GENERAL UPDATES
A new Invoice Management System ("IMS") implemented in the Goods and Services Tax ("GST") portal
A new communication process called the IMS is being implemented in the GST portal to help taxpayers efficiently deal with invoice corrections/amendments with their suppliers. This will (i) help tax-payers match their records/invoices with those issued by suppliers for claiming the correct Input Tax Credit ("ITC") and (ii) allow tax-payers to accept, reject, or keep invoices pending in the system for later use. This feature has now been accessible on the GST portal starting from 1 October 2024.
Income Tax ("IT") Department increases thresholds for filing appeals in tax disputes
The IT Department has raised the minimal threshold for submitting tax appeals for expediting the procedure for cases heard by the Income Tax Appellate Tribunal ("ITAT"), High Courts, and the Supreme Court. The Central Board of Direct Taxes ("CBDT") has issued a circular limiting appeals to disputed tax amounts above Rs. 60 lakhs for ITAT (US$ 75,000 approximately), Rs. 2 crores for high courts (US$ 250,000 approximately) and Rs. 5 crores (US$ 625,000 approximately) for the Supreme Court. Previously, the criterias were Rs 50 lakh (US$ 62,500 approximately) for ITAT, Rs 1 crore (US$ 125,000 approximately) for High Courts and Rs 2 crore (US$ 250,000 approximately) for the Supreme Court. The updated restrictions apply to all instances, including those involving tax deduction at source ("TDS") and tax collection at source ("TCS"). Furthermore, the CBDT has ordered removal of outstanding appeals before the Supreme Court, High Courts and tribunals that does not satisfy the criteria setup by new standards.
Draft Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2024 ("Draft Rules") released
The Ministry of Health and Family Welfare has released the Draft Rules for public comments and inputs. Key highlights of the Draft Rules include provisions for all online curated content (OCC) platforms to display non-skippable anti-tobacco health spots, each lasting a minimum of 30 (thirty) seconds at the beginning and middle through any content; a 20-second audio-visual disclaimer warning about the dangers of tobacco use, to be shown at the start of the content; static anti-tobacco warnings will need to be displayed for scenes featuring smoking and tobacco consumption. These Draft Rules once implemented may be applicable retrospectively.
Virtual sharing of Lading bill started between India and Korea
For ease of doing business, India and South Korea have started sharing of lading bill (a legal document issued by a carrier to acknowledge receipt of cargo for shipment) in an online transfer mode.
Medical Textiles (Quality Control) Order, 2023 notified
The Ministry of Textiles has issued Quality Control Order (QCO) which is effective from 1 October 2024. As per the order, a Bureau of Indian Standards (BIS) license for manufacturing, importing, distributing, selling, hiring, leasing, storing, or displaying products (sanitary napkins, baby diapers, reusable sanitary pads, and dental bibs) for sale will be required. Non-compliance with these QCO will lead to fines and penalties. Small-scale enterprises, particularly Self-Help Groups (SHGs) are exempted.
New guidelines regarding testing of drugs issued
The Central Drugs Control Organization ("CDSCO") has reduced the timelines to any 1(one) consignment in 2 years or to any one consignment in sequential 20 (twenty) consignments whichever is earlier for testing of drugs imported from countries such as United States, Australia, Japan, Canada and European Union – provided samples have not failed quality tests in the past five years. Frequency of random sampling has also been revised.
CORPORATE LAW UPDATES
Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024 notified
The Ministry of Corporate Affairs ("MCA") has amended the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 through the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024. The amendments intend to raise the minimum claim amount required to submit a claim to the Investor Education and Protection Fund Authority and to make clear the procedure for transferring securities to legal heirs. A new requirement is brought regarding businesses to acquire insurance coverage for risks related to verification reports. The purpose of these modifications is to simplify the procedure for investors to retrieve misplaced or unclaimed assets and safeguard the interests of corporations and investors alike.
Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024 ("Amended Rules").
A new sub rule has been inserted in the Amended Rules wherein the transferor (foreign company incorporated outside India being a holding company) and the transferee (Indian company being a wholly owned subsidiary company incorporated in India), enter into merger or amalgamation, then they have to comply with certain requisitions i.e. (i) both the companies shall obtain the prior approval of the Reserve Bank of India; (ii) the transferee Indian company shall comply with the relevant provisions regarding mergers and amalgamations of the Companies Act, 2013; (iii) the appropriate application shall be made by the transferee Indian company to the Central Government and provisions related to process for mergers or amalgamations under Companies (Compromises, Arrangements and Amalgamations) Amendment Rules 2016 shall apply to such application; and (iv) the declaration as prescribed shall be made at the application filing stage.
Clarification on holding of Annual General Meeting ("AGM") and Extraordinary General Meeting ("EGM") through Video Conference ("VC") or Other Audio Visual Means ("OAVM")
In continuation to the MCA's previous circulars, it has been decided to allow companies whose AGMs are due in the Year 2024 or 2025, to conduct the same through VC or OAVM on or before 30 September 2025 as per the previously prescribed requirements.
LABOUR LAW UPDATES
Minimum wages increased by Government of Delhi
The government of National Capital Territory of Delhi has revised the rates of minimum wages with effect from 1 October 2024, whereby increasing the amount payable to all categories of workers in Delhi.
Revision of rate of damages to be paid by employer
As per a previous notification issued by Ministry of Labour and Employment in June 2024, in case an employer makes a default in payment of any charges such as payment of contributions, charges payable, transfer of accumulations under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Employees' Pension Scheme, 1995, the damages are to be recovered from employer at the rate of 1 (one) % of the arrear of contribution per month or part thereof. The said notification was effective from 14 June 2024.
The Employees' Provident Fund Organization has issued a new circular wherein it was clarified that prior to the issuance of notification i.e. upto 13 June 2024 damages are to be levied and recovered in accordance with the then prevailing provisions.
Pension under Employees' Pension Scheme ("EPS") can be with drawn from any bank
Starting from 1 January 2025, an EPS pensioner can now withdraw their pension from any bank, any branch across India through a Centralised Pension Payment System. This will be a big relief to pensioners in a larger country like India.
Variable Dearness Allowance revised for Unorganised Sector Workers
With effect from 1 October 2024, the Ministry of Labour and Employment has revised the variable Dearness Allowance for Unorganised Sector Workers.
INTELLECTUAL PROPERTY UPDATES
Copyright societies' rights protected against unauthorized use of sound recordings during religious ceremonies
A circular issued by the Government of Goa allowed usage of sound recordings in religious ceremonies without seeking permission from copyright owners. It also authorized enforcement action against copyright societies or hotels asking for royalty or fees for use of the sound recordings.
The Bombay High Court clarified that allowing such unchecked usage of sound recordings improperly expanded the scope of relevant provisions of the Copyright Act, 1957 ("Act") – where fair use or infringement would be determined based on facts of individual cases. Additionally, the court held that allowing action against copyright societies or hotels directly conflicted with the enforcement mechanism envisaged in the Act. Accordingly, the circular was struck down for attempting to interpret the law, which is exclusively courts' prerogative.
Interim injunction imposed against Defendant who has stolen confidential information/document during course of employment
The Delhi High Court ("DHC") has passed an interim injunction in favour of the Plaintiff. The Court has found Defendant guilty of misappropriating confidential information, technical knowhow, trade secret, and proprietary information pertaining to Plaintiff's robotic loading and unloading system prior to his resignation by sending such information from the official email address to his personal email address. The DHC prohibited the Defendant from disclosing or misusing the trade secrets and other relevant information and directed the appointment of a local commissioner for the purpose of collecting evidence from the defendants' premises.
Boroline declared well-known mark
The DHC has declared the mark "BOROLINE" as a well-known mark in India and directed Defendant to change their trade dress and name so that the same is completely distinguishable to Plaintiff's antiseptic cream Boroline.
CASE LAWS
Clarification provided regarding Jurisdiction of Court in case of an appeal to be filed against the order passed by National Consumer Disputes Redressal Commission ("NCDRC")
The Delhi High Court ("DHC") has held that orders of NCDRC can only be challenged before the High Court where the cause of Action had initially arisen and not before the DHC.
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