Insights
December 16, 2015

EXTERNAL COMMERCIAL BORROWINGS BY INDIAN COMPANIES MADE EASY

Introduction On November 30, 2015, the Reserve Bank of India (the “RBI”) revamped the regime governing external commercial borrowings (“ECBs”) by Indian companies and introduced a revised framework (the “Revised Framework”). The Revised Framework significantly relaxes the rules on permitted lenders, rupee denominated borrowings (“RDBs”) and long term foreign currency denominated borrowings (“LTBs”). The Revised…

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Banking and Finance Corporate/M&A
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December 14, 2015

INDIA’S REAL ESTATE SECTOR – CURRENT TRENDS

Introduction The real estate sector in India forms a critical component of the Indian economy and contributes 5-6% to the GDP. Although this sector has stagnated over the last couple of years, it has started to show a turnaround, and growth is expected on the back of a rising economy.  In terms of foreign direct…

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Real Property
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December 4, 2015

INDIA’S FOREIGN DIRECT INVESTMENT POLICY CHANGES – A CRITIQUE

Introduction India stands committed to having a Foreign Direct Investment (“FDI”) regime that is investor friendly and promotes foreign investment for overall economic growth.  Since the Modi government came to power in June 2014, many FDI policy reforms were made in sectors such as defence, rail infrastructure, construction development, insurance, pension, medical devices and others. …

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Foreign Investment
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November 5, 2015

TWO INDIAN PARTIES CAN NOW HAVE A FOREIGN SEAT OF ARBITRATION – WILL THIS HOLD!

Sasan Power Limited v. North America Coal Corporation The often debated question of whether two (or more) Indian parties can opt for a foreign seat of arbitration has surfaced again.  The Madhya Pradesh High Court (the “MP HC”) has, in the case of Sasan Power Limited v. North American Coal Corporation (the “Sasan Case”), held…

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Disputes and Arbitration
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October 19, 2015

FOREIGN TAX CREDITS MADE EASY

Recently, in the case of Wipro Limited (the “Taxpayer”), the Karnataka High Court (the “KHC”) has held that a foreign tax credit can be claimed against Indian income under the provisions of section 90(1)(a)(i) of the Income-tax Act, 1961 (the “Act”),  irrespective of the fact that the income is eligible for a deduction under section…

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Tax
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September 30, 2015

THE MAGGI BAN – HAS THE INDIAN GOVERNMENT DONE ENOUGH TO CONTROL THE DAMAGE?

On June 5, 2015, the Food Safety and Standards Authority of India (the “FSSAI”) issued an order against Nestle India Limited (“Nestle”) imposing restrictions  on the manufacture, sale and distribution of nine (9) variants of Nestle’s product, Maggi instant noodles with tastemaker (collectively “Maggi Noodles”). The main reasons for the ban were: the alleged presence…

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Disputes and Arbitration
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September 7, 2015

POSITIVE SIGNAL TO FIIS AND FPIs – NO MAT PRIOR TO APRIL 1, 2015

Background Section 115JB of India’s Income-tax Act, 1961 (the “IT Act”), provides for taxation of those companies who, despite showing high profits in their books and paying substantial dividends, do not pay or pay only marginal taxes, by taking advantage of the various tax concessions and incentives available under the IT Act.  Minimum Alternate Tax…

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Foreign Investment Private Equity and Venture Capital Tax
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September 1, 2015

POLICIES AND TRENDS IN INDIA’S SOLAR ENERGY SECTOR

Introduction In its Union Budget, 2015, the Indian government has set an ambitious target of installing 175,000 Megawatts (“MW”) of renewable energy by 2022, which will include 100,000 MW of solar energy, 60,000 MW of wind energy, 10,000 MW of biomass energy and 5,000 MW of small hydro energy.  This is in line with the…

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Foreign Investment Tax
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July 31, 2015

FOREIGN COMPANIES RECEIVING MONEYS FROM INDIAN PAYERS MAY NOT NEED A PERMANENT ACCOUNT NUMBER (PAN)

Background The provisions of section 90(2) of the Income-tax Act, 1961 (the “Act”) permit a non-resident to avail either the provisions of the Act or the Double Taxation Avoidance Agreement (the “DTAA”), whichever are more beneficial.  There are various judicial precedents propounding the principle that beneficial DTAA provisions override the provisions of the Act. However,…

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Tax
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July 10, 2015

BORROWERS BEWARE – BANKS CAN NOW TAKE OVER COMPANIES TO RECOVER THEIR DEBT

Introduction To address various issues surrounding distressed assets in the banking system, on February 26, 2014, the Reserve Bank of India (the “RBI”) issued the Framework for Revitalising Distressed Assets in the Economy (the “Framework”). The Framework, inter alia, requires lenders to compulsorily form a Joint Lenders Forum (the “JLF”) if the principal or interest…

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Banking and Finance Insolvency and Restructuring
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