Latest updates

100% FDI in insurance intermediaries: a welcome change
Tuli & Co
  • Insurance
  • India
  • 08 October 2019

Since 2015, foreign investment in insurers and insurance intermediaries has been capped at 49%. However, many felt that this parity in the foreign direct investment (FDI) limits was unfair, as – unlike insurers – insurance intermediaries are not custodians of policyholders' money. Thus, the recently notified Indian Insurance Companies (Foreign Investment) Amendment Rules 2019 have effectively increased the limit on FDI in insurance intermediaries to 100%.

Taxation (Amendment) Ordinance 2019: what you need to know
BDO LLP
  • Corporate Tax
  • India
  • 04 October 2019

Over the years, India has witnessed a number of notable tax reforms. Now – in yet another attempt to enhance the country's attractiveness as a business destination, boost investment and encourage manufacturing – the government has introduced the Taxation Laws (Amendment) Ordinance 2019, which has amended the Income Tax Act 1961 and the Finance (No 2) Act 2019. In so doing, India has tried to bring its tax rate in line with other countries and has given domestic companies a level playing field.

High court settles constitutional challenges to Competition Act
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 26 September 2019

In April 2019 the Delhi High Court disposed of 12 writ petitions filed by 10 car manufacturers and India's largest music label and movie studio. The writ petitions had challenged the main provisions of the Competition Act 2002 and were filed against a common order passed by the Competition Commission of India, which had found that 14 car manufacturers had been dominant in their respective markets and abused this dominance by preventing the establishment of an aftermarket in India.

Provident fund liability: EPFO to the rescue
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 25 September 2019

The Employees' Provident Fund Organisation recently directed the provident fund authorities not to initiate inquiries into employers' previous wage structures on the assumption that certain allowances might not have been treated by employers as basic wages for the purposes of provident fund contributions. Such inquiries had been prompted by the Supreme Court's decision in Vivekananda, which clarified the legal position regarding allowances that fall within the definition of 'basic wages'.

IRDAI issues insurance regulatory sandbox regulations
Tuli & Co
  • Insurance
  • India
  • 24 September 2019

The Insurance Regulatory and Development Authority (IRDAI) recently issued the IRDAI (Regulatory Sandbox) Regulations 2019, which aim to facilitate the creation of a regulatory sandbox in which to test new business models, processes, proposals and applications in order to strike a balance between the orderly development of the insurance sector and the protection of policyholders' interests. Although insurance players are calling the sandbox a game changer, it remains to be seen how much it will be used.

Supreme Court permits material seized during dawn raid to be used as evidence
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 19 September 2019

On 15 January 2019 the Supreme Court allowed the Competition Commission of India's (CCI's) appeal against a Delhi High Court order which had prohibited the CCI director general from acting on the evidence seized during a dawn raid of 19 September 2014. The dawn raid in question was the first to be conducted by the director general and formed part of the investigation into JCB India Limited's alleged abuse of its dominant position.

General Anti-avoidance Rule – a pivotal development
BDO LLP
  • Corporate Tax
  • India
  • 13 September 2019

In an attempt to curb tax evasion and avoid tax leakage, the government introduced the General Anti-avoidance Rule (GAAR), which took effect from April 2017. Following the introduction of the GAAR, businesses have had to revisit and revalidate their transactions. Further, as there are a number of potential issues that may be faced by taxpayers, they must observe the types of transaction that are likely to be affected.

Supreme Court holds government cannot seek preference while seeking stay on enforcement
Khaitan & Co
  • Arbitration & ADR
  • India
  • 12 September 2019

The Supreme Court recently considered whether an unconditional stay can be granted under Section 36 of the Arbitration and Conciliation Act 1996 when the applicant is the government. The court rightly held that the safeguards which were incorporated for the Crown by Order 27, Rule 8A of the Code of Civil Procedure are now inapplicable and outdated, especially as the purpose and intent of alternate dispute resolution is to treat parties equally.

CCI finds no evidence of resale price maintenance in sale of Kaff appliances on Snapdeal
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 12 September 2019

The Competition Commission of India (CCI) has dismissed allegations of resale price maintenance against Kaff Appliances (India) Pvt Ltd under Section 26(6) of the Competition Act 2002. The CCI noted that it could not conclusively establish that the evidence (ie, an email, a caution notice and a legal notice) had been used as instruments to impose a resale price maintenance on the informant. Further, the presence of many competing dealers suggested a fair degree of intra-brand competition.

District court grants significant damages in IP case, paving the way for future decisions
Saikrishna & Associates
  • Intellectual Property
  • India
  • 09 September 2019

The Indian district courts rarely grant significant damages in IP cases. However, this recently changed as a district court in Ahmedabad passed a significant judgment restraining the defendants from using the plaintiffs' software and ordering the defendants to pay $81,1795 in damages. This judgment is the first of its kind and will pave the way for other district courts to award damages in infringement suits in accordance with the irreparable loss and damage suffered by plaintiffs.

CCI penalises Godrej for role in bilateral ancillary cartel
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 05 September 2019

In January 2019 the Competition Commission of India imposed a penalty of Rs85,01,364 on Godrej & Boyce Manufacturing Co Ltd for its role in a bilateral ancillary cartel, which violated Section 3(3) read with Section 3(1) of the Competition Act. Godrej's role in the cartel had been revealed via a leniency application filed by Panasonic Corporation, Japan on behalf of itself and its Indian subsidiary.

CCI cedes jurisdiction to decide abuse of dominance complaint against NSE
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 29 August 2019

The Competition Commission of India (CCI) recently decided not to investigate allegations that the National Stock Exchange had abused its dominant position due to a potential jurisdictional conflict with the Securities Exchange Board of India. This decision was a surprise turn from the CCI's earlier position and is likely to have been influenced by a Supreme Court judgment which warned the CCI against deciding technical issues relating to the terms of a licence granted by the Telecom Regulatory Authority of India.

CBDT clarifies assessment procedure for start-ups
BDO LLP
  • Corporate Tax
  • India
  • 23 August 2019

The Central Board of Direct Tax (CBDT) recently issued a circular clarifying the applicability of Section 56(2)(viib) of the Income Tax Act and the procedure that must be followed by tax officers in assessment proceedings. Although an attempt has been made to end the confusion created in the start-up community, uncertainty surrounding the legal basis for the Department for Promotion of Industry and Internal Trade and CBDT notifications regarding the applicability of Section 56(2)(viib) remains.

Haryana government makes compliance with Standing Orders Act mandatory for other registrations
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 21 August 2019

The Haryana state government recently issued a notification under the Standing Orders Act and introduced a new requirement for principal employers and contractors to file an undertaking of compliance with the act. While the 2019 notification aims to ensure the effective enforcement of the act, employers may perceive the move to require compliance a condition precedent to obtaining registration under other labour laws as a roadblock.

Court allows simultaneous proceedings against directors for alleged antitrust violation
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 15 August 2019

In December 2018 the division bench of the Delhi High Court reconfirmed an earlier decision and held that simultaneous inquiries could be undertaken into Monsanto and its directors and officers for their alleged violation of the Competition Act 2002. The court also clarified that under Section 27 of the act, penalties could be imposed on the individuals in question based on their Monsanto-derived income.

Supreme Court ends jurisdictional conflict between CCI and TRAI
Vaish Associates Advocates
  • Competition & Antitrust
  • India
  • 08 August 2019

In December 2018 the Supreme Court finally ended the jurisdictional conflict between the Competition Commission of India (CCI) and the Telecom Regulatory Authority of India (TRAI). By invoking the doctrine of harmonious construction, the court balanced the scales and gave the TRAI the power to first determine the rights and obligations of parties, after which – if the TRAI believes that anti-competitive activity has occurred – the CCI's jurisdiction can be invoked.

Supreme Court rules that arbitrators' fee schedule fixed by parties overrides Fourth Schedule of Arbitration Act
Khaitan & Co
  • Arbitration & ADR
  • India
  • 08 August 2019

The division bench of the Supreme Court recently held that if the parties to an arbitration have agreed an arbitrators' fee schedule, the arbitrators must charge their fees in accordance with this agreed schedule and not in accordance with the Fourth Schedule of the amended Arbitration Act. While this decision gives credence to party autonomy and may thus be hailed as pro-arbitration, it specifies no limits and provides no other directions for parties to bear in mind when fixing a fee schedule.

Union Budget 2019: key capital markets highlights
BDO LLP
  • Capital Markets
  • India
  • 06 August 2019

On the back of its new electoral mandate, the Modi Sarkar 2.0 government recently presented its first budget. The budget focuses primarily on infrastructure spending and boosting investment from private and foreign investors, with the government forecasting that the Indian economy will grow to $5 trillion by 2025. Following the budget announcement, a slew of reforms and policies are expected in the coming months. This article highlights some of the key capital market-related amendments.

Newly recognised tool for effective and expedient resolution of technical matters
Saikrishna & Associates
  • Intellectual Property
  • India
  • 05 August 2019

The Delhi High Court recently recognised, for the first time, the merit of applying Section 20 of the Evidence Act 1872 in technical IP matters. This decision may have far-reaching consequences in the IP world, as it could eliminate the controversy surrounding infringement suits which involve complex technical questions and help the courts to reach a finding by relying on the opinion of an expert agreed on by both parties.

Union Budget 2019: e-vehicle manufacturing incentives
BDO LLP
  • Energy & Natural Resources
  • India
  • 05 August 2019

On the back of its new electoral mandate, the Modi Sarkar 2.0 government recently presented its first budget, which proposes a number of amendments regarding electric vehicle (e-vehicle) manufacturing. Among other things, the government has proposed reducing the goods and services tax on e-vehicles, providing an additional income tax deduction on interest paid on loans taken to purchase e-vehicles and waiving customs duty on e-vehicle parts.