Page 6 – Vaish Associates Advocates

Legalaxy – Monthly Newsletter Series – Vol XXI – February, 2025

In the February edition of our monthly newsletter “Legalaxy”, our team analyses some of the key developments in securities market, banking and finance, labour, environment, insurance and aviation.

Below are the key highlights of the newsletter:

SEBI UPDATES

Standard setting forum for AIFs releases implementation standards for offering of differential rights to AIF investors
SEBI updates FAQs for grant of registration as AIF and taking on record PPM of the scheme
Extension of timeline for review of ESG rating

RBI & IFSC UPDATES

RBI allowed Indian exporters to maintain foreign currency account outside India
RBI allowed greater flexibility to foreign investors in terms of the types of bank accounts for remittances in India for foreign investments
RBI allowed person resident outside India having business interest in India to open SNRR account
RBI amends guidelines on settlement of dues of borrowers by ARCS
Framework for imposing monetary penalty and compounding of offences under the Payment and Settlement Systems Act, 2007

LABOUR UPDATES

Government of Karnataka increases the contribution rates to Karnataka labour welfare fund
Meghalaya Government notifies conditions for exemption for employing women in the factory during night shift
Revision in validity of licenses granted/ renewed under the Meghalaya Factories Rules, 1980

ENVIRONMENTAL UPDATES

MOEFCC’S notifies the Environment Protection (End-of-Life Vehicles) Rules, 2025
Producers, importers and brand owners to disclose specific information regarding plastic packaging
MOEFCC’S new air and water pollution guidelines: simplifying the industrial consents

OTHER UPDATES

Regulated entities to maintain records of their business to ensure security and compliance with applicable laws; and to adopt an established data governance framework
The Bharatiya Vayuyan Adhiniyam, 2024 – Notified

We hope you like our publication. We look forward to your suggestions.

Please feel free to contact us at [email protected]

TaxBuzz | Interest paid on Capital Borrowed Outside India for Overseas Investment NOT exigible to tax in India – Assessee eligible for Refund of TDS: Delhi HC

We are pleased to share with you a copy of our in-house publication – “TaxBuzz”, wherein we have analysed the recent ruling of the Delhi High Court in the case of Sun Pharmaceuticals Industries Limited 2025:DHC:564-DB, wherein, the Hon’ble High Court has held that interest paid by an Indian Company on capital borrowed outside India for the purpose of overseas investment(s) in its subsidiaries, is not exigible to tax as the same is covered under the exclusions enumerated under section 9(1)(v)(b), thereby, not attracting TDS liability under section 195 of the Income Tax Act, 1961.

We trust that you will find our TaxBuzz useful and look forward to receiving your valuable feedback.

For any further information/ clarification, please feel free to write to:

Mr. Rohit Jain
Senior Partner
[email protected]

Mr. Aniket D. Agrawal
Associate Partner
[email protected]

Mr. Abhisek Singhvi
Associate
[email protected]

Supreme Court Resolves Regulatory Ambiguity Between IBC and the Competition Act

The Competition Act, 2002 mandates the Competition Commission of India (“CCI”) to regulate large sized mergers and acquisitions beyond high value thresholds (in terms of assets or turnovers) prescribed for “combinations” under the Competition Act, 2002 (“the Act”) to assess whether such transactions could adversely affect competition in the relevant markets, It is an ex-ante process which requires a deep and forward-looking economic analysis of the competition scenario likely to emerge post such proposed combination. In most cases, the CCI accords “conditional approvals”, requiring modifications such as disinvestment of overlapping assets to protect competition in the markets. On the other hand, the acquisition of strategic assets of distressed companies by resolution applicants under the corporate insolvency resolution process (“CIRP”) as envisaged under the Insolvency and Bankruptcy Code, 2016 (“IBC or Code”), may require prior approval from the CCI, if the Resolution plan contains and qualifies as a “combination” under the Act, before such Resolution plan is placed before the Committee of Creditors (“CoC”) for its approval.

This regulatory overlap between IBC and the Act, that is, the moot issue whether obtaining prior CCI approval for such Resolution Plans, which qualify as “combinations” under the Act, is mandatory or discretionary under the Proviso to Section 31(4) of the IBC has now been settled by the Supreme Court in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. decided on 29.01.2025.

To read complete article click on Download PDF Copy

Article authored by:

Mr. MM Sharma
Head of Competition Law
E: [email protected]

and

Mr. Ankit Singh Rajput
Associuate
E: [email protected]

TaxBuzz | Validity of Reassessment Initiated on Assumption of Facts

We are pleased to share with you a copy of our in-house publication – “TaxBuzz”.

In this edition, we have analyzed the recent judgment rendered by the Delhi High Court in the case of Grid Solutions OY, wherein reassessment proceedings initiated on the basis of findings of survey conducted in a different assessment year and on the basis of assumption of facts have been held to be unsustainable.

We trust that you will find our TaxBuzz useful and look forward to receiving your valuable feedback.

For any further information / clarification, please feel free to write to:

Mr. Aditya Vohra
Associate Partner
[email protected]

Mr. Shashvat Dhamija
Junior Associate
[email protected]

Union Budget 2025 Highlights – GST & Customs

We are pleased to share with you the highlights of the Union Budget 2025 on GST and Customs developments.

We trust that you will find the same useful.

Looking forward to receiving your valuable feedback.

For any clarifications, please write to:

Mr. Shammi Kapoor
Senior Partner
[email protected]

Mr. Arnab Roy
Associate Partner
[email protected]

Mr. Sandeep Gupta
Principal Associate
[email protected]

Standard Setting Forum for AIFs Releases Implementation Standards for Offering of Differential Rights to AIF Investors

Securities and Exchange Board of India (“SEBI”), vide its notification dated November 18, 2024, had notified the SEBI (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 (“AIF Amendment Regulations”), thereby amending the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”). The amendments were introduced with respect to maintaining pro-rata and pari-passu rights of investors in a scheme of an Alternative Investment Fund (“AIF”).

SEBI, vide its circular dated December 13, 2024 (“AIF Circular”) had further laid down the guidelines in respect of granting pro-rata and pari-passu rights of investors of AIFs.

The AIF Circular has specified that differential rights may be offered by AIFs to select investors without affecting the rights of other investors, based on the following guiding principles:

Any such right shall not result in any investor bearing liability accrued or accruing to other investors of the AIF/ scheme of AIF;
Any such right with respect to non-monetary/ non-commercial terms shall not provide control to an investor on the decision making of the AIF/ scheme of AIF, except in cases where investor/ its nominee is part of the Investment Committee constituted by the manager;
Any such right shall not alter the right(s) available to other investors under their respective agreements with the AIF/manager; and
Any such right and eligibility to avail the same shall be transparently disclosed in the Private Placement Memorandum (“PPM”) of the AIF/ scheme of AIF.

In this regard, Standard Setting Forum for AIFs (“SFA”) on January 28, 2025, has released the below mentioned implementation standards, prescribing the positive list of specific differential rights that may be offered by AIFs.

Further, (a) any information provided to select investors which elaborates AIF documents in line with the AIF Regulations and circulars and (b) right in the nature of providing specific treatment to select investors to comply with laws or regulations applicable to them, will not be considered as a differential right.

To read the AIF Amendment Regulations click here, to read the AIF Circular click here & to read the SFA Implementation Standards click here

For any clarification, please write to:

Mr. Yatin Narang
Partner
[email protected]