Bimonthly Legal Tablet Volume 2 Issue 3 May 05, 2012
Bimonthly Legal Tablet : Volume 2 Issue 3
Bimonthly Legal Tablet
Volume 2, Issue 3, May 05, 2013
Law & Policy
Consolidated FDI Policy applicable as on April 10, 2012
Highlights of the new Consolidated Foreign Direct Policy effective as on April 10, 2012 (‘FDI Policy’) are attached.
The FDI Policy is an exercise in removing ambiguities. Further, the issue of dual control of the Reserve Bank of India and the Government of India has been addressed. For instance, prior approval of the Reserve Bank of India is now not required: in transactions which attract theprovisions of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997; in case of transfers of capital instruments of an Indian company engaged in financial services sector; in case the activity of the Indian company whose capital instruments are being transferred falls outside the automatic route and the approval of the Government has been obtained for the said transfer; and in case of transfer of capital instruments of companies engaged in sectors falling under the Government route from residents to non-residents by way of sale or otherwise requires Government approval.
The FDI Policy delivers no surprises. However, the clarifications were much needed.
The RBI/2011-12/481 A. P. (DIR Series) Circular No.101 under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999)
The RBI/2011-12/481 A. P. (DIR Series) Circular No.101 has been issued to All Category-I Authorised Dealer Banks with respect to the Notification No. FEMA 10/2000-RB dated May 3, 2000 [Foreign
Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000] (the Notification), as amended from time to time.
Highlights of the circular are :
1. To provide operational flexibility to the Indian party, it has been
decided to liberalise the regulations pertaining to opening / holding / maintaining the Foreign Currency Account by Indian party outside India as under:
2. An Indian party will now be allowed to open, hold and maintain
Foreign Currency Account (FCA) abroad for the purpose of
overseas direct investments subject to the following terms and conditions:
3. The Indian party is eligible for overseas direct investments in
terms of Regulation 6 (Regulation 7, if applicable) of Notification No. FEMA 120/RB-2004 dated July 7, 2004, as amended from time to time.
4. The host country Regulations stipulate that the investments into
the country is required to be routed through a designated account.
5. FCA shall be opened, held and maintained as per the regulation of
the host country.
6. The remittances sent to the FCA by the Indian party should be
utilized only for making overseas direct investment into the JV / WOS abroad.
7. Any amount received in the account by way of dividend and / or
other entitlements from the subsidiary shall be repatriated to
India within 30 days from the date of credit.
8. The Indian party should submit the details of debits and credits in the FCA on yearly basis to the designated AD bank with a certificate from the Statutory Auditors of the Indian party certifying that the FCA was maintained as per the host country laws and the extant FEMA regulations / provisions as applicable.
9. The FCA so opened shall be closed immediately or within 30 days from the date of disinvestment from JV / WOS or cessation thereof.
Necessary amendments to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000 have been issued separately.
The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice topermissions/approvals, if any, required under any other law.
SEBI Guidelines for Credit Rating Agencies dated 1st March, 2012
The Security exchange Board of India (SEBI) in exercise of the powers conferred by Section 11(1) of Securities and Exchange Board of India Act, 1992 and Regulation 20 of (Credit Rating Agencies) Regulations, 1999 has issued the circular No. CIR/MIRSD/3/2012 dated March 01, 2012 for relating to rating of other securities / instruments and loans / facilities provided by banks which are not regulated by SEBI.
The Credit Rating Agencies (CRAs) registered with SEBI also carry out rating of other securities / instruments and loans / facilities provided by banks which are not regulated by SEBI. As per the guideline, other securities / instruments and loans / facilities provided by banks which are rated by the Credit Rating Agencies (CRAs) registered with SEBI shall be governed by the same stringent norms as applicable for rating of securities issued by way of public and rights issues.
As per the guideline, the Credit Rating Agencies (CRAs) registered
with SEBI has to follow the applicable requirements pertaining to
rating process and methodology and its records, transparency and
disclosures, avoidance of conflict of interest, code of conduct, etc, as prescribed in the SEBI (Credit Rating Agencies) Regulations, 1999 and circulars issued by SEBI from time to time.
The half-yearly internal audit for the CRAs as prescribed by SEBI shall also cover the above mentioned ratings.
SEBI circular for Clearing and Settlement of OTC trades in
Commercial Paper (CPs) & Certificates of Deposit (CDs) dated 5th March, 2012
The Security exchange Board of India (SEBI) in exercise of powers conferred by sub-section (1) of section 11 and section 11A of the Securities and Exchange Board of India Act, 1992, to protect theinterests of investors in securities and to promote the development of, and to regulate the securities market.It has now been decided by the SEBI that all SEBI regulated entities shall settle their OTC trades in CDs and CPs on the lines of already existing process for settlement of OTC trades in corporate bonds,
through National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL) with effect from April 01,
2012.All transactions cleared and settled in terms of this circular will be subject to such norms as may be specified by NSCCL and ICCL.
Society for Un-aided Private Schools of Rajasthan Vs. Union of India (UOI) and Anr.
The Supreme Court of India t has upheld the constitutional validity of the Right to Education Act, 2010. The Right to Education Act 2010 which envisages that all poor children aged 6-14 years be given free and compulsory education within their neighbourhood had been challenged by several schools. This judgement shall become operational from the upcoming 2012-13 academic year but admissions that have already been completed would not be disturbed. The government will reimburse private schools for admitting poor students but only to the extent of the expenditure it will incur if those students were to be schooled in a state-run set-up. For boarding schools and orphanages, the Supreme Court has said that the judgement will be applicable only for day scholars and not for students-in-residence. The apex court judgement had a majority and a minority view, which included an element of dissent. Chief Justice S.H. Kapadia and Justice Swantanter Kumar pronounced the majority verdict, while Justice K.S.
Radhakrishnan delivered a dissenting judgement, holding the Right to Education Act 2010 unconstitutional on the point of applicability to unaided non-minority schools. However, both judgements upheld the intention and overall constitutionality of the aforesaid act.
Hardeep Kaur Vs. Malkiat Kaur
The Supreme Court of India held that the High Court has allowed the second appeal and set aside the judgment and decree of theappellate court without formulating any substantial question of law, which is impermissible and that renders the judgment of the High Court unsustainable. It reaffirmed its own judgment given in the case of Umerkhan v. Bismillabi alias Babulal Shaikh and Ors. (2011) 9 SCC 684 that the second appellate jurisdiction of the High Court is restricted to such substantial question or questions of law that may arise from the judgment and decree appealed against. As a matter of law, a second appeal is entertainable by the High Court only upon its satisfaction that a substantial question of law is involved in the matter and its formulation thereof.
Ashok Sadarangani and Anr. Vs. Union of India (UOI) and Ors. MANU/SC/0209/2012
The Supreme Court of India held that-” continuance of a criminal proceeding after a compromise has been arrived at between the complainant and the accused, would amount to abuse of the process of court and an exercise in futility, since the trial could be prolonged and ultimately, may conclude in a decision which may be of any
consequence to any of the other parties……… not that there is any restriction on the power or authority vested in the Supreme Court in exercising powers under Article 142 of the Constitution, but that in exercising such powers the Court has to be circumspect, and has to exercise such power sparingly in the facts of each case.”
Maria Margarida Sequeria Fernandes and Ors. Vs.
Erasmo Jack de Sequeria (Dead) through L.Rs.
The Supreme Court of India held that “no one acquires title to the
property if he or she was allowed to stay in the premises gratuitously. The caretaker or agent holds property of the principal only on behalf of the principal. He acquires no right or interest whatsoever for himself in such property irrespective of his long stay or possession.
The caretaker or servant has to give possession forthwith on demand.
Rameshkumar Agarwal Vs. Rajmala Exports Pvt. Ltd. and Ors. MANU/SC/0252/2012
The Supreme Court of India was of the view that -“while deciding the
application for amendment ordinarily the Court must not refuse bona
fide, legitimate, honest and necessary amendments and should never
permit mala fide and dishonest amendments. The purpose and object
of Order 6 Rule 17 of the Code is to allow either party to alter or
amend his pleadings in such manner and on such terms as may be just. Amendment cannot be claimed as a matter of right and under all circumstances, but the Courts while deciding such prayers should not adopt a hyper-technical approach. Liberal approach should be the general rule particularly, in cases where the other side can be
compensated with costs. Normally, amendments are allowed in the pleadings to avoid multiplicity of litigations.”
ANALYSIS – ANTI-MONEY LAUNDERING LAWS IN INDIA : A brief overview
The literal meaning of laundering is washing or cleaning dirty clothes.
The term Money Laundering is used for cleaning dirty money. It is the disguising or concealing of illicit income in order to make it appear legitimate.
Money Laundering is being employed by launderers worldwide to conceal criminal activity associated with it such as drugs / arms trafficking, terrorism and extortion.
Article 1 of EC Directive on Prevention of the use of the Financial System for the Purpose of Money Laundering, 1991 defines the term money laundering’ as “the conversion of property, knowing that such property is derived from serious crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who
is involved in committing such an offence or offences to evade the legal consequences of his action, and the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to,
or ownership of property, knowing that such property is derived from serious crime”.
India became the 34th country member of the
Financial Action Task Force in 2010 . India is also a signatory to various United Nations Conventions which deal with anti money laundering and countering financing of terrorism.
The Financial Action Task Force on Money Laundering (FATF)an inter-governmental body established by the G-7 Summit in Paris in 1989 and responsible for setting global standards on anti-money laundering and combating financing of terrorism defines money laundering as the
processing of criminal proceeds to disguise their illegal origin in order to
“legitimize” the ill-gotten gains of crime.”
India became the 34th country member of the Financial Action Task Force in 2010 . India is also a signatory to various United Nations Conventions which deal with anti money laundering and countering financing of terrorism.
India has criminalised money laundering under both the Prevention of Money Laundering Act, 2002 (PMLA), as amended in 2005 and 2009, and the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), as amended in 2001.
In India, before the enactment of the Prevention of Money Laundering Act 2002, a number of statutes addressed scantily the issue in question. These statutes were The Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974,The Income Tax Act, 1961,The Benami Transactions (Prohibition) Act, 1988,The Indian Penal Code and Code of Criminal Procedure, 1973,The Narcotic Drugs and Psychotropic Substances Act, 1985, The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988.
The Prevention of Money Laundering Act 2002 is sought to be further amended by the The Prevention of Money Laundering (Amendment) Bill, 2011 hereinafter referred to as the ‘Bill’, which has been
introduced by the Minister of Finance, Mr. Pranab Mukherjee in the Lok Sabha on December 27, 2011.
The Bill proposes to introduce the concept of ‘corresponding law’ to link the provisions of Indian law with the laws of foreign countries. It also adds the concept of ‘reporting entity’ which would include a banking company, financial institution, intermediary or a person carrying on a designated business or profession. The Bill expands the definition of offence under money laundering to include activities like concealment, acquisition, possession and use of proceeds of crime.
The Prevention of Money Laundering Act, 2002 levies a fine up to
Rupees five lakhs. The Bill proposes to remove this upper limit of fine.
The Prevention of Money Laundering (Amendment) Bill 2011 was necessitated in view of India being an
important member of the Financial Action Task Force and to bring prevention of money laundering legislation on par with global norms.
The Bill seeks to provide for provisional attachment and confiscation of property of any person for a period not exceeding 180 days if the authority has reason to believe that the offense of money laundering has taken place. The Bill proposes to confer powers upon the Director to call for records of transactions or any additional information that
may be required for the purposes of investigation. The Director may also make inquiries for non-compliance of the obligations of the reporting entities. The Bill seeks to make the reporting entity, its designated directors on the Board and employees responsible for omissions or commissions in relation to the reporting obligations. The Bill states that in the proceedings relating to money laundering, the funds shall be presumed to be involved in the offence, unless proven otherwise. The Bill proposes to provide for appeal against the orders of the Appellate Tribunal directly to the Supreme Court within 60 days from the communication of the decision or order of the Appellate Tribunal. The Bill seeks to provide for the process of transfer of cases of the Scheduled offences pending in a court which had taken cognizance of the offence to the Special Court for trial. In addition, on receiving such cases, the Special Court shall proceed to deal with it from the stage at which it was committed. The Bill also proposes to bring all theoffences mentioned under Part A of its Schedule to ensure that the monetary thresholds do not apply to the offence of money laundering.
Money Laundering is a global menace that cannot be contained by any nation alone. The Prevention of Money Laundering (Amendment) Bill 2011 was necessitated in view of India being an important member of the Financial Action Task Force and to bring prevention of money
laundering legislation on par with global norms. The said Bill is still pending for approval in the Parliament.
March 1, 2012 – 1. The government of India has approved the proposalfor expediting disinvestments through the buyback route under which the blue chip state -owned company’s will buy its stake.
2. The government of India is understood to have cleared a proposal to amend the Motor Vehicles Act to deal sternly with violators of traffic rules.
March 2, 2012 – The Supreme Court of India has dismissed the PIL questioning CJI SH Kapadia being part of the bench which delivered the Vodafone tax matter verdict as highly scandalous, frivolous and
March 3, 2012 – 1. The Finance Ministry is considering a proposal to give more power to its anti-evasion machinery by making violation of custom laws a non-bailable offence as part of a large plan to build stiff deterrents. The Directorate of Revenue Intelligence ‘s role has become more crucial after certain custom’s offences such as over-invoicing and under- invoicing were made a predicate offence under the country’s anti-money laundering law.
2. The Competition Commission of India has relaxed many of the merger and acquisition regulations dropping the pre-merger
notifications in matters relating to intra-group amalgamations where the companies being merged are wholly -owned. The Commisision may further relax the rules.
3. The independent directors will be stripped off posts in firms with which they have significant business relationship once the parliament passes the new Companies Bill 2011.
4. With a view to improving the fire safety of high rise buildings, the
environment ministry has issued guidelines co-relating to height of
buildings to the width of the roads. These guidelines are over and above those required by the fire department national or state disaster management authority.
March 4, 2012 – The government of India is mulling setting up of a National Cyber Coordination Centre for assessing cyber security threat on a real time basis and monitoring of the internet traffic.
March 13, 2012 -1. The apex decision making body of the Communications Ministry has cleared the proposal to grant more
powers to the Telecom Regulatory Authority of India and enable the watch dog to act like a civil court. The Telecom Regulatory Authority of
India’s new powers will be spelt out in the upcoming National Telecom
2. The Cellular Operator’s Association has moved the Supreme Court of India challenging the sectoral tribunal TDSAT’s verdict upholding the Centre’s decision to allocate GSM Spectrum to CDMA operators.
March 14, 2012 – The Cellular Operator’s Association of India has moved the Supreme Court against the permits given to Reliance Communications, Tata Teleservices and HFCL in 2007 that allowedthem to offer services on both GSM and CDMA platforms.
March 15, 2012 – 1. The National Telecom Policy 2012 under which the government of India has proposed free roaming throughout the country is likely to be in place by June 2012.
2. The United kingdom’s foreign office has clarified that when
oversea’s citizens of India are in India, they will continue to be treated as British citizens and offered consular assistance if required.
3. The Reserve Bank of India has said that Indian financial institutions which do not have a banking license cannot classify investments into fixed deposits with banks and interest earned from them as financial assets.
March 16, 2012 – 1. The Telecom Department has rejected the
demand of mobile phone companies to extend the May 31st 2012 deadline to install realtime tracking devices that will identify eachusers precise location.
2. The Finance Minister of India presented the Finance Budget with a provision to cut subsidies, push investments and recast the entire tax regime.
March 20, 2012 – 1. The Telecom Regulatory Authority of India has sought easing of the Department of Telecom’s mobile connection guidelines, pleading before the Supreme Court that the new norms will put unnecessary burden on operators as well as subscribers.
2. The government of India has defended the retrospective change in the Income tax law which will give powers to authorities to tax cross-border transactions wherein the underlying asset is located in India.
2. The Commerce Ministry has said that India plans to give preferential market access to domestically manufactured products was against the provisions of the Trade Related Investment Measure ( TRIMS ) Agreement under the World Trade Organisation Trade Treaty of which
India was a signatory.
March 21, 2012 – The Supreme Court of India has declined to
reconsider its ruling that the tax authorities had no jurisdiction to tax
Vodafone’s offshore acquisition of its Indian Mobile unit.
2. India has asked Iran to bear oil Insurance Risk amid sanctions.
March 22, 2012 – 1. Bharti, Airtel, Idea Cellular and Loop Mobiles and
their top officials were summoned by a Delhi court for allegedly
violating the TRAI Regulations on mobile number portability.
2. The government of India is likely to modify the guidelines for foreign
direct investment in single brand retail to ensure that foreign retailers
can have longterm relationship with micro and small enterprises.
March 23, 2012 – The Reserve Bank of India has directed that with effect from April 1, 2012 the banks should not make payments against cheques, drafts, pay orders or bankers cheques if they are presented after the period of three months from the date of issue.
March 24, 2012 – 1. In the past one week since the budget, several FII’s have been actively planning to shift their holdings from Mauritius to Singapore to escape taxation by Indian authorities.
2. The Reserve Bank of India may hike minimum capital requirements for setting up new urban cooperative banks from a minimum 15 lakhs to 50 lakhs.
March 26, 2012 – Reserve Bank of India has released the fair practices
code for Non-Banking Financial Companies which among other things
stipulates that they should mention the penal interest rate if any in
bold in the agreement.
March 27, 2012 – 1. RBS has halted India’s tanker payments due to Iran sanctions.
2. 12 countries may face US sanctions over oil purchase from Iran. 3. India assures Norway of fair solutions for Telenor.
4. Telecom Regulatory Authority of India will recommend that the government need not create a separate exit policy for telco’s who did not want to continue offering telecom services. The entry fee paid by licensees will continue to be non-refundable and an advance notice of 60 days to surrender permits will remain.
March 31, 2012 – 1. The government of India is likely to oppose any move by Vodafone Plc. to invoke the India- Netherlands bilateral Investment Promotion and Protection Agreement if it is forced tocough up Rs. 12,000/- crores in taxes on the grounds that the investment was routed through several step down firms based in different countries and that the treaty does not cover tax disputes.
April 1, 2012 – The Gujarat High Court has ruled that banks cannot freeze accounts nor can they stop issuing cheque book or providing ATM facility where the account holder has not supplied KYC (KnowYour Customer) documents.
April 2, 2012 – 1. The proposed Real Estate Regulator under the Real Estate (Regulation and Development) Bill 2011 would make
registration compulsory for property agents as well as for residential projects over 1,000 square metres or 12 dwelling units. The said Bill would also include provisions for imprisonment of builders who sell flats or plots before registering them with the Authority
2. The Securities & Exchange Board of India, or SEBI, may relax rules
stipulating minimum contribution by the sponsor or promoters in a
private equity fund after hectic lobbying by the PE industry. New SEBI rules may peg the minimum contribution at 2.5% of the fund corpus as against 5% proposed earlier.
3. The government of India has filed a review petition before the Supreme Court of India asserting its right to formulate policy and the propriety of first-come-first-served (FCFS) as a policy in the allocation of 2G licences, without questioning the Court’s cancellation of the licences issued by telecom minister A.Raja.
April 3, 2012 – 1. Securities and Exchange Board of India has unveiled rules for regulating private pool of capital to increase systematic stability while making it mandatory for real estate funds and hedge funds to register with the regulator.
2. Widening its ambit by bringing in unregulated funds like hedge funds, capital market regulator SEBI has proposed a comprehensive framework in the form of Alternative Investment Funds (AIFs)
Regulations. As per the proposed regulation, Alternative Investment
Funds (AIFs), operating as private equity funds, real estate funds,
hedge funds etc, must register with SEBI under the AIF Regulations.
April 4, 2012 – 1. The Income Tax Department will revive the demand notice to force Vodafone Group Plc. to pay up thousands of crores in taxes after the Finance Bill is passed in Parliament. The Finance Bill is to be taken up for discussion and voting once Parliament re-convenes in early May.
2. The Supreme Court of India today began hearing the plea for
investigating the alleged role of Home Minister P Chidambaram in the 2G spectrum scam with an NGO claiming that he was in the know of all developments relating to fixation of price for allocation of radio waves.
April 5, 2012 – The Supreme Court has declined to reconsider its order cancelling 122 telecom licenses which had been issued by former telecom minister A.Raja in 2008. In all seven companies had filed review petitions before the Supreme Court.
April 6, 2012 – 1. In order to check duty evasion, the Government of India in the Memorandum to the Finance Bill 2012 has proposed to tighten the custom laws by making violation of certain provisions as cognizable offences, meaning that the offender will have to approach a Court or a Magistrate to seek bail.
2. The Supreme Court of India has declined to reconsider its order cancelling 122 telecom licences, possibly setting the stage for further legal battles before international arbitration panels, even as it agreed to hold further hearings on the government’s review petition
questioning parts of the judgement that had appeared to mandate auction of natural resources.
3. Private sector banks, such as ICICI Bank and HDFC Bank that have majority foreign holding will not be considered foreign banks under a compromise solution thrashed out between the Reserve Bank of India and the government of India.
April 7, 2012 – 1. In an effort to ensure Indian banks adhere to
international best practice and, importantly, play on a level-playing field, the Indian government is seeking to amend the 60-year-old Banking Regulation Act, 1949. The proposed amendments will encompass the Banking Regulation Act, 1949, the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, and the Banking Companies (Acquisition and transfer of Undertaking) Act, 1980.
2. Reserve Bank of India has said that it has implemented its web-based online bidding in primary auctions of government securities. The
module on web-based negotiated dealing system auction will allow internet-based direct participation of gilt account holders.
April 9, 2012 – The Central Board of Direct Taxes in India has brought out new tax forms for the current fiscal that require “all residents ” to provide information about assets located overseas even before Finance Bill 2012 which mandates these disclosures has been passed by
Parliament. According to the new forms even Indian residents holding signing authority for the foreign accounts of their employer will need to disclose overseas assets
January 2012 is now facing criticism from many users and privacy
advocates especially in Europe where privacy is a fundamental right.
with section 43 A of the amended Information Technology Act 2000 of
India however section 43 A does not have all the privacy safeguards
that exist for citizens in developed countries.
April 12, 2012 – 1. The General Anti-Avoidance Rules or GAAR
proposed in India’s Financial Budget of 2012-2013 give powers to the income – tax officials to deny tax benefit to a business arrangement if they feel the purpose is primarily to save taxes. According to income tax officials GAAR provisions will apply on all tax planning transactions irrespective of whether domestic or overseas.
2. A proposal that seeks to allow foreign carriers to own up to 49% in Indian airline companies may be considered next week by the cabinet, government officials said. But they indicated that the final decision on the long-waited change could be delayed if the government leadership decides that it could provoke yet another confrontation with the
Trinamool Congress, which is opposing investment by foreign airlines.
April 16, 2012 – 1. India in the bilateral free trade agreement being negotiated has demanded that the European Union lift restrictions on flow of sophisticated outsourcing business to India by designating it as a data secure country. India is among the countries not considered data secure by the European Union
2. Jury selection in a high-stakes dispute over smartphone technology between Oracle Corp and Google Inc is set to begin here on Monday morning, kicking off a trial in which both companies’ chief executives are set to take the stand. Oracle sued Google in August 2010 overseven patents and copyright claims for the Java programming language, which Oracle acquired when it bought Sun Microsystems
April 18, 2012 – The Vodafone Group has served a dispute notice on the Indian Government since the government included a proposal in the Finance budget for March 2012-2013 to tax overseas transactions involving sale of Indian assets on a retrospective basis. The dispute notice is the first step before the Vodafone Group begins international arbitration proceedings under the India -Netherlands bilatera
investment treaty against the Indian government’s move to tax the company’s acquisition of Hutchison Essar in 2007.
April 19, 2012 – The software coalition group which includes Microsoft, Oracle and Adobe have enlisted American law firm Baker &McKenzie to lobby with Prime Minister Manmohan Singh against software tax
changes proposed in the Union Budget. According to the firm ‘to impose new rules with retroactive effect to 1976 under the guise that they are clarifications violates fundamental notions of fairness ‘.
April 20, 2012 – The Indian Government has ruled out the possibility of an amicable settlement with Vodafone Plc in the current environment and is intent on pursuing its claim on the Company despite growing
April 21, 2012 – The telecom regulator on Friday mandated all mobile phone companies to offer ‘per second billing’ option to their customers. The regulator said all operators must have at least one tariff plan that provides per second billing, while adding that telcos could offer up to 25 different tariff plans in total to their customers.
April 21, 2012 – The telecom regulator on Friday mandated all mobile
phone companies to offer ‘per second billing’ option to their customers. The regulator said all operators must have at least one tariff plan that provides per second billing, while adding that telcos could offer up to 25 different tariff plans in total to their customers.
April 23, 2012 – 1. The General Anti -Avoidance Rules (GAAR)
proposed in the Finance Budget 2012 can potentially also be used to target individual taxpayers. Tax Authorities could use the rules to
question the manner in which salaries have been structured if they come to the conclusion that the sole purpose of the arrangement is to save tax. GAAR would apply to every resident who is a taxpayer in India, including individuals, Indian companies or foreign investors.
2. A consortium formed by non-residents to bid for a turnkey project in India is liable to be taxed in India as Association of Persons according to the authority for advance ruling.
April 24, 2012 – The Telecom Regulatory Authority of India (TRAI ) has sent shockwaves throughout the telecom industry by
recommending setting up of a minimum price for pan-India spectrum that is 13 times more than Rs. 1,659 crore at which the former telecom minister A. Raja allocated spectrum and licenses in 2008. TRAI’s
recommendations which are not binding on the central government have been severely criticized by lobbies representing cellular operators offering services based on GSM and CDMA technologies.
April 25, 2012 – The Supreme Court of India has ordered the
government to conduct 2G spectrum auctions and grant licenses by August 31, rejecting the Centre’s plea that it required 400 days to complete the process. The Supreme Court has also allowed the nine mobile companies whose licenses were cancelled earlier this year to continue operations till September 7 extending its earlier deadline of June 2.
April 26, 2012 – The government of India is examining investment treaties signed with other countries individually and as part of larger free trade agreements to identify prickly clauses that may lead to disputes in future.
April 27, 2012 – The Securities and Exchange Board of India has been
insisting that companies with higher promoter holdings should divest
their equity stake in the company within the given time frame. The
regulator has also written to the state owned companies that they should pace down their holdings by August 2013.
April 28, 2012 – According to the Law Minister Salman Khurshid, the government of India will go by Parliament views on tax amendments as proposed in the Income Tax Act 1961 by the Finance Bill 2012.
April 30, 2012 – Norway’s Telenor has warned it will exit India if the
Government of India accepts the telecom regulator’s proposals to
auction airwaves at 13 times the price used in 2008. Telenor’s India
operations were among the worst affected by the Supreme Court of India’s February 2, 2012 order quashing licenses awarded in the
controversial 2008 sale by former telecom minister A. Raja.
2. The Telecom Commission has decided to go back to TRAI seeking clarity on several of its recommendations including its proposal for a 13-fold increase in spectrum prices compared to 2008 and limiting the airwaves sale to a mere 5 MHZ in the 1800 MHZ band this year, a move that allows only one company to win back its permit.
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