Rules & Regulations

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SEBI MAY ANNOUNCE NEW TAKEOVER RULES WITH EFFECT FROM NEXT FISCAL

OCT 2010 - Market regulator SEBI is likely to announce new norms for mergers and acquisitions (M&As). The regulator is in the process of collating comments received on its public discussion paper on the new Takeover Code which, among other things, proposes to bring in minority shareholders at par with promoters in terms of price received in M&A deals. The recommendations made by the Takeover Regulatory Advisory Committee include raising the public offer trigger to 25 percent, from the existing 15 percent. Besides, the panel has suggested that the acquirer make an open offer for the entire 100 percent stake in case its holding crosses the 25 per cent threshold.



INDIA REMOVES RADIAL TYRE IMPORT LICENSE

SEPT 2010 - India decided to eliminate import licensing requirements for radial tyres by moving the product back to the 'free' category after keeping radial tyres on a so-called 'restricted' list for nearly 18 months. This is positive news for the EU tyre industry (as well as for importers in India) as it should result in an increase in EU exports, which have been affected by the measure since 2008. The aim is to reach a situation where India's import license and fees are fully in line with the relevant WTO provisions.



GOVERNMENT ALLOWS COTTON EXPORTS WITHOUT LICENCE FROM OCT 1, 2010

SEPT 2010 - The government allowed export of cotton with effect from October 1 without the required licences even as it needs to be registered with the authorities concerned, said a notification issued by the Directorate General of Foreign Trade (DGFT), which is under the Ministry of Commerce and Industry. The government has also removed the export duty of '2,500 a tonne on raw cotton which it had imposed on April 9. On the back of steep rise in the prices of cotton and ballooning exports, the registration of cotton export was stopped from April 19 and only those under licence were allowed.



GOVERNMENT PROPOSES LOOSENING FOREIGN INVESTMENT RULES

SEPT 2010 - The Indian government has released a discussion paper on whether to scrap existing rules that force foreign companies who have tied up with an Indian firm to seek approval before expanding outside the joint venture. Foreign companies who tied up with Indian firms before 2005 must ask the government's permission to make new investments in the same field and prove the new venture would not hurt its Indian partner's interests. Foreign companies who came to India after 2005, the year the policy was last reviewed, are already exempt.



INCREASE FDI IN THE DEFENSE PRODUCTION DEPARTMENT AND MULTI BRAND RETAIL SECTOR

JUL 2010 - The Ministry of Commerce and industry may increase Foreign Direct Investment (FDI) in the Defense sector to 74% from 26% for the purpose of encouraging local manufacture and technology. However, the Defense industry prefers a limit of 49% so that the control remains in hands of Indians. Along with this, the commerce and industry ministry is also likely to propose 100% foreign direct investment (FDI) in multi-brand retail. FDI in multi-brand retail will enhance supply-chain efficiencies, give farmers better earnings and reduce wastage. Finance minister Pranab Mukherjee said that opening retail trade would help in bringing down the considerable difference between the farm gate prices, wholesale prices and retail prices.



PAYMENT MADE ABROAD TAXABLE IF DEAL HAS LINKS WITH INDIA

JUL 2010 - The Income-tax department can tax even a payment made to a foreign entity outside India, if the transaction has a business connection within the country, according to a verdict passed by the Income Tax Appellate Tribunal, Mumbai. The ITAT said that India does not follow territorial taxation method in its income tax and it is not necessary that the party have a business activity in India (territorial nexus). A division bench of ITAT held that tax is payable in India on any income which is either sourced from India or which arises to a person domiciled in India. The ITAT drew support for its decision from the amendment made in the relevant I-T laws in the Finance Act 2010.



indian customs upscale measures against counterfeiting

In 2007, the Indian Government issued a regulation on the protection of the intellectual property rights that is imported into India. These rules provide a detailed procedure to be followed by the right holder or his representative as well as by Customs to block import of goods that are suspected of counterfeiting and piracy. To facilitate the use....