India Business Bulletin - May 2024

Archer & Angel


Archer & Angel
The Reserve Bank of India ("RBI") releases Draft Prudential Framework for Income Recognition, Asset Classification and Provisioning pertaining to Advances...
India Corporate/Commercial Law
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General Updates

The Reserve Bank of India (“RBI”) releases Draft Prudential Framework for Income Recognition, Asset Classification and Provisioning pertaining to Advances - Projects Under Implementation, Directions, 2024 (“2024 Directions”

The RBI has released Draft 2024 Directions, for seeking public comments and inputs aiming to strengthen the current regulatory framework governing project finance and harmonizing the guidelines across all regulated entities (“REs”). The purpose of these directives is to give REs a uniform prudential framework for financing projects in the commercial real estate, non-infrastructure and infrastructure sectors. These Draft 2024 Directions also propose changes to the provisions relating to the “date of commercial operations beginning” of such projects, considering an evaluation of the current guidelines and an assessment of the risks related to the financing.

G-sec app, Fintech Repository and PRAVAAH portal launched by RBI

To enhance public access and facilitating regulatory approvals and transaction, RBI has launched the PRAVAAH (Platform for Regulatory Application, Validation, and Authorisation) portal for online application of various regulatory approvals; the Retail Direct Mobile App which facilitates transactions in government securities and a FinTech Repository to provide a better understanding of the sector from a regulatory perspective and facilitate the design of appropriate policy approaches. 

Alert issued on prohibition of Calcium Carbide for Fruit Riening

With the aim to uphold the integrity of India's food supply chain and safeguarding public health, Food Safety and Standards Authority of India (“FSSAI”) has issued a warning to fruit traders / business operators, not to use Calcium Carbide for ripening fruits to ensure compliance of Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011.

Directive issued regarding claims of “100% fruit juices”

As per recent directive of FSSAI, Food Business Operators (“FBOs”) can no longer claim that their juices are 100% fruit juices as there is no provision for making such a claim as per Food Safety and Standards (Advertising and Claims) Regulations, 2018. FSSAI has further directed FBOs to (i) remove all such claims with immediate effect from the advertisements and packaging labels; (ii) proper labelling of words such as “reconstituted” and “sweetened juice” as per Food Safety and Standards (Labelling and Display) Regulations, 2020; (iii) compliance with standards laid down under Food Safety and Standards (Food Products Standards & Food Additives) Regulation, 2011; and (iv) exhaust all existing stocks before 01 September 2024.

Import restrictions on electronics and IT goods reconfirmed

According to the notification by the Ministry of Commerce & Industry, imports of new, second-hand, or refurbished IT and electronic goods as per Electronics and Information technology Goods (Requirement of Compulsory Registration) Order, 2021 will remain restricted unless they are registered with the Bureau of Indian Standards (“BIS”) and comply with its labelling requirements. Additionally, samples of Light-emitting diode (“LED”) products and Direct Current (“DC”) or Alternating Current (“AC”) supplied control gears for LED modules will be picked up in random manner and will be sent to BIS recognised Labs for testing purposes.

Monthly sharing of import data between India and Australia

Both the countries have agreed to various key initiatives such as mechanism for regular sharing of preferential import data on monthly basis; timely resolution of market access issues; deepen people to people contact in the first Joint Committee Meeting under the IndiaAustralia Economic Co-operation and Trade Agreement.

New functionality in Annual Information Statement (“AIS”) introduced

With the aim to ease of compliance and improved taxpayer services, the Central Board of Direct Taxes has rolled out a new functionality in AIS to display the status of information confirmation process. AIS provides details of a large number of financial transactions undertaken by the taxpayer having tax implications and provides a feature related to furnishing of feedback on every transaction.

Norms, Guidelines and Procedure for implementation of Indian Space Policy, 2023 released

Indian National Space Promotion and Authorization Centre (INSPACe) has unveiled Norms, Guidelines and Procedures for implementation of Indian Space Policy-2023 in respect of Authorization of Space Activities (NGP). Key highlights include Criteria, Application procedure, Activities requiring Authorization; Pre-Requisites; Liability as per various International Space Treaties signed by Gov

Corporate Law Update

The Ministry of Corporate Affairs (“MCA”) Relaxes Additional Fees on late filing of certain forms by Limited Liability Partner ship (“LLP”)

The MCA has provided relaxation to LLPs by extending the due date for filing Form LLP BEN-2 (a return for filing a declaration under section 90 of the Companies Act, 2013) and LLP Form No. 4D (a return for filing a declaration for the beneficial interest in contributions received by the LLP) until 1 July 2024 without incurring any additional fees. Previously, the last date for filing these forms was 15 May 2024. This relaxation in additional fees was provided by the MCA in view of the transition of the MCA portal from V2 to V3 and to promote compliance on the part of the reporting LLPs.

Labour Law Updates

Inclusion of foreign workers under the ambit of Employees' Provident Funds Scheme, 1952 unconstitutional

In a landmark judgment, the Karnataka High Court has opined that the provisions of the Employees' Provident Funds Scheme, 1952 mandating foreign workers to contribute to the Provident Funds on their entire global salary is unconstitutional, arbitrary and hit by the fundamental right enshrined in the Article 14 (Right to Equality) of the Constitution of India.

Leave encashment cannot be refused by Employer

The Bombay High Court has ruled that leave encashment of accumulated and unutilized leave of an employee cannot be refused by employer. Once earned, leave encashment acquired by an employee would constitutes to be their property and depriving someone of the said property would be violative of the provisions of the Constitution of India. 

Shops and establishments exempted from weekly off by the Government of Rajasthan

As per notification by the Rajasthan Government, shops and establishments registered under the Rajasthan Shops and Commercial Establishments Act, 1958 are exempted from weekly off for a period of 3 years - subject to fulfilment of certain conditions such as paid weekly holiday to employees on rotation basis; separate records to be maintained in case working hours of the employed employees exceeds 9 hours per day and 48 hours per week; appointment letter to be given; overtime payment as per Act.

Findings of the internal complaints committee binding

It has been upheld by the High Court of Judicature at Madras that the disciplinary authority is bound by the findings of the facts given by the internal complaints committee in matters relating to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013.

33% quota for women in all outsourced job

As per the notification by the Government of Karnataka, it is mandatory to provide 33% (thirty three) reservation for women in services and posts that are being outsourced by various government departments and organizations.

Intellectual Property Updates

Personality Rights of the famous Bollywood Actor protected

The Delhi High Court while acknowledging the personality / publicity rights; Copyright in photographs, literary, musical, artistic, dramatic works, sound recordings, cinematographic films etc in other associated works; Trade Mark Infringement and Common Law Rights of a famous Indian Actor has restrained the Defendants from utilizing/exploiting/misappropriating the Bollywood Actor's (a) name and other sobriquets; (b) voice; and (c) image for any commercial purpose without the Actor's consent and/or authorization.

Draft Protection of Trade Secrets Bill 2024 proposed

The Law Commission of India proposes a Draft Protection of Trade Secrets Bill 2024. The key highlights of the bill include Meaning of Trade Secret; Exceptions; Rights of a Trade Secret holder; Compulsory Licensing and associated legal remedies.

Lost profit damages awarded in Patent Infringement suit

In a case of first of its kind, the Delhi High Court has awarded loss of damages to the tune of Rs. 217 Crore (US$ 216 Million approximately) along with full litigation cost in a Patent Infringement Matter based on extensive documents on lost sale and the prices at which Patentee would have sold the products.

For communication of sound recordings - Royalty payment is mandatory 

The Calcutta High Court has recently ruled that a company must pay royalties to Indian Performing Right Society for using copyrighted Caller Ring Back Tone. The court further observed that “The underlying object being that creative work ought to belong to the authors and that the author should have a share in all future commercial exploitation of their work (except cinema halls)”.

Case Laws

Fine imposed on biscuit manufacturer for selling biscuits below advertised weight

An order has been passed by the District Consumer Disputes Redressal Commission in Kerala's Thrissur directing a biscuit manufacturer company to pay a fine of Rs. 60,000 (US$ 770 approximately) for selling biscuits below advertised weight.

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