Ergo Update

Commercial Papers (CPs) in India are regulated by Reserve Bank of India (RBI) and governed by the RBI directions (RBI CP Directions) which lays down the eligibility requirements, disclosure norms, rating and documentation procedures. Further, the Fixed Income Money Market and Derivatives Association of India (FIMMDA) prescribes standard procedures and documentation for issuance of CPs in compliance with guidelines issued by FIMMDA on 5 October 2017 (FIMMDA Operational Guidelines).

The Ministry of Home Affairs has notified the Foreign Contribution (Regulation) (Second Amendment) Rules on 16 September 2019 (“Amendment Rules”) amending the Foreign Contribution (Regulation) Rules, 2011 (“FCRA Rules”) under the Foreign Contributions (Regulation) Act, 2010 (“FCRA”).

On 14 October 2019, the Government of Andhra Pradesh (Government) notified and brought into effect the Andhra Pradesh Employment of Local Candidates in the Industries / Factories Rules, 2019 (Rules) framed under the Andhra Pradesh Employment of Local Candidates in the Industries / Factories Act, 2019 (

The Hon’ble Supreme Court of India (Supreme Court), vide its recent judgment of Vinubhai Haribhai and Others v The State of Gujarat and Another dated 16 October 2019, (Vinubhai Case) arising out of a criminal appeal against an order of the High Court of Gujarat (High Court), has held that a judicial magistrate has wide powers under Section 156(3) read with Section 156(1) and Section 2(h) read with Section 173(8) of the Code of Criminal Procedure, 1973 (CrPC) to direct further investigation, upon an application or suo moto, even at post-cognizance stage bef

In furtherance of its widely promoted objective of ensuring efficiency and transparency in tax administration, the Government has notified the much-awaited E-assessment Scheme, 2019 vide Notification No. 61/2019 (Scheme) to provide a framework for conducting assessment proceedings by:

On 28 August 2019, the government announced critical changes liberalising foreign direct investment (FDI) norms in: (a) single-brand retail trading (SBRT) (b) contract manufacturing (c) uploading / streaming of news and current affairs through digital media and (d) coal mining.

In a recent decision in the case of M/s Golden Bella Holdings Ltd v Deputy Commissioner of Income Tax (International Taxation), Income tax appeal number: 6958/MUM/2017, the Mumbai bench of Income Tax Appellate Tribunal (ITAT) examined the concept of ‘beneficial ownership’ in relation to interest income and held the taxpayer, a Cyprus company, to be the ‘beneficial owner’ of such income and accordingly eligible to a lower tax rate under the India-Cyprus tax treaty (Cyprus Treaty).

In a recent judgment [ITO(TDS)-2(3) v/s M.S.Shah Developers Private Limited and Ors., CC No. 53/SW/2014] (Judgment), the Hon’ble Court of Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier, Mumbai (Court) has ordered 3-months imprisonment (along with a monetary fine of INR 5,000) for the directors of M/s M.S.Shah Developers Private Limited (Company) for delayed deposit of tax deducted at source (TDS) by the Company, pertaining to Financial Year (FY) 2009-10.

Recently, the Delhi Bench of the Income Tax Appellate Tribunal (Tribunal) held that the Liaison Office (LO) of Hitachi Technologies Singapore Pte Limited (Hitachi) constituted a Permanent Establishment (PE) of Hitachi in India for the financial years (1 April to 31 March) 2001-02 to 2006-07. Hitachi was engaged in trading business and the activities undertaken by the LO were viewed as “core” activities for a trading business and not merely “preparatory” in nature.

In a recent case, The Deputy Commissioner of Income-tax v TCS E-Serve International Limited dated 28 August 2019, the Mumbai Bench of the Income Tax Appellate Tribunal (Tribunal) has allowed a demerged company to continue to avail Minimum Alternate Tax (MAT) credit pertaining to its demerged SEZ units even after the demerger. The Tribunal has relied on the Bombay High Court’s order sanctioning the scheme of demerger which provided that the taxes including income tax paid or payable upto the appointed date shall remain only with the Taxpayer.