Bimonthly Legal Tablet Volume 3 Issue 5 September 05, 2013

A.P. (DIR Series) Circular No. 104 dated May 17, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘FDI in India – Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-incorporation expenses’

Para 3(II) of A.P. (DIR Series) Circular No. 74 dated June 30, 2011 read with A.P. (DIR Series) Circular No. 55 dated December 09, 2011 allowed issue of equity shares/ preference shares under the Government route by conversion of import of capital goods, etc., subject to terms and conditions stated therein. On review, it has been decided to amend condition at (c) in the said Para 3(II), which shall read as below:

All the other conditions contained in the A.P. (DIR Series) Circulars No. 74 dated June 20, 2011 and No. 55 dated December 09, 2011, shall remain unchanged.
Necessary amendments to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 have been notified.

A.P. (DIR Series) Circular No. 105 dated May 20, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation’
A.P. (DIR Series) Circular No. 52 dated November 20, 2012 extended the enhanced period for realization

and repatriation to India, of the amount representing the full value of goods or software exported, from six (6) months to twelve (12) months from the date of export. This relaxation was available up to March 31, 2013.
It has been decided, in consultation with the Government of India, to bring down the above stated realization period from twelve (12) months to nine (9) months from the date of export, with immediate effect, valid till September 30, 2013.
The provisions in regard to period of realization and repatriation to India of the full export value of goods or software exported by a unit situated in a Special Economic Zone (SEZ) as well as exports made to warehouses established outside India remain unchanged.

Press Note No. 1 (2013 Series) dated June 03, 2013 issued by the Government of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion regarding ‘Review of the policy on foreign direct investment in the Multi Brand Retail Trading Sector – amendment of paragraph 6.2.16.5(2) of Circular 1 of 2013 – Consolidated FDI Policy’

As per paragraph 6.2.16.5 of Circular 1 of 2013 – Consolidated FDI Policy, effective from April 05, 2013, FDI up to 51% under the government approval route, is permitted in the multi-brand retail trading sector, subject to specified conditions. The list of States/Union Territories which have conveyed their agreement for the policy in multi-band retail trading is contained in paragraph 6.2.16.5(2) of the said Circular 1 of 2013.
As per the revised position, the Government of Himachal Pradesh has given its consent to implement the policy on multi-brand retail trading in Himachal Pradesh in terms of paragraph 6.2.16.5 (1) (viii). Accordingly, the list of States/Union Territories which have conveyed their agreement for the policy in multi-band retail trading as contained in paragraph 6.2.16.5(2) stands amended.

Press Note No. 2 (2013 Series) dated June 03, 2013 issued by the Government of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion regarding ‘Foreign Direct Investment Policy – definition of group company’

The Government has decided to incorporate the following definition of ‘group company’ in the Consolidated FDI Policy contained in Circular 1 of 2013, effective from April 05, 2013:

A.P. (DIR Series) Circular No. 108 dated June 11, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Export of Goods and Software – Realization and Repatriation period for units in Special Economic Zones (SEZ)’

In terms of A. P. (DIR Series) Circular No. 91 dated April 1, 2003, time limit for realization and repatriation of export proceeds, for the exports made by units in Special Economic Zones (SEZs), was done away with.
It has now been decided that the units located in SEZs shall realize and repatriate, full value of goods/software/services, to India within a period of 12 months from the date of export. Any extension of time beyond the above stipulated period may be granted by the RBI, on case to case basis. Necessary amendments have been made in Foreign Exchange Management (Export of Goods and Services) Regulations, 2000.

A.P. (DIR Series) Circular No. 109 dated June 11, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Processing and Settlement of Export related receipts facilitated by Online Payment Gateways – Enhancement of the value of transaction’
In terms of A.P. (DIR Series) Circular No.35 dated October 14, 2011, AD Category I banks have been permitted to offer the facility to repatriate export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers (‘OPGSPs’) for export of goods and services for value not exceeding USD 3000 per transaction, subject to the conditions stipulated therein.
It has now been decided to increase the value per transaction from USD 3000 to USD 10,000 for export related remittances received through OPGSPs. The revised limit will come into force with immediate effect. All other terms and conditions issued, vide A.P. (DIR Series) Circular No.17 dated November 16, 2010, shall remain unchanged.

A.P. (DIR Series) Circular No. 110 dated June 12, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Foreign Direct Investment – Reporting of issue/ transfer of Shares to/by a FVCI’

In terms of Regulations 9 and 10 and para 9 of Schedule I to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 read alongwith A. P. (DIR Series) Circular No. 44 dated May 30, 2008 and A.P. (DIR Series) Circular No.63 dated April 22, 2009, transfer of equity shares/fully and mandatorily convertible debentures/fully and mandatorily convertible preference shares (‘shares’) of an Indian company, from a person resident outside India (‘non-resident’) to a person resident in India (‘resident’) or vice versa, has to be reported to an AD bank within 60 days of transactions. Further, the receipt of consideration for issue of shares as well as the issue of shares of an Indian company, to a non-resident has to be reported to the RBI through an AD bank within 30 days of the transaction.
It has been observed that SEBI registered FVCIs making investments in an Indian Company under FDI Scheme in terms of Schedule 1 of Notification No. FEMA.20 / 2000 – RB dated May 3, 2000, also report the same transaction under Schedule 6 of the Notification, resulting in double reporting of the transaction.
It is clarified that wherever a SEBI registered FVCI acquires shares of an Indian company under FDI Scheme in terms of Schedule 1 of Notification No. FEMA 20 / 2000-RB dated May 3, 2000, such investments have to be reported in form FC-GPR/FC-TRS only, as applicable. Where the investment is under Schedule 6 of the Notification, no FC-GPR/FC-TRS reporting is required. Such transactions would be reported by the custodian bank in the monthly reporting format as prescribed by RBI from time to time. Revised forms FC-GPR and FC-TRS have been annexed to this A.P. (DIR Series) Circular No. 110 dated June 12, 2013.
A SEBI registered FVCI while making investment in an Indian company may determine upfront whether the said investment is under FDI or FVCI scheme and report accordingly.

A.P. (DIR Series) Circular No. 113 dated June 24, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (ECB) for the low cost affordable housing projects’

In terms of A.P. (DIR Series) Circular No. 61 dated December 17, 2012, ECB for low cost affordable housing projects is allowed as a permissible end-use under the approval route. The policy regarding ECB for the low cost affordable housing projects has been reviewed and it has been decided to modify the guidelines contained in the said Circular as follows:
i. Developers/builders should have a minimum of three (3) years experience in undertaking residential projects as against five (5) years prescribed earlier and should have good track record in terms of quality and delivery.
ii. The condition of minimum paid-up capital of not less than INR 50 Crore, as per the latest audited balance sheet, for Housing Finance Companies (‘HFCs’) stands withdrawn. However, the condition of the minimum Net Owned Funds (‘NoF’) of INR 300 Crore for the past three (3) financial years remains unchanged.
iii. The aggregate limit for ECB under the low cost affordable housing scheme is extended for the financial years 2013-14 and 2014-15 with a ceiling of USD 1 billion in each of the two years, subject to review thereafter.
iv. The ECB availed of by developers and builders shall be swapped into Rupees for the entire maturity on fully hedged basis.
Regarding issue of fixation of spread for on-lending by National Housing bank (‘NHB’); interest rate spread to be charged by NHB may be decided by NHB taking into account cost and other relevant factors. NHB shall ensure that interest rate spread for HFCs for on-lending to prospective owners’ of individual units under the low cost affordable housing scheme is reasonable.
Further, HFCs while making the applications shall;
i. submit a certificate from NHB, the nodal agency, that the availment of ECB is for financing prospective owners of individual units for the low cost affordable housing;
ii. ensure that cost of such individual units does not exceed INR 30 Lac and loan amount does not exceed INR 25 Lac;

iii. ensure that the units financed are having maximum carpet area of 60 sq. mtrs.; and
iv. ensure that the interest rate spread charged by the HFCs to the ultimate buyer is reasonable.
All other aspects of the scheme mentioned in the said Circular remain unchanged.

A.P. (DIR Series) Circular No. 115 dated June 25, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Buyback/prepayment of Foreign Currency Convertible Bonds (‘FCCBs’)’

On a review it has been decided that the existing scheme of Buyback / Prepayment of FCCBs under the approval route which expired on March 31, 2013 may be continued till December 31, 2013 and shall stand discontinued thereafter.

A.P. (DIR Series) Circular No. 116 dated June 25, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (‘ECB’) for Civil Aviation Sector’

In terms of paragraph 2 (iii) of A.P. (DIR Series) Circular No. 113 dated April 24, 2012, the ECB for working capital for civil aviation sector should be raised within twelve (12) months from the date of issue of the Circular. On a review, it has now been decided that the scheme of availing of ECB for working capital for civil aviation sector will continue till December 31, 2013. All other aspects of the ECB Policy shall remain unchanged.

A.P. (DIR Series) Circular No. 117 dated June 25, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (‘ECB’) in Renminbi (‘RMB’)’

In terms of A.P. (DIR Series) Circular No. 30 dated September 27, 2011, Indian companies in the infrastructure sector are allowed to avail of ECB in RMB under approval route subject to an annual cap of USD one billion pending further review. It has been observed that the facility of ECB in RMB had remained unused so far. Accordingly, it has been decided that this scheme of ECB in RMB may be discontinued from the date of issue of this Circular, i.e., June 25, 2013.

A.P. (DIR Series) Circular No. 118 dated June 26, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Export of Goods and Services – Project Exports’

On a review, it has been decided to increase the time limit and henceforth the exporter undertaking Project Exports and Service contracts abroad should submit form DPX1, PEX-1 and TCS-1 to the Approving Authority, i.e., AD Bank / Exim Bank / Working Group, within thirty (30) days of entering into contract for grant of post-award approval. All other instructions issued in terms of Memorandum of Instructions on Project and Service Exports (‘PEM’), notified vide A. P. (DIR Series) Circular No. 32 dated October 28, 2003, shall remain unchanged.

A.P. (DIR Series) Circular No. 119 dated June 26, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (‘ECB’) Policy – Import of Services, Technical know-how and License Fees’

In terms of Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 and the A.P. (DIR Series) Circular No. 5 dated August 1, 2005, as amended from time to time, eligible borrowers can raise ECB for investment such as import of capital goods (as classified by DGFT in the Foreign Trade Policy), new projects, modernization/ expansion of existing production units in the real sector – industrial sector including small and medium enterprises (SME), infrastructure sector as defined under the ECB policy and entities in service sector viz. hotels, hospitals and software companies.
On a review, it has been decided to include import of services, technical know-how and payment of license fees as part of import of capital goods by the companies for the use in the manufacturing and infrastructure sectors as permissible end-uses of ECB under the automatic/ approval route as the case may be subject to:
i. there should be a duly signed agreement between the service provider and the borrower company;
ii. the original invoice raised by the service provider as per the payment schedule in the agreement should be duly certified by the borrower company;
iii. declaration by the importer that the entire expenditure on import of services will be capitalized;
iv. declaration by the importer that entire expenditure on import of services forms part of project cost; and v. AD category – I bank has to ensure the bonafides of the transaction.
The above modifications to the ECB Policy will come into force with immediate effect. All other aspects of the ECB Policy, such as, eligible borrower, recognized lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements etc. shall remain unchanged.

A.P. (DIR Series) Circular No. 120 dated June 26, 2013 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (ECB) Policy – Structured Obligations’

On a review, it has been decided that credit enhancement can be provided by eligible non-resident entities to the domestic debt raised through issue of INR bonds/debentures by all borrowers eligible to raise ECB under the automatic route. It has also been decided to reduce the minimum average maturity of the underlying debt instruments from seven (7) years to three (3) years. Prepayment and call/put options, however, would not be permissible for such capital market instruments up to an average maturity period of three (3) years. All the other terms and conditions mentioned in para 4 (iv), (vi) to (viii) of A.P. (DIR Series) Circular No. 40 dated March 02, 2010 will remain unchanged.
On invocation of such credit enhancement, if the guarantor meets the liability and if the same is permissible to be repaid in foreign currency to the eligible non-resident entity, the all-in-cost ceilings, as applicable to the relevant maturity period of the Trade Credit/ECBs as per extant guidelines, would apply to the novated loan.
The amended policy will come into force with immediate effect.

UPCOMING…
RBI Master Circulars effective July 01, 2013

RBI has issued Master Circulars under the following 7 categories:

i. Banking Regulation: 21 in number
ii. Co-operative Banking: 16 in number
iii. Currency: 1 in number
iv. Financial Institutions: 3 in number
v. Foreign Exchange: 15 in number
vi. Government Business: 2 in number
vii. Special Programmes: 1 in number
The details of the Master Circulars issued under ‘Foreign Exchange’ category shall follow shortly in our ‘Alerts’.

Bills

The Budget Session of the Parliament was held between February 21 and May 10, 2013.
However it was convened for 32 days and adjourned sine die on May 8,2013 two days ahead of schedule. The Finance Bill and 10 Appropriation Bills were also introduced and passed. A total of 116 Bills are pending at the end of the budget session.

FINANCE BILL 2013

The Finance Bill 2013 received the assent of the President on 10th May 2013 and has been enacted as the Finance Act 2013 (No. 17 of 2013). The Act has given effect to the financial proposals of the Central Government for the financial year 2013-2014. The Finance Act, 2013 contains the amendment in Income Tax Rates, Section wise Amendment in Income Tax Provisions, General Anti Avoidance Rules, Rate of TDS on Payment to Resident and Non Residents, New Rule for Computation of Agricultural Income etc.

Supreme Court of India’s Judgements

Arun Kumar Agrawal Vs. Union of India and Ors., MANU/SC/0490/2013

Held: The Hon’ble Supreme Court of India has held that the scope of the decision making process concerning economic and commercial matters gives liberty to States and its instrumentalities to take appropriate decision after weighing advantages and disadvantages of the same. The Apex Court while exercising its jurisdiction is not justified in interfering with such decisions, especially when there is nothing to show that such decisions are contrary to law or actuated to mala fide or irrelevant considerations.

Antrix Corp. Ltd. Vs. Devas Multimedia P. Ltd, MANU/SC/0514/2013

Held: The Hon’ble Supreme Court of India has held that where an Arbitrator had already been appointed and intimation thereof had been conveyed to the other party, a separate application for appointment of an Arbitrator is not maintainable. Once the power has been exercised under the Arbitration Agreement, there is no power left to, once again, refer the same disputes to arbitration under Section 11 of the 1996 Act, unless the order closing the proceedings is subsequently set aside.

Competition Commission of India’s Orders :

Ashtavinayak Cine Vision Limited vs. Northern India Motion Pictures Association and others
Case No. 71 of 2011 Dated: 10/01/13

Held: The Competition Commission of India found Northern India Motion Pictures Association (NIMPA)in contravention of the provisions of Section 3(3) (b) read with section 3(1) of the Competition Act. The Commission observed that the acts and conduct of the NIMPA have caused appreciable adverse effect on competition by laying condition on every film

distributor to become their member and/or register its film with the Association before the exhibition of such films. Further, the Commission directed NIMPA, to suitably modify its Articles of Association, rules and regulations to remove the condition of compulsory registration of films as a pre-condition for release of any film.
The Commission had also passed a compliance order dated, 08th May, 2013 whereby, it has been asked from NIMPA to give an undertaking to the effect that the Association shall have no rules and regulations governing registration/release of the picture which discriminates the films on the basis of registration, release, language of films and number of screens relating the release of the films.

DhanrajPillay and others vs. Hockey India, Case No.73 of 2011 Dated 31/05/13 Held:

The Competition Commission of India in this case has analysed the scope of jurisdiction of the Competition Act over sports federation. The Commission to examine the issue of jurisdiction in detail and considered the international jurisprudence and literature on sports sector to draw relevant broad principles. The Commission observed that pleas of sports federations not being subject to Competition laws, it based on that they are non-profit organizations. The Commission in this case has taken into consideration similar cases in other jurisdictions of the world, where the Courts have held that such organizations have no immunity from antitrust or competition law based on their non-profit status. Therefore, on the basis of principles emerging from international jurisprudence, the provisions of the Act are applicable to such sports federations.

May 1, 2013

1. Competition Commission has dismissed charges of alleged cartelisation by five firms, including Tata Chemicals and Nirma in manufacturing and sale of soda ash.
2. The Government of India has announced a scheme through which it will provide financial support to young technology companies filing international patents. The five-year scheme that comes into force from this fiscal year will provide half the amount incurred in filing a patent and reimburse fees paid to an attorney.

May 6, 2013

As per a list compiled by the Home Ministry of India as on April 23, as many as 85 bills submitted by various states since 2010 under Article 200 read with Article 254(2) of the Constitution of India remain pending for consideration of the President.

May 7, 2013

1. The government of India has started a project called the Central Monitoring System which would be a single window from where the government arms such as the National Investigation Agency or the tax authorities will be able to monitor every byte of communication. The System will lawfully intercept internet and telephone services. It is being set up by the Centre for Development of Telematics.
2. The government of India is planning to introduce a new classification for investors that do not come under the foreign direct investment (FDI) route. These investors will now be classified as foreign portfolio investors.

May 8, 2013

1. Finland has invoked an alternate dispute resolution provision in its double taxation avoidance agreement with India against the 2,000-crore demand slapped on handset maker Nokia, as it seeks to arrive at a negotiated settlement over the tax dispute.

2. The government today approved the National Cyber Security Policy that aims to create a secure computing environment in the country and build capacities to strengthen the current set up with focus on manpower training.

May 10, 2013

1. The Supreme Court of India dismissed a petition challenging the $8.5-billion Cairn-Vedanta deal, and ruled that a commercial decision cannot be regarded as mala fide or driven by ulterior motives merely on the grounds that it looks wrong in hindsight.
2. The Finance Ministry of India has tightened norms for application of lower rate of service tax on construction, dealing a blow to buyers purchasing houses above a certain size or value.
3. The Competition Commission of India has ordered a probe against four pharmaceutical entities including drug-maker Cipla and one person for anti-competitive practices in Himachal Pradesh.

May 13, 2013

Departmental enquiry and proceedings against government employee must be done in the language of his preference, the Supreme Court has said while setting aside punishment meted out to an official on the ground that proceedings were not conducted in Hindi as sought by him.

May 15, 2013

1. In a setback to the Unique Identification Authority of India initiative, the government has put on the back burner a law to give statutory powers to the body that issues Aadhaar numbers.

2. UK clothing chain Marks & Spencer may have to seek approval under the multi-brand retail policy to continue to do business in India as its current business model of selling sub-brands does not seem to meet the country’s single brand retail policy. “There is no legal term as a sub-brand, and hence it is equivalent to multi-brand,” said an official from a Department of Industrial Policy and Promotion (DIPP).
3. The Supreme Court of India has agreed to hear a plea seeking to restrain government authorities from taking any coercive action against anyone for posting alleged objectionable comments on social networking sites. An application was filed before the apex court seeking its direction to the authorities not to take action for posting such comments during the pendency of a case before it pertaining to constitutional validity of section 66A of the Information Technology (IT) Act.

May 16, 2013

The Supreme Court of India has said that all states and union territories must follow the Centre’s advisory and refrain from arresting people for posting allegedly objectionable comments on social networking sites unless senior police officials have given their nod for it.

May 17, 2013

Prime Minister Manmohan Singh has made a major intervention to revive India’s core sector investments by initiating work on a new law to resolve disputes in public contracts being executed on a PPP or public private partnership basis.

May 18, 2013

The standing committee on finance has recommended the scrapping of the Chit Fund Act, 1982, in the wake of the collapse of the Saradha chit fund in West Bengal.

May 19, 2013

1. The government will bring in a new legislation to deal with all kinds of betting in sports, according to the Law Minister Kapil Sibal.
2. Foreign institutional investors are holding back from buying Indian corporate bonds despite the best rally in five years as the government notification on the reduction of withholding tax has added to confusion.
3. With the passage of Finance Bill 2013 last week, the Revenue department officials can now arrest a person for non-payment of collected service tax. Earlier, the officials did not have any power to arrest a person for service tax evasion. Besides, director and manager of a company who fail to pay collected service tax can now be arrested with imprisonment for upto seven years in addition to the penalty which may extend to Rs one lakh. This is for the first time that service tax rules have been amended to attract the Criminal Procedure Code ( CrPC) in line with customs and central excise.
4. The Department of Pharmaceuticals had notified the Drugs (Prices Control) Order 2013 under which prices of 348 medicines in the National List of Essential Medicines (NLEM) have been brought under price control, thus replacing an earlier order of 1995 that regulated prices of only 74 bulk drugs

May 20, 2013

1. The Finance Ministry of India has implemented onetime amnesty scheme for service tax defaulters to pay their due without any penalty or late payment charges. The ‘Voluntary Compliance Encouragement Scheme’, which came into force after passage of Finance Bill on May 10, can be availed by a service tax defaulter by this year end.
2. Amid a growing number of brokerage firms, hedge funds and other market intermediaries from abroad soliciting business from HNIs and other investors in India, Sebi is considering introducing a separate set of rules for such foreign entities. The new set of rules would ensure that the intermediaries working in foreign markets maintain the high levels of compliance, as required from the Indian market entities, while dealing with the investors in India.

May 21, 2013

India’s SEBI has revised some of the guidelines for algorithm trading to put in place additional safety measures such as half yearly auditing of the algorithmic trading system by a certified auditor while doubling the penalty for defaulters.

May 24, 2013

1. The Supreme Court has ruled that anyone can record a dying declaration .
2. The government issued new guidelines on Thursday that require India’s drugs companies to comply with the Good Manufacturing Practice (GMP) standards of the European Union to ensure pharmaceuticals exports to the 27-country region continue unrestricted. The directive, which will become effective from July 2, prescribes standards for the entire supply chain, from manufacture to final retail sale
3. India will need stronger domestic laws on bribery before it can become signatory to the Organisation for Economic Cooperation and Development convention on bribery, a senior OECD official has said.

May 25, 2013

In a bid to combat the menace of pesky calls and SMSes, telecom regulator Trai has decided that telecom facilities given to subscriber would be immediately disconnected if it is found to be sending unsolicited communication. Name and address of such subscribers shall be entered into a blacklist and no resources would be allotted to these subscribers for a period of two years in such cases..

May 26, 2013

Law minister Kapil Sibal has said that the government intended to bring a law that would deal with all sorts of dishonest practices in all sports, including cricket, and bring under its sweep foreign players, bookies, conduits, even ordinary spectators who try to change the course of a game or the result of a game.

May 30, 2013

The government of India is examining the possibility of putting in place a formal framework for resolving tax disputes, notably the one with Vodafone, similar to the advance pricing agreements used to resolve transfer pricing cases.

May 31, 2013

The Bombay High Court has held that liability towards an employee engaged by a contractor or a managing agent is on the principal employer .

June 3, 2013

The US has expressed “inability” to push internet giants like Google and Facebook to meet Indian agencies’ requests for access to private content uploaded on their sites to track criminals and mischief-mongers.

June 4, 2013

1. More than 65 countries have signed the landmark treaty regulating the multibillion-dollar global arms trade. While the treaty was overwhelmingly approved on April 2 by the UN General Assembly, key arms exporters including Russia and China and major importers including India, Saudi Arabia, Indonesia and Egypt abstained and have given no indication yet that they will sign it.
2. The Union Cabinet today approved the bill to set up a regulator for the real estate sector with provisions for a jail term for the developer for putting out misleading advertisements about projects. The Real Estate (Regulation and Development) Bill, approved by the cabinet, seeks to provide a uniform regulatory environment to the sector.

June 5, 2013

The Enforcement Directorate (ED) has issued a show-cause notice to Emaar MGF Land, a JV between Dubai’s Emaar Properties and India’s MGF Development, for violation of the Foreign Exchange Management Act to the tune of 8,600 crore.

June 6, 2013

1. The Competition Commission of India has rejected a complaint of alleged anti- competitive practices against beer maker SABMiller India. Hyderabad-based Official Beverages had alleged that SABMiller was abusing its dominant positions besides forming a cartel that hurt the business interests of the complainant. Rejecting the plea, CCI said the “dispute between the parties was business/commercial dispute regarding implications of the franchisee agreement”. The regulator said, “No competition issue arises in this case”.

2. The telecom department is likely to finalize the unified licensing regime within a month, telecom secretary MF Farooqui said even as reports of changing several clauses in the final document keep arising. Mobile phone companies have to mandatorily move to the unified licensing regime under which they will be allowed to offer all forms of communication under a single permit. At present, companies need to get different licenses for different types of services such as the internet, mobile and long distance calls. The final guideline was scheduled to be released by December but was pushed back several times.

Jun 7, 2013

The commodity transaction tax, imposed in this year’s Finance Budget of India , will come into force from July 1. The tax will be levied on trade in non-agricultural commodities.
Jun 10, 2013 At a recent meeting of the Financial Stability and Development Council (FSDC), which was chaired by finance minister P Chidambaram and where the report of the Financial Sector Legislative Reforms Commission (FSLRC) was discussed, both regulators made it clear that they were opposed to recommendations such as allowing a review of all regulations by financial firms, intermediaries or others by a new body — the Financial Sector Appellate Tribunal, or FSAT. In the current regulatory regime, a judicial review is limited to executive orders issued by the regulators and excludes regulations which are approved by the board of the supervisors.

June 12, 2013

Sebi will soon get powers to summon phone call records, emails and SMSes of persons it is probing for insider trading and other market manipulations. The finance ministry is separately considering amendments to the SEBI Act, SCRA and the Depositories Act to strengthen the regulator’s powers

Jun 13, 2013

Thousands of expat workers working across India may see a dip in their take-home salaries if the law ministry okays a government plan to club allowances with employees’ basic pay in order to calculate their Provident Fund dues.

Jun 14, 2013

The US Supreme Court has restricted ability of firms to patent human genetic sequences, ruling in a case that tested a decades-old practice and raised questions about thousands of biotechnology, agricultural and drug patents. The justices unanimously issued a mixed ruling on Myriad Genetics’ patents on genes linked to breast and ovarian cancer. The majority said that some parts of Myriad’s patents improperly covered natural phenomena, while other parts require enough human intervention to be eligible for legal protection. Writing for the court, Justice Clarence Thomas said isolated DNA is a “product of nature and not patent eligible merely because it has been isolated.” At the same time, Thomas said synthetic molecules known as complementary DNA can be patented because they need a significant amount of human manipulation to create
.
Jun 17, 2013

Regulator SEBI is finalising new anti-money laundering guidelines covering entities such as brokers and mutual funds to put in place stronger checks against possible cleansing of funds through capital markets. The guidelines, expected to be ready in a few weeks, will replace SEBI’s existing AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) standards, which first came into effect about 10 years ago and saw the last major amendments in late 2010, a senior official said. The review will also take into account the new FATF standards on anti-money laundering measures. FATF is the global standard-setter in the fight against money laundering, and the financing of terrorism.

June 18, 2013

A public interest litigation has been filed by a former Dean of Law Faculty of Delhi , Professor S N Singh before the Supreme Court of India on the issue of the US National Security Agency monitoring internet data of India , seeking its direction to the Centre to initiate action against internet companies for sharing information with foreign authority in “breach” of contract and violation of right to privacy.

Jun 19, 2013

1. The New York-Based law firm, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, filed the class action lawsuit against US-based iGate Corporation and some of its officers in the US District Court of Northern District of California on June 14. According to the law firm, the complaint has alleged that throughout the class period, defendants (iGate) had made materially false and misleading statements regarding its business, operational and compliance policies.
2. Google has asked a special US court (The Foreign Intelligence Surveillence Court) handling national security investigations for permission to publish the number of government requests for data to the Internet giant.

June 20, 2013

1. France has threatened Google with a fine of up to 150,000 euros ($198,000) if it does not bring its privacy procedures into line with French law on data protection within three months. France’s move follows Google’s introduction last year of a new privacy policy which enables it to track users activity across its search engine, gmail, the Google+ social networking platform and other services it owns, which include You Tube ..
The 27-member European Union warned Google in October 2012 that its data protection procedures did not comply with an EU directive on the subject and gave the company four months to change them. That deadline passed without any action, prompting France to set up a task force of individual member states interested in pursuing the issue that involved Britain, Germany, Italy, the Netherlands and Spain.
2. The Government will soon bring a Bill which is aimed at regulating the medical equipments industry in the country which so far has remained unregulated. The new Bill will replace the existing Drugs and Cosmetic (Amendment) Bill,2007 which is pending in Parliament.
3. The European Commission told five European Union countries to (Italy, Poland, Belgium, Greece and Finland’s self-governing Aland Islands ) that they must enforce new EU laws aimed at tackling tax evasion within the next two months or else face court action.

Jun 21, 2013

Capital market regulator Sebi is set to overhaul the way companies buy back securities from investors through the stock market. The regulator is likely to make it mandatory for companies to buy back at least 50% of the proposed offer and if a firm fails to do so, it may have to forfeit 2.5% of the money earmarked for the buyback.

June 22, 2013

India’s second largest telecom operator, Vodafone , has urged the government to follow a more flexible and investment friendly approach as the government begins to review the implementation of the National Telecom Policy 2012.

June 24, 2013

The government of India is considering making it mandatory for companies paying advance tax of over 10 crore annually to register with the LTU (Large Taxpayers Unit), a move likely to augment and streamline tax collection.

June 25, 2013

1. The European Union is finalising a major overhaul of its 20-year-old data protection law that would make internet companies follow EU rules if their services target European consumers.
2. Google must respect EU privacy law but is not obliged to delete sensitive information from its search index, an adviser to the highest European Union Court said, in a case that tests whether people can have harmful content erased from the Web. The adviser backed the internet search giant’s position that it cannot erase legal content from the internet even if it is harmful to an individual. But he rejected the view of many U.S. internet firms that they are not bound by EU privacy law. A final judgment on the case is expected before the end of the year. Judges in the European Court of Justice are not bound by an advocate general’s opinion, but follow such recommendations in the majority of cases.
3. Competition Commission of India (CCI) has approved the proposed acquisition of a Strides Arcolab subsidiary by Mylan Inc, saying the deal will not have an adverse impact on competition in India. The watchdog’s green signal came after these entities modified certain aspects of non-compete pact which was part of the deal.

Jun 26, 2013

1. Sebi has tightened the rules for share buybacks by mandating companies to purchase at least 50% of the offer size, failing which they will have to forfeit 2.5% of the total amount earmarked. The Sebi board has also approved an overhaul of rules for overseas investors following recommendations of a panel headed by a former cabinet secretary, besides a slew of other market friendly measures.
2. The government has decided to put a blanket ban on several websites that allow users to share pornographic content. In an order dated June 13, Department of Telecom (DoT) has directed internet service providers (ISPs) to block 39 websites

Jun 30, 2013

The Income Tax Department has announced withdrawal of a controversial circular and modification of another one relating to taxation of R&D centres, which play a key role in software development.