PE) concerns for the overseas employers?

What is the concern?

Organization of Economic Cooperation and Development (OECD) said, “These situations should be treated as ‘exceptional and temporary’ and should not trigger a change in residency or PE status.”

How is India dealing with it?

Yup, India has decided to aid in addressing these tax concerns. Tax Authorities are looking into the guidance provided by OECD. Concepts of resident not ordinarily resident under the Indian domestic tax law are being provoked. There are existing ‘tie-breaker’ rules in tax treaties for the residence. An individual might qualify as a resident under the domestic laws of more than one country. Determining which country has the right to tax the individual is of major concern. Notifications for clarification will be released. A modified application of treaty rules and domestic laws to cater covid-induced tax implications might be on its way.

Keeping in mind…

The crisis has been bringing major changes and has been recognized as an ‘exceptional circumstance’. India should make sure that businesses are not overburdened with these additional risks at this inopportune time. Hence authorities should be considering a more normal period of time when assessing a person’s residential status and determining the allocation of taxing rights.


Digital Taxes Might Create Tax Risk for India

A Suggestion...

was put forth by The Central Board for Direct Taxes...saying that at least 10–20% of the total income should be attributable to data collected from a person resident in India. This may vary depending on the level of participation or user contribution in this ‘generation of the Data.’

Nirmala Sitharaman in her Budget 2020 speech went on to say that ‘data is the new oil.’

Let’s Rewind

The story goes back to the era of awakening of digitization of business models. G-20 countries stated that traditional taxation principles, especially the ones in India would prove to be insufficient. Under the current rules, India will not not be able to tax income of companies operating highly digitized business models....especially companies that do not have a physical presence in India.

India has been the fast(est) to react

Several changes are inserted in the Indian Income Tax Act. These changes are aimed at any business having taxable presence in India. It concludes that income derived from or through the analysis of “ANY” data collected from a person in India could potentially result in tax exposure. Look at how India expands digital taxes in a difficult time.

Here’s The Catch

It does not appear, under the proposed rule, that all data collected or originated from India should create a tax risk as non-personal data. There might be data that is not collected from or connected to a particular individual. Data “scraped” from the internet, satellite imagery of relevant locations for public companies such as mines, retail parking lots or shipping lanes and other publicly available website data.

It Might Not Be All That Simple

This has the potential of creating a huge “tax-risk” for India. It may be possible to argue that retail parking slots relate to persons or individuals, as opposed to satellite imagery of forests.


And Also...This

Deadlines that have been extended

The GST Portal notified the extended filing dates which clear all the clouds. A list of notifications was issued on April 3.

Deadlines that might get extended

The IT/ITeS sector has been reeling under the coronavirus outbreak. The IT industry body NASSCOM has asked the government to extend the tax holiday to IT SEZs for the 2020-21 financial year.

Byte of the Day

“...but in this world nothing can be said to be certain, except taxes.”

- Benjamin Franklin

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How is Netflix dodging taxes?

Netflix is one of the world's largest and popular content streaming platform with over 169 million users. With total revenue of $ 4 Billion, one expects Netflix to pay taxes in millions. But, just like other major Silicon Valley Companies, Netflix has paid $ 0 Tax in U.S. in 2018.


Netflix paid $0 in taxes in 2018.

Senator Sanders has been very vocal about his feelings towards the loophole exploiting companies. Bernie said, "$8.99 Netflix subscription is more than the company paid in federal income taxes last year (nothing),". If that wasn't enough, Sanders also lashed out at tech behemoth Amazon for avoiding taxes.

The online content streaming services like Netflix and Amazon prime are considered a Luxury in India. However, the 'Netflix Culture' is getting mainstream day by day. Netflix India had a revenue of INR 466 Crores in the fiscal year 2019-2020. If the trends continue, India could be Netflix's biggest market ever. Still, these companies have been using legal loopholes to avoid taxes.


How are countries Taxing these companies?

Although on paper, slashing the Corporate Tax seems the pretty obvious and go-to choice, Netflix's case in the U.S. suggests otherwise. Reducing corporate tax from 35% to 21% didn't work for the U.S. as companies always found buffer around it.

According to several Senior Senators, Corporate Taxation has been a continuous issue for a very long time. But this is changing, several countries are coming down hard on these loopholes. France, introduced a 'Digital Service Tax' under which a flat 3% tax will be levied on Tech companies doing business in France. Sounds Familiar? Because it is, India levied a '2 % Equalization Tax' on any tech/digital company doing business in India.


How did Netflix do it?

In 2018, Netflix posted a profit of $ 845 million. Rationale governs that Netflix should pay $ 177 million i.e 21% in Taxes to the U.S. Government. Just like major Silicon Valley Tech Giants, Netflix has been using legal loopholes to avoid taxes.

The US Government has a 'Double Taxation Treaty' with several nations to protect the interests of the companies. These treaties allow companies to claim a 'Tax Rebate' if they have already paid taxes in other nations.

Netflix used this loophole to its advantage. Not only it benefited from the Double Taxation Treaty, but it also claimed Tax Rebate for future 'Tax Purposes'.

According to the 10-K Report mandated by the U.S. Securities and Exchange Commission, companies are allowed to provides tax income information that is geographically specific. Unsurprisingly Netflix's 'Foreign Tax Provision' of $ 133 million was pretty close to the $ 131 million Tax paid by Netflix.


Netflix 'Cruising' on tax havens

Apart from the 'Double taxation treaty', Netflix has been recently accused of using Tax Havens like Netherlands to further save on taxes. If news reports are to be believed, Netflix moved somewhere around $ 330 million in tax havens. According to reports, only 4 million euros were paid to the Ducth, while Neflix used 3 BV accounts to transfer money.

Using safe havens to save on taxes has been a major business practice for a long time. The Cruise industry has also been avoiding taxes in the US for decades. Most of the famous companies have been registered in tax havens like Bahamas, Malta and Panama for Tax-Deferring reasons.


Why do Tax Revenues from Online companies matter so much?

India is the second most populous country in the world. We have the highest number of growing middle class people. On top of that we are among the youngest nations in the world. These important Socio-Economic traits have made India a huge market for global corporations.

Companies like Amazon, Facebook and Netflix are spending millions on marketing their products to India's novel consumer base. Netflix's subscriber count has risen from 1.2 million to 2 million in just one year. If the trend continues, India will soon overtake U.S. subscribers i.e 60 million. Hence, It will become very important for India to extract tax revenues from digital companies.

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India Expands Digital Tax in a Difficult Time






India is a significant player in the digital tax negotiations. Even during the coronavirus outbreak, India has been putting efforts to change the way digital business models are taxed in India.

What is "equalization levy"

The equalization levy was introduced in 2016. It was originally designed as a 6% on gross revenues from online advertising services. In the financial year 2017-2018, the revenue from the equalization levy was INR 550 Cr (USD 73.4 million). Only nonresident businesses are subject to the tax.

The expansion

India announced on March 23 that its tax aimed at foreign digital companies, the “equalization levy,” will be expanded. The new expansion will apply a 2% on revenues of e-commerce operators and suppliers. This change is applicable from April 1. This change expands the equalization levy from online advertising to nearly all online commerce done in India. The change is for businesses that do not have taxable presence in India.

Who will it be applicable to

This will impact those companies that don’t have a base in India, but sell their goods here. Any overseas platform that streams, advertises, or sells goods to an Indian IP address will be taxable. The levy would be imposed on those companies that have a turnover or sales of over INR 2 Cr (USD 267,000) in the previous year. Facebook, Google Amazon, eBay and many more will be affected by the tax.

Not a part of Income Tax

The equalization levy is essentially a tariff and is not based on ability to pay. Businesses with higher profit margins on their digital business with India will face a lower marginal tax rate than businesses with lower profitability. The 2% revenue tax equates to a 20% income tax if a business has a 10% profit margin in India. This compares to the statutory tax rate of 22%. The lower a business’ profit margin, the higher the marginal tax rate. Equalization levy may also add to the cost of operations for foreign companies. They may not get credit for the equalization levy in their residence country or avail any favorable treaty benefits.

What is SEP

Significant Economic Presence is a nexus test introduced in the financial year 2018-2019. Income of nonresident businesses can be attributable to India for digital transactions by nonresidents in India above a payment threshold. The test defines the significant economic presence for the purposes of corporate income tax. The equalization levy paired with the significant economic presence test represents one of the more coordinated efforts to tax digital business models.

The temptation to tax the more profitable business sectors

The extent of possible compliance disruptions caused by the tax is not not immediately clear. Neither is it clear how much India could garner from the tax. The timing of the introduction of the levy appears to be an attempt to increase revenue collections during the pandemic. The temptation to apply special taxes to digital firms right now when they may be more profitable than the rest of the global economy may be strong. But broad-based, neutral policies should be the tools of choice for taxation. A tax base that relies too heavily on a particular business sector could be left standing in the cold when the economic winds shift.

An element of surprise

India's internet users are increasing at a fast pace. The country's e-commerce and digital ad markets are also expanding, making it extremely attractive for Amazon and other players. However, the amount of revenue that can be generated by the new tax remains unclear. The technology giants seem to have been taken by surprise by the tax. India's finance minister did not make any mention of the levy during her budget speech in February. The levy was reportedly included in the Finance Bill on March 23.

Push-back from major tech heavyweights & the six-month deferment

Facebook and Google are seeking to delay paying India's 2% digital tax. Given the ongoing circumstances surrounding the COVID-19 pandemic, Google and Facebook have asked the tax to be deferred by at least six months. India, on the other hand, is looking to boost its tax reserves, which will also provide the country with additional resources to fight the coronavirus.


The equalization levy essentially operates as a tariff on foreign-provided digital goods and services The significant economic presence (SEP) test can create challenges in minimizing double taxation. This might lead to international friction. If every country chose its own way of defining nexus, there would be an overlap in taxation where two countries think they have the right to tax the same income.

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Twitter in times of Covid-19

The start to this decade has been anything but perfect. Safe to say that 2020 has been a true horror story. The most surreal part of it is the Covid-19 Pandemic. The Pandemic has affected more than 90% of the countries. News channels, social media, newspapers are abuzz with news of the Covid-19 Pandemic. Many Individuals have sorted to spread awareness about the Pandemic on twitter.



As you might know, twitter is a micro-blogging site that is extensively used. There are around 350 million active users on Twitter and every day nearly 500 million tweets happening. Twitter allows its users to 'Tweet' on a trending topic. Also, the nature of Twitter avoids it being turned into a 'meme sharing platform'. Due to this reason, Twitter translates into a very convenient way to communicate with the world. This core competence of Twitter is widely used by Governments, Organizations and Individuals to spread their message.

Covid-19 has been the worst humanitarian crisis of modern world. Governments have been going out of their ways to spread awareness about the disease. And unsurprisingly, Twitter has been a major contributor towards their propaganda campaigns. Let's look at how Twitter has been a crucial tool in our fight against Covid-19.


Twitter Diplomacy

Twitter has been traditionally used by Governments as a solid diplomatic tool. We've seen enough twitter feuds between major world leaders. There are extensive debates, Q&A sessions and threads on tweets from their Twitter handles. Often 'Twitter Diplomacy', Governments are using this reach to spread awareness and make important announcements regarding Covid-19.

Just like in this Tweet, the Italian Prime Minister is lauding American President for his support and his gesture of solidarity.



Recently, New York City has become the epicenter for Coronavirus. Nearly 50,000 Individuals have been infected in the Big Apple. It's no secret that keeping people's morale up is the biggest task for any Government during these grim times. Hence to boost morale, the official Twitter handle of the White House tweeted a New York Post's article. The article talks about a healthcare worker who returned to work after recovering from COVID-19.



Due to the Formal nature of Twitter, World Leaders use it to address their nations in times of crisis. We can see the French President rallying the G20 Nations to fight Covid-19 together. In his tweet sent on March 31, 2020, President Macron seems to have quite a bit of engagement already.



On April 1, 2020, the Indian Government announced a new dedicated Twitter handle for circulation of authentic news, updates and other announcements regarding COVID-19. The Twitter handle is jointly operated by the Ministry of Information and Ministry of Health Department. This is a crucial step to negate the spread of misinformation regarding this sensitive issue.



Indian Prime Minister is known to be an avid user of the platform as well. PM Modi's tweets have engagements in millions, and he often drives interactions with his followers. Below is a snippet of one such instance, where PM Modi interacts with a patient who just recovered from Covid-19.



Twitter for Organizations

Organizations have used Twitter in the most creative ways. But It has been extensively used for Marketing and Consumer Relations. So much so, major companies have dedicated Twitter Teams. There's no doubt that Twitter holds more or less the same importance for companies as any other social media channel. And it's not just Companies, many NGOs and Government organizations also use twitter to drive conversations.

Twitter tells the user which topics are trending. Organizations use these trending topics to communicate their message related to that topic. This gives them instant reach and interaction for minimal cost. Since the past two months, Companies and other organizations have been using Twitter to create viral threads and gain instant consumer attention.

Whenever an event as big as the Covd-19 outbreak happens, fake news and rumors catch fire. Some companies use Twitter to instill truth in times of chaos. For example, in the snippet below, we are debunking some fake news regarding the Financial New Year starting date.



The door's of World Bank have been constantly knocked by Government's seeking aid. To help the worst hit countries, the World Bank announced a aid of $ 14 Billion to help various countries.



In a bid to inspire people and to create awareness about COVID-19, United Nations recently tweeted a video. This video highlights the Humanitarian systems that are at work in Virus hit Countries.



While some organizations use Twitter for updating their customers with the latest compliance, some raise awareness about pressing issues. Zomato gained a lot of attention on social media when they raised awareness about a campaign to feed the daily wagers.



Ministry of Railway recently retweeted a tweet from UN lauding Indian Railways converting passenger coaches as Covid-19 isolation wards. More than a thousand people have already interacted with the tweet so far.



Twitter for Individuals

Apart from being an impactful medium for Governments and Organizations, the place where twitter makes the most impact is through reputed Individuals. Since Facebook is losing its shin, Instagram and Twitter are emerging as the next big thing. But the Nature of Instagram limit's its users from making formal announcements and driving discussions. Areas in which Instagram lacks is where Twitter excels.

In the times of Covid-19 Pandemic, many reputed Individuals are using Twitter proactively for communicating diplomatic messages. Like Jens Stoltenberg, NATO's Secretary-General recently tweeted a picture of aid being sent by Turkey to fellow NATO nations.



Cristiano Ronaldo is probably among the most followed Individuals on the Internet. He has a total following of 83 Million. With that amount of reach, anything that he tweets becomes gospel truth. To create awareness about the importance of staying home, he tweeted a picture of him and his family. The tweet has garnered nearly quarter-million likes already.



In India, thousands of Individuals are storming twitter with their opinions regarding COVID-19. Some are also sharing various measures that have been taken by local governing authorities to curb the spread. This Samaritan took to Twitter to share the innovative idea implied in Tripura. The tweet posted on April 1, 2020 seems to have garnered quite a bit of applause. Take a look.



As many companies are working from home, and with whole of the country under lockdown, Twitter has become a powerful tool to share your ideas, opinions and drive debates with the world. However, one needs to stay away from fake news and encouraging rumors.

Stay safe, Stay home, Until Next time....

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📅 FY 20-21: Is this a Dark Night?




Hey,

Happy Financial New Year… Except there’s very little to be really happy about right now (apart from the dolphins coming back to Juhu Beach). But it’s not the end. The world will move on from this Pandemic like we moved on from the Great Depression...stronger than ever. And we will continue to bring you a weekly dose of Tax updates.

FY 20-21: Is this a Dark Night?

Hello FY 20-21!

Contrary to the rumor mill... the new Financial Year is already here. Along with a new Financial Decade, FY 20-21 brings a new Question: Old Tax Regime VS New Tax Regime. Why not use a Tax Calculator to answer your burning question?

How about some resolutions?... Every year we promise ourselves to be opportunistic, but eventually, fail to do so. This year lets ‘Strike when the iron is hot!’. The Iron is the Financial New Year and you can strike it by some solid Resolutions. And why not? IMF predicted that the World is moving towards a Recession. Might as well have all your Finances in order.

Netflix could get more expensive… The parliament approved the 2% equalization tax on digital businesses in India. Apparently any foreign e-commerce company will have to pay a 2% tax if they do business in India.

World v/s Covid-19

Covid-19 = Recession… In a study published by EIU, the majority of the G20 countries are predicted to have negative GDP Numbers with Germany’s - 6.8% worst among all. India’s GDP for fiscal year 20-21 is also predicted to simmer down from 6% to 2.1%. Interestingly China’s GDP prediction stood at a modest 2.6%.

Donations to PM-Cares 100% Tax Deductible… If you are one of the many patriots who want to contribute towards India’s fight on Covid-19, a 100% Tax Deduction u/s 80G could be a cherry on the cake. Individuals making donations can claim this benefit until June 30, 2020... Talk about Motivating people ehh?

While we’re WFM in our PJs…. China is going to work. The majority of its cities are inching towards normalcy in their lives. Chinese factories are receiving orders for PPEs, facemasks, and sanitizers from other virus hit countries. This has only fueled the conspiracies around the topic.

Byte of the Day

With Solidarity, we can defeat the virus and build a better world.”

                 -UN Secretary-General, Antonio Guterres

Extra Bytes

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