Ergo Newsflash

The role of an independent director (ID), amongst others, is to uphold ethical standards of integrity and probity, act objectively while exercising his / her fiduciary duties, and exercise responsibilities in a bona fide manner in the interests of the company. Under the Companies Act, 2013 (Act), IDs are required to possess appropriate skills, experience, and knowledge in one or more fields of finance, law, management, corporate governance, or other disciplines related to the company’s business. 

The ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’ (Guidelines) issued by the Central Consumer Protection Authority (CCPA) have been notified on 9 June 2022, and brought into force with immediate effect.

In furtherance of the Press Note No. 3 (2020 Series) (PN3) which announced a critical change to the Consolidated Foreign Direct Investment Policy to curb opportunistic takeover of stressed and strategic assets, or Indian entities in light of the impact of COVID 19 pandemic, on 1 June 2022, the Ministry of Corporate Affairs (MCA) has notified amendments to the Companies (Appointment and Qualification of Directors) Rules, 2014 (Rules), by way of the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 (2022 Amendment).

The Indian Computer Emergency Response Team (CERT-In) had issued directions on 28 April 2022 (Directions) on information security practices, procedure, prevention, response and reporting of cyber incidents for safe and trusted internet. On 18 May 2022, the Ministry of Electronics and Information Technology (MEITY) issued clarifications in the form of frequently asked questions (FAQs) in respect of the much talked about Directions. The FAQs have been released at a pivotal juncture, with just about 5 weeks left before the Directions come into effect.

The Mumbai Bench of the Income Tax Appellate Tribunal (Tribunal) in a recent decision has questioned the ‘reading in’ of the condition of ‘beneficial ownership’ (as opposed to legal ownership) when determining a taxpayer’s eligibility to avail capital gains tax benefits under Article 13 of the India – Mauritius Double Taxation Avoidance Agreement (Treaty). 

The Hon’ble Supreme Court decided on the constitutional challenge to the levy of Goods and Services Tax (GST) on ocean freight for Cost, Insurance and Freight (CIF) imports. The Gujarat High Court had struck down the levy pursuant to its finding that the reverse charge was ultra vires the parent enactment, that is the Integrated Goods and Services Tax Act, 2017 (IGST Act). The High Court observed that the charge of IGST could be reversed and fastened only to a “recipient”.

The Central government has amended the rules associated with share transfer forms as required to transfer shares of companies under the Companies Act 2013.  Based on the amendment, the buyer is required to confirm in the form of a declaration in the share transfer form, that no approval is required under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (the “NDI Rules”), or where such approval is required under the NDI Rules, it has been obtained.

The Indian Computer Emergency Response Team (CERT-In) has issued a direction on 28 April 2022 (Direction) under Section 70-B(6) of the Information Technology Act 2000 (IT Act) relating to information security practices, procedure, prevention, response and reporting of cyber incidents for safe and trusted internet. This is an ongoing effort on the part of CERT-In to further strengthen cyber incident reporting, internet security and allied topics.

The Bombay High Court (HC) in a recent decision in Bhagyashri v Jagdish [Writ Petition Number 2527 of 2021], upheld the decision of a lower court decreeing ‘maintenance pendente lite’ and permanent alimony in favour of the ex-husband.

“Ease of doing business in India” is one of the fundamental mantras in the economic policy framework of the Government of India. In an effort to re-affirm its resolve, the Ministry of Corporate Affairs (“MCA”) renewed two significant notifications on 16 March 2022. This Ergo recaps their necessity and highlights the ramifications of their revival.