all Law.

Here is another episode of LKS’ all Law., where Mr. Devesh Aswal and Ms. Neha Jain discuss the topic “Cross-Border Share Sale – Eligibility for Tax Treaty Benefit”. The benefit under the tax treaty is subject to provisions of General Anti Avoidance Rules (GAAR) enacted under the domestic law and Principal purpose test (PPT) embedded in tax treaties. Under both GAAR and PPT, the benefit of tax treaties should be available only for transactions having commercial substance. Though both GAAR and PPT are relatively new, the Courts in India have been applying judicial anti-avoidance tests existing prior to the introduction of GAAR. In this podcast, we will cover the jurisprudence and the key issues surrounding the application of GAAR and PPT.This podcast is based on a recent article by Mr. Harshit Khurana and Ms. Sonali Bansal.Link to the article: https://www.lakshmisri.com/insights/articles/cross-border-share-sale-eligibility-for-tax-treaty-benefit/

Here is another episode of LKS’ all Law., where Ms. Anshita Khandelwal and Mr. Arpit Mehra discuss the topic “EU’S NON-PREFERENTIAL RULES OF ORIGIN: A TOOL FOR DETERMINING ORIGIN OF GOODS AND PROMOTE FAIR TRADE”Recently, EU has been focusing on strengthening its non-preferential rules of origin by prescribing tighter norms for the determination of the origin of goods. These rules are enforced by the customs authorities at the border, thereby ensuring origin is properly declared in the entry documents filed before customs authorities for all regulatory purposes and duties, including trade remedial duties, are appropriately paid by the importers.This podcast is based on a recent article authored by Mr. Arpit MehraLink to the article: https://www.lakshmisri.com/insights/articles/eu-s-non-preferential-rules-of-origin/ 

Here is another episode of LKS’ all Law., where Mr. Prashant Pratyay and Mr. Gaurav Tiwari discuss the topic “Digital Personal Data Protection Act – Implications for financial entities and fin-tech sector”The Digital Personal Data Protection Act, 2023 introduces a comprehensive framework on data protection applicable to entities processing personal data across all sectors. Some of the key obligations include notice, consent requirements, relying on legitimate purposes (where applicable), implementation of technical and organizational measures and security measures for preventing data breach. Link to the article:  Digital Personal Data Protection Act – Implications for financial entities and fin-tech sector Authors:  Prashant Phillips and Sameer Avasarala

Here is another episode of LKS’ all Law., where Mr. Aman Joshi and Ms. Mehak Mehra discuss “Key Issues Impacting the Pharmaceutical Sector Classification, Human Resources & Investigations”Since the introduction of Goods and Services Tax (GST), Indian pharmaceutical companies have faced significant challenges in implementing their operations, revamping their systems, understanding the law, complying with various law provisions, claiming refunds, and handling audits and investigations in an uncertain environment. In this podcast, we will cover key issues relevant to the Indian pharmaceutical industry from a Classification, Human Resources & Investigations perspective. This podcast is based on a recent article by Mr. Satya Sai, Associate Partner, and Satish Gandla, Principal Associate.Link to the article: https://www.lakshmisri.com/insights/articles/key-issues-impacting-the-pharmaceutical-sector-1/ 

Here is another episode of LKS’ all Law., Ms. Masooma Rizvi. and Ms. Rashi Srivastava discuss the topic “Withdrawal of Corporate Insolvency Proceeding Even Prior to Formation of Committee of Creditors is Permissible”  The Honourable Apex Court, in the recent matter of Abhishek Singh vs. Huhtamaki PPL Ltd. and Ors. rendered a significant ruling, establishing that a plea for the withdrawal of the Corporate Insolvency Resolution Process can be allowed by the adjudicating authority even before the establishment of the Committee of Creditors. Link to the article: Withdrawal of corporate insolvency proceeding even prior to formation of committee of creditors | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Authors: Abhilasha Jha

This podcast examines the decision of the Hon’ble High Court of Calcutta (‘High Court’) on an appeal (AID NO. 11 OF 2021) filed by Decco Worldwide Post Harvest Holdings B.V & Anr. (‘Appellant’) seeking to set aside an order (‘impugned order’) passed by the Controller of Patents and Designs (‘Respondent’) refusing the grant of the Appellant’s patent application for being a method of agriculture under Section 3(h) of the Act, apart from lacking an inventive step and having insufficient disclosure. The High Court, after considering the facts of the case, decided that the assessment of the claimed invention by the Respondent was erroneous and remanded the application back to the Respondent to examine the subject patent application afresh including the question of patentability, after giving an opportunity of hearing to the appellant. This podcast specifically focuses on the opinion of the High Court with respect to the assessment of inventions under Section 3(h) of the Act. This podcast is based on a recent article by Srinivasan T. and Eeshita Das.Link to the article: Patent of method of treating a plant – Interpretation of Section 3(h) | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Voice: Nikita Chauhan and Devesh Aswal

Here is another episode of LKS’ all Law., where Ms. Soumya Malhotra and Mr. Gaurav Tiwari speak about the much-awaited digital personal data protection bill 2023.Passed by both Lok Sabha and Rajya Sabha, the Digital Personal Data Protection Bill 2023 finally received assent from the Hon’ble President of India on 11th August 2023. This podcast is based on a recent article authored by Mr. Prashant Phillips, Executive Partner and Mr. Sameer Avasarala, Senior Associate Link to the article:  Pacing towards a data protection law: Analysing the Digital Personal Data Protection Bill, 2023 | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)

Here is the latest episode of all Law, featuring Ms. Kanika Jain and Ms. Aishwarya Vardhan, as they delve into the recent ruling of the Maharashtra AAAR of CHEP India Pvt Ltd. This ruling examines a transaction and holds that although the supply of goods/services between distinct persons would amount to a supply under GST laws, the mere movement of goods between two GSTINs would not amount to a supply when the GSTIN undertaking such movement is only a bailee of such goods. This podcast is based on a recent article by Mr.  Brijesh Kothary, Ms. Padmasri Manyam, and Ms. Ananya Raghavendra. Link to the article: Leasing of capital goods between two GSTINs | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)

This podcast addresses uncertainties in tax laws, particularly regarding the interpretation of legal provisions and the ensuing litigation. It focuses on the tax implications of exporting services, treated as tax-free or zero-rated under GST laws. The Export of Services Rules, 2005, have been subject to frequent amendments and litigations due to the interpretational challenges posed by the "used outside India" condition. The podcast highlights a recent decision in Arcelor Mittal Stainless India Private Limited vs. CST, Mumbai-II, 2023-VIL-516-CESTAT-MUM-ST where the Larger Bench of CESTAT ruled in favor of exporters. It held that providing Business Auxiliary Services to recipients outside India, with consideration received in convertible foreign exchange, qualifies as an export of service. The Tribunal clarified the term "service recipient" and determined that the location of the service recipient being outside India is crucial for fulfilling the export condition. The impact of this decision on the GST regime and its implications for businesses engaged in cross-border transactions remains to be seen, as it may influence the interpretation of GST provisions as well. Link: Export of services: Settled, yet unsettled | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Source: An article published on the LKS website in June 2023Authors:  Shrishti Agarwal, Disha Jain, and Narendra Singhvi Voice: Ananya Raghavendra and Saundarya Sinha

The Finance Act, 2021 overhauled the then-existing reassessment provisions under the Income-tax Act. Earlier, the reassessment provisions required the Assessing Officer to form an “independent belief” based on the “new tangible material”. Now, the reassessment provisions have been made information centric. The Assessing Officer is required to possess the information that suggests that the income chargeable to tax has escaped assessment. For that matter, what constitutes information has also been defined under the Act. When the reopening has now been made permissible on the possession of the defined information, the question is whether a change of opinion based on such information can result in a valid reopening. This Podcast seeks to discuss this crucial aspect of the new reassessment provisions.Link: Change of opinion: Whether permissible under the new provisions of reassessment? | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Source: An article published on the LKS website in July 2023Authors: Neha Sharma Voice: Arpit Mehra and Kanishka Sihare

In this podcast, we have explored how, despite not being a statutory remedy, the revival of Insolvency proceedings is permitted if the same was withdrawn pursuant to a settlement. We have discussed the process of revival. The process of revival would only arise if the terms of the settlement pursuant to which the IBC Proceeding was withdrawn, have not been honoured  by the parties to the said settlement. We have further examined the concept of ‘liberty’ that is required in the National Company Law Tribunal’s order vide which the withdrawal of the IBC Proceeding was permitted. We further went on to examine the effect of the settlement agreement on the nature of debt if the settlement was entered between the parties after the IBC Proceeding was initiated. We have concluded that (a) revival of IBC Proceeding is permitted on certain conditions; (b) by virtue of entering into Settlement after IBC Proceeding is initiated would not change the nature of the debt.Link: Revival of insolvency proceedings: Analysis and way forward | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Source: An article published on the LKS website in June 2023 Authors: Aman Gupta Mayank KumarVoice: Pratyush Jain and Falguni Gupta 

The Government of India’s consistent push to promote domestic electronic industry’s manufacturing capabilities faced a slight dent due to the recent adverse judgement from the WTO. The judgement held that India’s import duty measures were inconsistent with its commitments & obligations under the WTO Agreements. The complainant’s (EU and several other countries) viewpoint was that India had breached the bound rates under the Schedule of concessions by imposing the disputed custom duties on imports of certain electronic goods. However, India maintained that bound rates in the Schedule were not applicable to the products in question as those products were not in existence at the time of India’s commitments, and they got included in India’s commitment by an inadvertent oversight. Although the arguments advanced were insightful & contained merit, the Panel was of the view that India’s primary obligations stem from her WTO Agreements and not from the commitments under the ITA which formed the fulcrum of India’s arguments. While the industry may face headwinds in the short term, the government will find alternative measures to keep the electronics industry competitive in the long term as envisioned.Link: India loses the fight for electronic goods against EU at the WTO | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Audio Source: An article published on the LKS website in June 2023Authors: Rizwan ShahVoice: Sanjhi Agarwal and Gaurav Tiwari

The Hon’ble Supreme Court of India (“Hon’ble SC”) in the recent decision in Saraf Exports v. CIT settled the issue of entitlement of deduction as per Section 80IB of the Income Tax Act, 1961 (‘IT Act’). The issue was pertaining to the receipts under Duty Drawback scheme (‘DDS’) and transfer of Duty Entitlement Pass book scheme (‘DEPB’). During the subject period, the taxpayer received certain incentives under DDS and DEPB. These said benefits were claimed as deduction u/s Section 80IB of the IT Act, as being ‘derived from’ its industrial undertaking of manufacturing wooden handicrafts. The Hon’ble Supreme Court held that export incentives will not qualify as first-degree nexus for the purposes of claim of deduction under Section 80-IB.  The decision has reiterated the principle laid down earlier that restrictive meaning must be given to the expression ‘derived from’. Link: Impact analysis of the Supreme Court decision in Saraf Exports v. CIT: Worth the wager? Audio Source: An article published on the LKS website in June 2023.Authors: Krishna Laasya V Voice: Dikshita Damodaran, Amrusha Monga

When producers/exporters export goods to other countries, they are likely to face anti-dumping and anti-subsidy investigations. To successfully face such investigations, the producers/exporters need to be trade-remedy ready. This podcast provides a short guide on the certain steps that producers/exporters should take in this regard. One, entities must employ a robust ERP system for reporting their data seamlessly and accurately. Second, entities must ensure support from their traders, especially when the supply chains are complex. Third, they must monitor their export prices regularly. Producers/exporters must aim to secure their market position by participating in the investigation and getting the best results.Link: Becoming trade remedies-ready – A practical guide for producers and exporters | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Audio Source: An article published on the LKS website in May 2023.Authors: Devinder Bagia Jayant Raghu Ram Voice: Prashant Phillips and Bhavya Shukla  

 Recently, an amendment was brought in through the Finance Act 2023 in section 11 of the Income Tax Act, 1961, through which only 85% of the total sums paid or credited by one charitable entity to another charitable entity will be deemed to be “application” towards charitable purposes. This amendment was brought in to discourage the practice of forming multiple layers of charitable entities in order to retain more than 15% at each stage. However, it may seriously impact those charitable entities which are working on channelizing the donations by aggregating donations from multiple donors and applying almost whole of the donations by contributing to charitable entities engaged in actual application towards end causes. Thus, these charitable entities that act as aggregators can be subject to taxation at maximum marginal rates in spite of applying almost 100% of the donations received by it by way of donations to other charitable entities. This deeming provision causes uncertainty for the charitable entities, and a clarification from CBDT in this respect would be welcome. Link:  Deemed application provision causes uncertainties for donation aggregators | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com) Audio Source: An article published on the LKS website in May 2023.Authors:  Sanjhi Agarwal and Prachi Bhardwaj Host: Arpit MehraExpert: Sanjhi Aggarwal  

The Hon’ble Supreme Court of India (“Court”) in the recent decision by the five-judge Bench in N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. (Judgment dated 25 April 2023), which is a reference from the decision of three judge Bench delivered by the Court on 1 January 2021 [(2021) 4 SCC 379], clarified the stance on the validity / enforceability of the arbitration agreement or arbitration clause contained in an agreement / contract, which is not stamped in accordance with the Indian Stamp Act, 1899 (“Stamp Act”). The Court finally settled the conundrum and held that the arbitration or the appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) cannot be invoked if the arbitration agreement or clause is contained in an unstamped or insufficiently stamped agreement or contract. Link: Arbitration agreement, which is part of an unstamped contract, has no existence | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Audio Source: An article published on the LKS website in May 2023.Authors: Manasa Tantravahi Aman GuptaExpert: Dhruv Matta 

This podcast examines the decision made by Hon’ble High Court of Delhi (‘High Court’) on an appeal filed under Section 117A of the Patents Act, 1970 (‘Act’). The appeal was filed by Societe Des Produits Nestle Sa (‘Appellant’) seeking to set aside an order passed by the Controller of Patents and Design (‘Respondent’) refusing the grant of the Appellant’s Patent Application for lacking inventive step and for not being patentable under Section 3(i), Section 3(e), and Section 59 of the Act. The High Court after considering the facts of the case, decided that the assessment of the claimed invention by the Respondent was erroneous and directed that the Patent Application may proceed for a grant. The High Court has redefined the boundaries of permissible claim amendments for overcoming the objections on non-patentability especially Section 3(i) of the Act without jeopardizing the requirements of Section 59 of the Act. Therefore, the primary focus of this podcast is on the interpretation of Section 3(i) and Section 59 of the Act provided by the High Court.Link: De-blurring Section 59 of the Indian Patents Act 1970 | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com) Audio Source: An article published on the LKS website in May' 2023Authors:  Malathi Lakshmikumaran, Srinivasan T, Eeshita Das, and Aashmeen Kaur  Expert:  Falguni GuptaHost:  Arnab Bhattacharya

This podcast focuses on the interesting issue settled by the Hon’ble Madras High Court in the case of Eastman Exports Case pertaining to the reversal of ITC on the loss of inputs inherent to the process of manufacturing. The Hon’ble Court held that ITC can be claimed on the inputs which are lost in manufacture as such loss is inherent to the process of manufacture itself. To arrive at the decision, the Hon’ble Court primarily relied on the principles laid down in the JK Cotton Spinning & Weaving Mills Case. The Hon’ble Court also resorted to the principles of indispensability and commercial expediency of the inputs to arrive at the aforesaid conclusion. The Article also focuses on the ratios laid down in the subsequent decisions under diverse indirect tax legislations, wherein, similar conclusions were arrived at. The Article also compares S.19(9)(iii) of the TNVAT Act with Section 17(5)(h) of the CGST Act and opines that the Impugned Judgement might come to assistance if similar demands are raised under the GST regime. The Podcast ends on a cautious note that each claim/reversal of ITC must be independently dealt with.Link:Eligibility of Input Tax Credit vis-à-vis inherent loss of inputs during manufacture | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com) Audio Source:  An article published on the LKS website in May 2023.Authors: Charulatha R Nimrah Ali

While the inclusion of interest amounts in ‘financial debt’, for the purposes of the Insolvency and Bankruptcy Code, 2016 (‘IBC’), is clearly provided for in the IBC, the interest component in the case of operational debt has always been a point of contention.Definition of the term ‘financial debt’under Section 5(8) of the IBC expressly includes the term ‘interest’ to be a part of the debt that can form a part of the claim against the corporate debtor. However, the definition of the term ‘operational debt’ under Section 5(21) of the IBC does not specifically mention the term ‘interest’ to be included as a part of the debt. There appears to be a deliberate difference in the language used for both terms. Accordingly, the understanding between the parties over levy of interest plays a key role while computing the amount of ‘operational debt’.Link: Interest as part of Operational Debt: A conundrum | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Audio Source:  An article published on the LKS website in April 2023.Authors: Noorul Hassan Aishwarya Narasimhan

The podcast discusses the intricacies of TDS (tax deducted at source) withholding, which affects the taxable value under the Goods and Services Tax (GST) system in India. Under the Income Tax Act, 1961, TDS is withheld by Indian service recipients on the amount payable to foreign service providers. To clarify the taxable value under service tax, the Central Board of Excise and Customs (CBEC) stated that the taxable value shall be the gross value, including TDS. However, the net receipt in the hands of foreign service providers is reduced to the extent of TDS, which can be overcome by restructuring the transaction. The issue is whether the taxable value for discharging GST should be confined only to the contractual payment or whether the amount of TDS should also be added. The podcasr discusses court decisions on the valuation provisions in the Finance Act, 1994, and the GST law. The author highlights the intricacies of TDS withholding, which has been a matter of dispute in the past. While some court decisions have held that TDS should not be added to the taxable value, the podcast suggests that the valuation provisions under the GST law require a closer examination of whether the contractual payment made to the supplier can be equated with 'sole consideration.' While the Finance Act considers the contractually agreed amount as the gross amount charged, the GST law provides that the taxable value shall be the transaction value, i.e., the price actually paid or payable. However, the presence of 'sole consideration' would depend on the facts and circumstances of each case, and it needs to be examined whether the contractual payment made to the supplier can be equated with 'sole consideration', wherein TDS is borne by the service recipient.The podcast concludes that the presence of 'sole consideration' would largely depend on the facts and circumstances of each case.Link:Withholding Income Tax: Withholding the ambiguity in GST Valuation? | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)Audio Source:  An article published on the LKS website in April 2023.Authors:  Shiwani Kaushik, Associate LKS