INDIA’ SUPREME COURT BACKS THE NEW INSOLVENCY REGIME; UPHOLDS ACTION AGAINST ESSAR STEEL
With the aim of having a robust and efficient insolvency process and to remedy the appalling credit default situation in India, the Indian government enacted the Insolvency and Bankruptcy Code, 2016 (the “ Code”). The Code introduced sweeping reforms by consolidating the law on insolvency in India, and providing an effective and time bound mechanism for recovering debts due to both, financial as well as operational creditors.
“DOMINANT” WHATSAPP NOT INDULGING IN PREDATORY PRICING IN INDIA
In 2009, the Indian government implemented the provisions for prohibition of anti-competitive agreements and abuse of dominant position in India under the Competition Act, 2002 (the “Act”). More recently, antitrust litigation has picked up in India as the general public is becoming aware of various issues such as price fixing, cartel formation, tying arrangements and predatory pricing.
FURTHER EXEMPTIONS ON LONG TERM CAPITAL GAINS IN INDIA
Under the existing provisions of section 10(38) of the Income-tax Act, 1961 (the “IT Act”), income arising from the transfer of a long term capital asset, being equity shares of a listed company or units of an equity oriented fund, is exempt from capital gains tax if the sale transaction is chargeable to Securities Transaction Tax (“ STT”) under Chapter VII of the Finance (No.2) Act, 2004 (the “Tax Exemption”)
INDIA – CROSS-BORDER MERGER PROVISIONS NOTIFIED
The erstwhile Companies Act, 1956 (the “1956 Act”) contained provisions for the merger of a foreign company with an Indian company but not vice versa. The Companies Act, 2013 (the “ 2013 Act”) made a significant change and introduced enabling provisions for merging an Indian company into a foreign company. The provisions relating to both inbound and outbound mergers along with the corresponding amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, have been notified on April 13, 2017.
THE TARGET TEST EXEMPTION UNDER INDIA’S MERGER CONTROL REGIME TWEAKED
The Competition Act, 2002 read with the Competition Commission of India (Procedure in Regard to the Transaction of Business relating to Combinations) Regulations, 2011, deal with the merger control regime in India. On March 27, 2017, the Indian government issued a notification (the “ Notification”) changing the target test exemption.
DELHI TRIBUNAL AFFIRMS TAX ON INDIRECT SHARE TRANSFERS DERIVING VALUE FROM ASSETS IN INDIA
Under the provisions of the Income-tax Act, 1961 (the “IT Act”), the income of a non-resident is deemed to accrue or arise in India, inter alia, if it arises, directly or indirectly, through the transfer of a capital asset situated in India. The Finance Act, 2012, introduced an explanation to section 9(1)(i) of the IT Act, under which an indirect transfer of shares or an interest in a company or entity registered or incorporated outside India substantially deriving its value from assets located in India was subjected to capital gains tax in India on the theory that the offshore capital asset would be regarded as situated in India if it substantially derived its value (directly or indirectly) from assets located in India.
IMPORTANT CHANGES USHERED IN BY INDIA’S NEW TRADE MARKS RULES
On March 6, 2017, the Government of India (the “Government ”) notified the Trade Marks Rules, 2017 (the “2017 Rules ”), which replace the Trade Marks Rules, 2002 (the “ 2002 Rules”) and revamp the regime for trade mark filings in India. The Trade Marks Rules (both, 2002 and 2017) are formulated by the Government under the Trade Marks Act, 1999 (the “Act”), and specify the procedure to be followed for various matters, including applying, renewing or assigning trademarks and rectification of the trade marks register. In this update, we present a snapshot of the key features of the 2017 Rules and their impact on stakeholders.
INDIA – THE DAWN OF A NEW ERA IN REMEDIES FOR THE CONSUMER
Consumers in the real estate sector, particularly the residential real estate sector, often find themselves locking horns with builders or developers from whom they have purchased apartments in residential buildings. Grievances of consumers have commonly been for delayed possession of the housing space purchased, poor quality of construction, failure to meet assured standards, etc. Remedying these grievances has required either approaching the ordinary civil courts or alternate forums established under the Consumer Protection Act, 1986 (the “ Act”).
INDIA BUDGET 2017-18 – KEY HIGHLIGHTS
India’s Union Budget (the “Budget”) was announced on February 1, 2017, and the Finance Bill, 2017 (the “ Finance Bill”) was tabled in Parliament. Most of the income tax proposals in the Finance Bill will be effective from the financial year commencing on April 1, 2017, unless specified otherwise. The Finance Bill will be discussed in Parliament before its enactment, and therefore, it is likely that the Finance Bill may be amended as a result of these discussions.
PENALTIES IN COMPETITION LAW VIOLATIONS IN INDIA
In June 2011, the Indian government implemented the merger control regime under the Competition Act, 2002 (the “Act“) and the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (the ” Regulations“). While the Competition Commission of India (the “CCI“) is a fairly young regulator, over the years, the jurisprudence on Indian competition law and the merger control regime has developed substantially.